Aptos

Katherine Ross

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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



Let’s be honest: Ethereum’s not having a good time. Part of it, <a href="https://blockworks.co/news/bearish-altcoin-action-drivers">as I wrote yesterday</a>, is due to the overall lack of momentum for altcoins. There’s also just a lack of positive sentiment — which is unlike what we’re seeing for bitcoin (even if it hovers below $100,000).&nbsp;



In my conversation with Amberdata’s Greg Magadini, one part that was left out of yesterday’s edition were his thoughts on ETH.&nbsp;



“The drag on ETH, in my mind, is because the value proposition of <a href="https://blockworks.co/news/eip-1559-is-live-thanks-to-ethereums-london-hard-fork">EIP-1559</a> creating a supply burn was made invalidated, or was invalidated once everyone started building their L2s and app chains and having all the transactions process off Ethereum and settle back to Ethereum. So then you flip from a deflationary asset to an inflationary asset. That’s a fundamental reason for ETH going down,” he explained.&nbsp;



In other words, ETH’s inability to regain momentum is not directly tied to the rest of the market right now — especially not the memecoin craze.



Okay so this wasn’t my most positive intro, but I actually wanted to take more of a positive look at Ethereum right now thanks to a Galaxy <a href="https://www.galaxy.com/insights/research/big-companies-building-on-ethereum/">report</a> from Vice President of Research Christine Kim.



The report is focused on what’s being built on Ethereum and is a nice refresher — or inside look — to see how projects are using it.&nbsp;



Kim noted that over 50 non-crypto companies have built either on Ethereum or an Ethereum L2. That’s no small number, especially when you dig in and find that about 20 of them are financial institutions with 10 of those being banks.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfoPZSy0Zh3uxXWq9jApvCl1X9bx6g7ZT-FNyvh6m_MYXm_VmkNA7VpiwLJeNCuyzuJWiVhhv2jzxMz2jNXy9PWYRVAyzFZBXV6is2tj6TSLP1jCpWnO7hC29wDp468bkHCKI9dJA?key=xC-bzhA2CEmj-eUhI-akgM4r" alt=""/><figcaption class="wp-element-caption">Source: Galaxy</figcaption></figure>



The biggest use case, which should come as no surprise to loyal Empire readers, is real-world assets. That’s where you have the financial institutions building and experimenting with tokenized assets — such as money market funds (think BlackRock or Franklin Templeton) or government bonds.&nbsp;



As seen below, Ethereum more than doubles the number of RWAs issued by Ethereum L2 rollup ZKSync.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcgnceAwY89zZJHfb5uCoG4L7tjkcjKNGFV1ggp6ohC-P8EbQwDSrINyrngqvt3mAaC8xbtCdmfZx27AcK70u52aX4GzEdIkag5z8603KkxEhGyGdB6Afwc-Kkh3qGtmuAVmoslAg?key=xC-bzhA2CEmj-eUhI-akgM4r" alt=""/></figure>



Now I know that RWAs aren’t the sexiest use case for crypto — and I get it — but I think we can all agree that they show some of the promise of crypto for non-crypto natives (so long as we keep them away from the memecoins).&nbsp;



But, okay, let’s move on to another use case Galaxy found: gaming on Ethereum L2s.&nbsp;



NFTs haven’t made a comeback, which means that some of the companies that tried to get some crypto exposure through them stopped issuing them years ago. Fair enough. But Galaxy found that nowadays, there is a use case for NFTs for some non-crypto native companies and that’s gaming.&nbsp;



“What is most notable about the ongoing investment and development of NFTs by non-crypto-native companies like Atari, Lamborghini, and Lotte’s Caliverse is that they are being developed in the context of a larger on-chain gaming application,” Kim wrote.



“This highlights how the scalability gains from L2s are helping to support crypto-native use cases that require frequent on-chain interactions like gaming among major retail brands and corporations,” she continued.



There are still a lot of questions and concerns about Ethereum and where it goes from here, and that’s something I’m sure we’ll be covering again soon. But Galaxy’s report shows that we’re still seeing a lot of building happening, and it’s attracted folks outside of crypto. And that, I think, is a small positive.



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

More than 50 non-crypto native companies are building on Ethereum: Galaxy

David Canellis

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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



Unless you live under a rock, you probably heard about the Kaito token drop yesterday.&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">Base has been humming along nicely during the Kaito airdrop, topping out at 160 TPS at a median fee of $0.02 Their scaling efforts are clearly paying off <a href="https://t.co/a6UVHkJvKY">pic.twitter.com/a6UVHkJvKY</a>&mdash; Dan Smith (@smyyguy) <a href="https://twitter.com/smyyguy/status/1892585101873033380?ref_src=twsrc%5Etfw">February 20, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Vibes were pretty positive, it turns out people like to be paid to yap (and some of us — ahem, myself — are left with FOMO after not yapping to earn). But alas, I turned to two colleagues who did <a href="https://blockworks.co/news/kaito-yap-to-earn-takeover">earn KAITO for posting</a>.&nbsp;



<a href="https://blockworks.co/newsletter/lightspeed">Lightspeed’s Jack Kubinec</a> and <a href="https://blockworks.co/newsletter/thedrop">The Drop’s Kate Irwin</a> both earned roughly $200 of KAITO. Kubinec praised the project for understanding that folks didn’t want another social media site to post on to earn their yaps, and instead kept it on X — where parts of the crypto community are the strongest.&nbsp;



Kubinec was lucky in that a <a href="https://x.com/whosknave/status/1875216410391253192">thread of his went viral</a> shortly after claiming his profile on Kaito, bumping him up to one of the top yappers briefly. However, he admitted that even his short-lived CT fame didn’t prompt him to post any more than usual.



For Irwin, the question is all about longevity. We’ve been through a few hype cycles now, and admittedly when it’s good, it’s great and when it’s bad, CT kind of feels desolate. Irwin told me that it’s hard to see people still posting about yapping and caring about it in six months.



The token, however, is holding on for now. Perhaps some of that is due to some of the shaming we’ve seen over on X.



<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">you&#39;re free to do what you want with your money and also I want to publicly state that I think it&#39;s lame to celebrate immediately divesting of long term builders who are rewarding us for our contributions and using tokens to bring us in as cobuilders long term &gt; short term&mdash; jesse.base.eth (@jessepollak) <a href="https://twitter.com/jessepollak/status/1892554449668768024?ref_src=twsrc%5Etfw">February 20, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Or perhaps this is finally the project that can break the cycle and we’ve finally solved the code for SocialFi. Only time will tell I guess.



And now you know.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc3U1VGuuxlJWLf6NMwtCI9lQjgOSjDERfdn9I1hxS7-XpL3VgM1oTd83lw6HehD1qJdONZWCVItRR5TQtMsHriMcbnQl-GwL0Yww2l9mBmLvwrLKujaqqFJRn8Oxan7OpbjU1YNA?key=xC-bzhA2CEmj-eUhI-akgM4r" alt=""/><figcaption class="wp-element-caption">HYPE is up 550% since it launched at the end of November</figcaption></figure>



Maybe David Sacks is right. Memecoins are collectibles.



