Bonk

Byron Gilliam

This is a segment from The Breakdown newsletter. To read more editions, <a href="https://blockworks.co/brand/the-breakdown">subscribe</a>.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“No member bank shall, directly or indirectly by any device whatsoever, pay any interest on any deposit which is payable on demand.”



— Section 11(b) of the Banking Act of 1933
</blockquote>



Money market funds — the world’s most boring financial product — terrified bankers as soon as they started to catch on in the 1970s.



When interest rates soared beyond what banks were legally allowed to pay on deposits, money market funds, which faced no such restrictions, suddenly looked like a threat to the entire banking system.



None other than Paul Volcker called money market funds a “regulatory arbitrage” that “weakens the financial system&#8221; because they “sucked deposits out of banks.”



The problem was that banks couldn’t compete with the higher interest rates on offer from money market funds because of Regulation Q — a 1933 rule explicitly designed to prevent banks from competing on interest.



In the 1920s, banks engaged in a ruinous “rate war,” offering ever-higher interest rates to attract deposits. To pay these rates, banks had to make increasingly risky loans, creating a dangerous cycle that ultimately destabilized the banking system.



Regulation Q sought to avert such competition by banning banks from paying any interest at all on checking accounts and capping what they could pay on savings accounts and CDs.



This is why banks became famous for giving out gifts in return for new deposits: They couldn’t offer a higher interest rate than their competitors, so they offered toaster ovens and televisions instead.



In 1979, <a href="https://tontinecoffeehouse.com/2021/04/26/toasters-televisions-and-regulation-q/">for example</a>, depositing $1,475 with the Republic National Bank for 3.5 years earned you a 17-inch color television, and the same amount deposited for 5.5 years earned a 25-inch one.



Want an even better deal? Depositing just $950 for 5.5 years earned you a stereo with built-in disco lights.



But even disco lights weren’t enough to keep bank depositors from fleeing to unregulated money market funds.



Money market funds were able to pay those higher interest rates because they didn’t pay “interest”: They got past Regulation Q by paying dividends instead.



This was (and remains) a distinction without a difference, but regulators chose to allow it in the name of financial innovation.



Banks warned that this regulatory arbitrage would siphon away their deposits and impair their ability to make loans.



They were right, too: In the decade or so after money market funds were introduced, retail savers moved hundreds of billions of dollars out of their local banks and into the new “shadow banking system” of money markets.



As forewarned, this impaired the regulated banking system’s ability to serve its core purpose of creating the money that the US economy needed to grow.



To their credit, regulators recognized the problem and, as early as 1970, began offering banks various exemptions to Regulation Q.



By 1986, interest rate caps had been almost entirely phased out; but it wasn’t until after the Great Financial Crisis — caused in part by a panic over unregulated money market funds — that lawmakers decided to fully repeal Regulation Q.



The bell could not be unrung, however.&nbsp;



For better and worse, the decision to allow money market funds to pay interest while banks could not shifted the foundation of the US financial system from bank loans to capital markets.



Now, the government’s decision to allow stablecoins into the US banking system might do something similar.



The Genius Act, expected to be signed into law any moment now, legalizes stablecoins as a new form of money.



Specifically, stablecoins become non-bank money that looks eerily similar to the money market funds that were de facto legalized in the 1970s over the objection of the banking industry.



Lawmakers, however, appear to have long memories: This time around, the new form of money they’re allowing will not be interest bearing.



The Genius Act prohibits issuers from paying interest on stablecoins, in the hope of protecting the banking system from the same kind of ruinous “rate war” that Regulation Q was designed to prevent.&nbsp;



Interest-bearing stablecoins, it’s feared, could further drain the banking system of demand deposits, making it even harder for your friendly neighborhood community bank to give you a loan.



It might happen anyway.



If money market funds were able to innovate their way around Regulation Q, is there any doubt that crypto will be able to innovate its way around the Genius Act?



Stablecoin issuers will likely figure out an equivalent of rewarding their users with toasters instead of interest.



And even if they don’t, DeFi protocols will figure out ever more ways to pay interest.



You can already get over 5% yield on stablecoins by taking a sliver of smart contract risk with a protocol like Compound.



Tellingly, that might represent less risk than what bank depositors were initially willing to take with money market funds — and stablecoin deposits are nearly as accessible, too.&nbsp;



Money market funds demonstrated that US savers were eager to accept a little counterparty risk and a slight delay to withdrawals in return for higher yields.



So much so that today, money market funds are effectively risk free because they’ve become too big to fail.



The Genius Act may prove to be stablecoins’ first step in the same direction.



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Can the Genius Act save banks from stablecoins?

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>.



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Solana’s Firedancer client — a high-performance implementation of the blockchain’s software being built by Jump — was first announced in 2022. 



Nearly three years later, the project still comes with <a href="https://blockworks.co/news/lightspeed-newsletter-solana-firedancer-testnet">training wheels</a>.



That’s a very long time in the crypto world, so when Firedancer developer Michael McGee <a href="https://www.youtube.com/watch?v=RbY0vLjQO9A">joined me on the Lightspeed podcast</a> this week, I was curious to get his take on the client’s timeline. McGee painted an enormously difficult engineering task: rewriting a poorly documented codebase from scratch while the original software sees constant upgrades.



“The fact that…the product is alive…is, I think, pretty impressive,” McGee said of Firedancer.&nbsp;



Firedancer’s biggest current obstacle is the conformance problem, McGee said, where the validator must perfectly match the existing Agave client’s behavior under all circumstances. Conformance is made harder by the fact that Solana developer shop Anza ships a lot of new code, so the software is something of a “moving target,” McGee said.



Anza’s proposed Solana <a href="https://blockworks.co/news/solana-alpenglow-next-gen-consensus-layer-speed">consensus rewrite</a>, Alpenglow, is a “perfect example of something that makes our life very, very difficult,” McGee said, noting that he had personally implemented what he saw as the best possible proof-of-history implementation into Firedancer.



Under Alpenglow, <a href="https://blockworks.co/news/solana-proof-of-history">proof-of-history</a> will go away, making all that work moot.



In the meantime, Firedancer’s more limited client has seen growing adoption. Frankendancer is up to 9.3% of all staked SOL, according to Blockworks Research <a href="https://app.blockworksresearch.com/analytics/solana?dashboard=131">data</a>. Validators running Frankendancer have noticed better-packed blocks, <a href="https://blockworks.co/news/firedancer-delegating-stake-solana">we reported previously</a>.



With Solana’s current block limit of 50 million compute units, McGee said Firedancer can’t push performance as far as it would like to, so it has focused on more efficiently packing blocks in the interim.



When I asked him for Solana’s ideal block limit — which basically defines how compute-intensive blocks can be — McGee said the barrier should be removed entirely, and validators should be left to come to a block size equilibrium.



So that hallowed figure of one million transactions per second is likely a way off, but in the meantime, a number to watch will be 20%. When that proportion of Solana stake is running Frankendancer, the network will be vulnerable to stoppages from the client but better protected from an infinite mint bug.



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Solana Firedancer dev sheds light on the project’s difficulties

Casey Wagner

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



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It’s day two of “Crypto Week” in the US House.&nbsp;



The Rules Committee on Monday afternoon heard from fellow representatives on three crypto bills: the GENIUS Act, the CLARITY Act, and the Anti-CBDC Surveillance Act.&nbsp;



House members then failed to pass a procedural vote Tuesday that would have advanced further debate around the bills. Thirteen Republicans voted against the motion (alongside Democrats), bringing the final tally to 196-223.&nbsp;



With the exact next steps unclear, it remains worth knowing about each potential law and what proponents and critics have to say:



<h2 class="wp-block-heading">GENIUS Act&nbsp;</h2>



This is the stablecoin-focused bill that <a href="https://blockworks.co/news/genius-stablecoin-act-passes-senate-vote">passed the Senate</a> last month with bipartisan support. It’s poised to pass in the House, too, but not everyone is happy about it.&nbsp;



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf3lY5rLz4Ln2auqDC2XwNO-FnhDpCnr9hJMxu8TtJEqSMd7wDfSzVjIcQOvw3WxlZ8_asihETzMPAt-sJomxgeAdz36TBKLldOmzTixg1E8yjKo6k4SrQ5OOBpy7GdxDWgW91h?key=10fZU7ZsgvEMwThJTJ1Sbw" alt="" style="width:560px;height:auto"/></figure>



