Ethena USDe

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">
&#8220;100% of the information you have about any business reflects the past, and 100% of the value of that business depends on the future.”&nbsp;



— Bill Miller
</blockquote>



Are markets still forward-looking?



A core tenet of investing theory is that asset prices are driven by the market’s best (and sometimes worst) guesses about the future.



This is why stocks are valued on forward earnings multiples, not trailing ones. And bonds are priced on what the economy is expected to do, not what it’s already done.



It doesn’t feel like that’s what’s happening just now.



This week’s data showed inflation ticking back up again, and every week’s data shows the federal deficit exploding. But Treasury yields are flat on the week and down on the year.



Meanwhile, the US economy seems headed into recession, but stocks keep making new highs.



There are two possible explanations.



One is offered by valuation expert Aswath Damodaran, who <a href="https://pca.st/episode/5916b67a-b936-40eb-89f2-e553872470f7?t=955">thinks</a> the market has given up on being a “predicting machine.”



After years of forecasters missing the mark, he says, the market has shifted into “reactive” mode, where he expects it will stay “until we figure out a better predictive mechanism.”



In other words, investors are living in the moment and not worrying about tomorrow.



The second possible explanation is the opposite: that the stock market is still in prediction mode; it’s simply predicting that things will be good.



That may seem hard to square with the constant drumbeat of worrying headlines: a weak jobs market, the president at war with the Fed, a politicized Bureau of Labor Statistics.&nbsp;



But the market might be looking through all that and seeing its favorite thing: easy money.



The FOMC is expected to start cutting interest rates at its next meeting and might be bullied by the president into cutting more, and faster, than it probably should.



And a federal court may be on the verge of repealing the president’s tariffs, at the cost of higher deficits and the benefit of higher earnings.



Lower interest rates, bigger budget deficits and higher earnings is a surefire recipe for higher stocks.



But investors may be even more forward-looking than that.



With the stock market valuations nearing all-time highs, it’s easy to think investors must be blind to the risks we see in the headlines every day.&nbsp;



But <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5127501">recent research</a> suggests investors don’t think in terms of risk, as textbooks assume, but in terms of fear: “Fear provides an alternative explanation for the magnitude of the excess return realized [by stocks] historically.”



Could anything be more fear-inducing than the AI boom?



Chief AI doomer Eliezer Yudkowsky, for example, <a href="https://futurism.com/the-byte/ai-destroy-humankind-yudkowsky">warns</a> that artificial general intelligence could lead to human extinction in as little as two years. On a longer timeline, he generously gives us a “shred of a chance” to survive.



For investors, though, the truly existential risk is in missing out.



That may turn out to be less hyperbolic than it sounds because even reasonable people can fear that superintelligent AIs (should they choose to let us live) might take all the jobs.



If so, the only way to make money will be from investments — and you’ll need to make those investments before the AIs take over, which could be any time now. Personally, I think there will always be plenty for humans to do, so I’m not as pessimistic as that.



But record-high stocks might be a prediction that I should be.



Let’s check the charts.



There’s more money:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf2wkUE1KaUpYMN05dR0zfy6twUk-JSvBRFltKWtHRdtzOh83y1fzqUujC_D4FMeI54RbcimghYMHlcHygU3Yy60aL24iGS0Js7ovu-o6MlJPgIiKw75ooU94FxMzPCm9D_guV6lw?key=8QFttY5ASmmE069NR2oSqw" alt=""/></figure>



M2 money supply is growing again, thanks to increased bank lending and deficit spending (I think). There should be a lot more of both to come. The FT <a href="https://www.ft.com/content/efe1e350-62c6-4aa0-a833-f6da01265473">writes</a> that the AI boom has created “a race among private capital providers to offer more and larger loans” to build data centers.



The capex race:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdvFwaTA0Oh6ezmEUMC6kp9RgiPK5LWZzdpoCv6Mvwa-ZExWU2vj7mCIg62G-PGEesLdo25q38XLSdc6rB9ZoHpGubF1oFvi22hoTtN0Kz3YjkN5bUaPDKYxm-pf8xlHZo5DSvA?key=8QFttY5ASmmE069NR2oSqw" alt=""/></figure>



ChatGPT fired the starting gun and the race seems to be just getting going. The big four hyperscalers are expected to spend $350 billion on data centers in 2025, and another $400 billion in 2026.&nbsp;



Cash flows won’t cover it:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe3_XRttNpiuufovWYr26gEqKpARXrm6jHr0rWQUYTqKGZZbs_PbTfLThm_t7GCCqaXrVn3SRJPN3FrNMq63fXSm0bp0ix8TcatMoxyNGsk7CsZ2w3TQyK0cOV_mEBZf9uHmJL5fA?key=8QFttY5ASmmE069NR2oSqw" alt=""/></figure>



Morgan Stanley forecasts that the hyperscalers will spend $2.9 trillion on data centers over just four years, and that their cash flow will cover less than half of it.&nbsp;



Don’t forget the little guys:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf_pg93sEwPtmqpzain5u94-e4gE3MtBT47v9dpAgYh6PaDRogUDpAR3zakhYBqHknGFPLoKPTMjApo49D3nh_5ptkIX0cpjZ3wJgHU8E85r4pNhX5w1Nt0FA4FJnIMZEllCZhH7w?key=8QFttY5ASmmE069NR2oSqw" alt=""/></figure>



Based on the surging number of new businesses, Torsten Slok says “the US remains the most dynamic economy in the world.” Thanks to AI, some of these might soon be <a href="https://www.economist.com/business/2025/08/11/how-ai-could-create-the-first-one-person-unicorn">one-person unicorns</a> (i.e., $1 billion companies with a single employee).



Transitory?



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfPkdMZQmA0PrTzVHc4tzkr5GLhN4rGYZBabGEw3pZaEdhOmSch8cZYKDJbRGD4y98bEoGvUlUSrAjmNSy2egxVdWjYO0aApyY5HTmJ6bUTR7BKa1RRR31z76y2jtSmqk8o1T40zQ?key=8QFttY5ASmmE069NR2oSqw" alt=""/></figure>



Producer prices were sharply higher in July, suggesting that companies are starting to pass the cost of tariffs through to consumers. Economists at Goldman Sachs estimate that consumers absorbed just 22% of tariff costs through June, with businesses absorbing the other two-thirds (through lower margins). Goldman expects those numbers to flip-flop by October, with consumers bearing two-thirds of tariff costs.



What tariffs?



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcfw8wbpB8_ZCvumbJKgVnTUJXWg02d_LqNS1_6S5ohmMvLwt-dlF7PK8f4fTE86q7b3ZLwffJz79WFSO-OS8RzpijwUlJzi6ygwx_TJLukN1piYZr9TF7XaLAm9vYQHlqKZy3s?key=8QFttY5ASmmE069NR2oSqw" alt=""/></figure>



Brad Setser <a href="https://x.com/Brad_Setser/status/1955813263033131152">notes</a> China’s trade surplus in goods (exports minus imports) continues to rise despite the trade war with its largest customer.



Time to renegotiate the rent:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf1qPQpACTnf5_pdQcZaswbpOW-sX2N_WORjhzM3GOQtTn8Vn0Jleci1j0jSZ0DdfUFvbzcMkO_BAl-tDcFFFIOYqvPd3gLp9402l1gOEqJ6JSejpmazy9LA1cTy2YyaR6oyLKHcQ?key=8QFttY5ASmmE069NR2oSqw" alt=""/></figure>



Data from the Cleveland Fed shows an unprecedented collapse in the cost of renting, as measured by new rental agreements. Jeff Weniger <a href="https://x.com/JeffWeniger/status/1955264056559862151">speculates</a> it’s the result of non-citizen residents “<a href="https://x.com/JeffWeniger/status/1955264056559862151">self-deporting</a>.”



End of an era?



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfKMneElssmPwKnKoyXhFL0LWJElCMQG9bEZX-GJQs7JRSAUjNGBKWic8Be0aLVHQsf_rJSDT95HmdPYbO4E6n5WvPKD4_1Zj19uJ5mNJM-o-uwYP-M8nnc1FwolsTr0FPCTsRzfA?key=8QFttY5ASmmE069NR2oSqw" alt=""/></figure>



The rate of wage growth for low-income workers has dropped below the rate for high-income workers for the first time in 10 years. “The era of big raises for low-paid workers is over,” <a href="https://www.wsj.com/economy/jobs/low-wage-employees-pay-growth-cdf3cd36?st=EmRNsY">according</a> to the Wall Street Journal. If so, it was an excellent run.