If that’s true, then crime season suddenly gets an element of Pokémon GO.&nbsp;



Like how you might wander through the park and catch Wigglytuffs and Psyducks, we could all frolic through Raydium and <s>buy dead rugpulls</s> collect souvenirs of all the memecoins that come and go.&nbsp;



It’s a pain that memecoins have sucked so much air out of the room and it’s made for a ton of myopic takes. The <a href="https://www.coindesk.com/tech/2025/02/21/kanye-west-self-proclaimed-nazi-who-said-coins-prey-on-fans-plans-yzy-token">supposed</a> Yeezy token launch isn’t helping, either.



So, here’s some eyebleach: Of the major coin launches in the past few months, HYPE — tied to a project of substance in Hyperliquid — is outperforming the pack with steady price action.&nbsp;



Around 60% of all perps <a href="https://defillama.com/perps/chains">volumes</a> on DEXs flows through Hyperliquid right now, which is a stat the market obviously appreciates.



MORPHO, the lending app on Ethereum and Base, is otherwise ahead by 135% since its own launch a week or so before HYPE.&nbsp;



That’s much better than BERA, PENGU and MOVE, which have lost between 24% and 38% since they started trading (BERA is staging a comeback as we speak). Morpho currently has $6.8 billion in <a href="https://dune.com/morpho/morpho-blue-dashboard">deposits</a>, up 160% in the past three months.



All well and good: Real projects might have a chance after all.&nbsp;



The best part is, if you zoom out this analysis to include coins launched just a few months earlier, in August and October, it would be FARTCOIN dominating the chart, even after its 84% retracement.



Sometimes, ignorance is bliss.



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Not all new coins are pointless pump and dumps

Jack Kubinec

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



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



The crypto-incentivized cell network provider Helium Mobile is bringing Helium network coverage to 2.3 million Mexicans via a partnership with Movistar, the country’s second largest carrier service.



Under the new plan, Movistar will pay for its subscribers to use Helium coverage where possible, and Helium hotspot operators will be rewarded with tokens. The expanded Mexico deployment hints at Helium Mobile’s broader development strategy: grow its network in new markets by partnering with existing telecommunications companies.



Helium Mobile sells <a href="https://blockworks.co/news/helium-miami-tmobile-hotspots-network-cellular">hotspot devices</a> that people can plug in to function as <a href="https://blockworks.co/news/helium-tech-for-disaster-relief">mini cell towers</a>, and it also <a href="https://blockworks.co/news/helium-mobile-introduces-free-plan">offers cellular plans</a> based on its patchwork of hotspots mixed with T-Mobile coverage in the US. Helium’s network is monetized with its Solana-based token, HNT. In addition to building a cellular network that <a href="https://blockworks.co/news/lightspeed-newsletter-helium-future-vision-depin">aims to unseat</a> legacy cellular networks, Helium Mobile has also looked to partner with them.



The company piloted an activation with Movistar, which is a subsidiary of the Spanish telecom giant Telefónica, in January 2024. The limited rollout happened in Mexico City and Oaxaca. A little over a year later, Helium is growing its number of hotspots in Mexico from 91 to 300 or more. Together, Helium Mobile and Movistar will create a hybrid system whereby subscribers’ phones will switch between the networks based on availability.&nbsp;



Helium Mobile general manager of network Mario Di Dio said partnerships like this one are advantageous for mobile virtual network operators — cell providers that do not operate their own cell towers, but functionally rent cell service from other operators — since Helium’s hotspots can provide service more cheaply. Movistar has <a href="https://www.telecoms.com/wireless-networking/telefonica-gives-up-mexico-network-but-it-s-not-an-mvno">contested</a> being labeled an MVNO, but it does pay AT&amp;T for mobile traffic in Mexico.



Helium Mobile offers a version of this in the US, and it has partnered with two of the three big mobile network operators in the US. Although these MNOs run their own cell towers, Helium Mobile can provide connectivity in cellular dead zones, which tend to emerge in indoor locations, Di Dio explained.



By growing its own cellular network while striking data offloading deals with telcos, Helium Mobile thinks it can have its cake and eat it, too. Carrier offload programs like the one in Mexico incentivize people to plug in Helium hotspots, and more hotspots make the network better for Helium’s own cell network. Helium pays T-Mobile for data when its own network can’t provide coverage.



Also as part of the partnership, Helium Mobile’s <a href="https://blockworks.co/news/helium-partners-with-dawn">decentralized physical infrastructure</a> machines will start being sold in Movistar retail stores.



“We will literally have a traditional telco company like Movistar selling DePIN miners on the shelves [in] retail stores, which to me is kind of a mind blowing achievement,” Di Dio said.



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Helium Mobile expands presence in Mexico

Casey Wagner

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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



With a new administration in the White House, 2025 is shaping up to be a big year for institutional interest in crypto.&nbsp;



“It’s here to stay,” Roger Bayston, head of digital assets at Franklin Templeton, said of digital assets during a <a href="https://blockworks.co/roundtable/2025-a-year-of-acceleration-for-institutional-crypto">Blockworks Roundtable</a> discussion on Thursday.&nbsp;



Crypto, which has now surpassed the high-yield bond market, will only start to act as a more robust and mature capital market over time, Bayston added.&nbsp;&nbsp;



His enthusiasm is something Liat Shetret, director of policy at Elliptic, has observed in other institutional players as well.&nbsp;



“In the past, we&#8217;ve talked a lot about how the global finance system is kind of made up of an assortment of band aids, like ‘stop the bleeding here,’ and we have almost this opportunity to rebuild with vision,” she added, noting that crypto infrastructure has the potential to disrupt capital markets.&nbsp;



The excitement comes as the industry continues to clock small “wins” from the Trump administration and federal agencies.&nbsp;



The SEC has started to back off Gensler-era lawsuits against <a href="https://blockworks.co/news/binance-sec-temporary-ceasefire">Binance</a> and <a href="https://blockworks.co/news/legal-pro-analyzes-coinbase-sec-ruling">Coinbase</a>, and while neither has been dismissed, it’s a level of <a href="https://blockworks.co/news/crypto-task-force-coinbase-suit">industry-agency cooperation</a> that we’ve never seen before.&nbsp;



Binance, in response to the SEC’s <a href="https://blockworks.co/news/sec-chair-nominee-crypto-past">new leadership</a>, announced yesterday that it would be restoring its fiat rails.&nbsp;



“In the past two weeks, we&#8217;ve seen very strong signals, some tangible evidence of the sea change that&#8217;s ongoing,” Christopher Blodgett, president of Binance.US, said.&nbsp;



We’re not quite through the first quarter yet, but we’ll be watching to see if this optimism continues throughout the year, and if federal regulations do start to shift in favor of the industry.