Most Democrats that oppose the <a href="https://www.govinfo.gov/content/pkg/BILLS-119s1582es/pdf/BILLS-119s1582es.pdf">bill</a> argue it fails to stop President Trump and his family from <a href="https://blockworks.co/news/world-liberty-permissionless">profiting off of USD1</a>, the stablecoin tied to World Liberty Financial.&nbsp;



When asked during Monday night’s Rules Committee hearing why he wouldn’t support an amendment that explicitly bars the president from issuing a stablecoin, Rep. French Hill said Trump is not the issuer of a stablecoin — but an owner of a company that issued one.&nbsp;



When pressed further, Hill said the Senate had already discussed this issue at length (and 68 Senators still voted to pass the bill).&nbsp;



Some Dems also think that while the bill might be a step in the right direction, it falls short. The legislation is too weak on anti-money-laundering and terrorism-financing protections, opponents insist.&nbsp;



US-based stablecoin issuers have largely gotten behind the legislation. Circle — fresh off its<a href="https://blockworks.co/news/circle-shares-nyse-day-one"> public market debut</a> — has even applied to establish a national trust bank in order to align with the policy.&nbsp;



For foreign issuers like Tether, the GENIUS Act comes with more hoops to jump through. The bill mandates that stablecoins be backed by cash and cash equivalents and that issuers file regular audited financial statements, something Tether has yet to do (despite quarterly attestation reports).&nbsp;



<h2 class="wp-block-heading">CLARITY Act&nbsp;</h2>



The CLARITY <a href="https://www.govinfo.gov/content/pkg/BILLS-119hr3633rh/pdf/BILLS-119hr3633rh.pdf">bill</a> does two main things: First, it establishes the concept of (and defines) “digital asset commodities.” Second, it divides regulatory authority between the SEC and the CFTC.&nbsp;



The CLARITY Act is a bit more controversial within the industry. It’s by far the longest bill of the three, so it gives interested parties more to fight over.&nbsp;



One of the main issues brought up by opponents of the bill relates to decentralization. Sufficiently decentralized blockchains — defined in the legislation as transparent chains with no person or individual in control — are considered commodities.&nbsp;



The Rules Committee on Monday allowed the bill to advance, but representatives will have some amendments to consider.&nbsp;



<h2 class="wp-block-heading">Anti-CBDC Surveillance Act&nbsp;</h2>



This one is straightforward. It seeks to amend the Federal Reserve Act to prohibit the central bank <a href="https://blockworks.co/news/house-passes-cbdc-anti-surveillance-act">from issuing</a> a retail central bank digital currency (CBDC).&nbsp;



Proponents like the privacy aspects of the <a href="https://www.govinfo.gov/content/pkg/BILLS-119hr1919rh/pdf/BILLS-119hr1919rh.pdf">bill</a>, arguing that a CBDC could give the government too much access to sensitive information.&nbsp;



Those against it say ruling out ever establishing a CBDC could put the US behind other countries exploring the technology. Democrat Rep. Stephen Lynch said the bill is “an act of breathless stupidity.” 



This is a developing story. Check <a href="http://blockworks.co">Blockworks.co</a> and the daily Forward Guidance <a href="https://blockworks.co/newsletter/forward-guidance">newsletter</a> for further updates.



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The bills up for debate as ‘Crypto Week’ continues

Ben Strack

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



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Kraken’s latest US offering reflects a theme we’ve seen again and again this year: building out a one-stop shop and/or multi-asset trading platform and/or unified investing experience. (I’ll let you pick the buzzy marketing language.)



The crypto exchange in May closed on its <a href="https://blockworks.co/news/crypto-ma-mergers-feeding-frenzy-kraken">acquisition of NinjaTrader</a> — a company with a CFTC-registered FCM license that allows Kraken to offer crypto derivatives in the US.



A couple months later, here we are: CME-listed crypto futures available via Kraken Pro. The company plans to offer commodity, fixed income, FX and equity futures later this year.



Crypto giants realize the value of the derivatives market. It’s a higher-margin business segment (i.e. compared to spot trading) that they’ll look to expand as trading fees are compressed, Architect Partners’ Michael Klena previously told me.



I’m sure you recall Coinbase revealing its <a href="https://blockworks.co/news/coinbase-deribit-deal-focus-derivatives">intent to buy Deribit</a> for $2.9 billion. Unlike Kraken’s buy, that acquisition was more about extending its derivatives footprint outside the US.&nbsp;&nbsp;



But the broader goal for these industry behemoths is the same. Offer traders “seamless access” (I’ve read one too many press releases) to as many exposures as possible: spot, options, futures, etc.



That’s now extended further to include tokenized stocks and ETFs — though the current iteration of certain offerings (<a href="https://blockworks.co/news/kraken-tokenized-stocks-tradfi-crypto">Kraken’s xStocks</a> and <a href="https://blockworks.co/news/robinhood-l2-staking-us">Robinhood’s stock tokens</a>) means owning tokens that follow the underlying’s price — not the actual stock or ETF.



Dinari chief business officer Anna Wroblewska envisions the “cross-asset opportunities” if NYSE-, CBOE- and CME-linked assets, for example, unified (there’s that word again) in one place that all market participants could access.&nbsp;&nbsp;



Dare to dream — particularly as movement on the crypto legislation front could mean the industry is closer to such a reality. &nbsp;



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Kraken’s US derivatives launch reflects broader ‘unified access’ trend

Macauley Peterson

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/0xresearch" target="_blank" rel="noreferrer noopener">subscribe</a>.



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TAC, which launched its mainnet today, is betting it can solve one of Telegram’s biggest blockchain challenges: getting Ethereum’s DeFi builders to care about TON at all. The new purpose-built layer-1 offers an EVM-compatible bridge to Telegram’s ecosystem and is listing its $TAC token on major exchanges alongside Telegram Wallet support.



TAC is not an official <a href="https://blockworks.co/tag/telegram">Telegram</a> project, but an independent blockchain built to integrate with the <a href="https://blockworks.co/tag/ton">TON</a> ecosystem and tap into Telegram’s massive user base without being developed or controlled by Telegram itself.



At its core, TAC targets a specific problem: TON’s native virtual machine (TVM) and smart contract language (FunC) remain <a href="https://app.blockworksresearch.com/research/ton-not-right-now">bespoke and less accessible</a> to Ethereum’s vast developer ecosystem. By introducing an EVM-compatible chain directly integrated with TON, TAC offers a pragmatic bridge for blue-chip Ethereum DeFi apps to deploy to Telegram’s billion-plus user base without rewriting its entire codebase.



This goal shaped every step of TAC’s pre-launch strategy. The project ran an “$800 million Summoning Campaign” on Turtle Club — the same liquidity launchpad trusted by projects like <a href="https://blockworks.co/news/polygon-katana-defi-focused-chain-agglayer">Polygon-backed Katana</a> — to bootstrap deep liquidity before mainnet launch.



It’s worth noting that a year ago, the TAC team <a href="https://www.coindesk.com/tech/2024/07/09/ton-blockchain-will-release-new-layer-2-based-on-polygons-technology">announced</a> collaboration with Polygon Labs to build a TON layer-2 using Polygon CDK. The idea was for the planned rollup to eventually run as an EVM-compatible layer on top of TON itself. But that’s evidently been shelved. By contrast, the newly launched TAC chain is a sovereign layer-1 built on <a href="https://blockworks.co/tag/cosmos">Cosmos</a> SDK, bridging to TON via a dedicated cross-chain adapter.



TAC’s fee model also reflects this bridging complexity. As co-founder Marco Monaco explained to Blockworks:



“MiniApps are built with our SDK, [where] transactions simulate the EVM gas cost and convert it in real-time in TON with an oracle. This TON is attached to the user&#8217;s transaction, sent to the TON Adapter…picked up by a network of sequencers and relayed to the TAC EVM side, where there is a network-level paymaster that sponsors the TAC gas fees. We then convert the collected TON into TAC and refill the paymaster.”



This approach abstracts away gas payment friction for end-users while creating sustained buy-pressure for the TAC token, as TON collected from users is systematically converted.



On the staking side, TAC uses standard Cosmos-style delegated proof-of-stake (DPoS), offering yields in the 8-10% APY range, not counting transaction fees. Monaco clarifies these rewards are not artificially boosted beyond the protocol’s <a href="https://www.tac.build/blog/introducing-tac-token-utility-and-tokenomics-of-the-tac-protocol-token">inflation schedule</a>.



“[TAC emissions] run at around 5% inflation per year, with a staking ratio of 60%,” Monaco said.