FOMO valuations:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdEu11o4O7y8Of-mG9abmdBwzTXDY3Vnum941y5KsVn88TqnhH82t6fKXs1KSwm-D_TFD3MzcbfeqnR6MbD3tQClxGNlGhLyut8ReVXZLoxU_OhLVmyoZ0IKSW6pjxdMeLCDw-w-Q?key=8QFttY5ASmmE069NR2oSqw" alt=""/></figure>



27.2% of stocks in the S&amp;P 100 trade at a P/E of at least 50. Just one trades 10x.



All-time greatest FOMO?



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd8rVafhAalP4a5TNPitVrEFvRAIUT77GYVbi2YAIm52EwdL80YTu3Kdn05DM-1QW4RbcBguWblQJCPhWj2E6aDDwhpumRsaoWwneG_0drYNZUTlnnLjUlLlSfYffeui9j81Qjd?key=8QFttY5ASmmE069NR2oSqw" alt=""/></figure>



At nearly 100x next year’s sales, The Economist <a href="https://www.economist.com/finance-and-economics/2025/08/12/palantir-might-be-the-most-overvalued-firm-of-all-time#">says</a> Palantir might be the most overvalued stock of all time.



Are markets still in the prediction business then? I think they are — and I think they’re predicting good things.



For investors, at least.



Have a great weekend, predictive readers.



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Friday charts: Investor’s crystal ball, cloudy with a chance of FOMO

Donovan Choy

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



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We learned this week that Stripe and Circle are planning to launch their <a href="https://blockworks.co/news/stripe-circle-l1s-solana">own L1 chains</a>.



Ethereum community members were quick to <a href="https://x.com/ryanberckmans/status/1955289483345113471">question</a> why corporations shouldn&#8217;t launch L2s instead.



Ethan Buchman has a simple <a href="https://blockworks.co/news/circle-l1-impact-ethereum">explanation</a>: Vertical integration is profitable.



Christian Catalini of Lightspark <a href="https://www.forbes.com/sites/christiancatalini/2025/08/11/stripe-is-building-a-blockchain-can-openness-survive-branded-rails/">echoes</a> this view in Forbes:



“&#8230; stablecoin issuers have strong incentives either to commoditize the rails — by issuing on multiple networks and positioning themselves at the center of interoperability across them — or to nudge most activity to a network they control. Either strategy gives them a shot at becoming massive global fintech leaders and capturing most of the value the technology creates.”



Circle/Stripe is doing simply what’s best for them. But that means these new chains aren’t contributing to Ethereum data availability fees, which does not elevate the bags of ETH token holders.



The team behind Phantom wallet faced similar “chain alignment” questions upon announcing its integration of Hyperliquid perps.



This as opposed to a perps DEX built on Solana like Drift or Jupiter.



Reasoning from a viewpoint of chain tribalism is pretty standard fare in this industry. But from an outsider’s perspective, it’s probably a very weird mental model to make decisions from. Builders should simply do whatever’s best for business.



Brandon Millman, CEO of Phantom, puts it plainly on this week’s Lightspeed <a href="https://youtu.be/ogdTMLHMRy8">podcast</a>:&nbsp;



“In the world of trading and perps, how do we get the best prices for users? If you just look at the objective numbers, price, execution, liquidity…all of that is an order of magnitude greater on Hyperliquid. And so by completely ignoring that, I think we would&#8217;ve been doing a pretty big disservice to users.”



To put it another way, Hyperliquid processed $371 billion in volumes over the last 30 days. Solana&#8217;s two largest perp DEXs, Jupiter and Drift, processed a collective $52 billion over the same time.



That’s roughly 7.1x more addressable volume, which should lead to a pretty straightforward business decision.



From my time speaking to application developers in the industry, most pursue a multichain strategy simply because it’s best for business.



Aave for instance, is deployed on something like 15 chains. This multichain strategy is proving unprofitable on several L2s like Soneium, Celo, Linea, ZKsync and Scroll. So they won’t do it <a href="https://x.com/DefiIgnas/status/1951238740526993611/photo/1">anymore</a>. Another simple straightforward decision!



<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 reached an L2 saturation point: Aave deployed on 16 chains, but the new deployments are operating at a loss (Soneium, Celo, Linea, zkSync, Scroll). As a result, Aave is unlikely to deploy on Bob BTC L2, even though it passed the temp check vote. Now, a proposal on the Curve… <a href="https://t.co/jl6FKICbOk">pic.twitter.com/jl6FKICbOk</a>&mdash; Ignas | DeFi (@DefiIgnas) <a href="https://twitter.com/DefiIgnas/status/1951238740526993611?ref_src=twsrc%5Etfw">August 1, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



It would be nice for businesses to show cultural loyalty or be altruistic.



But as the economist-philosopher Adam Smith taught us, it’s not from the benevolence of the butcher, baker or brewer that we expect our dinner from, but from a regard to their own self-interest.



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



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Corporations don’t care about your blockchain

Ben Strack

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



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It’s worth taking another look at those corporations hoarding crypto — particularly as we see momentum around the ones accumulating ETH.&nbsp;



You may know them as crypto treasury companies or, as Blockworks Research’s Dan Smith calls them: DATs (digital asset treasuries).&nbsp;



But no matter the label, they’ve grown big enough for many to notice — and we’re not just talking about Michael Saylor’s Strategy.&nbsp;&nbsp;



Though Strategy (holding 628,946 BTC) has historically dominated trading volumes in this segment of companies, we saw BitMine Immersion (BMNR) eclipse the firm on that metric a few times this week.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeQGAW-FTFm--xLQrgBOpu4J8C3H90cUtcLCaDKYFbcp2wwuUr2iK-yNFSS3QBfoOFFyuQrYXSr_f8o2JBSX40i7CN2QoxavnjMxmaHX_eVC8YH0HrnWA0EG3NQX4GzdPCjnAHmiw?key=yr74Q2nUOtE3n6BBNbnCUg" alt=""/></figure>



BitMine said Monday it held $4.96 billion worth of ether. That means that roughly five weeks after revealing its ETH accumulation plans, the company has the world’s largest corporate ether treasury. BitMine’s stated goal is to own 5% of the ETH supply.&nbsp;



Blockworks’ Smith previously addressed BMNR’s rising daily volumes within a broader “flywheel”:



<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">&gt; smash the bid over the weekend &gt; open higher on monday &gt; increased volatilty = more volume &gt; more volume = raise more cash via ATM &gt; more cash = buy more ETH The Real Flywheel <a href="https://t.co/A0xDy8G7iW">https://t.co/A0xDy8G7iW</a> <a href="https://t.co/85xNMPpW3z">pic.twitter.com/85xNMPpW3z</a>&mdash; Dan Smith (@smyyguy) <a href="https://twitter.com/smyyguy/status/1954227040816603186?ref_src=twsrc%5Etfw">August 9, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Another big crypto treasury firm <a href="https://blockworks.co/news/bitcoin-treasury-strategies-sharplink-eth">focused on ether</a> is SharpLink Gaming. That’s the one with Ethereum co-founder Joseph Lubin as its board chair.



ETH treasury companies now hold nearly 2% of all ETH — up from about 0.5% a month ago. Not quite the percentage bitcoin treasury companies (mostly MSTR) hold, but getting closer:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcaJF2uZ1jno3pcUZKcsPW1dOEEa4pIMDOVgRsondMOwXCAr0MFA1u0PrHDDYpJ_C0r-sPpwqr0JkPSNyCPOW8Zpp6xCCM7KG2OyKXIHn0hjWjchVrvBaNPbJ06s9X9PRuldLT5kQ?key=yr74Q2nUOtE3n6BBNbnCUg" alt=""/></figure>



To be clear, the market cap of companies building ETH treasuries is only about 11% of those with BTC-buying strategies ($107.6 billion to $12.7 billion).&nbsp;



Benchmark analyst Mark Palmer said he views the recent volume surge for ETH treasury-focused companies as “largely a new-entrant phenomenon.”



“We would expect treasury company launches focused on other cryptocurrencies to see similar surges in trading volume as they start to deploy the capital they have raised and attract investor attention,” he told me.



We’ve mentioned in this newsletter before about the firms looking to hoard crypto assets beyond BTC and ETH (i.e. solana, BNB, SUI and HYPE).&nbsp;



The <a href="https://blockworks.co/analytics/treasury-companies">growing number</a> of these types of firms has spurred some skepticism. Not all will last, some say — particularly any copycats with no differentiation, or those targeting less tested assets. Felix <a href="https://www.youtube.com/watch?v=1bIw1Pqa7Kg">discussed</a> this universe of companies on stage with industry executives at Permissionless IV, and the Empire podcast crew has also weighed in on the space plenty (see <a href="https://blockworks.co/news/appetite-for-dats">here</a> and <a href="https://www.youtube.com/watch?v=KHGEZf0TnzY">here</a>).