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Crypto rides the Trump optimism 

Ben Strack

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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



There’s a new stablecoin on the block.&nbsp;



Figure Markets is calling its new offering the first SEC-registered public security USD stablecoin native to a blockchain.



Called YLDS, it pays an interest rate of secured overnight financing rate (SOFR) minus 0.50%. Users can transfer the securities peer-to-peer via the Provenance blockchain using Figure Markets&#8217; self-custody wallets.



It was roughly a year ago that I caught up with Figure CEO Mike Cagney at Blockworks’ Digital Asset Summit in London. <a href="https://blockworks.co/news/figure-raises-60m-launches-dex">He told me then</a> — following a $60 million raise — that his company was working toward having a registered security alternative to stablecoins that would pay a yield. There was this <a href="https://www.sec.gov/Archives/edgar/data/1974395/000113743923001216/fccs1102023.htm">filing</a> from October 2023.



So here we are.&nbsp;



The launch comes about a month after stablecoin issuer <a href="https://blockworks.co/news/circle-hashnote-deal-tokenized-money">Circle acquired Hashnote</a>, a company that created the largest tokenized money market fund.



Circle CEO Jeremy Allaire noted the demand for market participants using yield-bearing collateral, while also being able to easily convert it to tokenized cash (referring to USDC).



Stablecoins have been called <a href="https://blockworks.co/news/stablecoins-are-cryptos-killer-app-so-far-just-not-terra">crypto’s killer app</a> and a <a href="https://blockworks.co/news/stablecoins-are-cryptos-killer-app">payments space disruptor</a>.



Andrew O’Neill, digital assets managing director at S&amp;P Global Ratings, noted in a recent report that stablecoins could lead to more TradFi-DeFi overlap — like in the case of cross-border payments, the tokenization of real-world assets (RWA) or digital bonds issuance.



Stablecoins’ market capitalization stands at nearly $222 billion; there are roughly 149 million stablecoin holders, according to rwa.xyz <a href="https://app.rwa.xyz">data</a>. Onchain RWAs amount to about $17.5 billion.&nbsp;&nbsp;&nbsp;



“The lack of a consensus about the tools that should be used to bring money natively onchain is among the main factors that hinder the development of digital bonds and RWA tokenization.”



We’re keeping an eye out for <a href="https://blockworks.co/news/congress-crypto-regulation-updates">stablecoin legislation</a> in the US, as S&amp;P Global analysts expect regulation to bolster the category’s adoption.&nbsp;



To that point, they forecast a number of users to “transition progressively” from unregulated to regulated stablecoins. So perhaps Figure is on to something.



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

A look at the new SEC-registered, yield-bearing stablecoin

Felix Jauvin

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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



January’s FOMC meeting minutes were released this week, providing plenty of fodder for monetary plumbing nerds to piece together what the Fed thinks about bank reserves and its ongoing campaign of quantitative tightening (QT).



As seen in the chart below, the QT campaign has been fraught with nuance and idiosyncratic offsetting. As QT occurred, the vast majority of it has been offset by the reverse repo facility (RRP) balance as seen by the white line below.&nbsp;



Further, this has been hiccuped by the debt ceiling debacle of 2023 and the SVB banking crisis that led to the bank term funding program’s creation.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXddtnv8macN6P0Q-gp_AShjmDiNmg5MwT_7Q3BlFp_9UKPa0s1zsAqid9l9kKKp_aO9Gm4QMg1_aBD5MhnbRluRAwFhjtEtiw1xVMbx_eZTJ4_KN9TNhM8HpwC7rkfAnOGNUjC0?key=LlXg5u-Xi5nyRcHrMP7lAND7" alt=""/></figure>



All that said, we’re getting close to the end goal of QT in terms of the bank reserve levels the Fed is targeting. There are a lot of ways to measure this, but a simple shorthand is that the Fed has been targeting an ideal reserve level of $3 trillion that includes both bank reserves and the RRP. Currently, that nets us at $3.27 trillion.&nbsp;



Given this context, there’s been a lot of talk about when the Fed might end QT altogether. And with the release of this week’s FOMC meeting minutes, we received our first hint:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcYeVMdILV51LM_KGC1QMOdXTu7hqqauMqyvniROyhBUHJ4lvKowdAm9x-A_2VHWRv5LaQ9XyiCytM69ifkdo04nOc32L_ww3j9SaSq3_OAvGmVok0iPQvG9QNKYHTx-ta9Khhj3g?key=LlXg5u-Xi5nyRcHrMP7lAND7" alt=""/></figure>



Now, there’s a lot to unpack here as it contains a lot of nuances. Let’s run through them:



<ol class="wp-block-list">
<li>The Fed is re-thinking the duration of the bonds it holds. Ideally, it wants to run back to a level of duration that was pre-2008 and pre-QE. That is what they meant by saying “appropriate to structure purchases in a way that moved the maturity composition of the SOMA portfolio closer to that of the outstanding stock of Treasury debt&#8230;”</li>
</ol>



As of right now, that SOMA portfolio is composed of 5% in T-bills. However, treasury issuance is at 22.4%.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf76p2b-zTOd2SvQk5f8sawkWdTG3_ymMYNjU56dk5PjgTl_OX3_BFjlDlhBLXsggHpGgXCUUVL1r_UghLWTFnCmKFBnlj9OZ01woVPjrb4gkNHLh1TWR-QmqeSW5h4rAClfLKM?key=LlXg5u-Xi5nyRcHrMP7lAND7" alt=""/></figure>



<ol start="2" class="wp-block-list">
<li>The Fed is concerned about the implications of the debt ceiling and the ensuing treasury general account (TGA) drawdown, as well as the following TGA rebuild once the debt ceiling is resolved. Simply put, for the TGA to be rebuilt back to the level it was before the debt ceiling, Treasury needs to issue a ton of T-bills. In 2023 it was able to do this easily because the RRP was filled to the brim and acted as a dampener for it. Now, sitting at $73 million, there’s no buffer. As such, the following statement was included in the minutes: “Regarding the potential for significant swings in reserves over coming months related to debt ceiling dynamics, various participants noted that it may be appropriate to consider pausing or slowing balance sheet run-off until resolution of this event…”</li>
</ol>



<ol start="3" class="wp-block-list">
<li>Although not a pressing concern, the Fed is getting closer and closer to reserve levels where “liquidity hiccups” tend to happen. The last time this occurred was September 2019 when reserves were too scarce and caused a major repo spike, stopping QT in its tracks. However, looking at the current reserve demand elasticity dashboard below (one of the best metrics for gauging risk of a repo blowup), as long as we are near that zero level there are no short-term concerns. That said, the Fed is aware that time is ticking and it does not want a repeat of September 2019 — hence its mention that “several participants also expressed support for the Desk’s future considerations of possible ways to improve the efficacy of the SRF…” The SRF, or standing repo facility, is a new permanent tool the Fed has in place to act as a shock absorber during events such as in September 2019. By mentioning its aim to improve efficacy, we can surmise that the Fed is focused on ensuring all the correct tools are in place to continue gradual balance sheet run-off.</li>
</ol>



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdJihTliUEtlK5aa9nGjJz-5ghdtoH1mTR_xXuLJaSseXNwEwOAdf10FsVAeCj5zYgXQa2PFOWA6D8NJtxg8Mi1UCTE_pEHcSf-2kuhQzkga_gwC5RpWABrkzfYi1JusFEVWLsF?key=LlXg5u-Xi5nyRcHrMP7lAND7" alt=""/></figure>



For a relatively short amount of text, we sure were able to glean a lot as to how the Fed is thinking about its balance sheet and bank reserves in the coming months.



