Jack Kubinec

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed" target="_blank" rel="noreferrer noopener">subscribe</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



XNET, a Solana-based project building a decentralized network of Wi-Fi hotspots, has partnered with US telecom giant AT&amp;T. The collaboration will enable AT&amp;T to offload mobile data traffic onto XNET’s network, the team told Lightspeed exclusively.



XNET sells Wi-Fi hotspots that businesses and public spaces can deploy in exchange for XNET token rewards. Together, the patchwork of hotspots makes up a distributed wireless network. XNET partners with cell carriers to offload mobile data onto its hotspots where available, easing network congestion and improving coverage — while the cell carriers pay XNET for the data.



Under the agreement with AT&amp;T, which has been live since September 2024, AT&amp;T wireless customers connect to XNET’s Wi-Fi network where available. AT&amp;T pays XNET in dollars for the data usage, and XNET passes tokens along to its node operators.



According to a Dune <a href="https://dune.com/xnet/xnetmobile">dashboard</a>, XNET currently has 688 active nodes, and around 9 million users have connected through its Wi-Fi offloading network. The handoff between AT&amp;T’s coverage and XNET’s Wi-Fi is seamless, and most users have no idea it’s happening, XNET co-founder Richard DeVaul told me. He added that bootstrapping a business like XNET would have been difficult without a token.



“XNET is the poster child for DePIN. We financed millions of dollars of equipment on our network using our token, without conventional equity or debt financing,” DeVaul said in a text.



DeVaul was previously chief technology officer of Google X, Alphabet’s research and development arm focused on technological “moonshots.” He <a href="https://www.nytimes.com/2018/10/30/technology/alphabet-executive-sexual-harassment-resigns.html">resigned</a> in 2018 following a report that he had allegedly sexually harassed a female job applicant. DeVaul denied the allegations in a comment shared with Blockworks.



XNET has a similar feel to Helium Mobile, a popular DePIN company building a nationwide cellular network through token-incentivized hotspots. But while Helium lets individuals install hotspots at home, marketing lead Chris Banks said that XNET focuses exclusively on B2B services and restricts deployments to “high-value locations to the carriers.”



“We see Helium as a potential customer, not a competitor. But [Helium Mobile CEO Amir Haleem] may have different ideas,” DeVaul said, adding a tongue-wagging emoji.



Updated April 9, 2025 at 1:15 pm ET: Added allegations against DeVaul and his departure from Google X.



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<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forward-guidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/supply-shock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

AT&amp;T

Exclusive: Wi-Fi DePIN XNET announces AT&T partnership

Katherine Ross

Leading this week’s funding wrap is Azra Games, a gaming studio.



The company announced a Series A round of $42.7 million, led by Pantera Capital with participation from a16z Crypto, a16z Games and NFX.



The firm is focused on creating role-playing games specifically on mobile. Mark Otero, who previously worked at Electronic Arts, founded the studio.



“The funding will be instrumental in accelerating the growth of Azra Games and advancing its various projects that are currently in development, including its flagship ground-breaking game, currently code-named ‘Project Legends,’” a press release announced.&nbsp;



The studio plans to roll out games with the ability to add in technologies such as blockchain.&nbsp;



Read more: <a href="https://blockworks.co/news/empire-newsletter-nfts-comeback-gaming">A wave of new games could prove NFTs aren’t dead after all</a>



“The team at Azra Games has the incredible opportunity and vision to trailblaze the fourth generation of mobile RPG games that combines the creativity of new <a href="https://blockworks.co/tag/gaming">gaming</a> formats and experiences with the digital ownership of blockchain,” said a16z Crypto’s Arianna Simpson.



Then, we have a pre-seed round coming out of stealth.&nbsp;



Hyve, a secured network on Symbiotic’s ecosystem, announced a $1.85 million pre-seed round as it exited stealth.&nbsp;



Lemniscap led the round, with participation from Paper Ventures and Frachtis.&nbsp;



“Across the Web3 landscape, current infrastructure has struggled to keep up with the growing complexity and data demands of modern applications. As we move towards an increasingly decentralized future, the need for robust, scalable and secure infrastructure has never been more pronounced,” Douwe Fassen, Hyve’s CEO, said in a press release.



Read more: <a href="https://blockworks.co/news/slow-defi-infrastructure-curbs-mass-adoption">DeFi’s slow infrastructure is holding back mass adoption</a>



<h2 class="wp-block-heading">Other notable rounds:&nbsp;</h2>



<ul class="wp-block-list">
<li>Blockstream <a href="https://x.com/Blockstream/status/1846193752999608427">raised</a> $210 million in convertible note financing. The round was led by Fulgur Ventures.</li>



<li>Crypto derivatives exchange Bitnomial <a href="https://x.com/Bitnomial/status/1846188841381593591">announced</a> a $25 million Series C in a round led by Ripple — with an aim to launch a US perpetual futures trading platform. </li>



<li>Gaming startup PiP <a href="https://markets.businessinsider.com/news/currencies/web3-gaming-startup-pip-world-secures-10-million-seed-funding-from-leading-global-fintech-organization-exinity-1033842615">raised</a> $10 million in seed funding in a round led by Exinity. </li>



<li>Layer <a href="https://x.com/LayerOnEth/status/1843409739939471623">said</a> it raised $6 million in a seed round led by 1kx, with participation from Fabric Ventures, Arrington Capital and others.</li>
</ul>



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Funding

Funding Roundup: Gaming startup Azra Games raises $42M

Ran Yi

DeFi&#8217;s infrastructure needs to evolve significantly if it intends to compete with traditional financial systems and drive mass adoption. Despite the promise of decentralized finance, current platforms fall short in areas like liquidity, speed and cross-chain compatibility. Without addressing these critical shortcomings, DeFi will struggle to gain the trust and adoption needed to rival TradFi. To truly bring DeFi into the mainstream, we must develop frameworks that are as secure, scalable and efficient as their TradFi counterparts.



Global financial infrastructures like Swift and other core systems were the backbone of the digital finance boom in TradFi. They enabled seamless cross-border transactions, improved trust in financial institutions and ultimately aided global adoption. Just as the pillars of TradFi required strong, innovative frameworks to thrive, DeFi must evolve beyond its current limitations. The exponential growth of Web3, onchain trading and decentralized finance demands infrastructure that can not only keep pace but also drive further adoption.&nbsp;



Read more: <a href="https://blockworks.co/news/banks-swift-crypto-transaction-trials">Banks to use Swift network for crypto transaction trials</a>



Centralized exchanges have arguably come closest to emulating the foundational pillars of TradFi, as evidenced by their broad user bases and large trading volumes which comfortably outstrip those of DeFi platforms. However, the downfall of FTX in 2022 served as a harsh reminder of the risks inherent in using custodial services, while underscoring the value of decentralized, non-custodial solutions. This is where DeFi has the opportunity to truly differentiate itself — but only if the underlying infrastructure is up to the task.



Read more: <a href="https://blockworks.co/news/non-custodial-stablecoin-native-exchange">Post-FTX world needs ‘next-generation’ exchange, ex-Coinbase exec says</a>



So, which infrastructure options do developers have to build orderbook-based platforms in the DeFi space?



While some devs may opt for crypto exchange clone scripts — white-label solutions that replicate existing CEXs or DEXs — these often fall short in crucial areas. Although they can reduce development time, they lack the foundational elements necessary for long-term survival and success. Furthermore, while there are a number of CEX clone scripts available to build orderbook-based platforms, there aren’t that many options for orderbook-based DEXs.



In my view, any infrastructure designed to support successful DeFi platforms must excel in four key areas. First, deep liquidity is essential — it’s the lifeblood of any trading system. Without sufficient liquidity, platforms will struggle to offer competitive spreads, leading to a poor user experience and ultimately, failure.



Read more from our opinion section: <a href="https://blockworks.co/news/bitcoin-powerful-defi-potential">Bitcoin’s evolution into DeFi is inevitable — and it’s about time</a>



Next, omnichain functionality — the capacity of assets to move freely and securely across multiple blockchains — is crucial for enhancing liquidity and creating new trading opportunities. This process can be simplified further by chain abstraction, which reduces the complexities involved in cross-chain transactions and makes the entire ecosystem more seamless.



Modularity is another important factor. Developers need the flexibility to customize infrastructure to meet the specific needs of their platform. A modular approach allows them to choose the components that best serve them, driving innovation and adaptability.



Finally, there’s speed. In trading, speed is everything. High latency kills market opportunities, and slow platforms will inevitably drive users away. For any DeFi platform to be taken seriously, high-speed infrastructure is non-negotiable.