The ongoing emergence of these models doesn’t necessarily make the segment a bubble (at least in the classic sense), Palmer argued.&nbsp;&nbsp;



“Unlike the dot-com era, when companies chased the same market with similar offerings, crypto treasury firms are taking siloed approaches in which a given firm focuses on a specific cryptocurrency and a single jurisdiction,” he explained. “Or it has a differentiated approach such as a franchise-based model aimed at accelerated token accumulation.”



I’ll be most interested to see the market cap growth of those focused on ETH (and other altcoins) relative to the BTC ones. Compared to Strategy, this segment’s companies are rather young and small. We don’t have to rush to judgment.&nbsp;



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DAT-a crunch: Momentum builds around ETH treasury companies

Macauley Peterson

Ronin, the gaming chain launched by <a href="https://blockworks.co/tag/sky-mavis">Sky Mavis</a>, is making its way back into the Ethereum fold.&nbsp;



Today, the team announced that Ronin will migrate from a standalone sidechain to a full Ethereum layer-2 rollup.



Scheduled for Q1-Q2 2026, the shift aligns Ronin with Ethereum’s settlement layer while retaining <a href="https://blockworks.co/price/ron">RON</a> as the chain’s native gas token. Users won’t pay ETH directly, but transaction data will be posted to Ethereum, and the chain will inherit Ethereum’s security guarantees.



For <a href="https://blockworks.co/tag/ronin">Ronin</a>, this marks <a href="https://blog.roninchain.com/p/ronins-homecoming-to-ethereum">a kind of homecoming</a> — not just technically, but economically and strategically. Its next evolution involves new tokenomics, with “Proof of Distribution” rewarding builders rather than just validators or liquidity providers. It’s a classic layer-2 model: Preserve the ecosystem’s internal coherence while plugging into Ethereum’s shared infrastructure.



But Ronin’s return to <a href="https://blockworks.co/tag/ethereum">Ethereum</a> also highlights an increasingly relevant design question: if Ethereum is the center of gravity, how should aligned systems connect to it? Should app-specific ecosystems become <a href="https://blockworks.co/tag/rollups">rollups</a> with their own sequencers? Or should they integrate more deeply, adopting shared sequencing via Ethereum validators — so-called “based” architectures?



Ronin is choosing to keep sequencing local. Control over order flow, fee logic and transaction inclusion will remain with the chain’s own operators. But not everyone sees this as the optimal path forward.



<h2 class="wp-block-heading">Based and beyond</h2>



Take Taiko, the self-described “first <a href="https://blockworks.co/news/unpacking-the-based-rollups-debate">based rollup</a>,” which just shipped a major milestone: <a href="https://blockworks.co/podcast/bellcurve/0345b516-eb15-11ee-854f-cbb5ba1433a1">preconfirmations</a> live on Ethereum mainnet. The rollout made <a href="https://blockworks.co/price/taiko">Taiko</a> the first production implementation of a rollup that outsources sequencing directly to Ethereum proposers. Instead of running its own centralized sequencer, Taiko uses Ethereum block proposers to order transactions, preserving decentralization and aligning incentives with the base layer.



Preconfirmations fill a key gap: While Ethereum validators publish blocks every 12 seconds, apps need to give users faster feedback — sometimes known as “soft confirmation.” Taiko’s preconf system introduces a fast path — about two seconds — for users to get confirmation that their transaction will be included. It doesn’t feel instant, but it’s a breakthrough for systems that refuse to compromise on decentralization in exchange for speed.



An adoption hurdle for Taiko has been that its design made transactions consistently more expensive than its rollup rivals. But that’s changing, according to Lin Oshitani, protocol researcher at Nethermind.



“At some point, being a based rollup becomes more cost-efficient than having a centralized sequencer, and it can provide these composability guarantees and all that,” <a href="https://x.com/i/spaces/1RDxlzAXLnRGL">he said</a> in an X space Friday. “Blob aggregation is the first step.”



Taiko’s milestone was the first time preconfirmations went live on a mainnet-based rollup. But it won’t be the last.



Puffer Labs <a href="https://x.com/puffer_unifi/status/1956013582027460733">just launched</a> the second testnet of its UniFi stack, another based architecture that pushes the model even further. Puffer is building infrastructure for application-specific chains that use Ethereum’s validator set for sequencing and settlement. They call them “based appchains.”



UniFi’s differentiator is speed. While Taiko targets two-second preconf times, Puffer claims sub-10 millisecond latency on testnet, which is approaching Web2 performance territory. That’s enabled through a preconfirmation AVS (Actively Validated Service) built on <a href="https://blockworks.co/tag/eigenlayer">EigenLayer</a>, which restakes ETH to back a distributed set of preconfirmers. Add in a multi-TEE (trusted execution environment) prover setup spanning both Intel TDX and AMD SEV, and Puffer is trying to minimize trust assumptions while maximizing responsiveness.



Puffer opts for the TEE route, for now, because current zk-provers lack real-time proving — a prerequisite to achieving synchronous composability — according to Amir Forouzani, a contributor at Puffer.



“As ZK technology matures, we are gradually transitioning toward fully trustless real-time proving, while continuing to use TEEs as a safeguard to catch potential bugs in the zk-circuits, ensuring maximum safety,” Forouzani told Blockworks.



Like Taiko, UniFi routes <a href="https://blockworks.co/tag/mev">MEV</a> and congestion fees back to Ethereum proposers. Unlike most rollups — and of course L1’s like <a href="https://blockworks.co/news/circle-l1-impact-ethereum">Circle&#8217;s planned Arc chain</a> — UniFi appchains don’t need to centralize sequencer logic or fee capture. They get the sovereignty of an appchain with the alignment and finality guarantees of Ethereum.



If Taiko is the “proof of concept” for based rollups in production, Puffer can be seen as a forward-looking blueprint with different tradeoffs. It’s more configurable, faster and has a clearer path toward institutional use cases. Its second testnet introduces <a href="https://eip7702.io/">EIP-7702</a>-based atomic withdrawals, custom gas token logic and optional privacy features, making it attractive to both permissionless builders and enterprise clients.



Taiko offers a simpler, fully live architecture with no reliance on trusted hardware or external AVS networks, prioritizing neutrality and <a href="https://blockworks.co/tag/decentralization">decentralization</a> today.



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



What’s emerging is a spectrum of Ethereum-aligned architectures. At one end, you have Ronin joining the status quo of rollups, with its own sequencer and token logic, drawing security from Ethereum but keeping execution local. In the middle, you have based rollups like Taiko, which rely entirely on Ethereum’s validator set to handle transaction ordering. And on the far end, Puffer proposes sovereign appchains that share sequencing and economic alignment with Ethereum while maintaining full control over execution environments.



Like Ronin, Circle’s Arc is built for a specific use case with a custom gas token. But unlike Ronin, it’s not trying to be part of the Ethereum stack at all.



All are responses to Ethereum’s current limitations: latency, throughput, cost or governance overhead. But they diverge on the question of how deeply to plug into Ethereum (via shared sequencing), partially (via settlement), or not at all.



Beyond the battle between rollups and L1s, it’s a tussle over who controls order flow, who earns MEV, and where economic gravity pulls. For developers and users alike, the trade-offs are getting sharper: faster UX vs deeper alignment, composability vs. sovereignty, local revenue vs. shared security.



Ronin’s return to Ethereum as an L2 shows that the mainstream rollup-centric roadmap playbook still holds weight. But Taiko and Puffer suggest a new one is being written, where Ethereum’s broad base of validators have a more direct role in the execution of everything that builds on top.



Updated Aug. 15 at 3:20 pm ET: Added comment from Puffer.



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Ronin rejoins Ethereum as rollup strategies diverge

Kate Irwin

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Winklevoss twins-backed exchange Gemini launched a wallet product yesterday, presumably to better compete with rivals like Coinbase and Kraken in the consumer market.



So how does it hold up — and where does it fit into the increasingly competitive wallet landscape?



The Gemini Wallet is a self-custody solution that also ties into a web-based dashboard, dubbed “<a href="https://onchain.gemini.com/portfolio">Onchain</a>,” which essentially offers a bigger screen to examine your crypto portfolio and make trades.



As of right now, this experience is on the web — there’s no standalone Gemini Wallet mobile app (yet). It’s not a Chrome browser extension either, though that could change at some point. Instead, some browser pop-ups will help you navigate the wallet sign-up and settings.