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

FOMC minutes hint at end of quantitative tightening

Kate Irwin

This is a segment from The Drop newsletter. To read full editions, <a href="https://blockworks.co/newsletter/thedrop">subscribe</a>. 



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



Community Gaming, a crypto-powered gaming platform, launched a prediction market (PM) called Forkast on Ronin this week. Forkast will use the CGX token and let users bet on different real-world outcomes in gaming and influencer culture.



But some traders on Crypto Twitter accused the Community Gaming team and affiliated insiders of selling off the token — before regular users had the chance to claim it early Wednesday morning.&nbsp;



Massive interest in the token took their website down, making new distributions to retail impossible until the site was restored.&nbsp;



Over half a dozen posts from different accounts asked the team who was selling the token because its price had already <a href="https://x.com/Earning_Town/status/1892213093926613317">slipped</a> from $0.3 to $0.03 the morning the token launched. On Wednesday, it was <a href="https://cryptorank.io/price/forkast">down 70%</a> from its all-time high. Now, it’s already at $0.009 — a 90% decline from its ATH.



Community Gaming founder and CEO Chris Gonsalves tells me that neither the team nor its investors have sold their allocations of the token.&nbsp;



“The only entities that have tokens [besides the team, investors, and influencers] are the exchanges themselves who distributed through their listing promotions,” he said Wednesday morning while the website was down.



The token is available on Gate, MEXC and Katana.



“So those traders and the site going down is causing bad price action but any FUD about insiders selling is 100% false. Team tokens are locked for 18 months and all investors for 12 months,” Gonsalves said, adding:



“We sent out 8 creators payments (total of ~25k in CGX tokens) simultaneously when the claim process started and the site crashed right after that so people are sharing a screenshot of that but none of them did anything with those tokens so it&#8217;s just poor optics.”



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc-w1WXrsZqD2qrNi-qw5MWMC3m0HJRK__vKLV4E_yOGdhyoyQwOxBxekMNUsblYXDb7A9ln1-drxSsQJVm5E0nDbcUQHt_PJevRYHKKKLb2Geh66YrSlWoznJrn8G0e-3VawaOJQ?key=STpUeLVJS9V_sBKNDC79oh8T" alt=""/></figure>



Ronin’s <a href="https://app.roninchain.com/token/0x656fe582b4c6dc95c598ea54dc820eb36152e2f7?t=owners&amp;p=1&amp;ps=25">blockchain scanner</a> shows me that creators Kyroh, Inspectormnbl, and Raiden are still holding their allocations as of Thursday morning.



A big selloff could mean that those who get allocations of the token don’t see value in holding it long-term. Or, they could just be farmers looking for a quick buck. A tale as old as time in crypto.



If you do end up getting some CGX and don’t want to toss it into the prediction market or sell it just yet, Forkast is promising those who stake CGX various rewards including monthly loot boxes with platform credits, Community Gaming tournament access, and governance participation in Community Gaming’s upcoming player-versus-player (PVP) blockchain.



Yep, that’s right — Ronin is getting an L2 blockchain, PVP. It’s intended for competitive gaming apps, according to the team. The chain will be governed by CGX DAO as well as the PVP Council, as well as anyone who stakes their CGX tokens.



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Community Gaming launches CGX token, Forkast prediction market

Macauley Peterson

Sky (<a href="https://blockworks.co/news/maker-rebrands-as-sky-dai-will-be-changed-to-usds">formerly MakerDAO</a>) governance is grappling with the implications of an emergency proposal <a href="https://vote.makerdao.com/executive/template-executive-vote-out-of-schedule-executive-vote-risk-parameter-changes-february-18-2025">executed today</a> that alters MKR’s role within the ecosystem. Pitched as a necessary move to protect protocol security, these changes’ swift approval has instead ignited debates over transparency, process integrity and the risk implications for DAI/USDS.



The proposal eliminates the longstanding 5% exit fee on MKR withdrawals, significantly expands borrowing against MKR collateral and raises borrowing rates — while simultaneously lowering liquidation thresholds. Critics argue these measures increase the protocol’s risk of exposure, particularly given that MKR now has one of the highest loan-to-value (LTV) ratios in DeFi.



Community members have questioned the rationale behind these decisions. Others raised concerns over the timing, suggesting that the proposal was pushed through with minimal explanation just as governance critics were being silenced.



Rune Christensen, Sky’s founder, defended the move in a community call on Wednesday. He argued the changes were necessary to prevent a governance takeover. In Discord and X posts, he <a href="https://blockworks-research.beehiiv.com/p/kaito-s-attention-airdrop">alleges</a> a cooperation between PaperImperium, the pseudonym of a known activist investor with <a href="https://gfx.xyz/">GFX Labs</a> and governance participant in Sky, and a group of investors hoping to wield influence in Maker.



Other prominent voices within Sky have <a href="https://x.com/hexonaut/status/1892253800796422518">linked</a> Nexo to the effort, <a href="https://x.com/MonetSupply/status/1892288025851265134">citing</a> a leaked plan.



Framework Ventures general partner Vance Spencer, a long time Maker bull, <a href="https://x.com/pythianism/status/1892276559790153880">referenced</a> Zeus Capital in connection with the governance kerfuffle. Zeus Capital has been <a href="https://x.com/MyNameIsHugh/status/1892278080925839858">associated with</a> Nexo in the past.



In response, PaperImperium cited a long track-record of positive contributions to DAO governance. “GFX has not agreed to work with Nexo beyond listening to their opinions and sharing ours,” noting they are generally willing “to talk to anyone requesting a meeting or open channel of communication in any DAO we work in,” he told Blockworks.



A Nexo spokesperson responded that “Nexo&#8217;s team is on the way back from [Hong Kong],” and thus not immediately available to rebut the allegations.



&#8220;Historically, Nexo is the largest client of Maker and we have consistently tried to proactively contribute to its long-term growth by engaging with their team. We will release an exclusive, in-depth overview of the protocol’s intricacies, decentralization shifts and evolving dynamics, providing and critical insights,&#8221; the spokesperson said.&nbsp;



PaperImperium is known for frequently engaging in governance debates and pushing for transparency reforms. The account has been vocal about Sky governance practices, often criticizing decisions that concentrate power among insiders.