By integrating features like deep liquidity, omnichain compatibility, modularity and speed, developers can unlock significant advantages across various DeFi platforms. For example, in the case of spot or perpetual DEXs, shared orderbooks can offer users better price discovery, reduced slippage and institutional-grade trading experiences — benefits typically associated with CEXs.



Read more from our opinion section: <a href="https://blockworks.co/news/defi-future-nirvana-hack-risk">DeFi is the future (and a hack can’t convince me otherwise)</a>



Similarly, DeFi aggregators can leverage a unified liquidity pool, minimizing the fragmentation of liquidity across different networks. This allows seamless access to deep liquidity, without the need for separate integrations, thus creating a more efficient trading environment.



When it comes to institutional trading platforms, robust infrastructure ensures they can meet the high standards required by professional and algorithmic traders. With the right setup, it becomes much easier to implement advanced features like algorithmic trading, diverse order types and risk management tools, all supported by reliable onchain data and liquidity.



Even CEXs stand to benefit from this type of infrastructure. By developing decentralized counterparts to their platforms, CEXs can cater to users who prioritize the autonomy and transparency of DeFi, while still offering the speed and trading experience expected from centralized platforms. Hybrid models, such as WOOFi Pro and BTSE DEX, are already leading the charge in this area.



Similarly, derivatives and options platforms can take advantage of real-time price feeds, transparent order matching and efficient settlement processes, all directly onchain. This reduces the need to rely on centralized entities, offering a more decentralized and transparent trading ecosystem for complex financial products.



However, none of these advantages matter without active traders. Liquidity is the lifeblood of any market and without it, the crypto market as we know it would cease to function. When deep liquidity and fast execution are present, traders benefit from tighter spreads, reduced slippage and a superior overall trading experience.



To drive mass adoption, the focus must shift from grand promises to tangible advancements. Imagine a world where decentralized exchanges and platforms offer the same reliability and efficiency as traditional finance, where traders can move assets across chains without friction, and where high-frequency trading happens at the speed of thought. Building this future is necessary if DeFi is ever to move beyond the fringes and take its place as a serious contender in the global financial ecosystem.



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<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forward-guidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



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centralization

DeFi’s slow infrastructure is holding back mass adoption

David Canellis

Today, enjoy the Empire newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



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<h2 class="wp-block-heading">Six-figure standard</h2>



Mass adoption is a chicken and egg problem.



By raw numbers alone, we’re likely well on track to build enough infrastructure to support the next wave of users.



There are now dozens of layer-1 and layer-2 networks, interoperability protocols and other types of financial plumbing ready to pipe onchain activity across our multichain future.



But whether it’s truly enough depends on how big a wave we’re talking about.&nbsp;



Another one or two million users — especially really active ones — could probably fit, as long as they spread themselves out across all the different blockchain networks available.



That’s rather than, say, all clamoring onto Ethereum mainnet. Doing so would inevitably make the chain far too <a href="https://consensys.io/blog/the-inside-story-of-the-cryptokitties-congestion-crisis">expensive</a> to use.



But while blockspace is becoming cheaper due to its growing abundance (compared to user demand), app developers are still limited by how many transactions can be processed at any one time. Transactions per second, or throughput.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdVSwlxPiSc-trZkDzqrnRqRfLyYvWh1E6eFt0lBakf_igX1WV0oSnm03-9iI6KVkho_zKK-3R3n3x418VNc-6akZjBY1_7biuScMteLajO124ANoD8Pc0-CmG6G9qrQD1KNzQviTEk0D9XaPI-4SuwMz63?key=jj_HMR3HLJ-G204VfS1fkQ" alt=""/><figcaption class="wp-element-caption">Not all transactions are created equal, but blockchains generally are</figcaption></figure>



Crypto itself is a permissionless sandbox. Of course, some use-cases quickly attract boogeymen like the SEC, CFTC and DOJ. But developers and entrepreneurs can mostly build whatever they want — as long as it doesn’t need to use the chain too frequently.



That presents the riddle: Would crypto have more users if it had more entirely onchain consumer apps?



Would crypto have more consumer apps if the underlying networks could handle more traffic <a href="https://blockworks.co/news/ton-outage-permanent-uptime-web3">without going offline</a>?



MegaETH is weaving much of its future value proposition on the answer to both questions being a resounding “yes.”&nbsp;



The project is to be an Ethereum layer-2 network hinged on a souped-up centralized sequencer that aims to process transactions onchain in real-time, or at least, at 100,000 transactions per second.&nbsp;



That way, developers could build the high-performance apps of their dreams and onboard all the newbie users hungry for onchain speed. For scale, Visa <a href="https://www.visa.co.uk/dam/VCOM/download/corporate/media/visanet-technology/aboutvisafactsheet.pdf">touts</a> that it can handle 65,000 transactions per second.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcaWR2910NFcvz2pb3Jw6qvx2Euw2C2C0ruZfBEb8RxU5kvv2gziuliXBdS-MK7hyLdrGYBCf1EDSYu9eT8dB9UK91egiaH5wNZ9YfjCeOpXs-RJwDE5rjrHPLXa2TPMXYLszu3qOg0K4brY9LnPCmEQno?key=jj_HMR3HLJ-G204VfS1fkQ" alt=""/><figcaption class="wp-element-caption">The big pink candle is whatever chain first makes it to 100,000 transactions per second</figcaption></figure>



It’s early days for MegaETH. But in any case, that 100,000 number is turning out to be an increasingly common benchmark.&nbsp;



TON <a href="https://blog.ton.org/100000-transactions-per-second-ton-sets-the-world-record-on-its-first-performance-test">bragged</a> last October that it had surpassed that amount on a testnet implementation, but in reality, it keeps breaking at around 300 transactions per second. Aptos has previously claimed it could theoretically reach 160,000 per second but so far only reached 10,734, per Chainspect.



More recently, Ava Labs expressed hope in pushing Avalanche to <a href="https://www.theblock.co/post/274683/ava-labs-outlines-scaling-solution-vryx-in-plan-for-avalanche-to-reach-100000-tps">eventually</a> hit six figures with a new scaling solution.



It could be that some of these networks reach their theoretical limits, some of which are close to 100,000. And their odds would certainly be better if there were more users to get them there, as blockchain networks today are rarely truly at capacity, and if they are, it’s usually temporary.



Whether that would suddenly make crypto’s next killer app appear is anyone’s guess. Better to keep building, just in case.



— David Canellis



<h2 class="wp-block-heading">Data Center</h2>



<ul class="wp-block-list">
<li>BTC is up 1.5% on the day and ETH is flat as markets trend sideways. (BTC: $59,200; ETH: $2,510).</li>



<li>KLAY, FLOKI and MATIC are the worst hit over the past week, losing between 19% and 18%.</li>



<li>Daily Base stablecoin transfer volume is at another all-time high beyond $5.44 billion, according to <a href="https://app.blockworksresearch.com/analytics/base?dashboard=base-onchain-activity">Blockworks Research</a> data.</li>



<li>Over $550 million has flowed out of Arbitrum bridges in the past week, per <a href="https://defillama.com/bridges/chains">DeFiLlama</a>. $457 million has otherwise flowed into Ethereum bridges.</li>



<li>Native ETH staking <a href="https://www.validatorqueue.com/">yield</a> is at a record low of 3%, down from 3.55% at the start of the year.</li>
</ul>



<h2 class="wp-block-heading">No improvement</h2>



Binance exec Tigran Gambaryan’s trial restarted yesterday, and the situation continues to look bleak for the American, who just passed the six-month mark in Nigeria.



Gambaryan was initially detained in February and has been held in the country since. His health has deteriorated while in prison, including <a href="https://blockworks.co/news/binance-detained-exec-charges-dropped-nigeria">bouts of pneumonia</a>, and Gambaryan now suffers from a herniated disk. According to a family spokesperson, he’s also suffered from malaria and tonsillitis. 



A video shared on X depicts a distressed Gambaryan attempting to walk into the courtroom. He was, per a spokesperson, unable to use his wheelchair. According to Gambaryan in the video, officials were told not to offer aid.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">“Nigerian Prison Official Abandons Binance Executive To Struggle In Pains In Court Premises As He Begs for Help ” <a href="https://t.co/q8GhvIluNq">pic.twitter.com/q8GhvIluNq</a>&mdash; Oyindamola🙄 (@dammiedammie35) <a href="https://twitter.com/dammiedammie35/status/1830651090175693237?ref_src=twsrc%5Etfw">September 2, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



“This is f*cked up,” Gambaryan says. He then points to the guard walking next to him and exclaims, “He was told not to help me.”



“Why can’t I use a goddamn wheelchair? This is a show!” Gambaryan adds. “I’m f*cking innocent.”