The onboarding process is a little different from what we’ve seen before. There are no Gmail single-sign on (SSO) flows, no passwords and no visible seed phrases. It doesn’t ask for any personal information, unlike onboarding with Gemini via an exchange account, which involves KYC.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfVpxvbvj_WX6BTyKd8p8Oz52iS1uP_y55GYBb02OCbiic1a80rqpyNF0gI6b1caNGqjNvW8n-B6kdKqx_qQqBVxr2ilaadoDNnhplSgwvDkWDfNrT34PwOLpMb3nmccYdzYSspEg?key=4wtK2839eBZvCsEpeak85Q" alt=""/></figure>



Instead, it takes about two seconds to generate a wallet via your device’s passkey tech. After you pick a .gemini.eth username, you’re ready to roll.



Essentially, the username is a free ENS name attached to your Gemini Wallet, which is a nice perk.&nbsp;



After running through the setup flow myself, I was impressed and surprised by how speedy and smooth the onboarding process was. It was easier than MetaMask, Coinbase, Phantom, and Ronin Wallet, all of which I’ve used before (but whose UX has improved with time).&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf3e8XAmDuwSQ4PG2Wbta6z-qjFxCz71YMlUDxh5QmsznncRqGbldyOAbiWFpVJtM4F_fu2UDQcNR58p3VtffI7NnO0WkgKvLWoduLvJkvCNVzcI3dSmxcDGKHxZ-KjXFlN3Lp0Ww?key=4wtK2839eBZvCsEpeak85Q" alt=""/></figure>



So far, the main embedded feature on Gemini Onchain, besides making basic crypto trades, is access to Gemini’s “vaults.” Traders can choose from the “Prime” vault (lower-risk) or the “Core” vault (higher-risk).&nbsp;



A pop-out explanation of the vaults describes them as a way to “invest and receive returns on your holdings by matching you directly with borrowers at better rates than traditional lending protocols.”&nbsp;



Gemini is <a href="https://www.gemini.com/blog/launching-the-gemini-wallet-a-simple-and-secure-way-to-go-onchain?utm_source=thedrop.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=sink-or-swim">covering gas fees</a> for “key actions,” though it’s unclear for how long that gas sponsorship might last. The wallet currently supports Ethereum’s mainnet, plus ecosystem extensions Optimism, Polygon, Base, and Arbitrum.



The Gemini Onchain experience feels like a soft landing spot for total newbs to DeFi. Maybe it’s for people who come from a non-technical field, or the crypto-curious who have never touched it before. The wallet is not intimidating, but it’ll feel too simple for some traders.



One thing about the “Onchain” hub is that it’s not much of a hub as it stands right now, besides being a way to manage your own wallet via buys, sells and swaps, plus access to those vaults and some educational resources. The buttons to other trading tools like Uniswap link out to the external site without keeping you logged into your Gemini Wallet over there.



Maybe the team will add onto and build out this hub over time so it can feel more like a crypto destination.&nbsp;



I’m glad the Gemini Wallet exists — it’s one of the nicest onboarding processes I’ve encountered.



But because it could still use more functionality, I probably wouldn’t switch from my other existing wallets if given the choice.



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Winklevoss twins’ crypto exchange launches Gemini Wallet

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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“The miracle of compounding returns is overwhelmed by the tyranny of compounding costs.”&nbsp;



— John Bogle



<a href="https://www.economist.com/business/2025/08/06/how-loyalty-programmes-are-keeping-americas-airlines-aloft">Could stablecoins kill the airlines?</a>​​



The Economist writes that the four biggest US airlines would all have made a loss last year if not for their side hustle selling loyalty points.



Delta, for example, made an operating profit of $6 billion on the year, $7 billion of which came from selling loyalty points to credit card companies.&nbsp;



Incredibly, Delta says 1% of America’s GDP is spent through its co-branded cards.



In total, US consumers paid $187 billion in credit card interchange fees last year, which always seems ripe for disruption.



But The Economist points out that roughly three-quarters of interchange fees are returned to customers as rewards or rebates.



People love their rewards, especially the airline rewards that make travel feel like it’s free. This could be a defensive moat for the credit card companies that stablecoin issuers are hoping to disrupt.



Understandably, the airlines would like the card companies to maintain that moat — so much so that they lobbied against an amendment to the GENIUS Act that would have lowered interchange fees.



In a <a href="https://www.digitaltransactions.net/opposition-mounts-to-the-durbin-marshall-amendment/?utm_source=chatgpt.com">letter</a> to Congress, the airline industry warned that the legislation would “lead to significantly fewer passengers and flights.”



The amendment was dropped, but if stablecoins really catch on, it could have the same effect: fewer flights and higher ticket prices.



But what if stablecoins offer points, too?&nbsp;



The New York Times <a href="https://www.nytimes.com/2025/08/13/business/wall-street-banks-crypto-stablecoins.html">reported</a> this morning that big US banks planning to issue stablecoins also “plan to operate rewards programs, similar to existing credit card promotions, to woo customers to their own coins.”



<a href="https://www.wsj.com/finance/currencies/trump-family-crypto-1e7ab14a?gaa_at=eafs&amp;gaa_n=ASWzDAi8AHEWU5AffhZBSv_TQbcTnUofOrvKWrD2LDnjVPiUPUopD2VUdx7lmQIqyKQ%3D&amp;gaa_ts=689cfe24&amp;gaa_sig=Of7yLxXiom12TAQLQTXDx1x7fG8CZhe2xrGRkEyM2ozPTIWhlZbOAZYs8_QD2FXa_OxhUqBdMYcgIFsrUAD5sg%3D%3D">PancakeSwap diplomacy</a>



The Wall Street Journal <a href="https://www.wsj.com/finance/currencies/trump-family-crypto-1e7ab14a?gaa_at=eafs&amp;gaa_n=ASWzDAiQ5e0ijjCRuKB28f0bK_cN-PmNcO3Dyy02yWmbP9s183aOIDOA0m1-a4bbJgE%3D&amp;gaa_ts=689e03f8&amp;gaa_sig=3K9u0zdaSpLfTwXipkjvw7rHnBrH0tIRlcEJWoLgejOE9AE3oTMfO_0XBeVBIGyjfT96cOUq-MiqwWHb9zLXrA%3D%3D">reports</a> that Binance is making a concerted effort to promote World Liberty Financial’s USD1 stablecoin, presumably to curry favor with President Trump.



Amusingly, much of it is happening on PancakeSwap.



90% of the trading in USD1 happens on the breakfast-themed decentralized exchange, where volumes exploded over the last two months.



The reason? “Crypto investors were chasing prizes worth up to $1 million for generating as much USD1 trading as possible as part of a ‘Liquidity Drive.’” (I’m guessing paid by Binance.)



Popular USD1 pairs include Torch of Liberty and Eagles Landing — memecoins launched with the explicit goal of getting people to use the president’s stablecoin.



Despite the America-first branding, most of the activity happens in China: “Traders, mostly writing in Chinese, gather in groups on the Telegram messaging app to talk about competing for rewards paid out to top users of USD1 and advertised by PancakeSwap.”



Recent events have left many <a href="https://www.dw.com/en/why-is-trump-being-so-generous-to-china/a-73594826">wondering</a> why Trump is being so nice to China.



Could it have anything to do with a Chinese crypto exchange paying Chinese traders to use a US president’s stablecoin, to trade US-themed memecoins, on a US-breakfast-themed exchange?



I mean, it’s only natural to feel more generous toward someone that’s making you a lot of money.



Improbably, I know. The US-China détente is probably not about PancakeSwap.&nbsp;



But we can’t rule it out!



Which is wild.



If memecoin traders on PancakeSwap ease tension between China and the US, it will all have been worth it.



<a href="https://blog.bitmex.com/treasury-company-advisory-agreements/">DATs are more expensive than you think</a>



BitMEX Research details the hidden costs of investing in digital asset treasury companies.



Many DATs pay an outside asset manager just to hold on to their crypto for them.



The Solana DAT Upexi, for example, pays an annual fee of 1.75% of its assets to custody its SOL tokens.



Verb Technologies, a Toncoin DAT, pays an annual “advisory fee” equal to 2% of its market capitalization (every year!) to the investment firm Kingsway Capital Partners.&nbsp;



How much there is to advise on with a DAT is unclear — you just buy the token, right?



And paying your advisor as a percent of market capitalization instead of NAV seems particularly egregious.



MEI Pharma, the Litecoin DAT, pays 0.75% a year to an advisor and 1.75% a year to an asset manager.



ATNF, the latest ETH DAT, pays an asset manager 2% assets for custody, with a hefty annual minimum of $1 million.



ATNF is up 113% this week, so you can see why investors might not care just at the moment.



But they should because the “tyranny of compounding costs” is inescapable over time.



Most of these new DATs issue warrants and/or options to their advisors as well, which will dilute shareholders when exercised.



BNC, the BNB coin DAT currently trading at $28, has granted options to its advisor at an exercise price of $0.00001 per share.