Christensen maintains that the adjustments align with a broader effort to simplify the Seal Engine framework and improve governance efficiency, as <a href="https://forum.sky.money/t/simplifying-seal-engine-and-activation-removing-exit-fee/26023">outlined</a> in a forum post on Wednesday. The Seal Engine is a component of Sky that allows anyone to lock MKR tokens as collateral to borrow USDS. The elimination of the exit fee reflects a shift toward reducing governance complexity, as SKY holders would primarily delegate decisions to Core Executors, Christensen said.



Rather than conferring an insider benefit, defenders such as “chud” on Discord pointed out that the proposal wasn’t just about raising debt ceilings — it also increased the stability fee from 12% to 20%, making borrowing against MKR more expensive.



Christensen has <a href="https://x.com/intern_cc/status/1892502606192189771">significant</a> MKR-backed loans on Aave and Morpho, where he’s subject to those platforms’ more conservative LTVs and liquidation thresholds. By allowing more aggressive borrowing terms within Sky, he could shift his leverage away from third-party platforms to the Seal Engine.



This could reduce his risk of liquidation on Aave/Morpho — which was allegedly part of the governance takeover plot (though one which Christensen <a href="https://x.com/RuneKek/status/1891984687288963140">characterized</a> as “laughable”).



“Rune refinanced his debt from Morpho/Aave and consolidated it on Maker, where his collateral can vote,” PaperImperium said.



“GFX would never support putting a protocol or its users at risk,” he said, calling the matter “a typical DAO governance dispute about policy.”



As the dust settles, the community is left with pressing questions: Was the emergency proposal truly about securing Sky’s future, or rather a consolidation of control? And if governance processes can be bypassed in this way once, what’s to stop it from happening again?



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Emergency Sky proposal sparks governance debate

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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



There’s a deep yearning for fundamental valuation metrics in crypto.&nbsp;



Any basic formula would do, in the same way that dividing a company’s share price by its earnings per share spits out a P/E ratio that can broadly decide whether a stock is overvalued or not.



Blockworks Research’s <a href="https://x.com/blockworksres/status/1887146391874756775">Real Economic Value</a> could very well lay the basis for something similar in crypto.



One little problem: Whatever metrics come out in the wash, nobody is going to be happy about the results. 



Just like how P/E ratios are generally much <a href="https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart">higher</a> than they were in previous decades — making many stocks appear wildly overvalued by comparison — it could well be that cryptocurrencies are priced much higher than what’s implied by the activity they support.



So, if that’s the case, I’m here to throw fuel on the fire.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc-Y_Iaxczmu9ZeaMnFi-bbEJ_LgqAkHiYNgqp2kWwDIHspjVImBI5rTPimIuaj7XzwHMhiq1ViVZCAutn6Mn4OX_JjeKQx3UewrYAe667RcSegupkBVF2jljtOGCHd0ji9Bp7mcA?key=1xLBMXvanotHMhKUI4odMbhr" alt=""/></figure>



Here are two charts, for Ethereum and Solana, respectively. Each one plots the native token price against the backdrop of their NFT and DEX volumes.



Pay attention to the white space between the trading volumes (in green) from the price of ETH (in blue) — notice how separated they are.



If onchain trading activity were a fundamental metric on which to value native coins, then Ethereum DEX volumes would need to more than double from here to close the gap.&nbsp;



And that gap would then represent the value of the hype surrounding a particular chain — pushing the coin up to match the network’s future potential.



The kicker: The price of ETH has only really aligned with onchain trading volumes once in the past four years — where the blue line touches the green space during the Terra market crash in June 2022, when ETH bounced off $1,000 while the chain recorded $73 billion in monthly volumes across NFTs and DEX. 



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc4-rnlGLPXTXMHw0HLLyFA_W7blX68XnPVyLtsymS4m6d6D1P3rsg2MHPeslKWGc88B15ftnCODdhZP-zhZVnn7tfNNjHx7mVkHYj__4QmlZE20rmlmmmuRAbyQtcLBShjtoVioQ?key=1xLBMXvanotHMhKUI4odMbhr" alt=""/></figure>



Now, here is the same chart but for Solana, shown over two years instead of four.&nbsp;



See how the price of SOL stretched far above any onchain activity — until this year, when monthly DEX volumes had surged tenfold in five months to almost $340 billion alongside memecoin and AI agent hype. If any of this holds any weight (and that’s a big if), then it would imply SOL is reasonably priced right now compared to its DEX activity. It would be a shame if something happened to it.



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Nobody will be happy about fundamental metrics in crypto — including this one

This is a segment from The Drop newsletter. To read full editions, <a href="https://blockworks.co/newsletter/thedrop">subscribe</a>.



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



As most of you probably know by now, Doodles — the rainbow-barfing Ethereum NFT collection of 10,000 PFPs of the 2021 NFT boom — is launching a token on Solana.&nbsp;



Response so far has been pretty mixed. A lot of Crypto Twitter loves a token, especially one from an established brand, but there’s also been some criticism. First, there’s the token allocation. As one poster has pointed out, the Doodles team may receive up to 57% of the DOOD tokens, once you combine the parts of the pie that goes to the team plus the other pieces that could go to the team. That doesn’t look too cute, considering how tokens are often marketed as a way to “give back to the community.”



And then there’s the issue of timing. Is launching a token now, on a different chain than the NFT collection, too little, too late? Will DOOD serve any functional purpose, besides offering exit liquidity, a memecoin, and a way to get a bit more attention?&nbsp;



The market has been rough out there for art- and gaming-related tokens lately. PENGU, the Pudgy Penguins’ token, is still down 67% in the past month. PIXELS, the token behind the Ronin-based game of the same name, is also still down 50% in the past month. Apecoin, the once-hyped token behind the Yuga Labs world, remains down 50% in the past year.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcG4up-Vn0LJexf2fkJAjSvocp-TBM5cpYvfpNrp0lX9jEIBNEm9UwHZaz8hw5mq2Jhvon0Cw6V8V4D4yqFt0cUE9XcasMGE2NRJ2hO-zHl9LdI5HJugatjUKLSUuEzMHy7M-X4wA?key=xnUEi2Lbmszt8LaPf2XfzfBf" alt=""/></figure>



The Doodles team has tried other brand plays to generate interest in its IP, from striking a deal with rapper-producer Pharrell to join as their chief brand officer in 2023 to partnering with McDonald&#8217;s to release cups in November. Despite those high-profile deals, however, Doodles NFTs haven’t soared above the rest.



The DOOD announcement hasn’t really rejuvenated excitement around the NFT collection either, when we look at sales and volume traded. In the past week, Doodles sales volume is down 32%, according to CryptoSlam data.