Binance CEO Richard Teng shared the video, calling for the “inhumane treatment” to end.&nbsp;



“He must be allowed to go home for medical treatment and to be with his family,” Teng added.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">This inhumane treatment of Tigran must end. He must be allowed to go home for medical treatment and to be with his family. <a href="https://t.co/HsQNoyE0cS">https://t.co/HsQNoyE0cS</a>&mdash; Richard Teng (@_RichardTeng) <a href="https://twitter.com/_RichardTeng/status/1830869029705441553?ref_src=twsrc%5Etfw">September 3, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Gambaryan later told the judge that he’s not receiving adequate medical care and hasn’t been able to communicate with his legal team or embassy representatives. That’s not the first time we’ve heard this from folks representing his family, either.&nbsp;



The prosecutor for Nigeria’s Economic and Financial Crimes Commission (EFCC) pushed back on a new bail application filed by Gambaryan’s lawyers on medical grounds, arguing that the US executive isn’t suffering from ill health. But then, according to a family spokesperson, the prosecutor also claimed that Gambaryan is refusing treatment, which doesn’t seem to add up.&nbsp;



We’ve covered <a href="https://blockworks.co/news/binance-executive-denied-bail-in-nigeria">Gambaryan’s detention</a> before, but ICYMI: The US citizen was <a href="https://blockworks.co/news/binance-comments-on-exec-nigeria-detention">held in Nigeria </a>after flying there to meet with government officials when Nigeria <a href="https://blockworks.co/news/binance-ends-support-nigeria-naira">accused Binance of money laundering</a>. Nigeria then charged Binance and Gambaryan with said violations, which is what keeps Gambaryan in a prison cell. 



Nigerian officials also sought tax evasion charges against both Binance and Gambaryan but dropped the charges against Gambaryan himself over the summer.&nbsp;



Before either of these trials commenced, Binance ended support in Nigeria — shortly after Gambaryan was detained.&nbsp;



“It is useful to point out that Nigeria has never been a big market for Binance. The Government has said that we made $26B in revenue from Nigeria in 2023. That is not the case. The $21.6B figure is the total transaction volume from 2023. To provide an understanding of transaction volume: if a person were to take $1000 and trade it 1000 times, that would represent $1m in transaction volume,” Teng wrote in a <a href="https://www.binance.com/en/blog/leadership/from-richard-teng-binance-ceo-tigrans-deteriorating-condition-after-6-months-of-unjust-detention-426448993678618773?hl=en">blog post</a> last week.&nbsp;



US officials Rep. Chrissy Houlahan and Rep. French Hill <a href="https://x.com/RepFrenchHill/status/1803898800966091087">visited</a> Gambaryan back in June, calling for a “humanitarian release” at the time.&nbsp;



“The US Government must do more to help Tigran. I urge them to use every available tool to free an innocent American who is at risk of permanent damage,” Yuki Gambaryan, Tigran’s wife, said in a statement. I’ve reached out to folks at Houlahan’s and Hill’s offices.&nbsp;



Gambaryan is due back in court tomorrow, so we’ll continue to monitor how this plays out.&nbsp;



— Katherine Ross



<h2 class="wp-block-heading">The Works</h2>



<ul class="wp-block-list">
<li>SEC Commissioner Mark Uyeda thinks that the regulatory agency should <a href="https://www.theblock.co/post/314246/sec-should-customize-forms-mark-uyeda?utm_source=rss&amp;utm_medium=rss">create</a> a registration statement that’s customized for crypto securities. </li>



<li>The WazirX hacker has begun to move funds over to Tornado Cash to wash them, per Arkham Intelligence <a href="https://platform.arkhamintelligence.com/explorer/entity/wazirx-hacker">data</a>. </li>



<li>Metaplanet, the Japanese company that adopted bitcoin as a reserve asset earlier this year, announced that it <a href="https://contents.xj-storage.jp/xcontents/33500/f7c642e1/bf33/466c/9dca/88ae8b08b02b/140120240828577920.pdf">teamed up</a> with SBI VC Trade for custody, transactions and management of its bitcoin.</li>



<li>The SEC is <a href="https://www.coindesk.com/policy/2024/09/02/sec-might-challenge-ftx-bankruptcy-estate-from-paying-back-customers-with-stablecoins/?utm_medium=referral&amp;utm_source=rss&amp;utm_campaign=headlines">not happy</a> about the FTX estate paying out some creditors in stablecoins and other crypto, adding that it “reserves its rights to challenge transactions involving crypto assets.&#8221;</li>



<li>Libre is adding a few new digitized funds to the NEAR blockchain, opening the door for real-world assets to be transferred across multiple blockchains, CoinDesk <a href="https://www.coindesk.com/business/2024/09/02/brevan-howard-backed-tokenization-firm-libre-arrives-on-near-blockchain/?utm_medium=referral&amp;utm_source=rss&amp;utm_campaign=headlines">reported</a>.</li>
</ul>



<h2 class="wp-block-heading">The Riff</h2>



Q: Does mass adoption matter anymore?



I actually suspect that MegaETH and all the other 100k hopefuls might be right.



Games are the most obvious example. We need games that are entirely onchain. Otherwise, Web3 gaming is a poor and clunky imitation of games that already exist. But it’s difficult to do with the current throughput challenges, especially at scale.



Crypto is probably hitting its limits in terms of the payments narratives. Chain abstraction — tucking away the blockchain underneath slick UX — will likely get us further.&nbsp;



But the true final form seemingly involves a feeling of boundlessness when it comes to crypto app development.&nbsp;



So, mass adoption might matter, but there’s more important things to achieve before that.



— David Canellis



Yes.&nbsp;



That’s still the light at the end of the crypto tunnel, and the goal may be lofty —&nbsp;but it’s reachable.&nbsp;



Most of the conversations I have with folks end up segwaying into mass adoption and either the projects they’re eyeing that have potential, or what they think mass adoption means for crypto.&nbsp;



Like I said: it’s a lofty goal. But it’s an achievable one. Perhaps the parameters just need to be narrowed so that it feels like it’s achievable or that we can treat it as a little runway for the larger endgame.&nbsp;



But it’s possible —&nbsp;and it still matters. Dream big, right?



— Katherine Ross



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<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forward-guidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/supply-shock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Binance

Is mass adoption still crypto’s most important goal?

Donovan Choy

The growing negative sentiment around crypto’s current infrastructural bloat and absence of consumer applications is reaching a fever pitch.



It’s such a familiar talking point across social media and podcasts that it has largely become a consensus view. Prior cycles saw the innovation of smart contract-enabled blockchains, ICOs, DeFi, layer-2s and NFTs, but the bulk of the present cycle’s new tools are memecoins and increasingly redundant infrastructure.&nbsp;



By <a href="https://link.mail.beehiiv.com/ss/c/u001.H7dYcmAjREG3T9dvKDC1JEkeMtdIIZxIyVGNDcU8vHrxnlJKXdLDk6b61u0gi-8DqlI_NnKpE69rxzaNRKICyupR5hFFZ-vJ7K0U0egc8O7HDpaNawrUJOumYEp4Ek7fomkb8zlaw3mwxkc74wVHzFu2-ZmeYpSCuaQG-bCisin09FTJk2DUWnE5bhShhVibjCVpstReSSmjtZnfrKYU7S6r0DKiW94zM8zoBzZrEHChFRT69-xtbFkYNwRvfmOvUCrj6T8K-TGP0CRpgTSdRg/48w/Ol231DUbS7KSPQHcxNkHyw/h9/h001.MYU-1p94bInw9-hrOfbZ2F0OO-rXbX3fHSDDLWLRO3w">L2Beat’s</a> count, there are already 71 live L2s, with another 82 incoming. And that’s not even counting layer-3s. Why so many? The most obvious explanation is that it’s profitable to launch one.



In an industry where investors are still scrambling to figure out methods of “fundamental” valuation, the standard way to value a new upcoming L2 is to do a comparative analysis — or “comps” — to the biggest L2s to determine its potential value. The general idea is that since the largest have amassed multibillion dollar valuations, newer L2s riding that market narrative should at least command a sizable fraction too.



It’s testament to perhaps one of crypto’s most successful investing themes, the “<a href="https://blockworks.co/podcast/empire/a5e15ff2-24ef-11ed-8d82-e3f2693c2a08">Fat Protocol Thesis</a>.” Written by Union Square Ventures’ Joel Monegro in 2016, the thesis <a href="https://www.usv.com/writing/2016/08/fat-protocols/">argues</a> that value accrual to the infrastructural layer of Web3 will amass the greatest value, in stark contrast to Web2 where value has leaked from the TCP/IP/SMTP protocol layers into the walled gardens of Big Tech.