“In some cases,” BitMEX adds, “there is often an incentive or payment linked to the market capitalization or premium to mNAV.”



You can also throw in the cost of the C-suite incentives, payroll, legal advice, banker advice, auditor fees, exchange-listing fees…&nbsp;



All of which must add up to multiple percentage points of NAV per year. Every year.



Or you could hold an ETF for an all-in annual fee of 0.2%.



Or hold the crypto yourself for a fee of 0.00%.



“The end game here is that many of these companies eventually trade at a significant discount to mNAV and become zombies once again,” BitMEX concludes, “potentially still paying significant fees.” Emphasis added to make John Bogle roll over in his grave.



<a href="https://www.globenewswire.com/news-release/2025/08/11/3130918/0/en/Safety-Shot-Announces-Strategic-Alliance-with-Bonk-Founding-Contributors-Initiating-BONK-Treasury-Strategy.html">Bonk treasury strategy</a>



Markets have a knack for chasing any profitable strategy right up to its breaking point — and for DATs, they may have hit it this week.&nbsp;



Could a Bonk treasury company be to DATs what Pets.com was to e-commerce — a cartoon mascot that ends up discrediting the whole category?&nbsp;



Maybe. The token dropped 5% after the announcement.



<a href="https://stargate.discourse.group/t/layerzero-foundation-acquisition-of-stargate-stg/682">Merger arbitrage comes to crypto</a>



The financial blogger Mojo <a href="https://mojo3324106.substack.com/p/the-factory-that-makes-investment">explains</a> why “merger arbitrage” is the best way to learn about markets.



Speculating on whether a company with a pending takeover offer will ultimately be bought and at what price requires deep knowledge of both bidder and target, the industry it’s in, antitrust law, how the regulatory bodies work and much more.



It also makes you think harder about investing: “Merger arbitrage forces systematic thinking and mastery of process in ways that picking growth stocks never could,” Mojo writes.



Unlike most investing, merger arb generally requires you to be right for the right reason — being carried along by momentum or catching a narrative won’t save you from lazy decision making.



I’d argue that being right for the wrong reason is especially prevalent in crypto.&nbsp;



If so, the merger-arb situation announced this week might be especially educational.&nbsp;



On Monday, the LayerZero Foundation, which develops the LayerZero messaging protocol, proposed the acquisition of Stargate, a bridge protocol that uses LayerZero.&nbsp;



Just like a stock-based deal, the foundation’s offer was $0.1675 per token, paid in ZRO at a ratio of 1 STG to 0.08634 ZRO.



To know whether that presents an opportunity for arbitrage (by buying STG and shorting ZRO), you’ll need a deep understanding of DAO governance, how both protocols work, who the stakeholders in each community are, the crypto borrow-and-lend market&#8230;



There’s a lot more to it than, say, guessing how much the market will overpay for a DAT.&nbsp;



“Merger arbitrage strips investing down to its essential elements,” Mojo sums up.



Crypto investing could use some of that, I think.



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Thursday links: Points, pancakes, DATs and merger arb

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



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Here’s a weekly snapshot of the Solana ecosystem.



SOL’s price briefly flirted with the $200 mark before it dipped to $193 amid a broader market dip this morning.



Unlike BTC and ETH, SOL does not enjoy an institutional bid (yet) from treasury companies. SOL DATs, mainly Upexi (UPXI) and DeFi Development Corp (DFDV), have accumulated about $596 billion in SOL, compared to $11 billion in ETH and $86 billion in BTC.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfo3qnUVE2EwsXbB3ctZI-7qkQ1miqzkVGMBKhAQgPGYvT0kpRmhwNcQhyLZUjW_E8h9viFaTkW9zcUgrFlvwWiJU7ZtfEFkVvC_B04TbZa9rUvmEM5Cpg9w818GtNgGc7GpUUEHA?key=lCGEZ20LQzDEgtY3bmAgFw" alt=""/></figure>



Looking at daily REV (all fees paid to transact onchain), Solana’s REV has stayed relatively stagnant at the $2.5 million to $3.5 million mark for months.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcWMB1FxPxzEY5E6gzvo0iwUJxtt8T-TWPWZuafG-SA2tKqylwxIFaqvxLAbPmk2FvbjuUCujqz0K0GSA-2MTDEnPc0yvYAH82fvJACo30UyRkzNW7BWePw2pWDm9Jt3kMvRp2rGw?key=lCGEZ20LQzDEgtY3bmAgFw" alt=""/></figure>



Net inflows into SOL’s sole institutional ETF — the <a href="https://blockworks.co/news/sec-rex-osprey-first-solana-staking-etf">REX-Osprey SOL Staking ETF</a> (SSK) — have slowed. The fund drew $3.7 million for the week of Aug. 4-10, compared to $58.3 million in its launch week. Daily net flows were $5.2 million on Tuesday.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXct3Z7-BJMyI0zuS63L0ZiIxoe7iKMmEkXZ9UpEw5JF1QSUVUKOzqHgdg5kfef8XDMD-7N-mkbtWTGuk8ce-rWYNps_6Hp2KpdYlwkB5b4MxLGpbkxmkyKUGZ6SxqlBJ3SfEpnsOg?key=lCGEZ20LQzDEgtY3bmAgFw" alt=""/></figure>



Over on the memecoin side of the world, Pump lost its dominance to Letsbonk through July, but recently reclaimed its spot in the last week. Yesterday, Pump saw 30,550 tokens launched compared to 1,499 on Letsbonk.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcDeKL_YMDtlTDWEb8gcdq50zqOhvnnDOxsKsG2-K6uIAVjQCKUxQTEkownKiknmlTyZ6BaNDxZpw-8INqb68Nz_ccjmQf5XK_idxIapkzuLvc9mmMRNdiGBfOyRJEJOF3r0zu1rQ?key=lCGEZ20LQzDEgtY3bmAgFw" alt=""/></figure>



The PUMP token has traded down to $0.0036, after it briefly touched its ICO price of $0.004 last night.



The Axiom trading platform continues to dominate the market, regardless of which launchpad is winning. Axiom has grown to 60% market share since its inception in February.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeug22PZabAQnYntB4Qmse1Enj0UAkrHrPkPZyx22I8JvI2_nJCh_surFQY2SjYJg14zH6v8Lmn6HOtPQ1IOi9uADXAXUzc9RVC9ec4nmzAw24YSMBmhQkiHeaX3nR-ZEnf1d-oqg?key=lCGEZ20LQzDEgtY3bmAgFw" alt=""/></figure>



Over on the perps market, Drift has been having a good month, <a href="https://x.com/cindyleowtt/status/1955668879398568134">hitting</a> $500 million in open interest yesterday. Its zero-fee trading for BTC and ETH introduced in mid-July has sparked a growth of volumes, as seen in the below chart.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc8qZoCqS4QJUiHzCtAXqV9_2PsK38b2rAQTl8I53QYpjFamiVfbcZhCt-E-otlXFXUxQveTX5KpvWKoApbKa6_Aw8nZlFbf_QKDRnpYD87UFs5jNcG2QN8qqntT5i9OkjJh3oRrQ?key=lCGEZ20LQzDEgtY3bmAgFw" alt=""/></figure>



Despite its growth, though, the perps crown in Solana is still held by Jupiter.&nbsp;



Based on trading volumes, Drift has about $17.1 billion in the last 30 days, compared to Jupiter perp <a href="https://defillama.com/protocol/perps/jupiter">volumes</a> of $23.1 billion. Both are of course still eclipsed by Hyperliquid’s trading volumes of ~<a href="https://app.blockworksresearch.com/analytics/hyperliquid?dashboard=135">$371 billion</a> within the same time period.



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The state of Solana in 6 charts

Felix Jauvin

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



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It’s amazing how quickly things can change in one week.



It feels like only yesterday that the Fed appeared unlikely to cut rates at all in September. Now, we’re beginning to price in the chance of not just a 25 basis point cut, but a 50 bps one!



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcIqLXVnFPxgRS9-SQdjWp3QktkkCO7GOzrD5hMp4MTlc65rMLV_DMlDl8FXkrveiiTbx2mlyszeDAJCpomXmce_fvTtZ_36yjHYCYpzffvHxKyoB52CWJVqjUZrUETprAab8Z9?key=QdJD92B_gjB-YBebhmyAqg" alt=""/></figure>



In a Tuesday Fox Business interview, Treasury Secretary Bessent added fuel to the speculation by saying &#8220;the real thing now to think about is: Should we get a 50 basis point rate cut in September?”