TAC security is to be bolstered by <a href="https://blockworks.co/news/babylon-genesis-launch-l1-bitcoin-liquidity">Babylon bitcoin staking</a> — the network is targeting to be among the first BSNs (bitcoin secured networks) based on Comsos, Monaco said.



This dual-staking approach means validators must bond TAC while facing the risk of slashed BTC collateral enforced via Babylon’s SPV-based slashing system on Bitcoin itself.



“It&#8217;s of utmost importance for us…a layer-1 with a token trading at [a few hundred million dollars] FDV can&#8217;t secure 1b TVL on the network. So Bitcoin security is critical to be able to secure the TVL onchain.”



The validator set at launch features reputable infrastructure players such as ValidationCloud, P2P, Kintsugi, NodeStake, Chorus One and Animoca.



From a security perspective, TAC has taken care to avoid common launch pitfalls. The EVM implementation underwent a fresh <a href="https://www.halborn.com/audits/tac">Halborn audit</a> in late May 2025 — just before launch — which found no critical or high-severity issues and verified fixes for minor bugs. Earlier audits by Halborn, Trail of Bits, and Quantstamp covered the TON Adapter and proxy contract layers, reinforcing TAC’s claim of professional-grade security.



Still, the design reflects clear trade-offs. As an external EVM-compatible layer connected via cross-chain bridging and “state mirroring,” TAC introduces extra trust assumptions and sequencing complexity. Its sequencer network, for example, <a href="https://docs.tac.build/core-concepts/overview/what-is-tac">remains</a> “distributed, but not decentralized” at launch.



Ultimately, TAC’s mainnet debut is a major milestone for TON’s evolution from a payments-focused chain into a more mature DeFi-capable platform. It may be an indirect bridge — and certainly not without friction — but it’s also a pragmatic one that gives Ethereum developers a path to tap Telegram’s enormous audience without abandoning EVM tools and code. 



Whether that bridge will be widely used and sticky remains the big question ahead. The whole thing feels a bit Rube Goldbergian to me.







Correction July 15, 2025 at 12:23 pm ET: Clarified Babylon-based dual staking is not live at mainnet launch.



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TAC mainnet launch aims to bridge Ethereum DeFi to TON

Katherine Ross

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



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Bitwise is rolling out third-party daily attestations for its bitcoin ETFs, Blockworks has exclusively learned.&nbsp;



The attestations will replace the wallet addresses on the Bitwise site, Bitwise CEO Hunter Horsley tells me.



“The third-party CPA’s report will have examined the assets onchain, so the holdings of the funds, but then we&#8217;ll have also examined the liabilities, and so we&#8217;ll have looked at both sides of the ledger, and then [the] third party will provide a report on the state of those things. The report is very easy to consume and will be available daily. This is an evolution, from my perspective,” he explained.



The goal is to make the attestations consumable and simplify the information available because, as Horsley noted, the list of wallet addresses is around 90.&nbsp;



The big takeaway, for me, is just how much things have changed this year. Horsley told me that they’ve gone from proactively arranging meetings with large institutions every few weeks to now having institutions cold-email them in the hopes of starting the conversation.&nbsp;



While they operate in different parts of crypto, it’s very similar to what Securitize’s Carlos Domingo <a href="https://blockworks.co/news/rwas-35b-securitize">told us yesterday</a>. The institutions are here, and they’re eager to take part.&nbsp;



“So I think that helping people pull the thread on their curiosity or their understanding, to build a conviction, is hugely important, and it&#8217;s what Bitwise really does. And so…I think that this year has just been remarkable. I mean, we&#8217;ve been around for over seven years, and this year is absolutely just a watershed year in terms of mainstream investors coming online,” Horsley said.&nbsp;



The daily attestation report, in place of wallet addresses, also speaks to the level of investor coming in. Not everyone is able to understand wallet addresses, so the hope is that the new system is easier for a larger audience to digest.&nbsp;



“People are going to wake up in 12 months and say, ‘Wait a minute, when did everyone get into crypto?’ One of the funny dynamics of the moment that still hasn&#8217;t changed is that even for all of the new firms that are coming into the space and investing in the space, we have wealth management clients that have 30% of their clients&#8217; assets in crypto. That&#8217;s not the majority, but we have clients that have a ton of conviction and knowledge, and then people who are early in their journey,” he noted.



But there’s a bit of a weird dynamic, because even those institutions that are pretty bullish on crypto behind closed doors don’t necessarily want to be publicly named as giving clients access to Bitwise products. 



So while real adoption is taking place, a lot of it is behind the scenes. We’re not quite at the moment where everyone wants to come out as pro-crypto, though it seems more and more firms are exploring.



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



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



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</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/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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Exclusive: Bitwise to roll out daily attestations for bitcoin ETFs

This is a segment from The Breakdown newsletter. To read more editions, <a href="https://blockworks.co/brand/the-breakdown">subscribe</a>.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Capital goes where it’s treated best.” — Wall Street folk wisdom
</blockquote>



In this century full of Big Tech successes, Europe’s only big success is Spotify, whose shares are listed on the New York Stock Exchange.



I mention this because New York is not in Europe.



Spotify was founded in Sweden, incorporated in Luxembourg and keeps its accounts in euros.



At the time of its 2018 IPO, half of its workforce and more than half of its customers were in Europe.



But Spotify was one of 87 non-US companies that chose to list its shares primarily in the US that year.



It’s easy to see why: No market makes it easier to sell shares than the US does (no matter where the company’s from) and no market pays more for them.



This is not a recent development.



The US has been a magnet for international investment capital for at least 200 years, in part because it was always easier to both start a company here and sell shares in it.



In 19th century Europe, you needed a state or royal license to incorporate a company, for example.



In the US, you just filled out some paperwork and paid a processing fee.



The US had few restrictions on the issuance of stock at the time, so entrepreneurs could sell shares in those newly formed companies directly to the public with little, if any, regulatory oversight.



(Crypto-friendly readers may see where I’m going with this.)&nbsp;



The New York Stock Exchange required that companies be profitable and already have tradable shares, but there was an active over-the-counter market right outside the exchange where anyone could walk up and offer anything for sale to anyone.



In Europe, by contrast, public share offerings were viewed with suspicion and sometimes required ministerial approval.



Perhaps most importantly, the US developed a culture of small-scale shareholding far earlier than anywhere else did.



The Erie Railroad was one of the first to do so, selling shares directly to retail investors in the early 1830s. Its (relative) success helped develop a culture of public equity investing.



Retail enthusiasm for Erie shares inspired a wave of railroad IPOs, many of which were <a href="https://citeseerx.ist.psu.edu/document?repid=rep1&amp;type=pdf&amp;doi=c243875996dce14828dd4ca8243a0027288b0290">funded by European investors</a> who had more capital than domestic investment opportunities.



Europe also built railroads, of course, but these were mostly funded through government concessions or syndicates of banks.



As a result, the US finished the century with a much bigger railroad network than Europe did, despite having far fewer people.



Americans’ enthusiasm for buying stocks has been one of the country’s biggest competitive advantages ever since.



Automobiles, aerospace, electronics, the internet and AI: These capital-intensive industries all gravitated toward the place where it was easiest to raise capital — US stock exchanges.



But is there anywhere easier to raise capital than crypto exchanges?



On Saturday, it took the memecoin launchpad Pump.fun just 12 minutes to sell $500 million of tokens. (At a retail-friendly price of just $0.004 per token.)&nbsp;



Like the Erie Railroad — and unlike modern IPOs — much of this capital was raised from retail investors: Blockworks’ <a href="https://x.com/whosknave/status/1944182805883146712">Jack Kubinec reports</a> that the median order size for pump.fun tokens was just $400, and that 20,000 accounts KYC’d with exchanges to qualify.



US investors were excluded because of the still-uncertain regulatory regime here, but the pump.fun ICO is a reminder that crypto markets are theoretically open to anyone with an internet connection, at any time of day or night.



The pump.fun ICO alone raised more on a Saturday than the NYSE has raised on all Saturdays since at least 1952 (when it stopped trading on Saturdays).



This could prove to be a competitive advantage for the emerging digital economy: If crypto capital markets become the easiest place to raise money, that’s where companies will go to raise it.



And like non-US companies raising capital in the US, non-crypto companies may someday raise capital in crypto.



There are risks!



Crypto’s lack of regulation has attracted projects more interested in avoiding oversight than in doing anything genuinely innovative or productive.



(The jury’s still out on pump.fun, in my opinion.)