That idea has played out for the most part; of the top 30 crypto tokens by market capitalization today, 18 are L1s or L2s.



And thanks to Rollup-as-a-Service (RaaS) providers like Conduit and Caldera, launching a <a href="https://blockworks.co/tag/rollups">rollup</a> chain today has never been easier. The result is a jungle of almost identical rollups competing for mercenary capital.



Conduit Founder Andrew Huang claims his company’s focus is on projects with “unique differentiation from day one.”



“I don’t disagree that there are copy and paste L2s with little differentiation creating user fatigue between rollups,” Huang told Blockworks.



Market participants may be finally expressing their rejection of the rollup meta. For instance, the hyped <a href="https://blockworks.co/tag/blast">Blast</a> L2 launched its token at a $2.7 billion FDV, falling severely short of market expectations. It has since cratered to just over $1 billion.



Read more: <a href="https://blockworks.co/news/blast-ethereum-rollup-hacked">Blast incentives aim to attract strong devs, as value leaks</a>



There’s more than outsized marketing plays behind the rollup proliferation story. For most application builders on a chain, cost-minimization is also a driving factor.



“We’re seeing a pattern of more rollup deployment because as dapps become popular, the ‘rent’ they pay to the L1/L2 becomes prohibitively expensive,” Huang said. “Chains like Base receive $50 millions in fees but dapps don’t receive a cent.”



Launch your own app-specific rollup, however, and dapps capture that revenue. “It’s a perfectly rational business decision,” he said.



<h2 class="wp-block-heading">We still need infra</h2>



Despite the infrastructural progress, there are those who argue it’s still nowhere near enough. Limitations of existing rollups, both tangible and intangible, remain — like fragmented liquidity and other points of friction in the user experience.



Read more: <a href="https://blockworks.co/news/skate-solving-l2-fragmentation">Skate takes an app-centric approach to L2 fragmentation</a>



Ethereum&#8217;s rollup-centric vision is exacerbating the situation, Caldera CEO Matt Katz told Blockworks, “with potentially tens of thousands more in the future.”



“These rollups are isolated and struggle to communicate with each other,” Katz said, noting that connecting via&nbsp; Ethereum mainnet is slow and expensive. “There needs to be a more efficient way.”



In Katz’ view, apps and infrastructure have to work together. “It’s a mistake to think of it as a zero-sum game,” he said.



Another area where infrastructural development is still lacking is interoperability, which extends beyond cross-chain bridges. This is sometimes referred to as “chain abstraction”, a broad design philosophy that aims to remove all the inconveniences of cross-chain movements for the average onchain user.



Read more: <a href="https://blockworks.co/news/if-we-dont-make-crypto-invisible-it-will-never-reach-the-mainstream">If we don’t make crypto invisible, it will never reach the mainstream</a>



Shared settlement bridges like <a href="https://blockworks.co/podcast/lightspeed/e14b89fa-e5f0-11ee-94eb-d754c5abecb8">Polygon’s AggLayer</a> and <a href="https://blockworks.co/news/zk-sync-elastic-chain-rebrand-seeks-to-carve-out-scaling-niche">Zksync’s Elastic Chain</a> will help, according to Wei Dai research partner at 1kx.



“With better interoperability infrastructure, there&#8217;ll be less of a need to rely on external facilitators for high risk cross-chain transfers,” Dai told Blockworks. “Shared sequencers can guarantee atomic swap transactions across rollup chains, which is a huge user experience improvement,” he said.&nbsp;



Yes, some areas of infrastructure are overfunded and many will fail, Dai said. “But there are also underfunded areas such as AVS tooling and interoperability layers that are very much lacking,” he added.



Dismissing infrastructural build out may be premature, the thinking goes. After all, the value of infrastructural development is often not immediately obvious. Many of today’s cherished consumer innovations are largely emergent and unplanned outcomes, resulting from the painstaking work of piecemeal improvements in infrastructure over decades.



Netflix, for instance, was a mail-order movie rental business for ten years before broadband internet availability enabled quality on-demand streaming at scale today.



<h2 class="wp-block-heading">Consumer apps: Just do it</h2>



So is the infrastructure ready for consumer app builders? <a href="https://blockworks.co/tag/vitalik-buterin">Vitalik Buterin</a>, for one, <a href="https://vitalik.eth.limo/general/2024/03/28/blobs.html">believes</a> developers “no longer have any excuse.”&nbsp;



“Up until a couple of years ago, we were setting ourselves a low standard, building applications that were clearly not usable at scale, as long as they worked as prototypes and were reasonably decentralized,” he <a href="https://vitalik.eth.limo/general/2024/03/28/blobs.html">wrote</a> in a May blog post, “Today, we have all the tools we&#8217;ll need, and indeed most of the tools we&#8217;ll ever have, to build applications that are simultaneously cypherpunk and user-friendly.”



Venture funds may already be catching on to the valuation trap. In the second quarter this year, the share of crypto infrastructural investment has fallen to <a href="https://www.galaxy.com/insights/research/crypto-and-blockchain-venture-capital-q2-2024/">15%</a> — down from <a href="https://www.galaxy.com/insights/research/crypto-and-blockchain-venture-capital-q1-2024/">24%</a> quarter-over-quarter, according to Galaxy Research.



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1100" height="598" src="https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-1.jpeg" alt="share of crypto vc deal count by category - pie chart" class="wp-image-90612" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-1.jpeg?w=1100 1100w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-1.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-1.jpeg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-1.jpeg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-1.jpeg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-1.jpeg?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-1.jpeg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2024/08/image-1.jpeg?w=80 80w" sizes="auto, (max-width: 1100px) 100vw, 1100px" /></figure>



Infrastructure builders are hard at work, but it’s not like consumer app builders are asleep at the wheel.



Seed Club, a venture fund organized as a DAO that runs consumer crypto-focused accelerators saw 350 project applications in its last accelerator, according to Josh Cornelius, Partner at Seed Club.



“Historically, we haven&#8217;t been able to build great consumer products cheaply on the blockchain and bring them to market easily until the last six months,” Cornelius told Blockworks.



He attributes the success of <a href="https://blockworks.co/tag/meme-coins">memecoins</a> and protocols like <a href="https://blockworks.co/tag/farcaster">Farcaster</a> to the growth of abundant and cheap blockspace and developments like embedded wallet technology.



Why, then, haven’t consumer applications taken off? For Cornelius, one big sticking point that remains is marketing — “the sociocultural side of things.”



“The hardest challenge for consumer builders is getting users to understand the novel, differentiated experiences that crypto and blockchains are bringing,” Cornelius said.



Old go-to-market strategies won’t cut it anymore.



“We need founders who are great brand builders plugged in culturally outside of crypto, and can just go tell the stories of what&#8217;s happening here in accessible and culturally-relevant ways,” he said.



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<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forward-guidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/supply-shock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Infrastructure

Crypto’s infrastructure bloat — are we building too much?

Bart Hillerich

In the rapidly evolving world of blockchain gaming and decentralized applications, the significance of a reliable and robust infrastructure cannot be overemphasized. As developers aim to scale, enhance efficiency, and safeguard users, integrating powerful tools becomes paramount.&nbsp;



In this context, we delve into how Altura, a prominent platform for blockchain game developers, revolutionized its Web3 gaming ecosystem by collaborating with <a href="https://www.quicknode.com/?utm_term=quicknode&amp;utm_campaign=Brand&amp;utm_source=google&amp;utm_medium=cpc&amp;hsa_acc=1365030395&amp;hsa_cam=20244916698&amp;hsa_grp=150357053496&amp;hsa_ad=617804978340&amp;hsa_src=g&amp;hsa_tgt=kwd-972169075647&amp;hsa_kw=quicknode&amp;hsa_mt=e&amp;hsa_net=adwords&amp;hsa_ver=3&amp;gad=1&amp;gclid=Cj0KCQjw9fqnBhDSARIsAHlcQYQ_QWHvemzpk-zLhXhd_AM1LGuv1Ii7P7dk99NkqGPO-Xu-CcV7qV8aArSyEALw_wcB" target="_blank" rel="noreferrer noopener">QuickNode</a>. Furthermore, we&#8217;ll explore how DappRadar, the global dApp store, amplifies its real-time analytics capabilities with QuickNode&#8217;s robust infrastructure, ensuring both operational excellence and user safety in the face of prevalent scams.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">Altura</h2>



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1200" height="630" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image-1.png" alt="Altura integrates QuickNode to get more reliable blockchain infrastructure performance." class="wp-image-67704" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image-1.png?w=1200 1200w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image-1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image-1.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image-1.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image-1.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image-1.png?w=80 80w" sizes="auto, (max-width: 1200px) 100vw, 1200px" /><figcaption class="wp-element-caption">Source: <a href="https://www.alturanft.com/ogimg.png" target="_blank" rel="noreferrer noopener">Altura</a></figcaption></figure>



<a href="https://www.alturanft.com/" target="_blank" rel="noreferrer noopener">Altura</a>, a platform assisting blockchain game developers to integrate Web3 into their games, partnered with QuickNode to fortify its Web3 gaming ecosystem. Altura’s partnership with QuickNode has addressed past infrastructure inconsistencies, enhanced operational efficiency, and empowered them to tap into historical blockchain data using Archival Nodes.