I’m old enough to remember when Bessent said he wouldn’t comment on future monetary policy decisions. But here we are.&nbsp;



So, should the Fed cut 50 bps in September? Let’s look at both sides of the argument.&nbsp;



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



Although this month’s CPI print was pretty tame and consensus, there are some underlying inflation pressures building.&nbsp;



Core goods, one of the biggest drivers of the disinflation story over the last couple years, is now beginning to accelerate higher, largely driven by tariffs:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfxynCt7Fbq84LrOU49AcJo-R6lEirkgOm2MqZNFb1PXKKFSV6DP5CsPqXhgqzvegULkOl01gOsvxvHXTBB3VxPX4500nHkdAyWN8454L6i4yQTSJbz9NdntZgrdgRFcRRaLb0Uxg?key=QdJD92B_gjB-YBebhmyAqg" alt=""/></figure>



Despite a pretty nasty jobs report last week, forward-looking estimates point to a labor market that is beginning to reaccelerate again.&nbsp;



In the most recent business headcount surveys, the amount of businesses that planned on meaningfully increasing headcount in the next year bounced higher:<img loading="lazy" decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd2Y48iD6dzODB5onj4GCQPcoIhm8f7AyZrCQth5vH3RRbs2l4PwQuhvUOz-M9B_5piBInOGXMWx9B6L7-U7H1vnX2BQLANCd07rEPKuPK-UHVBmiZV_DpBtJ1Rdq1h9uFk7O-Y?key=QdJD92B_gjB-YBebhmyAqg" width="624" height="375">



Looking at Visa’s US spending momentum index, the consumer appears pretty resilient in the face of tariffs and their spending habits are looking like they’re beginning to tick higher:<img loading="lazy" decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc57w1GNEk5DGjGydNeqjW_7VvnHftktH-M6t6VMhN-5HhfrWeOSBQjWu7BGYJCFVSBWkqTf-jvb-A-6Jl6-IejRTxXhkFZT4Sx6pm0vgztMYvq8-ACUbR-sC8jzbBEumu2lpF9?key=QdJD92B_gjB-YBebhmyAqg" width="624" height="377">



Based on this confluence of data, I could make the argument that the economy is beginning to reaccelerate. If the Fed were to cut in September based on lagging data such as NFP, it could end up being a mistake that makes the bond market sell off like it did last year when the Fed did the same thing.&nbsp;



<h2 class="wp-block-heading">Cut and go big</h2>



Consumption is the engine that drives the US economy. Ever since Q4 2024, it’s been meaningfully slowing.&nbsp;



If purchasing power decreases due to the continued implementation of tariffs, we could well see further weakening in consumer spending that could quite quickly look recessionary.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc86KmotSb3WAyp4UaTK4PCnHiGcK9uB_XGxmZsXTxJwhpFUyaEYBrM4i7c065zePzZdLWLB77kZ87lL4M0mbc52BQ1uvLiHYNVD23QSU8RCtwkCJKmzQQ4wh8SQyRnOpz5rf6Vng?key=QdJD92B_gjB-YBebhmyAqg" alt=""/></figure>



Meanwhile, tariff collections continue to surge higher — and someone needs to foot that bill:<img loading="lazy" decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfo6SOm7VSHGBcekQ5hd2kECPnMYNo1---J3qozxcxv_WMVWG4Q56KVUklkplQ7frEqmHAe6gF2t9WY7ur2s8dNm_p3OiG8yny7McZUtn9t20AcK0CwJAvWshZO7UTYstAXmzCi-A?key=QdJD92B_gjB-YBebhmyAqg" width="624" height="377">



If companies pass on the tariffs to the consumer, those higher prices will eventually hurt aggregate demand since that additional price increase means that money cannot be spent elsewhere. Without an offset, this is negative for growth.&nbsp;



If companies absorb the price hikes, it will squeeze their corporate profit margins, which will also lower economic output. Either way, it’s negative for the growth outlook.&nbsp;



Finally, with a labor market that continues to surprise to the downside with downward revisions that continue to tick lower pro-cyclically, some sort of insurance rate cut could make sense here. <img loading="lazy" decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfxEa3gUV14t39q7WjqIHTMeKiFGmEMmo-rN_qgMfcMGx8WTumgAfvTF5K0PUH85Q9f7XlMePHrr2_sW-fdhIZqBgh6eCmmozx6qjbwhG3Rmxq5j90RpCR9_HdmQRvOfG7Y_YgI?key=QdJD92B_gjB-YBebhmyAqg" width="624" height="333">



Putting it all together, I can make the case for a pause as much as I can make a case for substantial cuts.&nbsp;



It’s no wonder the FOMC, on the question of where to go from here, is the most divided it’s been in decades.



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Should the Fed cut 50bps in September?

Circle is building its own blockchain —&nbsp;and it’s not a rollup, but a layer-1.



In doing so, the American stablecoin issuer is betting that the shortest path between a dollar and a smart contract is the one it controls — full-stack, sovereign, and custom-built for payments.



The new chain, dubbed Arc, will be Ethereum-compatible, but use USDC for gas, and feature sub-second deterministic finality.&nbsp;



The big question for Ethereum is whether Arc will shift stablecoin activity or function more like a hub-and-spoke architecture, internalizing issuance and settlement while routing liquidity and flow outward to the broader EVM ecosystem via <a href="https://blockworks.co/podcast/0xresearch/58c53fc4-c272-11ed-a55a-23d88d4d81ed">CCTP</a> and other bridges.



The decision to build a new sovereign chain — rather than deploying on a modular layer 2 — has reignited a familiar argument on Crypto Twitter: does this mark a return to enterprise chains, or is it simply the logical architecture for a dollar-native payments platform? Does it weaken Ethereum’s long-held role as crypto’s settlement layer for stablecoins, or further entrench it through cross-chain interoperability and network effects?



The answers may hinge less on ideology than execution, and whether <a href="https://blockworks.co/tag/circle">Circle</a> pursues Arc as a walled garden or merely a better bank.



<h2 class="wp-block-heading">Vertical integration</h2>



Circle declined to comment on Arc’s technical design, citing a quiet period. But what we know from the <a href="https://6778953.fs1.hubspotusercontent-na1.net/hubfs/6778953/Arc%20Litepaper%20-%202025.pdf">published</a> light paper is that the L1 is built on <a href="https://github.com/circlefin/malachite">Malachite</a>, a new high-performance BFT consensus engine originally developed by Informal Systems as a rewrite of <a href="https://blockworks.co/tag/cosmos">Tendermint</a>. Circle has hired the core team of nine behind Malachite, but the engine remains open-source and is already being used elsewhere, <a href="https://www.starknet.io/blog/product-market-fit/">including</a> in Starknet’s decentralization roadmap.



Informal co-founder Ethan Buchman told Blockworks he views Malachite as akin to the Rust language: “Originally developed at Mozilla, now used by everyone.”



For Buchman, Circle’s decision to launch its own chain is not a rejection of <a href="https://blockworks.co/tag/ethereum">Ethereum</a>, but a standard business choice for a team with sufficient resources. “It’s the same decision every time when people choose to build their own chain: they value vertical integration,” Buchman said.



“The kind of predictability that gives you, and how it sort of hedges uncertainty — because you have the stack, you have the team, you&#8217;re not dependent on some external team for core components,” he said.



Crypto Twitter/X is split on the net-impact. The bullish-ETH read (<a href="https://x.com/RyanSAdams/status/1955270488860614795">Ryan Sean Adams</a>, <a href="https://x.com/armaniferrante/status/1955261652892348782">Armani Ferrante</a>) says EVM-first corporate chains still feed Ethereum’s network effects. The bearish-ETH camp (<a href="https://x.com/jon_charb/status/1955260430890213650">Jon Charbonneau</a>) argues the marginal EVM developer now accrues close to zero to ETH if flows internalize elsewhere.&nbsp;



Others worry about censorship and developer gravity: <a href="https://x.com/EliBenSasson/status/1955237895473672568">Eli Ben-Sasson</a> fired a warning shot — “Corporate L1s / L2s won’t succeed” — against more open systems, while <a href="https://x.com/adamscochran/status/1955257074318823568">Adam Cochran</a> tried to disqualify Arc as “a consortium chain” rather than an L1.



The counter-narrative from operators is that deterministic finality and protocol-level controls are critical for payments and FX. Arc’s paper leans into that: “A transaction on Arc is either unconfirmed or it is 100% final and irreversible.”&nbsp;



This is the crux of L1 over L2 as a business decision. Rollups “rent” Ethereum’s finality and <a href="https://blockworks.co/news/ethereum-roadmap-data-availability-da">data availability</a>; sovereign L1s own the base-layer policy surface, including <a href="https://blockworks.co/tag/gas-fees">gas</a> denomination, <a href="https://blockworks.co/tag/kyc">KYC</a> hooks, dispute/refund logic, and transaction ordering.