That might have to change: In the US, investing in equities didn’t go truly mainstream until the SEC was formed, giving retail investors confidence that the market wasn’t rigged against them.



There is no such confidence in crypto markets.



But 19th century capital markets were largely rigged against retail investors and productive industries — banks, railroads, canals — managed to get funded and built anyway.



Similarly, if the current crypto industry (for better and worse) was built by the Ethereum ICO of 2014, the pump.fun ICO of this weekend could be the start of the crypto industry’s next phase.



In a best-case scenario, crypto capital markets could become to the 21st century what the US equity market was to the 19th: a more flexible, more inclusive and more speculative system of capital formation that outcompetes the rigid incumbents of traditional finance.



If a tech company as important as Spotify ever chooses to raise capital in crypto markets, pump.fun will go down in history as the Erie Railroad of crypto.



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Crypto’s competitive advantage: Saturday ICOs

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>.



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On July 12, the pump.fun ICO <a href="https://x.com/ChristiaanDefi/status/1944038638968615302">sold out</a> in 12 minutes, raising over $500 million onchain and an additional $100 million via centralized exchange partners. The ICO <a href="https://blockworks.co/news/pump-fun-500m-ico-twitch">attracted</a> over 10,000 wallets with a median buy-in of $537, according to Blockworks Research <a href="https://app.blockworksresearch.com/analytics/pumpfun/?dashboard=345">data</a>. 



Quite a big win for Pump, especially considering that we are long past the days of sell-out ICOs being the norm.



But underneath the ICO’s record-breaking demand, some interesting anomalies emerged.



One wallet (88888FAoqY6JdSvz7fk1FPd6qjPTcCMGcS64GbwonLoE) <a href="https://x.com/0xSharples/status/1944443037070905549">funded</a> 500 different addresses, each with $400 in USDC and 0.05 SOL for gas, according to data compiled by Blockworks researchers.&nbsp;



These wallets all participated in the ICO, purchasing $200,000 in PUMP tokens before fees. One wallet appears to have utilized centralized exchanges to create the illusion of being many wallets. It’s an impressive feat, given that KYC checks were required to purchase PUMP.



Onchain data shows the wallet’s activity in sequence: Withdraw stablecoins from Bybit and Binance, distribute them evenly to 500 wallets, send a bit of SOL to cover gas fees and have each wallet contribute exactly $400 to the ICO.



Researcher Sharples notes that these wallets <a href="https://x.com/0xSharples/status/1944443037070905549">show up</a> under the “unknown address” category in Blockworks Research’s funding source chart, skewing the optics of distribution.



Blockworks’ Dan Smith <a href="https://x.com/smyyguy/status/1944461735164850292">tracked the wallet’s history</a> and found that the actor previously used the same network of addresses to spoof holder counts in low-float memecoins like ARTIC and WUKONG.



Nine months ago, these wallets were dusted with 0.000000001 tokens to inflate “unique holder” metrics. ARTIC later rugged. It’s worth noting that the use of older wallets may help bypass anti-Sybil heuristics that flag recently funded/created addresses.



Some have <a href="https://x.com/0xDoing/status/1944462572951867545">suggested</a> that the orchestrator may have been speculating on future airdrops or bonuses for small buyers. By splitting a $200k allocation into hundreds of sub-$500 entries, the whale could appear to be 500 unique participants — each potentially eligible for future rewards from pump.fun or third-party protocols.



Of course, none of this is to suggest that pump.fun had any involvement in the behavior of this currently anonymous whale. Once tokens are live, it’s pretty impossible to control how wallets participate.



What is clear, however, is that without strong Sybil resistance, sophisticated actors can game even well-structured launches using fragmented wallets and coordinated funding strategies to dominate allocation, spoof demand and manipulate downstream incentives.



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Pump.fun’s record ICO flooded by coordinated wallet participation

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



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A month after <a href="https://blockworks.co/news/circle-shares-nyse-day-one#">Circle’s IPO</a>, Grayscale Investments appears to be plotting a similar path.&nbsp;&nbsp;



Chances are you’ve seen the company’s airport ads or recalled it notched a big legal win against the SEC — even if you don’t know exactly what it’s up to these days.



Like Gemini <a href="https://blockworks.co/news/gemini-files-confidential-s1-with-sec">did last month</a>, Grayscale “confidentially” <a href="https://www.globenewswire.com/news-release/2025/07/14/3114796/0/en/Grayscale-Investments-Announces-Confidential-Submission-of-Draft-Registration-Statement.html">submitted</a> a draft registration statement with the SEC. It’s a step toward going public. A spokesperson declined to comment further.&nbsp;



The Grayscale Bitcoin Trust (GBTC) launched as a private offering in 2013 and debuted on the OTC market in 2015. It morphed to an ETF in January 2024 — several months after <a href="https://blockworks.co/news/sec-grayscale-spot-bitcoin-etf">a court ruled</a> that the SEC blocking the conversion (while allowing bitcoin futures ETFs to start trading) was “arbitrary and capricious.”



While GBTC has seen roughly $23 billion of net outflows since becoming an ETF, its AUM still sits near $22 billion. Grayscale’s cheaper bitcoin ETF that launched a year ago manages $5.3 billion in assets.&nbsp;



Dan Weiskopf, a co-portfolio manager for the blockchain-focused Amplify Transformational Data Sharing ETF (BLOK), said an “innovative” company like Grayscale would have the scale, brand and focus required to be accepted on platforms, he added.



“When we have an opportunity to review the prospectus, we will be looking closely at expense control relative to its growth and how [it] expects to fight for market share,” Weiskopf told me.&nbsp;&nbsp;



Grayscale going public in the US would offer rather unique exposure for crypto equity investors. It’s obviously a different type of business than Coinbase, and while Galaxy Digital offers several crypto funds with Invesco and State Street Global Advisors, it’s not exactly a pure-play ETF issuer. You could maybe link it to <a href="https://blockworks.co/news/galaxy-defi-technologies-nasdaq-us-listings">DeFi Technologies</a>.



While WisdomTree might be a good comparison from a valuation standpoint, Weiskopf argued, “it has the diversity that Grayscale lacks.”&nbsp;



WisdomTree had its IPO in 1991 and has grown its AUM to $126 billion. Though it offers a bitcoin ETF and <a href="https://blockworks.co/news/wisdomtree-connect-expands-chain-base-tokenization">tokenized funds</a>, its equities, fixed income and alternatives business lines are bigger. BLOK’s allocation to WisdomTree is roughly 1.5%.



Grayscale has a few dozen private and publicly traded funds focused on other crypto assets. The SEC <a href="https://blockworks.co/news/sec-greenlights-grayscale-crypto-fund-etf">approved NYSE Arca’s 19b-4</a> to list shares of the Grayscale Digital Large Cap Fund (GDLC) as an ETF. But the order was “stayed,” and Grayscale shot back in a <a href="https://www.sec.gov/comments/sr-nysearca-2024-87/srnysearca202487-621627-1825194.pdf">letter</a> last week: “The commission has no power to do this after the 240th day” of the 19b-4 being published in the federal register.



Beyond GDLC, <a href="https://blockworks.co/news/crypto-etf-launch-timelines-sec">the SEC has until October</a> to rule on proposals from Grayscale and others to bring to market single-asset products that would hold litecoin (LTC), solana (SOL), XRP, dogecoin (DOGE) and more.



“How they manage the fee compression will be a challenge,” Weiskopf said about Grayscale, should these conversions gain approval.&nbsp;



As bitcoin has soared in recent days (hovering around $120,000 this afternoon), we’ll see whether other crypto companies might take steps toward going public.&nbsp;&nbsp;



Weiskopf estimates there are between 10 and 25 such firms at various stages of the confidential IPO filing process.



Among Grayscale’s main competitors is Bitwise. A spokesperson told me that while Bitwise has considered an IPO, its 2025 focus is “entirely on serving clients engaging with this space like never before.”



All’s to say: There’s more where this came from.



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Weighing Grayscale exposure after firm signals possible IPO path

Kate Irwin

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



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Wallet provider Privy is under the hood of a lot of your favorite crypto platforms, like OpenSea, Pumpfun, Jupiter, Hyperliquid and even <a href="https://blockworks.co/news/digg-news-reboot-relaunch-crypto-wallet-kevin-rose">Digg 2.0</a>.



In June, payments giant Stripe <a href="https://blockworks.co/news/stripe-acquires-privy-wallet">acquired</a> Privy, which says it’ll remain a separate product but that now they’ll be able to move faster and ship more.