<h3 class="wp-block-heading">Shaking off reliability issues</h3>



Before connecting with QuickNode, Altura struggled with its previous Web3 providers, experiencing frequent downtimes and shaky support. After a couple of misses with other providers, they turned to QuickNode because of its reputation for being reliable. Making the switch, Altura found what they were missing: reliability and a smooth ride.



With QuickNode on board, Altura dove deep into the available. They started using the Archival Node, a treasure chest of old blockchain data. Then came <a href="https://www.quicknode.com/quickalerts" target="_blank" rel="noreferrer noopener">QuickAlerts</a>, a nifty tool letting developers keep tabs on stuff like when NFTs are sold, resulting in an augmented marketplace indexer and easier new chain integration. Thanks to these tools, Altura&#8217;s platform became more efficient and user-friendly. QuickNode gave them the magic touch to level up in the blockchain gaming scene!



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“I can attest to both the user-friendly nature and the innovative techniques employed by QuickNode. However, the crux of any product’s effectiveness lies in its reliability. In my experience, among all the available products in the market, QuickNode is the singular entity that satisfactorily meets this essential requirement.”
<cite>Abdullah Rangoonwala, Head of Engineering at Altura</cite></blockquote>



<h2 class="wp-block-heading">DappRadar</h2>



<figure class="wp-block-image is-resized"><img loading="lazy" decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image.png" alt="DappRadar leverages QuickNode to protect users from blockchain scams." class="wp-image-67703" style="width:840px;height:473px" width="840" height="473" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/09/image.png?w=80 80w" sizes="auto, (max-width: 840px) 100vw, 840px" /><figcaption class="wp-element-caption">Source: <a href="https://dappradar.com/">DappRadar</a></figcaption></figure>



<a href="https://dappradar.com/" target="_blank" rel="noreferrer noopener">DappRadar</a> is the world’s dApp (decentralized application) store, serving as the starting point for millions of users as they initiate the discovery of Dapps across all product categories and blockchains. QuickNode’s robust infrastructure offers raw blockchain data, with instant access to archive nodes, tracking patterns, and other features; it provides the foundation needed for DappRadar’s real-time analytics tools to function and scale its data analytics capabilities across multiple chains.



<h3 class="wp-block-heading">Shining a light on bad actors</h3>



In an industry where scams are prevalent, maintaining user safety is essential for a platform like DappRadar that aggregates dApps globally. Every day, hundreds of smart contracts pop up; many are not trustworthy. By leveraging Quicknode, DappRadar taps into over 300,000 listed smart contracts, alerting its users if a deal is too good to be true. Thanks to this, developers can help users avoid sneaky scams lurking in the shadows and DappRadar can much easier maintain its reputation as a safe, trustworthy solution for locating dApps.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“When we started DappRadar two years ago, we chose QuickNode instead of running our own node. Saved us time and money!”
<cite>Skirmantas Januškas, Co-founder of DappRadar</cite></blockquote>



<h2 class="wp-block-heading">QuickNode&#8217;s crucial role in shaping the future of Web3</h2>



In the blockchain sphere, having a resilient and efficient infrastructure is not just about enhancing operational capacities; it&#8217;s about ensuring user safety and providing unparalleled experiences.&nbsp;



Altura&#8217;s transformation and DappRadar&#8217;s unwavering commitment to user safety are testaments to the indispensable role that QuickNode plays in fortifying the Web3 domain. By addressing the intrinsic needs of the decentralized world, QuickNode is setting a gold standard, helping renowned Web3 applications navigate challenges and scale new heights.



To get started implementing QuickNode into your endeavors, check out <a href="https://www.quicknode.com/?utm_term=quicknode&amp;utm_campaign=Brand&amp;utm_source=google&amp;utm_medium=cpc&amp;hsa_acc=1365030395&amp;hsa_cam=20244916698&amp;hsa_grp=150357053496&amp;hsa_ad=617931270212&amp;hsa_src=g&amp;hsa_tgt=kwd-972169075647&amp;hsa_kw=quicknode&amp;hsa_mt=e&amp;hsa_net=adwords&amp;hsa_ver=3&amp;gad=1&amp;gclid=CjwKCAjwo9unBhBTEiwAipC1181Cbw-SH0WRLDWk__hpugprn1pVnPeIQlvP32ezTSdY1dVqzyHiyxoC1YUQAvD_BwE" target="_blank" rel="noreferrer noopener">their website</a>. To stay on top of their latest updates, be sure to follow the team on <a href="https://twitter.com/quicknode" target="_blank" rel="noreferrer noopener">X</a> and join their <a href="https://discord.gg/quicknode" target="_blank" rel="noreferrer noopener">Discord server</a>.



This content is sponsored by <a href="https://www.quicknode.com/?utm_term=quicknode&amp;utm_campaign=Brand&amp;utm_source=google&amp;utm_medium=cpc&amp;hsa_acc=1365030395&amp;hsa_cam=20244916698&amp;hsa_grp=150357053496&amp;hsa_ad=617931270212&amp;hsa_src=g&amp;hsa_tgt=kwd-972169075647&amp;hsa_kw=quicknode&amp;hsa_mt=e&amp;hsa_net=adwords&amp;hsa_ver=3&amp;gad=1&amp;gclid=CjwKCAjwo9unBhBTEiwAipC1181Cbw-SH0WRLDWk__hpugprn1pVnPeIQlvP32ezTSdY1dVqzyHiyxoC1YUQAvD_BwE" target="_blank" rel="noreferrer noopener">QuickNode</a>.



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<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



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blockchain

The secret sauce behind Web3’s premier applications

Shalini Nagarajan

EigenLayer, a restaking protocol that aims to help scale Ethereum, has raised $50 million in a Series A round led by Blockchain Capital.



Other investors in the round include Electric Capital, Polychain Capital, Hack VC, Finality Capital and Coinbase Ventures.&nbsp;



The protocol’s fundraising round is noteworthy given that venture capital funding for crypto startups <a href="https://blockworks.co/news/funding-wrap-venture-funding-down-but-not-out">slowed</a> significantly during the crypto bear market. It previously raised a $14.5 million seed round last year led by Polychain Capital and Ethereal Ventures.&nbsp;



EigenLayer seeks to extend crypto-economic security to applications being built on the Ethereum network through restaking. Fragmented security is seen as one of the key issues within the blockchain ecosystem, meaning applications on Ethereum are responsible for generating their own trust mechanisms.&nbsp;



Founder Sreeram Kannan, who has been an associate professor of Artificial Intelligence and blockchain applications at the University of Washington for more than 8 years, said the mission of EigenLabs is to build protocols and infrastructure that boosts open innovation.



“One of the central bottlenecks to innovation in today’s crypto ecosystem is the requirement for projects to bootstrap trust, or crypto-economic security,” he said in a <a href="https://twitter.com/eigenlayer/status/1640755205443829760" target="_blank" rel="noreferrer noopener">statement</a>. By contrast, EigenLayer would allow developers to become consumers of trust generated by staked ether, according to its <a href="https://docs.eigenlayer.xyz/whitepaper.pdf" target="_blank" rel="noreferrer noopener">white paper</a>.



Kannan told <a href="https://fortune.com/crypto/2023/03/28/eigenlabs-eigenlayer-50m-funding-round-blockchain-capital-infrastructure/" target="_blank" rel="noreferrer noopener">Fortune</a> that blockchain infrastructure is currently blocked from supporting big ideas like Uber or social networks because it’s just not ready yet. And EigenLayer could be a fix for that.



Speaking to Blockworks’ <a href="https://youtu.be/O-uzBSevklk?t=1158" target="_blank" rel="noreferrer noopener">0xResearch podcast</a> in January, Kannan said that EigenLayer will allow staked ether to be used in a variety of cross-chain contexts.



“You can think of EigenLayer as enhancing the expressivity and flexibility of what the Ethereum trust network can do,” he said.