Circle will start with what amounts to a <a href="https://blockworks.co/tag/cosmos">Cosmos</a> chain using Proof-of-Authority, with a closed validator set. “It’s very cheap to operate,” Interchain Labs co-founder Barry Plunkett told Blockworks.&nbsp;



For instance, 5-10 Cosmos validator costs on the order of a few thousand dollars a month. “Maybe an L2 is a little cheaper because you don’t need as many boxes and don’t have the overhead of paying third parties to operate them for you. But you do have DA costs, so it’s probably a wash,” Plunkett said.



If your profit margin lives on settlement economics and working-capital velocity, sovereignty is attractive. If your priority is time-to-market and broad composability, a centralized-sequencer rollup may be cheaper and easier to ship.



<h2 class="wp-block-heading">Stablecoin boom as backdrop</h2>



A Keyrock/Bitso <a href="https://documents.keyrock.com/hubfs/Stablecoin-Payments-The-Trillion-Dollar-Opportunity.pdf">report</a> out today argues stablecoins are already reshaping the payments landscape. Monthly stablecoin payments more than tripled to $6.3 billion by February 2025, with B2B volumes jumping from $120 million to $2.7 billion in two years; card-based flows crossed $1 billion/month. On their trajectory, annual stablecoin payment volume could approach $1 trillion by 2030.&nbsp;



That helps explain why companies with distribution are eyeing sovereign rails, according to Alchemy CTO Guillaume Poncin, formerly Stripe’s engineering head.



“We are seeing several companies race to build a stablecoin-first blockchain,” Poncin told Blockworks. “The revenue opportunity from owning the settlement layer will dwarf traditional payment processing margins.” The infrastructure costs are tiny by comparison.



Poncin similarly frames L1 vs. L2 analysis as boiling down to a question of control vs time-to-market. “Choosing between the two is a nuanced trade-off… L1s can be fully customized at every layer, [but] <a href="https://blockworks.co/tag/rollups">rollups</a> are battle-tested and much easier to build and secure.” He’s not too concerned with fragmentation due to Arc’s <a href="https://blockworks.co/tag/evm">EVM</a> compatibility, because it “speeds adoption by both developers and users.”



As crypto-native builders chase composability and yield, Circle is playing a different game: infrastructure that can compete with payments giants like <a href="https://blockworks.co/tag/visa">Visa</a> and <a href="https://blockworks.co/tag/stripe">Stripe</a>, or even <a href="https://blockworks.co/tag/fednow">FedNow</a>.



<h2 class="wp-block-heading">Ethereum isn’t going anywhere</h2>



Critics have framed Arc as a sign that Circle, whose USDC accounts for <a href="https://blockworks.co/analytics/ethereum/ethereum-stablecoins">nearly 30%</a> of stablecoin supply on Ethereum, is pulling away from the chain that bootstrapped it.



But that overstates the case, according to Buchman.



“I think Ethereum is here for the long term, no matter what decision Circle makes today. I think it, it has achieved a kind of breakout velocity, it&#8217;s entrenched itself as a technology of fundamental import to human rights… Its longevity will be related to its neutrality and its conservatism.”



Circle will continue to have to grapple with that. Past concerns over the influence of the USDC issuer over Ethereum’s direction have been muted by the proliferation of competing stablecoin issuers, in Buchman’s view.



“This is part of Ethereum&#8217;s evolution and the idea that Ethereum only works if all compute happens on Ethereum, I think, is obscene and just it kind of misses the fundamental role Ethereum is going to have over the next 100 years or so,” Buchman said.



Ethereum’s centrality as a destination for stablecoin flows can persist even as issuance and FX trading move upstream to Arc. We don’t yet know the extent to which Circle will court DeFi apps to deploy on Arc, but in general, the application layer still wants to live where liquidity is deepest.



One legitimate concern is whether Arc’s USDC-native design introduces new vectors for censorship or exclusion, especially in sanctioned jurisdictions. If USDC is both asset and gas, what happens when the token itself is frozen?



“Technically, fallback mechanisms are possible,” Buchman said, but the baseline should be the current banking system and he thinks Arc will certainly clear that low bar.



“Is it going to be as freedom-supporting and protective of human rights as Ethereum and Bitcoin themselves? No. I don&#8217;t think anyone&#8217;s trying to kid themselves about it. But I feel like Circle is trying to go to bat for an open economy.”



There remain open questions about system-level privacy and regulatory constraints, which Circle has only lightly touched on. “We pitched them hard on privacy,” Buchman added.



“They’ve acknowledged it, but we’ll see how far they take it,” he said. “Malachite is well-suited to support privacy-preserving chains, and that’s going to be a critical next step.”



Whether it will ultimately be a handful of new chains or a <a href="https://blockworks.co/newsletter/daily/issue/post_afb749f3-24b3-4a45-a982-d6e174f353d7">Cambrian explosion</a>, it’s clear that some enterprises still prefer building sovereign chains, even in the era of modular, shared security stacks. The tradeoffs between customization, governance, cost, and platform risk are nuanced, whether it’s <a href="https://blockworks.co/news/robinhood-l2-staking-us">Robinhood’s rollup</a> on Arbitrum Orbit or Arc’s full L1, or whatever Stripe has in store its newly announced L1 <a href="https://blockworks.co/news/stripe-circle-l1s-solana">Tempo</a>.



“I see it a lot like cloud versus on-prem[esis],” Buchman said. “Right now there&#8217;s this whole movement to move things out of the cloud back to on-prem and it&#8217;s going to oscillate back and forth until the end of time — and I think we&#8217;ll see something similar with L1s and L2s.”



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Why Circle chose an L1 — and what it means for Ethereum

TeraWulf’s stock soared Thursday after revealing a 10-year deal with AI cloud platform Fluidstack that also aligns the bitcoin miner with Google.



The decade-long high-performance computing (HPC) colocation agreements — with two five-year extension options — come as bitcoin miners have looked to diversify income streams in recent years away from volatile crypto-linked revenues.



TeraWulf is set to deliver to Fluidstack more than 200 megawatts of critical IT load at its Lake Mariner datacenter in New York, the company said Thursday. TeraWulf estimates $370 million in annual revenue from this deal.&nbsp;



Perhaps a bigger takeaway from the deal is Google taking a roughly 8% stake in TeraWulf. The tech giant — as a result of backstopping $1.8 billion of Fluidstack’s lease obligations — is set to acquire about 41 million shares of WULF common stock.



Read more: <a href="https://blockworks.co/news/coreweave-pending-buy-ai">CoreWeave’s pending Core Scientific buy gives ‘optionality’ as AI needs evolve</a>



TeraWulf’s move to host AI workloads exhibits how a large miner can turn its energy infrastructure into stable, long-term revenue, said BlocksBridge Consulting founder Nishant Sharma.



“The scale and Google’s financial backing make it a standout and could inspire similar moves from peers,” Sharma added.



Despite Google’s involvement making the deal unique, TeraWulf’s deal resembles similar recent pivots across the mining segment. Sharma pointed to Bit Digital entering into a $44 million credit facility in June with the Royal Bank of Canada to expand its AI-focused infrastructure.



Gaining more attention was Core Scientific last year signing various 12-year contracts with CoreWeave. The bitcoin miner offered 200 MW of infrastructure to host the cloud provider’s HPC services; expected annual revenue stemming from the deal was $290 million.



CoreWeave then revealed last month that it would <a href="https://blockworks.co/news/coreweave-to-acquire-core-scientific">acquire Core Scientific</a> in an all-stock deal.



“Like Core Scientific’s multi-hundred-megawatt hosting deals with CoreWeave, this is a major long-term HPC commitment,” Sharma said.&nbsp;



“But TeraWulf’s version adds a strategic investor and backstop, giving it more financial certainty and independence.”



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Google involved in BTC miner TeraWulf’s ‘standout’ hosting deal 

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



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Blockchain devs are increasingly centering their new products around user accounts and identities — and are launching their own chains as a result.



Zink, an SVM L1 from ATMTA, is the latest new blockchain to join the trend. ATMTA is the studio behind the in-development space exploration game <a href="https://blockworks.co/news/star-atlas-development-advances">Star Atlas</a>, which for years was expected to use Solana’s mainnet for all its crypto elements.&nbsp;



But that now appears to be changing. While some die-hard Solana fans might see the move as a shakeup, those unfazed by this reveal might argue Star Atlas making its own chain was inevitable for scalability, anyway.



Zink uses zero-knowledge proofs to power features like “zProfiles,” which will give users a central identity with “global permission settings” that can automate transactions and connect and apply to multiple apps, according to a statement.&nbsp;



ATMTA founder and CEO Michael Wagner told me via email that Zink is intended to be a “generalist consumer blockchain” long term, but that initially the studio is looking to bring other crypto gaming studios onboard to use the Zink chain.