Privy’s chief executive and co-founder Stern has a background in finance and engineering, most recently as a research scientist at Protocol Labs before starting the crypto wallet firm.



This interview has been condensed and edited for clarity.



Kate Irwin: I&#8217;d love to get your thoughts on consumer crypto.



Henri Stern: The way we look at the customers [is] we serve is across three main angles. So there&#8217;s fintech, which is to say payments, treasury management, remittances, buying and holding dollars. There is DeFi and trading. And then there&#8217;s consumer engagement.&nbsp;



And I&#8217;m increasingly starting to think that those are the wrong categories, to some extent, because the definition of “consumer” has kind of changed. If you harken back to 2021, or even 2018, we used to say there&#8217;s “consumer crypto” and “fintech crypto.” And historically, it&#8217;s also been that the “consumer” in crypto was a developer, for the most part, because there was no broader adoption. And so, like, even through DeFi summer, the average consumer was a hyper, like, technically literate person.&nbsp;



And I think now we&#8217;re seeing the emergence of a new “consumer” category, which is “consumer finance.”&nbsp;



…Broadly, I wonder if we&#8217;re misusing the word “consumer” from now on. And I don&#8217;t know what that does, right? But it used to be that more or less you had “finance,” and that meant B2B, and you had gaming, DeFi, and NFTs, collectibles, creator economy, and that meant “consumer.” And I think actually the two are kind of blending, in that now there is, like, “consumer finance,” which is this new, maybe third, category. But I think for us, it&#8217;s a major part of our work.&nbsp;



We started serving companies like OpenSea, and Proof of Play, which does a huge amount of gaming. Today we serve Farcaster, so it&#8217;s a huge part of what we do. And I think, frankly, it&#8217;s kind of at the frontier of how you work through better UX. Because if a game can deal with the wallet experience without having transactions pop up in your face every other second, you&#8217;ve probably built something that&#8217;s good enough for any other type of consumer platform.



KI: Do you think the future of crypto involves each crypto user juggling many wallets?&nbsp;



Stern: Users do not have a single identity. You don&#8217;t have a single identity. I don&#8217;t have a single identity. The way I am at a crypto conference is different than the way I am with friends. It’s different from the way I am with family, and likewise, online, the way I use my bank, my grocery store, whatever else, is completely different based on the situation.



As more and more things come onchain, you will need to be able to tune your experience differently, your wallets differently, your risk settings differently.



Having a wallet for applications is problematic. So I guess my take is, broadly, [that] we&#8217;ll end up having some version of profiles, where you have wallets that you sort of cluster around, and then you reuse around types of applications that operate in similar ways.&nbsp;



And then the second thing, I think, is we&#8217;ll just get much better bridging between apps. I think it is inevitable.



Let&#8217;s take it as a premise that users will have multiple wallets. And then from there, the question becomes, how do we actually make it super easy for them to move assets across them very, very easily?



I think that&#8217;s a completely unsolved problem, and one where users will need a platform where they can broadly manage their identity and their assets across these. And my take is that I think of it a lot like Apple System Preferences.&nbsp;



I think when you use your iPhone, you come onto Uber, and Uber asks you, “Do you want this app to have access to your location?” You can say “yes,” “no,” [or] “just this once.” And you don&#8217;t think about it again. But if you ever wanted to manage that setting, you could in your System Preferences.



We’ll end up having a like, meta-level control center where they can manage their multiple identities. That&#8217;s something we&#8217;re thinking about a lot.



KI: What do you think about the rise of crypto “superapps,” where players like Coinbase are combining crypto wallets with social media and other features? It’s kind of uncharted territory, but I also wonder if it’s going to catch on.



HS: I guess it&#8217;s uncharted territory in the West because of how things came about, but WeChat is doing great, and has done this. And Line has also done this. So I think the thing is, there’s such path dependency on technological adoption that I don’t know that [just] because it has existed, it will exist again.



But we’re seeing it with apps like Farcaster. Like is Farcaster a wallet? They do have a wallet, we’re very happy, that’s powered by Privy, but they have mini apps. And so I spend an unholy amount of time playing Farcade, which is a gaming platform within Farcaster, and spending assets I have in my wallet to do so.&nbsp;&nbsp;&nbsp;



I think let a thousand flowers bloom and we’ll see.



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3 big questions with Privy CEO Henri Stern

A co-founder of the defunct crypto lending business BlockFi has made her next move.&nbsp;



Flori Gilroy is now the senior vice president of SoFi’s crypto unit.



The new hire was quietly made <a href="https://www.sofi.com/our-leadership/">official</a> via an update to the masthead on SoFi’s website and confirmed by a source familiar with SoFi’s business operations. It’s unclear when Gilroy took on the new role.



Gilroy and SoFi did not immediately return requests for comment.



Gilroy went by Flori Marquez while helping run BlockFi. After the bankrupt lender’s other co-founder Zac Prince was <a href="https://www.coindesk.com/business/2025/02/25/michael-novogratz-s-galaxy-hires-zac-prince-former-ceo-and-co-founder-of-blockfi">scooped</a> up by Galaxy, both of BlockFi’s co-founders have now returned to roles in the crypto industry.



Once a leading crypto lending business with a slew of prominent backers, BlockFi was caught in the fallout from Three Arrows Capital’s bankruptcy in 2022. <a href="https://blockworks.co/news/ftx-reaches-deal-to-acquire-blockfi-for-up-to-240m">FTX acquired the business</a> for $240 million, but following the exchange’s collapse, BlockFi <a href="https://blockworks.co/news/blockfi-bankruptcy-chapter-11-greenlight">filed for bankruptcy</a> itself.&nbsp;



Read more: <a href="https://blockworks.co/news/blockfi-ftx-bankruptcy-comparison">BlockFi’s bankruptcy proceedings ‘golden standard’ compared to FTX: Lawyers</a>



The links between Gilroy and SoFi go back several years. The online bank and fintech company <a href="https://medium.com/blockfi/blockfi-seed-round-funding-announcement-5f7f569f59f3">invested</a> in BlockFi’s seed round in 2018.



SoFi is <a href="https://www.barrons.com/articles/sofi-bitcoin-crypto-blockchain-3ddc4610">revamping</a> its crypto services this year after <a href="https://blockworks.co/news/sofi-shutters-customers-migrate-holdings">suspending crypto trading</a> in 2023 in the wake of new rules set by the Federal Reserve.&nbsp;



In a late June press <a href="https://investors.sofi.com/news/news-details/2025/The-Future-of-Financial-Services-SoFi-to-Offer-Members-New-Crypto-Enabled-Capabilities-to-Get-Their-Money-Right/default.aspx">release</a>, SoFi said global remittances and crypto investing are expected to launch later this year as the “first of many planned crypto and blockchain innovations” at the company.



Last week, the administrator overseeing BlockFi’s bankruptcy <a href="https://news.bloomberglaw.com/bankruptcy-law/blockfi-administrator-doj-agree-to-end-suit-over-crypto-assets">settled</a> a lawsuit with the US Department of Justice involving the proposed transfer of some of BlockFi’s crypto to the government. BlockFi <a href="https://blockfi.com/blockfi-emerges-from-bankruptcy/">emerged</a> from bankruptcy in October 2023.



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BlockFi co-founder Flori Gilroy hired to lead revamped SoFi crypto unit

Donovan Choy

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/0xresearch" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Are we back?



BTC is at a new all-time high of $121k, ETH is back above $3k, and Aave just <a href="https://x.com/aave/status/1944661485973602340">crossed</a> $50 billion in TVL.



But probably most significant of all is the return of initial coin offerings (ICO). This past Saturday saw <a href="https://blockworks.co/news/pump-fun-token-ico-date">Pump’s ICO</a> raising $500 million at a $4 billion FDV.



(A separate $100 million was raised offchain via CEXs.) I say “Saturday,” but it was all over in 12 minutes. 125 billion PUMP tokens (12.5% of total token supply) were all sold for $0.004 apiece.



As of this morning, PUMP is trading at $0.0059 on <a href="https://app.hyperliquid.xyz/trade/PUMP">Hyperliquid perps</a>.



Who were the buyers?