The protocol’s process of restaking, in which Ethereum’s security is redirected to alternative middleware, allows blockchain services to rely on itself for security rather than on the value of their own tokens. It essentially gives users an opt-in function that grants EigenLayer enforcement rights on their staked ETH, which can then be applied to other applications.



Viktor Bunin, a protocol specialist at Coinbase and an angel investor who participated in EigenLayer’s seed round, <a href="https://viktorbunin.medium.com/investing-in-eigenlayer-1020608cd69f" target="_blank" rel="noreferrer noopener">wrote</a> about why he is particularly interested in the startup.



“Sreeram and team are tackling an incredibly difficult problem, but one that has the potential for an enormous amount of impact,” he said. “There’s tens of billions of dollars of staked ETH. In the future there will be trillions. Making this capital useful will be a journey that can place crypto as an industry on a better path.”



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<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forward-guidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/supply-shock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

EigenLayer

EigenLayer Lines Up $50M In Bear Market Fundraise

Bessie Liu

Crypto infrastructure companies scored significant funding this week.&nbsp;



Among them was Blockstream, which landed $125 million in a convertible note from London-based Kingsway Capital, with participation from bitcoin-focused Fulgur Ventures.&nbsp;The <a href="https://blockworks.co/news/fundraising-wrap-over-800m-in-investments-poured-into-crypto-this-week">overall infrastructure trend isn&#8217;t necessarily new</a>, but such efforts do appear to be escalating. 



The latest capital haul <a href="https://blockworks.co/news/bitcoin-infrastructure-firm-blockstream-reaches-unicorn-status-with-3-2b-valuation">follows the firm’s Series B in August 2021</a>, when the company procured $210 million from investors to expand mining facilities and acquire Spondoolies, a crypto mining gear startup.



Erik Svenson, Blockstream’s president and chief financial officer, said in a statement that the fundraise allows the company to “accelerate” its year-over-year revenue growth and “build infrastructure for the future Bitcoin economy.”



Added Svenson: “We remain focused on reducing risk for institutional bitcoin miners and enabling enterprise users to build high-value use cases on the most secure, robust, and scalable blockchain in the world — Bitcoin.” 



Another infrastructure company that corralled funding this week was QuickNode. The end-to-end development platform <a href="https://www.theblock.co/post/205028/quicknode-reaches-800-million-valuation-in-series-b-round" target="_blank" rel="noreferrer noopener">closed</a> a $60 million Series B led by 10T holdings. Other investors who participated in the round include Tiger Global, Seven Seven Six, Protocol Labs and QED.&nbsp;



The latest funding brings QuickNode’s total valuation to $800 million, and will be used to grow the company’s international presence.



“The long-term health and success of Web3 are dependent on scalability, accessibility, and interoperability,” ​​said Alexis Ohanian, founder of Seven Seven Six, which also invested in the company’s seed round.



”[QuickNode’s] foundational technology and platform is building not only to meet the current needs of top Web3-native companies and flagship global brands but also those of the future decentralized web,” he said.



In a smaller fundraising effort, Tholos, an MPC wallet platform — similar to Fireblocks — landed pre-seed funding of $1.5 million.



The round was led by four crypto-native venture capitalists, including North Island Ventures, Lattice, Dispersion Capital and Chainforest. A handful of angel investors also participated, Abraham Litwin-Logan, the founder of Tholos, told Blockworks.



Tholos’ team currently consists of the co-founders, a full stack engineer, a mobile engineer and the head of product and design, as well as two part-time senior back-end engineers. But additional hiring, enabled by the cash infusion, is already under way, according to the team.



“On the cryptography side of things — we’ve partnered with a multi-party computation cryptography team in Israel, which is made up of three cryptographers,” Litwin-Logan said, adding that the remaining cash would be used for product development and testing before it goes onto the market.



Other notable fundraises this week include:



<ul class="wp-block-list">
<li>Spatial Labs <a href="https://www.theblock.co/post/205813/spatial-labs-iddris-sandu-seed-funding" target="_blank" rel="noreferrer noopener">lands</a> $10 million from Blockchain Capital, with participation from Marcy Venture Partners, a firm co-founded by Jay-Z.&nbsp;</li>



<li>Gemba, a software developer for virtual reality training, secures $18 million from Parkway Venture Capital, bringing its valuation to $60 million.&nbsp;</li>



<li>London-based blockchain infrastructure company Calimero Network closes an $8.5 million seed round led by Khosla Ventures, Lyrik Ventures and NEAR Foundation.</li>
</ul>



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Blockstream

Funding Roundup: Crypto Infrastructure All the Rage

<div id="highlights-block_632d78358acb9" class="highlights">
 <ul>
 <li>Low bitcoin prices and rising energy costs have hurt mining companies</li>
 <li>Daily revenue for bitcoin miners has fallen 70% since the peak of November 2021, Arcana Research data showed</li>
 </ul>
 
</div>



Crypto mining data center operator Compute North filed for bankruptcy in Texas, marking the latest victim of the bear market environment marred by a steep drop in bitcoin prices and rising power costs.



The <a href="https://www.scribd.com/document/596161089/178148591946#from_embed" target="_blank" rel="noreferrer noopener">petition</a> was filed on Thursday in the Southern District of Texas US bankruptcy court.



According to the filing, the Minnesota-based firm owes as much as $500 million to a minimum of 200 creditors. Its assets are worth between $100 million to $500 million.&nbsp;



Under its estimation of available funds, Compute North stated that it would have no capital to distribute to unsecured creditors after payment of administrative expenses.&nbsp;



Compute North began in 2017 as a crypto mining firm, but changed its focus to providing co-location hosting services in 2018.&nbsp; In March, it grew to 100 employees and in April, it launched a 300-megawatt data center in Granbury, Texas, its website shows.



The firm last raised <a href="https://www.crunchbase.com/organization/compute-north" target="_blank" rel="noreferrer noopener">$385 million</a> in debt financing in February, according to Crunchbase data. Mercuria, National Grid Partners and Generate Capital are among its investors.&nbsp;



Faltering bitcoin prices and increasing power costs have hurt crypto miners’ profitability, with many <a href="https://cms.blockworks.co/the-days-of-lucrative-bitcoin-mining-at-home-are-over/" target="_blank" rel="noreferrer noopener">at-home miners</a> who once minted money from their own garages finding they’re now struggling.&nbsp;



<a href="https://arcane.no/research/bitcoin-mining-profitability-falls-to-2020-levels?utm_source=substack&amp;utm_medium=email" target="_blank" rel="noreferrer noopener">Arcane Research</a> noted that daily revenue for bitcoin miners fell over 10% in the last week, generating $17.9 million per day — the lowest level since November 2020. That’s down from revenues of $62 million a day at the peak of the crypto bull market in November 2021.



Delays caused by Compute North’s energy provider prevented one of its biggest clients, Marathon Digital, from activating its mining machines for months, earlier this year. Marathon held about <a href="https://ir.marathondh.com/news-events/press-releases/detail/1292/marathon-digital-holdings-reports-second-quarter-2022" target="_blank" rel="noreferrer noopener">40,000 mining machines</a> in the firm’s West Texas facility, which had a 280-megawatt bitcoin mining facility.



Compute North and Marathon Digital didn’t return Blockworks’ request for comment by press time.



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bankruptcy

Compute North’s Business Goes South

Ben Strack

<div id="highlights-block_63039df5834c1" class="highlights">
 <ul>
 <li>“The interconnectivity that [the metaverse] enables will likely have a transformative impact across industries,” fund co-manager says</li>
 <li>Invesco launched two crypto-related ETFs in the US last October</li>
 </ul>
 
</div>



Asset management giant Invesco has launched a metaverse fund as it sees a particularly large opportunity in companies developing the infrastructure required for the space to reach its true potential.



The actively managed fund will invest in companies of all sizes across the US, Asia and Europe and will be available to investors in 14 European countries.



Tony Roberts and James McDermottroe, members of Invesco’s UK-based Asia and emerging markets equities team, will co-manage the fund, the firm revealed Monday.&nbsp;



Roberts cited <a href="https://www.pwc.com/id/en/media-centre/press-release/2020/english/virtual-and-augmented-reality-could-deliver-a-p1-4trillion-boost.html" target="_blank" rel="noreferrer noopener">estimates from PwC</a> in 2020 that virtual and augmented reality could deliver a £1.4 trillion boost to the global economy by 2030.



“While the metaverse’s applications to entertainment are increasingly well-understood, the interconnectivity that it enables will likely have a transformative impact across industries as diverse as healthcare, logistics, education and sport,” Roberts said in a statement. “We will seek to capitalize on these opportunities through a highly selective, valuation-conscious approach.”&nbsp;&nbsp;&nbsp;



The fund focuses on seven areas, one of which is blockchain. It also is set to invest in devices that offer access to the metaverse, tools allowing interoperability and services that will facilitate the digitization of the real economy.