Launching a token seems to be the latest way for crypto projects to monetize their IP. While I do think the Doodles’ art and aesthetic is cool in a minimalist way, I’m not sure their token will have a different fate than so many of the others currently out there. Time and time again, we’ve seen an initial pump and then a selloff, followed by flatlining or slowly declining price action.



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Doodles’ Solana token fails to impress

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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



Admittedly, it’s been a pretty bearish week for crypto, though an optimist can still find pockets of good news.



Amberdata’s Greg Magadini thinks the data out of the derivatives markets shows that options trading volume on Solana peaked around the inauguration last month which could imply that SOL hit its top.&nbsp;



“I think the bearish story within altcoins is that the supply of altcoins is essentially unlimited. And so we&#8217;re seeing so many new altcoins … every day there&#8217;s just kind of a new increase in the total altcoin float, which is completely opposed to the limited fixed supply of the bitcoin value proposition. And so I think that dynamic is hard to overcome,” Magadini explained.&nbsp;



The divide is simple and can be seen outside of crypto, too. It’s what Magadini would call the hard money narrative: Gold’s going up while commodities like coffee and cocoa become more expensive. Add in the discussions we’ve had about a potential AI bubble and, well, the bitcoin vs. crypto discussion makes a bit more sense.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcrK2qQFQTqtRCPAfK_YM17bQZaLQSyJIZ7VtX4lOQhe_59xA80d0Cq5BPinh2Ev-7kBXMAGTZtKHvFjmKr5ArxVWhUBYztkj2-hmjDGnPNHveqI4epewretpQM1eLRPQ9B8EjFIw?key=1xLBMXvanotHMhKUI4odMbhr" alt=""/><figcaption class="wp-element-caption">A look at ETH’s <a href="https://docs.amberdata.io/docs/block-volumes">block trades</a> courtesy of Amberdata</figcaption></figure>



Bitcoin, in this case, is still the solid narrative. Everything’s going swimmingly right now and we’re all waiting to hear about a potential bitcoin reserve. For altcoins, which don’t have the same catalysts on the horizon, the picture is unfortunately more bearish.&nbsp;



This isn’t to say that bitcoin’s going to pop off though. Magadini thinks that we’ll continue to see it trade sideways, between $85,000 and $100,000 for the next two to three months. He told me this action is needed after the bullishness we saw going into the end of last year.



“I think during that hanging out period, bitcoin actually gains dominance. It&#8217;s a relatively strong asset. I think for the altcoin space, we&#8217;re getting a little bit of a flush out, and we&#8217;re really seeing that right now with SOL and ETH.”



“If we just look at the charts of ether and bitcoin [in terms of] the relative price, the fact that we had a huge spike lower for ether versus bitcoin is pretty rare because those are very correlated assets. The move that it had was a very volatile move, which is unusual. That was significant, that meant something. And we&#8217;re seeing the same thing with the SOL-BTC ratio, where it pretty much popped out at a local high on inauguration day and has just come down since,” he explained. His read is that it’s a sign of retail flow — or lack thereof.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdAE6Njif-dzy41xM_YRzgwb_uYpcJgK78-aIDAYfgE5PHMb1gMjc9dZqXvgY6Ucpy7BAdpgwILbcw5gihH_ZysLDGqWziJRDW5egi4YWwrBrdL_Hsl89ZphY7loElrumPaVNg0xg?key=1xLBMXvanotHMhKUI4odMbhr" alt=""/><figcaption class="wp-element-caption">And bitcoin’s <a href="https://docs.amberdata.io/docs/block-volumes">block trades</a> courtesy of Amberdata</figcaption></figure>



It’s not something to be terribly worried about, he added, but rather it’s a natural sign that we may be hitting the speculative phase because there aren’t fundamentals tied to many altcoins just yet. But, hey, at least we don’t have to blame everything on memecoins…right?



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

What’s behind ‘bearish’ altcoin action: Amberdata

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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



The Blockchain Association has spoken again. Or, well, they’ve written another letter.&nbsp;



From the advocacy group that last month brought you a <a href="https://blockworks.co/news/blockchain-association-consensus-position-on-market-structure-policy">“consensus position”</a> on market structure policy comes a warning to lawmakers on Capitol Hill.&nbsp;



The choices they have: act, or possibly “cripple DeFi innovation in this country altogether.”



If you don’t remember, there was a proposed rule — finalized under the Biden administration — that would <a href="https://blockworks.co/news/sec-expands-dealer-rule-crypto-firms">expand the “broker” definition</a> to include software that allows users to access DeFi protocols.



The Blockchain Association says this “inappropriately and unlawfully misclassifies technology infrastructure as intermediaries” — forcing software companies that never take custody of users’ assets to nonetheless collect (and report to the government) those users’ personal info and transaction details.



The Wednesday <a href="https://theblockchainassociation.org/wp-content/uploads/2025/02/Blockchain-Association-Letter-to-Congress-on-DeFi-Broker-Rule-CRA-Vote.pdf">letter</a>, addressed to Sens. John Thune and Chuck Schumer, as well as Reps. Mike Johnson and Hakeem Jeffries, calls for them to vote “yes” on Sen. Ted Cruz’s Congressional Review Act (CRA) resolution and repeal the so-called DeFi broker rule.



Blockchain Association’s Kristin Smith reminded us how long this battle goes back:



<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">2/ 3+ years ago, the Infrastructure Investment and Jobs Act became law and amended the definition of a “broker” to include “any person who, for consideration, is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”&mdash; Kristin Smith (@KMSmithDC) <a href="https://twitter.com/KMSmithDC/status/1889740579824611440?ref_src=twsrc%5Etfw">February 12, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The IRS then sought to implement this new definition in 2023. The agency, in June 2024, applied the rule to centralized intermediaries — leaving out reporting requirements for decentralized or non-custodial brokers.&nbsp;



In December though, a second IRS rule <a href="https://blockworks.co/news/irs-new-form-crypto-accountants">sought to force</a> tax reporting obligations onto crypto software providers that don’t act as intermediaries.



The effort by Cruz and Rep. Mike Carey to <a href="https://blockworks.co/news/irs-crypto-broker-rule-opposition">reverse it</a> came two days after Trump’s inauguration.



<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 vote is (very) big for two reasons: (1) We get a heat check from the Dems on a limited crypto-specific resolution. They had an unpopular crypto platform under Biden and this rule encapsulates everything wrong with that approach. It&#39;s going to pass regardless, with at least… <a href="https://t.co/oSm0H4eBAK">https://t.co/oSm0H4eBAK</a>&mdash; Scott Johnsson (@SGJohnsson) <a href="https://twitter.com/SGJohnsson/status/1892237592222965883?ref_src=twsrc%5Etfw">February 19, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Blockchain Association members are set to discuss the CRA resolution with Congressional offices in DC on Feb. 26, a group spokesperson said. It’s unclear when exactly a vote would take place. The latest letter adds: “Policy decisions with such severe consequences should be made by Congress deliberately — not accidentally through ill-conceived midnight rulemaking.”