10,145 unique addresses aped in at a remarkably equitable median price of $537.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf67lgCjYcQpgaF-EGuOURmEBcuN6OMSq02I4Qk_qMpGRBTH9oo4iHFlCymFawKHqSaeNYLNGcjc88NtnUfkRFeThNuC-5jI6c_FWCGItEildfWBjoJtlxzYeawoEm7KnnvHqZBdw?key=qgDYZnpwkyeCXaIYg8xsfQ" alt=""/></figure>



Interestingly, more users came from DEXs than CEXs. About 3,878 Pump investors came from Solana DEXs including Raydium, SolFi and Jupiter — compared to 2,525 investors from CEXs.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfjSLMDiDgwpq45mobFnOILnhQ3WtlRMDVMVxDnX9G-hJiHyJBZ7o8zwAMib7s19rpLAHfiGmGCkkJ3NG4MXdbUQBJFQLMly1KrX3dvqLtRUJ4m5e0ha2k3zPvplE5GcwwqaA3x6w?key=qgDYZnpwkyeCXaIYg8xsfQ" alt=""/></figure>



A number of Bybit users failed to receive their PUMP allocations due to an “<a href="https://x.com/Bybit_Official/status/1944079461382582274">unexpected API delay</a>,” so they’ll be getting refunds and a sad $20 spot fee coupon instead.



<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"><a href="https://twitter.com/search?q=%24PUMP&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$PUMP</a> Token Sale: Oversubscription and Allocation Updates At 2:00 PM UTC on July 12, 2025, the <a href="https://twitter.com/search?q=%24PUMP&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$PUMP</a> public token sale officially launched with extremely high demand, and the sale was heavily oversubscribed within seconds, resulting in some users successfully receiving…&mdash; Bybit (@Bybit_Official) <a href="https://twitter.com/Bybit_Official/status/1944323460018102768?ref_src=twsrc%5Etfw">July 13, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The key takeaway here, I think, is: Onchain infrastructure has never been more streamlined and effective.



<h2 class="wp-block-heading">Pump’s strategy</h2>



Pump’s $600 million ICO is big, but not that big. Let’s put that into context.



EOS’ (today called Vaulta) ICO in 2017-18 still holds the record for the largest-ever ICO, at a whopping $4.1 billion.&nbsp;



<a href="https://blockworks.co/tag/telegram">Telegram’s</a> 2018 ICO also raised $1.7 billion in two phases. The GRAM tokens sold were <a href="https://blockworks.co/news/telegram-users-can-now-send-receive-crypto-following-2-year-hiatus">eventually refunded</a> due to regulatory troubles, and the app’s backers later <a href="https://blockworks.co/news/ton-standout-in-rocky-crypto-markets">created TON</a>.



Compared to Ethereum, however, Pump’s ICO is big. Ethereum raised ~$18 million in bitcoin across 42 days in 2014.



These are obviously not apples-to-apples comparisons given the differences in time period, market maturation, product type, etc.



But the biggest difference of all is that unlike the industry’s past ICOs, Pump is not a mere proof-of-concept — the memecoin launchpad is a cash cow.



Pump has made $786 million in cumulative revenues since its inception in January 2024. That’s a staggering $377 million in annualized revenues for the two-year-old company.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfQUfE28k9RQ4ZotaWXyt8N-uURU_cJoJYx2E3mAFDDGFwrj2l5kuDg9Zi5DllEAyPlHGsgRrduRWAty_x3b2B0FrAQQjXp04cAPA7-8AeU5Ac3OfddrlsIjyjL2XsVH91qltjADA?key=qgDYZnpwkyeCXaIYg8xsfQ" alt=""/></figure>



Furthermore, Pump is allegedly planning to share 25% of revenues with token holders, my colleagues Katherine and Jack <a href="https://blockworks.co/news/pump-revenue-sharing-token-holders">reported last week</a>.



“There’s a reasonably high probability that the PUMP token will have some value accrual mechanism,” Blockworks Research’s Ryan Connor told me.



Pump wants to go after the social media market. In the team’s <a href="https://x.com/pumpdotfun/status/1942947267436056740">own words</a>: “our plan is to Kill Facebook, TikTok, and Twitch. On Solana.”



The exact details of Pump’s strategy are not yet clear, but it looks to be capitalizing on its livestreaming feature that was brought back in April after a <a href="https://blockworks.co/news/pumpdotfun-call-for-ban-or-regulation">controversial removal</a> last year.



Pump’s livestreamers, like any other token creators, receive 0.05% of all trading fees from their token.



“Pump is interesting in that it’s adjacent to risk markets. Buying creators outright is hard to do because they’re costly. A lot of people undermonetize their internet celebrity, so if you could get paid some modest amount by people passing value back and forth, that’s costless to Pump and perhaps their wedge,” Connor said.



Updated Monday, July 14 at&nbsp;2:45 PM ET:&nbsp;This story has been updated to reflect that pump.fun raised $600M in its ICO.



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Inside pump.fun’s $600M ICO and its quest to topple Twitch

David Canellis

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



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



Bitcoin at $120,000 is a win for everyone on the left and right sides of the infamous bell curve meme.



<figure class="wp-block-image size-full is-resized"><img loading="lazy" decoding="async" width="828" height="608" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-2.png" alt="" class="wp-image-105141" style="width:700px;height:auto" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-2.png?w=828 828w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-2.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-2.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-2.png?w=350 350w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-2.png?w=355 355w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-2.png?w=298 298w, https://blockworks-co.imgix.net/wp-content/uploads/2025/07/image-2.png?w=80 80w" sizes="auto, (max-width: 828px) 100vw, 828px" /></figure>



Mid-curving is almost never the optimal strategy. Except for, perhaps, very specific points in a cycle — particularly in deep bear markets, when vibes and narratives are less powerful.



Right now, the extreme ends of the bell curve are both screaming one thing: There’s not enough bitcoin for everyone.



For example, the left-curve take on bitcoin scarcity goes something like this:



Bitcoin is currently only programmed to release 21 million BTC. Most of it has already been mined.



In fact, mining proceeds are now a tiny drop in the bucket compared to the trading activity across Binance and Coinbase, equivalent to less than 1% of their combined daily volume.



Now subtract the coins that are believed to have been lost — up to an <a href="https://fortune.com/crypto/2017/11/25/lost-bitcoins/">estimated</a> 4 million coins, or almost 20% of the entire intended supply.&nbsp;



We’re left with 15.9 million BTC in circulation right now. At the same time, there are more than 58 million USD <a href="https://www.aljazeera.com/news/2024/7/27/where-are-the-worlds-millionaires-and-how-is-wealth-divided-globally">millionaires</a> around the world. That puts the millionaire-to-bitcoin ratio at 3.6-to-1.



If you think the smart money (millionaires) will increasingly want to buy bitcoin over time — at size — then there’s only one way the price can go. Up. It’s simple supply and demand.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcrNs6HoHcp9wGlUtv4WST9OaWZy3R-lqpOz-3x4smL9FjoYaY8g2nowymvQ4qcAaDV0igmGwUPCxqLGjvke5Ake4OdHvyNXsp-HI_NQvKXieyvW0WWc_4A-C5rdFsX4wVU-MfQag?key=0Q_GFmsl9vtW1sltV96VdA" alt=""/><figcaption class="wp-element-caption">The orange line (BTC/USD) has never been higher, unlike the gold line (bitcoin’s gold ratio).</figcaption></figure>



Mid-curvers would point out that bitcoin is divisible by eight decimal places. So while whole bitcoin is scarce, individual satoshis are obviously anything but.&nbsp;



For neatness’ sake, we’ll say the current circulating supply of sats, minus the ones supposedly lost forever, is 1,590,000,000,000,000. That’s one quadrillion, five hundred ninety trillion sats — 190,000x larger than the total human population.&nbsp;



So, an even distribution of the current sat supply to every person on Earth would equate to 190,000 sats.&nbsp;



A common rebuttal to this logic has historically been, fittingly, about pizza. Imagine you have a delicious cheese pizza, and you need to feed a village with it. Except it’s nowhere near big enough.&nbsp;



Does cutting it into infinitely smaller slices help? Of course not, you’re left with the same amount of pizza. 1 pizza = 1 pizza; 1 BTC = 1 BTC.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfprQRJpHYTU4bKk8c42uRNfgejuYpQpyeU7tWegJe5oZQanzlybb0DYKlkpe_qPKU_tFX642RoMnUaR5FDcNHGXyIhgJb5P8cA1vtU0-T1qky0MqFdfwgxdSdL7RmWPmnG4-7rEQ?key=0Q_GFmsl9vtW1sltV96VdA" alt=""/><figcaption class="wp-element-caption">A rare occurrence: BTC dominance is going up alongside its market cap. Usually they’re inversely correlated.</figcaption></figure>



Clearly, the pizza rebuttal has a flaw: Imagine that each one of those tiny slices can grow into a giant pizza, like adding water to one of those toys that rapidly expand when wet. Suddenly, the whole village can be easily fed, and perhaps even the neighbouring villages, too.