It is available to investors in the United Kingdom, Germany, France, Netherlands, Finland, Czech, Sweden, Austria, Belgium, Italy, Luxembourg, Norway, Slovakia and Spain, a spokesperson told Blockworks.



<h3 class="wp-block-heading">Invesco funds with exposure to blockchain</h3>



Invesco managed roughly $1.4 trillion in assets as of June 30. The fund group partnered with Elwood Asset Management in March 2019 <a href="https://www.lseg.com/markets-products-and-services/our-markets/london-stock-exchange/equities-markets/raising-equity-finance/market-open-ceremony/london-stock-exchange-welcomes-invesco-and-elwood-asset-management-celebrating-launch-invesco-elwood-global-blockchain-ucits-etf" target="_blank" rel="noreferrer noopener">to launch a blockchain ETF</a> on the London Stock Exchange.  



The company revealed in September 2021 that it was <a href="https://cms.blockworks.co/invesco-and-galaxy-team-to-build-suite-of-crypto-etfs/" target="_blank" rel="noreferrer noopener">teaming up with Galaxy Digital</a> to create a suite of physically backed digital assets ETFs. It brought to market its Invesco Alerian Galaxy Crypto Economy ETF (SATO) and its Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF the following month. The funds have less than $10 million in assets under management combined. 



Rene Reyna, the firm’s head of thematic and specialty ETF strategy, told Blockworks in an email earlier this month that digital assets remains an emerging investment theme requiring education for many investors.&nbsp;



“We are committed to the digital asset space and will continue to monitor investor demand and product development opportunities,” she said.



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ETFs

Invesco Offers Investors Exposure to Metaverse

<div id="highlights-block_62cd2335d4261" class="highlights">
 <ul>
 <li>The $2 billion target valuation is said to be much higher than Mysten’s Series A round, according to The Information</li>
 <li>But that level could change if equity investors get additional rights</li>
 </ul>
 
</div>



<a href="https://cms.blockworks.co/tag/mysten-labs/" target="_blank" rel="noreferrer noopener">Mysten Labs</a>, a startup focused on Web3 and blockchain infrastructure, is reportedly in talks to raise a Series B round at a $2 billion valuation.



<a href="https://www.theinformation.com/articles/startup-founded-by-former-meta-crypto-execs-seeks-2-billion-valuation" target="_blank" rel="noreferrer noopener">The Information</a> reported on Monday that the startup is currently in discussions to raise at least $200 million in the round led by FTX Ventures, the venture capital arm of <a href="https://cms.blockworks.co/tag/FTX/" target="_blank" rel="noreferrer noopener">cryptocurrency exchange FTX</a>. It’s already said to have raised $140 million by investors so far.



Mysten’s $2 billion target valuation is much higher than its previous round, two people familiar with the matter told the outlet. This is noteworthy given that some companies have recently been grappling with <a href="https://cms.blockworks.co/tag/firing/" target="_blank" rel="noreferrer noopener">layoffs</a>, down rounds and uncertainty. 



But that target could reportedly change depending on whether equity investors secure added rights to buy tokens compatible with Mysten’s blockchains, and the strike price to exercise those options.



The startup raised $36 million in a Series A fundraising round led by <a href="https://a16z.com/2021/12/06/investing-in-mysten-labs/" target="_blank" rel="noreferrer noopener">Andreesen Horowitz</a> in December, according to a <a href="https://medium.com/mysten-labs/introducing-mysten-labs-building-foundational-infra-for-web3-7e5ec3df1ccb" target="_blank" rel="noreferrer noopener">blog</a> posted by the firm, but the valuation of that round isn’t clear. Other backers include Lightspeed, Coinbase Ventures, Electric Capital, Standard Crypto, NFX and Slow Ventures.



Founded in 2021, Mysten is focused on building blockchain infrastructure to enable decentralized applications, including crypto gaming. Its co-founders — Evan Chang, Sam Blackshear, Adeniyi Abiodun and George Danezis — are former employees at Novi Research, Meta’s cryptocurrency research and development team, where they helped develop the <a href="https://techmonitor.ai/technology/emerging-technology/facebook-diem-stablecoin-cryptocurrency" target="_blank" rel="noreferrer noopener">Diem stablecoin</a>. 



<a href="https://cms.blockworks.co/four-former-facebook-developers-launch-web3-startup/" target="_blank" rel="noreferrer noopener">Blockworks reported</a> in February that the one-time Big Tech personnel felt restricted at their previous employer and wanted the liberty to exercise their own vision.



Mysten didn’t return Blockworks’ request for comment by press time.



Investor anxiety within the crypto industry has ballooned as a result of plunging asset prices and the recent insolvencies of <a href="https://cms.blockworks.co/3ac-files-for-bankruptcy-as-co-founders-location-unknown/" target="_blank" rel="noreferrer noopener">Three Arrows Capital</a> and <a href="https://cms.blockworks.co/voyager-files-for-bankruptcy-days-after-freezing-withdrawals/" target="_blank" rel="noreferrer noopener">Voyager Digital</a>. Despite this outward backdrop of fear, <a href="https://cms.blockworks.co/funding-roundup-despite-bear-market-money-is-still-pouring-into-crypto/" target="_blank" rel="noreferrer noopener">money is still pouring</a> into blockchain-based companies as investors seek out opportunities to capitalize on the sector-wide downturn.&nbsp;



If Mysten were to reach its fundraising goal this time around, it would suggest firm belief in not just the startup’s potential, but a turnaround for the overall crypto industry.



“In today&#8217;s bear market, you&#8217;re seeing some of the worst-case scenarios,” Daniel Tal, project lead at ICHI, told Blockworks in an interview. “From a positive side, this is the best time to build.”



“The bear market exposes these holes that we have in some of our protocols. And now we see different kinds of communities building to cover those holes and create protocols that are much more resilient,” he added.



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FTX Ventures

Startup From Ex-Meta Devs Seek $2B Valuation: Report

Garrett Harper

On today&#8217;s episode of &#8220;<a href="https://www.youtube.com/watch?v=YL0zMCth_Lw&amp;ab_channel=BlockworksCrypto">Empire</a>,&#8221; Joe Lallouz, head of Coinbase Cloud, joins Jason and Santiago to discuss how Coinbase Cloud is building the AWS of crypto.



Coinbase Cloud is building blockchain infrastructure and APIs that abstract the complexities of staking, data access, deployment and more. Joe explains the challenges of building in crypto, how Coinbase Cloud is taking on this challenge, and why developer tooling is critical for rapid innovation.



Joe Lallouz, Jason and Santiago then discuss the importance of crypto&#8217;s low switching costs, proof-of-stake systems, Lido&#8217;s staking dominance, and Coinbase&#8217;s approach to MEV. Blockchain infrastructure isn&#8217;t the hot topic on crypto Twitter, but it&#8217;s the base layer of the entire ecosystem and will soon be a primary talking point. Don&#8217;t miss this fantastic conversation to stay ahead of the blockchain infrastructure narrative!



Plus, hear more on:



<ul class="wp-block-list"><li>Crypto&#8217;s bundling and unbundling </li><li>Developer SDKs</li><li>Staking derivatives</li><li>And so much more!</li></ul>



Check out what they had to say in the video below.👇



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="The AWS Of Crypto | Joe Lallouz" width="1024" height="576" src="https://www.youtube.com/embed/YL0zMCth_Lw?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
</div></figure>



<h3 class="wp-block-heading">About the show</h3>



&#8220;Empire&#8221; is a twice-a-week show where we share the real crypto stories that aren’t heard elsewhere. On Mondays, Jason and Santiago Santos interview crypto industry movers and shakers to talk about their struggles, bold moves and tough decisions. Finish off the week with Friday&#8217;s weekly roundup episode that covers the top news and narratives of the week.



For any NPR or Guy Raz fans out there, you can think of &#8220;Empire&#8221; as a &#8220;How I Built This&#8221; for the bitcoin and crypto industry.



Subscribe to &#8220;Empire&#8221; today on&nbsp;<a href="https://podcasts.apple.com/us/podcast/empire/id1554930038" target="_blank" rel="noreferrer noopener">Apple</a>&nbsp;or&nbsp;<a href="https://open.spotify.com/show/4UTePv1CR3APdKOiosR3Iq" target="_blank" rel="noreferrer noopener">Spotify</a>. Watch episodes on&nbsp;<a href="https://www.youtube.com/channel/UCEOv-8wHvYC6mzsY2Gm5WcQ" target="_blank" rel="noreferrer noopener">YouTube</a>.