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Objection to DeFi ‘broker rule’ returns to focus

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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



A bitcoin financial services company is now listed on the Nasdaq — joining a limited list of public players in the segment.&nbsp;



Called Fold, the company revealed a combination with FTAC Emerald Acquisition Corp. last July in an effort to go public.



Then, in December, Fold closed a $20 million convertible note financing from ATW Partners. That was secured in part by the company’s bitcoin holdings (totaling roughly 1,000 BTC) as collateral and was set to mature three years after Fold became a public company.&nbsp;



That brings us to today, when Fold shares were set to start trading on the Nasdaq after its deal with FTAC was approved. Founded in 2019, Fold lets customers accumulate BTC through its rewards program.



Among the top crypto predictions for 2025 were more crypto-related companies <a href="https://blockworks.co/news/2025-crypto-stocks-to-watch">going public</a> — joining Coinbase, Strategy and a bunch of miners.&nbsp;



Galaxy Digital CEO Mike Novogratz said at the Ondo Summit <a href="https://blockworks.co/news/crypto-narratives-to-watch">earlier this month</a> he expected such progress on that front by May or June. His firm has been waiting to list publicly in the US for four-plus years.



Shares of crypto wallet provider Exodus hit the NYSE American stock exchange <a href="https://blockworks.co/news/exodus-uplists-to-nyse-american">in December</a>. That company held 1,900 BTC and 2,660 ETH in its reserves at the time.



Dan Weiskopf, co-portfolio manager of the Amplify Transformational Data Sharing ETF (BLOK), said he counts about 20 blockchain-related companies at various stages of the US public listing process (or considering it).



A revamped SEC that has Hester Peirce leading a <a href="https://blockworks.co/news/sec-new-crypto-task-force">crypto task force</a> should support an expected 2025 public listing boom, Weiskopf added.&nbsp;&nbsp;&nbsp;



“Bitcoin price action will continue to be the focus of excitement,” he told me. “But behind the scenes people forget that the picks and axes are also an important way to capitalize on the innovation that is in front of us.”



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Bitcoin company joins the publicly traded ‘Fold’

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



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



I <a href="https://blockworks.co/news/tariff-trade-overshadows-earnings-season">wrote yesterday</a> about how the market has generally remained pretty resilient despite recent bouts of volatility.&nbsp;



<a href="https://blockworks.co/news/crypto-markets-tariff-reaction">Tariff concerns</a>, geopolitical tensions, earnings season and <a href="https://blockworks.co/news/fed-rate-cutting-journey">inflation</a> have all weighed on US equities at different points throughout 2025, but one tailwind has remained constant: economic growth is — at least for now — solid enough.&nbsp;



Some economic data points are looking really strong. Manufacturing is on the rise with the most recent ISM manufacturing PMI and the Empire State Manufacturing Survey both coming in better than expected.&nbsp;



January’s ISM services PMI came in a bit lower than December’s figure, but is still healthily above 50. Retail sales saw their expected January dip, but are also still in a Goldilocks range.&nbsp;



On the labor front, non-farm payrolls were up solidly, and initial jobless claims ticked up only slightly in recent weeks. Unemployment has stabilized and wage growth has started to moderate. Our labor market is, as Powell said, “solid.”&nbsp;



The Conference Board projects real US GDP to come in at 2.3% in 2025, a decline from 2.8% in 2024. Globally, the non-profit expects real GDP to show 3% growth for 2025.&nbsp;



“While the US economy is set to start 2025 on strong footing after a year of surprisingly robust growth, a combination of proposed policies will likely weigh on growth and leave inflation elevated as the year progresses, resulting in a more patient policy stance from the Fed,” The Conference Board wrote in a statement earlier this month.&nbsp;



So, what does all of this mean? I think it means the Fed just may be on track to achieve its coveted soft landing — that is if the data continues to reflect decent economic growth.&nbsp;



Chicago Fed President Austan Goolsbee said a few weeks ago he’s still “optimistic” about a soft landing.&nbsp;



Minutes from the FOMC’s most recent meeting (released today) show staff have concerns about the direction of federal policy.&nbsp;



They “continued to note elevated uncertainty regarding the scope, timing and potential economic effects of possible changes to trade, immigration, fiscal and regulatory policies,” the <a href="https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20250129.pdf">minutes</a> read.&nbsp;



Trade and immigration specifically could impact progress being made on inflation reduction, some staff noted.&nbsp;



Several participants also said it could be appropriate to pause or slow balance sheet runoff until Congress reaches a debt ceiling resolution.&nbsp;



It sounds like the pause on interest rate cuts will continue in the near term, unless there are significant changes to economic conditions.&nbsp;



“If labor market conditions deteriorated, economic activity faltered or inflation returned to 2% more quickly than anticipated,” committee members would consider easing monetary policy.&nbsp;



Generally, the minutes reflect what we’ve known since <a href="https://blockworks.co/news/jerome-powell-testimony-capitol-hill">Powell</a>’s last press conference: Officials are on hold until inflation trends much lower.&nbsp;



The economic data situation however remains the same. And again, unless we see major declines in growth, a soft landing is not out of the question.



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Economic growth data says we’re on track for a soft landing

Donovan Choy

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/research">subscribe</a>.



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



Crypto is a volatile industry for primarily two reasons: 1) it’s permissionless (anyone can make a token) and 2) it’s still largely looking for product-market fit.



What does this mean to a short-term trader looking to flip a quick buck? If you’re trying to frontrun the market, you’d want to know when a certain narrative is falling in (and out of) favor.&nbsp;



You can then spend absurd hours doomscrolling Twitter and Telegram groups — or you can use Kaito, a Web3-focused search engine that scrapes troves of data across social media to generate quantifiable sentiment analysis for you.



If you’ve spent time on CT in the last year, you’ve likely seen many of these useful Kaito dashboards around.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcY4JFvrXLi5IXhwdAk8n0E0bn5WUgwTfEikldvvnLsgPCdP0qdeCyqTPw4T70vQg-QHn1Ve5OsllI_X6QF_IIgZJlBMFpR5cq1CkcP9cf5Kt0R_jld87dM4bWHuKrkbyp9HqYsQw?key=OwV2jL9DN49AICoIFwBGNID_" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://x.com/sandraaleow">@sandraaleow</a></figcaption></figure>



But people are excited about Kaito today because of its token airdrop, not its core analytical product.



Wait, a data analytics platform needs a token?



Yes it does, because you can apparently tokenize anything in crypto. In Kaito’s case, it’s tokenizing the attention economy of Crypto Twitter.



Everyone has a shot — you can connect your X account to Kaito, and tweet a lot to <a href="https://blockworks.co/news/kaito-yap-to-earn-takeover">earn “Yap” </a>points, which entitle you to a larger KAITO airdrop.