Along the same lines, consensus is forming that bitcoin is destined to reach $1 million per coin. Bloomberg Terminal just began <a href="https://x.com/jacqmelinek/status/1943373069063786953?s=46">denominating</a> BTC in millions (current price: $0.122 million).&nbsp;



Now let’s take it to the extreme.&nbsp;



If hyperbitcoinization really happens and bitcoin becomes worth, say, $500 million apiece, then each satoshi would be equal to about $5. At that point, perhaps we would be marveling at the price of individual sats instead of whole bitcoins.&nbsp;&nbsp;



And besides, it’s technically possible to add even more decimal points to bitcoin, somewhere down the line, where whole coins are impossibly expensive. Lightning even tracks so-called “millisatoshis,” miniscule units that are 1/1000 of a sat.



But remember, this is no time for mid-curving. If you fancy yourself on the right-hand side of the curve, then the sentiment is exactly the same as the left: there’s not enough BTC for everyone, as proven by its recent repeated all-time highs.



It’s simple supply and demand.



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Both ends of the curve agree — there’s not enough bitcoin for everyone

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



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Real-world asset tokenization has been quietly growing, topping $25 billion just last week, so let’s check in with Securitize CEO Carlos Domingo, shall we?



Since inking its deal with BlackRock last year, Securitize has managed to really grow its presence in this sector. It started out this year, in January, with $1.1 billion, but that’s grown over 250% to $3.94 billion, per both rwa.xyz and Securitize’s own data.



Then you look at subparts of the RWA market, like tokenized treasuries, which have also seen huge growth this year alone. At the beginning of this year, it sat at $4 billion, but it’s now at $7.5 billion — an increase of 87%.



“Every single asset manager and bank in the US…is now looking at tokenizing something,” Domingo said.&nbsp;



“The concerns in the past [were] about, is this legal or not? Does it have product-market fit? Is there investor demand that has completely disappeared? So now the question is more about, when and what do I tokenize, as opposed to, why should I tokenize? Or is this legal?”&nbsp;



The problem for institutions at this point is that they don’t necessarily understand where the demand is, Domingo said.&nbsp;



“They will come to us and they will ask us, what do you think are good products to do it? There is still a bit of a perception that you should be tokenizing illiquid assets like real estate and private equity. I personally think that&#8217;s a bad place to start, because the fact that you tokenize them is not going to make them liquid,” he noted.



Instead, he’s seeing more of a pickup in tokenizing yield-bearing liquid assets.&nbsp;



Domingo said that one of the biggest unlocks he’s seen has been the integration with DeFi, which not only gives institutions the ability to explore DeFi, but it also has a huge benefit for projects in the space as well.&nbsp;



“All the DeFi companies know that they need to bring institutions into DeFi, for DeFi to continue to grow. So all these companies that didn&#8217;t want to touch institutions now realize that without institutions participating in DeFi, and without high-quality assets to be able to process collateral, etc, [then] DeFi is not going to grow back to where it was [during DeFi summer in 2021],” he explained.&nbsp;



Specifically, we’re going to see a pickup in lending and automated market making as institutions and DeFi projects team up in this space, though Domingo also thinks that there’s very healthy demand for tokenized stocks, which make for a “good combination” with DeFi.



As for outlooks, Domingo told <a href="https://blockworks.co/news/rwa-defi-integration-tokenized-treasurys">Empire back in January</a> that he could see the market growing to $50 billion over the next year. However, he’s pulling back on that slightly. He could see the sector adding another $5 to $10 billion to the current overall figure of $25 billion by year-end. 



As for when we could see the RWA market cap hit $50 billion? That’s going to come when the institutions feel secure and ready to enter, which could take some time. But players like BlackRock and Apollo have helped pave the way.



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RWAs could top $35B by year-end: Securitize

This is a segment from The Breakdown newsletter. To read more editions,&nbsp;<a href="https://blockworks.co/brand/the-breakdown">subscribe</a>.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“The importation of gold and silver is not the principal, much less the sole benefit which a nation derives from its foreign trade.”&nbsp;



— Adam Smith
</blockquote>



Capitalism, it is sometimes said, is how we take care of people we don’t know.



People you don’t know grow the food you eat, build the house you live in and sew the clothes you wear.



For Americans, many of those people live in Vietnam, although we don’t seem very thankful for them — this week, the chair of the White House Council of Economic Advisors, Stephen Miran, <a href="https://thehill.com/blogs/blog-briefing-room/5386853-miran-us-vietnam-deal-fantastic-extremely-one-sided/">said</a> a new trade deal with Vietnam is “fantastic” because it&#8217;s “extremely one-sided.”



This is a Hunger Games worldview that I wish I could talk him out of.



Dear Mr. Miran: Vietnam doesn&#8217;t have to suffer for Americans to prosper!



Just the opposite, in fact. The entire point of free-market capitalism is that exchanging goods and services is a positive-sum activity.



We learned this from Adam Smith, who explained that every voluntary exchange makes both parties better off — or it wouldn’t happen.



People have an innate “propensity to truck, barter and exchange one thing for another,” he wrote, and the more we do it, the wealthier we all are.



Extracting “extremely one-sided” trade deals, by contrast, makes both sides poorer.



The deal Miran touted is so one-sided that it literally has one side; Vietnam hasn’t even agreed to it, Bloomberg <a href="https://www.bloomberg.com/news/articles/2025-07-11/vietnam-surprised-by-trump-tariff-announcement-seeks-lower-rate?cmpid=071125_morningamer&amp;utm_medium=email&amp;utm_source=newsletter&amp;utm_term=250711&amp;utm_campaign=morningamer&amp;embedded-checkout=true">reports</a>.



The president imposed similarly one-sided deals on Japan and Brazil this week, in letters that revive the 18th-century practice of capitalizing random nouns:&nbsp; “We invite you to participate in the extraordinary Economy of the United States, the Number One Market in the World, by far.”



The letter to Japan complained that the relationship between the two countries has been “far from Reciprocal&#8221; (again with the capitalization!), because the US sends more money to Japan than it receives.



But Smith would explain that the primary purpose of trade is not “the importation of gold and silver,” but the increased availability of goods and services for all. To judge trade relationships solely by the flow of money is to assume that trade is a zero-sum activity.



Sadly, this Hunger Games outlook appears to be one of the few areas of bipartisan agreement.



“Zero-sum thinking doesn’t fall neatly along party lines and is not a clearly left-wing or right-wing mindset,” Stefanie Stantcheva <a href="https://www.economist.com/by-invitation/2025/07/07/to-understand-america-today-study-the-zero-sum-mindset-writes-stefanie-stantcheva">wrote</a> for The Economist.



Instead, a <a href="https://scholar.harvard.edu/files/stantcheva/files/zero_sum_political_divides.pdf">study</a> she co-authored found that urban dwellers, PhDs and young people are most likely to have a zero-sum view of the world.



Even PhDs don’t read Adam Smith anymore, I guess.



The stock market doesn’t seem very troubled by this troubling trend. It’s up nearly 7% year to date, as if nothing much has happened.



But I’m sure Adam Smith would tell you that if we insist on making world trade a competition, we’re all going to lose.



Hunger Games had a happy ending, after all, but only because they stopped playing the game.



Let’s check the charts.



Something is happening:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXft1eDSaFN6QJcfQT6ErmiBrwxevq91lVZZ2r7qAfuXfR4kv_737TePe1u4Y9UPzTQp2XIGBIslQ4zcRuAgcsDnG82BjMcnMB7DwGLkp3W9aPGm0KGCL0TKgGRpvj6dRq7p5YS2ig?key=gmQcsukBToMu7GJ4dl8UAQ" alt=""/></figure>



The euro-dollar exchange rate is usually a function of the difference in interest rates between the US and EU. These two things have decoupled since the start of the trade war, which suggests that currency markets (unlike stock markets) think that tariffs do matter.&nbsp;



Try to keep up:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcsp9ibZiTouQ6W2XtCLR7daXbpgBLqfsrESy-AgvMS-I1kcnXkWKJR2wR5gkaDsjyd-ouRUmFny2ns2KKWdHVj9fluC8YxzSDfNiN2AAE6P9YeUjRuRBOBF7kMNVWnAMVFnUUuIA?key=gmQcsukBToMu7GJ4dl8UAQ" alt=""/></figure>



Economists at Yale’s <a href="https://budgetlab.yale.edu/research/state-tariffs-july-11-2025">Budget Lab</a> calculate that the announced tariffs — as of today! — amount to an effective rate of 16.3% (pre-substitution). It’ll probably be different tomorrow. And probably higher.