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Coinbase

Podcast: Coinbase – the AWS of Crypto | Joe Lallouz

Casey Wagner

<div id="highlights-block_62050d46d5186" class="highlights">
 <ul>
 <li>Traditional financial institutions are interested in adopting crypto technology, and infrastructure providers are having a hard time keeping up</li>
 <li>Institutions like Vanguard and State Street are already using smart contracts for settlements</li>
 </ul>
 
</div>



According to enterprise technology infrastructure provider Symbiont, Wall Street is already leaning heavily into crypto technology, and the adoption is just beginning.



Symbiont, founded in 2013, launched its first enterprise blockchain product in 2019 with Vanguard. The product allows for smart contracts to take over data normalization for Vanguard’s passive index funds, allowing for orders to be executed autonomously.



<a href="https://www.symbiont.io/" target="_blank" rel="noreferrer noopener">Symbiont</a> currently manages about $2.3 billion of Vanguard&#8217;s passive indices value through that network, Mark Smith, CEO of Symbiont, said.



“We are looking at the technology as a toolkit to solve existing problems,” said Smith.&nbsp;



“From day one, it was really a question of how do we use this technology, in an appropriate way, for regulated entities to use it in a compliant fashion.”&nbsp;



The <a href="https://cms.blockworks.co/?s=infrastructure" target="_blank" rel="noreferrer noopener">infrastructure</a> provider also partners with other big names on Wall Street, including Citigroup, Nasdaq and Franklin Templeton Investments, and hopes for more collaboration opportunities in the future, Smith said.&nbsp;



In its most recent partnership, Symbiont worked with Vanguard and State Street to bring smart contracts to traditional financial transactions.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“We&#8217;ve been at the tip of the spear from an enterprise blockchain perspective looking at blockchain smart contract technology as tools to solve real world problems in regulated financial markets,” said Smith.</blockquote>



Vanguard and State Street now use Assembly, Symbiont’s distributed ledger technology, in the margin calculation process for a live trade of a 30-day foreign exchange forward contract.



Vanguard, as a global asset manager, has many international funds, meaning Vanguard must have the available foreign currency on a certain date and time to settle those transactions. To hedge against the risk of the timeframe in which Vanguard needs to settle in a foreign currency, the firm creates forward contracts or swap contracts.



With Assembly, Vanguard and State Street, which act as the bank counterparty, can negotiate the transaction in a secure, encrypted manner through the blockchain, Smith said.



“The smart contract calculates exactly how much collateral you need based on an initial margin calculation that&#8217;s agreed upon amongst the two counterparties,” Smith said. “Historically, each side calculates margin on their own, and then they reconcile on an overnight basis or every two days manually to determine if both sides got the right margin variance calculation.”&nbsp;&nbsp;



Symbiont, and other companies in the infrastructure space, are having a hard time keeping up with growing interest in crypto technology from financial institutions, Smith said.



“Demand has actually outpaced expectation, not just from a Symbiont perspective, but I think if you look at the other market participants, they are all looking to expand,” he said. “Now the question becomes how do those entities onboard and become customers, that&#8217;s the next phase of how enterprise blockchain starts to really take hold in these applications.”



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</ul>

Bringing Blockchain Infrastructure Tech to Wall Street

<div id="highlights-block_6108617aa864b" class="highlights">
 <ul>
 <li>$1.2 trillion infrastructure deal is financed in part through stronger tax enforcement around cryptocurrencies</li>
 <li>Senator Pat Toomey released a statement Monday saying he planned to offer an amendment to fix what he called “unworkable” text in the provision</li>
 </ul>
 
</div>



A portion of the $1.2 trillion infrastructure deal currently being considered by members of Congress “poses an imminent threat” to the US crypto industry, according to a dozen blockchain associations.



The deal, which includes $550 billion of investment in US infrastructure, is financed in part through strengthening tax enforcement around cryptocurrencies, according to a<a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/07/28/fact-sheet-historic-bipartisan-infrastructure-deal/" target="_blank" rel="noreferrer noopener"> White House fact sheet</a>.



The federal government could raise $28 billion in the next 10 years through these taxes on crypto, <a href="https://www.nytimes.com/2021/07/30/us/politics/infrastructure-deal-cryptocurrency.html?campaign_id=4&amp;emc=edit_dk_20210802&amp;instance_id=36891&amp;nl=dealbook&amp;regi_id=61427258&amp;segment_id=65129&amp;te=1&amp;user_id=6ce77f080f3d64e6312881475ed3b6767f080f3d64e6312881475ed3b676" target="_blank" rel="noreferrer noopener">the New York Times reported</a>, according to an estimate by the Joint Committee on Taxation.



But a provision of the bill called “Enhancement of Information Reporting for Brokers and Digital Assets,” which offers guidance for traditional cryptocurrency exchanges to report to the IRS, puts new reporting requirements on individual players in the industry who have no way to comply, blockchain association leaders <a href="https://theblockchainassociation.org/12-regional-blockchain-associations-urge-congress-to-reject-infrastructure-bill-provision-targeting-crypto/">wrote in an open letter to Congress</a> on Friday.



“These individuals will be faced with impossible-to-fulfill reporting requirements that could thwart critical investments in our economy and communities within our states,” the letter states. “Smaller tech companies will inevitably begin to move overseas in order to avoid these unfeasible reporting requirements and continue operating.”



The portion of the bill could be interpreted to apply to people who don’t have access to the information required to be reported, Kristin Smith, executive director of the <a href="https://theblockchainassociation.org" target="_blank" rel="noreferrer noopener">Blockchain Association</a>, explained in a statement.&nbsp;



Senate Finance Chair Ron Wyden also shared concerns in several <a href="https://twitter.com/RonWyden/status/1421864061528993796" target="_blank" rel="noreferrer noopener">Twitter</a> posts on Sunday, noting that the provision to the infrastructure bill is “an attempt to apply brick and mortar rules to the internet” and does not understand how the technology works.



“This seems very rushed, and that hurried implementation could lead to unintended consequences,” Nick Du Cros, head of UK compliance and regulatory affairs at CoinShares, told Blockworks in an email. “Also, based on precedent from other countries, it is likely that some companies may respond to the legislation by simply moving all or part of their operations abroad.”



A spokesperson for Republican Sen. Rob Portman, one of the main authors of the infrastructure bill, has told media outlets that the legislative language does not force non-brokers, such as software developers and crypto miners, to comply with IRS reporting obligations.



Rather, the representative said, it clarifies that any person or entity acting as a broker by facilitating trades for clients and receiving cash must comply with standard information reporting.



<a href="https://www.nytimes.com/2021/08/02/us/politics/infrastructure-cryptocurrency.html" target="_blank" rel="noreferrer noopener">The New York Times reported</a> Monday morning that lawmakers revised the bill to further clarify the definition of a broker by removing language involving decentralized exchanges or peer-to-peer marketplaces. It instead characterizes brokers as anyone “responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”



“Yes there were concessions but the latest language can still be interpreted by [the] Treasury to cover miners, lightning nodes, and the like,” Jerry Brito, executive director of <a href="https://www.coincenter.org" target="_blank" rel="noreferrer noopener">Coin Center</a>, said in a Twitter post. “If that&#8217;s not Congress&#8217;s intent, there are easy fixes they can adopt. There&#8217;s still time.”



Jake Chervinsky, general counsel of <a href="https://compound.finance" target="_blank" rel="noreferrer noopener">Compound Labs</a>, also took to Twitter on Monday to say the crypto provision was moving in the right direction, but that he still had concerns.



“We may reach a point today (or later this week) where our fate rests in the hands of a few Senators,” he wrote, “[and] we need to light up their phones with 1,000s of calls in support.”



US Senate Banking Committee Ranking Member Pat Toomey, a Republican from Pennsylvania, released a statement Monday saying he planned to offer an amendment to fix what he called “unworkable” text in the provision.



“Congress should not rush forward with this hastily-designed tax reporting regime for cryptocurrency, especially without a full understanding of the consequences,” he said. “By including an overly broad definition of broker, the current provision sweeps in non-financial intermediaries like miners, network validators, and other service providers.”



Though Majority Leader Chuck Schumer aims to get the bill through the chamber before the Senate leaves for a month-long recess on Aug. 9, the legislation would have to go through the House of Representatives, whose members don’t return from their break until Sept. 20.



“As this bill continues to move through the Senate, we urge senators to clarify that the language doesn’t capture non-custodial entities in the digital asset ecosystem,” Smith said. “We look forward to continuing this dialogue and sincerely thank Senate offices for their engagement and attention to this issue so far.”



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