To deter mindless spam, the team <a href="https://docs.kaito.ai/kaito-yaps-tokenized-attention">weights</a> Twitter posts by relevance (proof-of-work), originality (proof-of-insight) and engagement based on “reputation” (proof-of-exchange).



<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">Kaito has made CT a much shittier place. Discussion quality has gone down, outrage marketing has further gone up. You can really tell which people are performing for the algorithm. If you’re reading this &#8211; you know who you are.&mdash; Hasu⚡️🤖 (@hasufl) <a href="https://twitter.com/hasufl/status/1887513212414771485?ref_src=twsrc%5Etfw">February 6, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



This entire idea is based on a familiar sales pitch: Big Tech sucks because they monopolize the value created by content creators. Kaito lets the people retain some of that value.



It also opens up a very interesting business model for Web3 marketing.&nbsp;



The users who’ve signed up to “yap” away on Twitter provide Kaito with quality data around crypto trends and KOLs that can be sold to major ecosystem projects.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXciaK9GojuG18YNWods_Pb6auHf7pZSlS6t93GQEWDJzMRmUuhl_bYMztxgBJWQg3_-SgiFHu6e4nR0dQOggSfHHQc3AsTNZ7kIFMOc68US87HDaL_fWbBZKgQFrpbrnagfDHJj4g?key=OwV2jL9DN49AICoIFwBGNID_" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://yaps.kaito.ai/movement">Kaito</a></figcaption></figure>



“Essentially Kaito does all the hard work that marketing teams would otherwise need to spec out to determine how and where to develop and spend on social marketing campaigns in terms of selecting the right set of KOLs, targeting the proper audience and so forth,” Blockworks’ Danny Knettel told me.



<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">We are talking about <a href="https://twitter.com/KaitoAI?ref_src=twsrc%5Etfw">@KaitoAI</a> in the crypto marketing cabal today Some say it doesn’t reward “high quality” posts. I don’t think that is kaito’s purpose in the first place It’s a measurement of influence, quality of reach influence ≠ quality content If i was in house at a… <a href="https://t.co/wAVK4VnRiz">pic.twitter.com/wAVK4VnRiz</a>&mdash; Emily Lai (@emilyxlai) <a href="https://twitter.com/emilyxlai/status/1891187384169214392?ref_src=twsrc%5Etfw">February 16, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Now back to the points. Maybe you think this is another pointless “SocialFi” game we’ve seen with <a href="https://blockworks.co/news/sec-doj-charge-bitclout-creator-crypto-fraud-social-media">BitClout</a> or <a href="https://blockworks.co/news/frienddottech-relinquishes-platform-control">friend.tech</a>, but Kaito’s points are actually shaping up to be valuable.



Based on <a href="https://x.com/ren_gmi/status/1890385280114315736?s=46&amp;t=2q9OLMlaobNlHLewOXT4uA">@Ren_gmi’s estimates</a>, YAP points are worth anything between $20 to $140 per point.



It’s unclear how Kaito’s token product ties into its core analytics product, and it’s still too early to speculate on there being any kind of value accrual between the two.



Assuming an annual price of <a href="https://kaito.ai/pricing">$10,000</a> and 1,000 paid seats, Kaito generates annualized revenues of $10 million.



One could value KAITO at a conservative 20x P/S multiple, which would place the token’s value at a $200 million market cap (assuming a 24% token supply airdrop). On Aevo’s pre-launch market, KAITO is<a href="https://app.aevo.xyz/perpetual/kaito"> presently trading</a> at a $320 million market cap/$1.3 billion FDV.



Updated Feb. 19, 2025 at 1:48 pm ET: Updated KAITO P/S multiple.



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Crypto sentiment analytics platform Kaito AI prepares for token launch

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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



Trump didn’t take a direct route to Bitcoin — having sold three NFT collections on Polygon long before he <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-bitcoin-mining-meeting">met with bitcoin mining executives</a> at Mar-a-Lago last June.



And Trump is obviously no maxi. He and the First Lady have their own memecoins on Solana, not to mention his DeFi project World Liberty Fi has <a href="https://blockworks.co/news/trump-backed-project-token-swaps">actively courted crypto teams</a> for token swap deals and other types of partnerships.



Still, something clearly happened last year that changed his tune toward bitcoin, which he’d initially <a href="https://www.bbc.com/news/business-57392734">called</a> a “scam against the dollar” in the thick of the 2021 bull run.



Turns out that thing was Trump’s former campaign chair Paul Manafort.



On this week’s <a href="https://www.youtube.com/watch?v=pcpCNXyHGaE">episode</a> of Empire, David Bailey, CEO at BTC Inc, gave host Jason Yanowitz&nbsp; the inside scoop on how <a href="https://www.cnbc.com/2024/08/26/trump-orange-pilled-by-three-bitcoiners-in-puerto-rico-100-million.html">he and two other Bitcoiners</a> were able to orange-pill Trump heading into election season.



“I was hanging out in Puerto Rico with a friend of mine that lives here and we were sitting around — this is in January 2024 — and like, we’re a company but we are all in on bitcoin, all in emotionally, spiritually, financially. Our mission is hyperbitcoinization and we actually [wonder] all the time, &#8220;how do we accelerate hyperbitcoinization?&#8221;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf114aaZOa81M9ZeW87EgCLZwcsvabFuL-bQiF6QVlA_HgR5WqZ3pdmj1hdRCe0ZMPkw7Jbr5urhjURmHQ0FSSl_rpvqA04zW6C3rQH3XhI-z7tCQoLtV0JDkzWzWxjFby7ZJcRfQ?key=S6ZUtrpxMXUcwkCzW7EXNWHK" alt=""/></figure>



“And so, we were sitting around like ‘damn, if we could just get in front of Trump, like we could pitch bitcoin to Trump and get him bought in on it, and it&#8217;d be huge for bitcoin.’”



By happenstance, Bailey’s friend could make that connection — through her sister, whose godfather is Manafort. “So she was able to get a call set up with Paul, and so that’s how it got started.”



From there, it took months of Bitcoin education with Trump’s team before getting all the way to the big man, who had one key concern that hadn’t yet been resolved: Bitcoiners say bitcoin is going to destroy the dollar.&nbsp;



Trump likes the dollar — so what gives?



“And we&#8217;re like, ‘well, you know, America built Fort Knox and stored the world&#8217;s gold in Fort Knox — that didn&#8217;t undermine the dollar; it made the dollar stronger than ever. And if you want the dollar to stay strong into the future, then we got to build the digital Fort Knox and need to have the world&#8217;s digital gold stored in America as well. That&#8217;s how we get another 200 years of the dollar being relevant.’”



According to Bailey, Trump instantly understood and agreed to the next step — meeting in person at Trump Tower. And the rest is history.



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



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

AptosAPT

market data

Aptos Stats

What is the market cap of Aptos?

What is the current trading activity of Aptos?

What is the current price of Aptos?

How many Aptos are there?

What is the relative popularity of Aptos?

latest Aptos news