Tariff cheat sheet:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdTIHGScqHNcock1plmKNZFT3Zn47bwNtTDI07zzW5r3mnYFuCG5CeofW-o37XHfpGndTly2pdK931jQFHpSzWvZYDb4l3tTWcP2_d3WKnEEjbTRbglWziGwX8ojq6X2FHKd3V_Fg?key=gmQcsukBToMu7GJ4dl8UAQ" alt=""/></figure>



Yale also keeps a running calculation of how tariffs will impact GDP, inflation and our purchasing power. It currently estimates that the annual disposable income of American households will fall by an average of $2,480. (It seems to have read its Adam Smith.)



Is inflation due for a trend change?



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcasJPGYu8bmxDP32O1iie8BG3PoinR7WQcmXYyVfMj94eLFc131sgvzbBz0g89BOMyuVfCeiuoY6pZQJpuvcQL6wGpnBBVj5A7P_IQaO3MRNL3bVfLQjROED7meFGbgQPDVfep_g?key=gmQcsukBToMu7GJ4dl8UAQ" alt=""/></figure>



<a href="https://x.com/hashtag/CPI?src=hashtag_click">CPI</a> has surprised to the downside four months in a row, but the Cleveland Fed sees inflation nearly 0.8% higher in Q3 vs. Q2. Next week’s CPI report will be scrutinized for a change in the recent trend.



Shrinking the economy:



<img loading="lazy" decoding="async" width="624" height="321" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcrPgj0Cx-ZnUqWHTuwirKvNiTk8V8Qf37GT-2JKJ5SbW-gpPzCILuzH_YXPgKu4TQ5UWOcLPa0FAmf0vyfCcbNVWUKAbx29lH1qNLMU8yoAu6XuDVENnDmjaE1VctL1dM_jmXrIQ?key=gmQcsukBToMu7GJ4dl8UAQ">



The Budget Lab estimates that tariffs will take about 0.8% off GDP in 2026 and that the US economy, growing from a smaller base, will remain 0.4% smaller than it otherwise would have been, in perpetuity.



Shrinking the economy, part two:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcjO4-zOuwfwfqQpGFYnDxnKZ51fbNa0grwtcwpbKzQFaoWwxdLq9Bkua4EpMzYLHVjumYtUkPJzocjD_uyH22s-maD6L_XzVzIF80smiSB-ANyJIN3Mopx-_G6zl_eDW9tMLYh?key=gmQcsukBToMu7GJ4dl8UAQ" alt=""/></figure>



<a href="https://www.economist.com/graphic-detail/2025/07/01/ten-charts-to-explain-trumps-big-beautiful-bill">The Economist</a> (using Yale data again) charts the effect of the big beautiful bill, which is expected to have made the US economy 2% smaller in 2050 than it otherwise would have been. Two percentage points in 2050 may not sound like much, but it will happen faster than you might think. I did the math and found out 2050 is less than 25 years away. (Weird, but true.)



In case you missed it:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdkws_PS8lCp84KyIVi2VW6DekmKb5AdfmvoUIrXt5U3IYOBB-6h8slGixUhUzj_KBro7iX-Jg7IaUBkloD_SVjzkGOnBD3r7o_mRFzBO2GprLkZWWbK9h7q-FJLWDnITPBYJKd?key=gmQcsukBToMu7GJ4dl8UAQ" alt=""/></figure>



“It” being the stock market. Data from @ryandetrick shows that when stocks are up as much as they are now, they are always higher three, six and 12 months later. That is a mathematical fact…but with a sample size of just four, unfortunately, so maybe don’t bet the house on it.



My favorite chart:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc2ZRnk8J3KAXmnOGfo-fTujAZTKLMgdl1zArgFG1dr0Cp-UJCznsMTsHG606XoTgm9RtlYU-XQh6INRXF32IQ0vgiHBpZUIkPw-V8zmFDTUWZCcEFL1aGPWvKFo-mA_zRxPMGJiA?key=gmQcsukBToMu7GJ4dl8UAQ" alt=""/></figure>



I am excellent at buying high, so I always enjoy seeing the counterintuitive data <a href="https://x.com/MikeZaccardi/status/1940144800902303949">Mike Zaccardi</a> reprises above. Somehow, buying the S&amp;P 500 only at its all-time highs is better than buying randomly. There’s hope for us all.



Doing more with more:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfBTj-jSLXDw2D9NGqKGdgdysjJsYDXNNE1xhh6S3xPn-nOA-Ts3OtpECEEL7ww4xQVOW3nQScizincr1FOgKJFRZ4P7X8fONtv40N5_30qaxAaoKO8m17Apeia2ycdftuTKZPlVA?key=gmQcsukBToMu7GJ4dl8UAQ" alt=""/></figure>



The unsung hero of this longer-than-expected economic expansion has been a surge in productivity, as measured by output per hour. Economists are not yet sure why we’re getting more productive, but Timothy Taylor’s <a href="https://conversableeconomist.com/2025/07/03/the-weird-and-lovely-surge-of-us-productivity-growth/">best guess</a> is that we have the Covid-induced adoption of technology to thank.



They’d all agree, however, that the way to be even more productive is to keep trading with each other.



Have a great weekend, positive-sum readers.



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Friday charts: The rise of zero-sum thinking

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>.



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When Anza’s lead economist <a href="https://www.youtube.com/watch?v=xjjGq0EoS-o&amp;pp=ygUWbWF4IHJlc25pY2sgbGlnaHRzcGVlZA%3D%3D">Max Resnick came on Lightspeed recently</a>, I asked him a question that frequently gets brought up in conversations about Solana’s economics: What should be done about the sandwich attack problem?



His answer surprised me. “The sandwiching rate [is] way down,” Resnick said.&nbsp;



Solana’s speed makes it an ideal venue for timing games at the expense of unsophisticated users. A sandwich attack happens when a toxic market participant both frontruns and backruns a trade to profit at the expense of the trader.



Sandwiching has historically been a big concern for Solana and its developers. In early 2024, Solana infrastructure shop Jito <a href="https://blockworks.co/news/jito-labs-suspends-mempool-functionality">shut down its mempool</a> over sandwiching concerns. A couple months later, the Solana Foundation <a href="https://blockworks.co/news/lightspeed-newsletter-sandwich-attacks">cut suspected sandwichers</a> from its stake delegation program. Jito’s DAO also <a href="https://forum.jito.network/t/jip-15-authorization-of-new-blacklist-for-malicious-mev-activity/639">voted</a> to blacklist malicious validators from its stake pool.&nbsp;



None of these fixes turned out to be panaceas, however, and the <a href="https://blockworks.co/news/lightspeed-newsletter-solana-sandwich-attacks">sandwich attacks continued</a>.&nbsp;



But the story Resnick tells is that sandwich attacking was blunted not by blacklisting bad actors — who may be able to re-emerge with a different online identity — but by improving Solana’s code.



Basically, sandwich attacks are numbers games for the attackers.



In 2024, when landing transactions on Solana was much more difficult, transactions were sprayed widely to validators in hopes of getting user transactions to the blockchain. This meant toxic validators saw a lot of transactions and had more chances to frontrun them. As Solana’s transaction “targeting” has improved, fewer validators see each transaction on average, so sandwichers have fewer opportunities to mess with transactions, Resnick said.



Now, “a 10% stake that’s sandwiching is able to see only 10% of the transactions, which is what it should be,” Resnick added.



The data seems to bear this point out as well. A report from sandwich attack tracker Ghost <a href="https://sandwiched.me/research/state-of-solana-mev-may-2025-analysis">shows</a> Solana sandwichers profited less in March and April of this year than in the same months last year — despite the fact that the chain’s REV was roughly the <a href="https://app.blockworksresearch.com/analytics/team/323">same</a> during both periods.



Ghost’s report also said Solana stake pool provider Marinade had become the primary staking source for sandwichers. In response, Marinade has <a href="https://marinade.finance/blog/how-marinade-is-making-sandwiching-validators-pay">begun</a> penalizing sandwich attackers using its stake auction marketplace.



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<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</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/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



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



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</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/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

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