“Zink will start as a largely centralized and permissioned blockchain. We do anticipate a validator set that includes several external parties on mainnet launch; large validators from Solana. But generally, ATMTA wants to control how the L1 matures in the early phases, and prioritize performance for Star Atlas,” Wagner explained.&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">Star Atlas Dev Log 5: Spent time refactoring the crouch logic. State machine can get a bit complicated given support for toggle crouch and various movement abilities. Did you know if you hold forward and crouch during a dash or upon landing your character will try to slide? <a href="https://t.co/EUbT5c4rEg">pic.twitter.com/EUbT5c4rEg</a>&mdash; Chypto (@Chypto_) <a href="https://twitter.com/Chypto_/status/1955297614716363017?ref_src=twsrc%5Etfw">August 12, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



“However, we have a roadmap that ultimately leads to going open access and permissionless. I would anticipate we achieve that within 18-24 months, though expect greater degrees of decentralization over time in a more iterative fashion,” he added.



The studio has slated Zink for a December mainnet launch.&nbsp;



As with most blockchains, Zink’s native token of the same name will be used for staking, consensus and community incentives.&nbsp;



Next month, a ZINK airdrop campaign will track community members’ activity and contributions to let them earn XP (and then ultimately the token). Playing Star Atlas and its affiliated games, like the SAGE browser game, will earn XP, as will locking up Star Atlas tokens ATLAS and POLIS.



Other existing chains focused on user identities include Worldcoin’s EVM blockchain, which seeks to <a href="https://blockworks.co/news/worldcoin-biometric-identity-vision">discern between</a> bots and humans, and the upcoming EVM L1 <a href="https://blockworks.co/news/animoca-moca-chain-mainnet-launch">Moca Chain</a>, which aims to give users more control over their identities and data.



How many of these blockchains we actually need is up for debate, of course, though ultimately metrics like revenue and user activity will answer that question in the long term.&nbsp;&nbsp;



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Solana-compatible Star Atlas L1 plots December launch

Katherine Ross

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



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In July, we saw over $6 billion go into funding, a pretty big increase in comparison to June, according to Blockworks Research data.&nbsp;



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Look at the itty-bitty June bar in comparison to July&nbsp;



Of that $6 billion, roughly $177 million came from M&amp;A activity. To break that down further: 96 raise announcements were made in comparison to just 12 M&amp;A announcements. Both June and May saw 10 or fewer M&amp;A announcements, it did pick up ever so slightly.&nbsp;



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1600" height="1245" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXdiqko7sDez8scTxE8_7uHFb3sMUjTl4fw7mPM4tlmXQr9M_PDvz7gFuFEIlYYXKIhnzvNOkXXPdQei1AAJsSwO0rOEj3RkWzxjsa4X99tw7FaCf70wzZtNLtqeBhx8WhGgWxB25A.png" alt="" class="wp-image-106112" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXdiqko7sDez8scTxE8_7uHFb3sMUjTl4fw7mPM4tlmXQr9M_PDvz7gFuFEIlYYXKIhnzvNOkXXPdQei1AAJsSwO0rOEj3RkWzxjsa4X99tw7FaCf70wzZtNLtqeBhx8WhGgWxB25A.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXdiqko7sDez8scTxE8_7uHFb3sMUjTl4fw7mPM4tlmXQr9M_PDvz7gFuFEIlYYXKIhnzvNOkXXPdQei1AAJsSwO0rOEj3RkWzxjsa4X99tw7FaCf70wzZtNLtqeBhx8WhGgWxB25A.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXdiqko7sDez8scTxE8_7uHFb3sMUjTl4fw7mPM4tlmXQr9M_PDvz7gFuFEIlYYXKIhnzvNOkXXPdQei1AAJsSwO0rOEj3RkWzxjsa4X99tw7FaCf70wzZtNLtqeBhx8WhGgWxB25A.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXdiqko7sDez8scTxE8_7uHFb3sMUjTl4fw7mPM4tlmXQr9M_PDvz7gFuFEIlYYXKIhnzvNOkXXPdQei1AAJsSwO0rOEj3RkWzxjsa4X99tw7FaCf70wzZtNLtqeBhx8WhGgWxB25A.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXdiqko7sDez8scTxE8_7uHFb3sMUjTl4fw7mPM4tlmXQr9M_PDvz7gFuFEIlYYXKIhnzvNOkXXPdQei1AAJsSwO0rOEj3RkWzxjsa4X99tw7FaCf70wzZtNLtqeBhx8WhGgWxB25A.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXdiqko7sDez8scTxE8_7uHFb3sMUjTl4fw7mPM4tlmXQr9M_PDvz7gFuFEIlYYXKIhnzvNOkXXPdQei1AAJsSwO0rOEj3RkWzxjsa4X99tw7FaCf70wzZtNLtqeBhx8WhGgWxB25A.png?w=330 330w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXdiqko7sDez8scTxE8_7uHFb3sMUjTl4fw7mPM4tlmXQr9M_PDvz7gFuFEIlYYXKIhnzvNOkXXPdQei1AAJsSwO0rOEj3RkWzxjsa4X99tw7FaCf70wzZtNLtqeBhx8WhGgWxB25A.png?w=335 335w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXdiqko7sDez8scTxE8_7uHFb3sMUjTl4fw7mPM4tlmXQr9M_PDvz7gFuFEIlYYXKIhnzvNOkXXPdQei1AAJsSwO0rOEj3RkWzxjsa4X99tw7FaCf70wzZtNLtqeBhx8WhGgWxB25A.png?w=281 281w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXdiqko7sDez8scTxE8_7uHFb3sMUjTl4fw7mPM4tlmXQr9M_PDvz7gFuFEIlYYXKIhnzvNOkXXPdQei1AAJsSwO0rOEj3RkWzxjsa4X99tw7FaCf70wzZtNLtqeBhx8WhGgWxB25A.png?w=80 80w" sizes="auto, (max-width: 1600px) 100vw, 1600px" /></figure>



To give you a better idea of the breakdown



If we look at TIE data, which included <a href="https://www.youtube.com/watch?v=LfPMvCtU7PQ">Digital Asset Treasury</a> company raises, then we can also gauge what stage of raises were the most popular last month.&nbsp;



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Source: The TIE Terminal



With the rise of the Digital Asset Treasury companies, there is a decent amount of post-IPO equity being raised. But, excluding DATs, most raise announcements were either seed rounds or Series A rounds.&nbsp;



Let’s break down venture funding further: Coinbase Ventures was one of the most active investors in the last month, participating in 21 rounds.&nbsp;



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To put all of this in perspective, <a href="https://blockworks.co/news/venture-capital-funding-up-in-june">June saw a bit of a comeback in funding</a> after a very slow May, and it looks like July is yet again showing another pick up.&nbsp;



Last month also outpaced March, which had been the most successful month since 2021 based on Blockworks Research data, which goes to show how large the appetite is. Currently, DATs clearly reign supreme if we’re looking at total fundraising.&nbsp;



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1120" height="693" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXc9PqxEsL0-HzHT6nTGZD-P72CC30-qTqFRxZPAOti1867U_hKjyh0BmvlTLHDjK_9KdFdWopbzBOoMr_bAR3QEsLied-egENpR65ISO_CC5HYUeP44-8IULLtGiWcz0l7DXvINg.png" alt="" class="wp-image-106109" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXc9PqxEsL0-HzHT6nTGZD-P72CC30-qTqFRxZPAOti1867U_hKjyh0BmvlTLHDjK_9KdFdWopbzBOoMr_bAR3QEsLied-egENpR65ISO_CC5HYUeP44-8IULLtGiWcz0l7DXvINg.png?w=1120 1120w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXc9PqxEsL0-HzHT6nTGZD-P72CC30-qTqFRxZPAOti1867U_hKjyh0BmvlTLHDjK_9KdFdWopbzBOoMr_bAR3QEsLied-egENpR65ISO_CC5HYUeP44-8IULLtGiWcz0l7DXvINg.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXc9PqxEsL0-HzHT6nTGZD-P72CC30-qTqFRxZPAOti1867U_hKjyh0BmvlTLHDjK_9KdFdWopbzBOoMr_bAR3QEsLied-egENpR65ISO_CC5HYUeP44-8IULLtGiWcz0l7DXvINg.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXc9PqxEsL0-HzHT6nTGZD-P72CC30-qTqFRxZPAOti1867U_hKjyh0BmvlTLHDjK_9KdFdWopbzBOoMr_bAR3QEsLied-egENpR65ISO_CC5HYUeP44-8IULLtGiWcz0l7DXvINg.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXc9PqxEsL0-HzHT6nTGZD-P72CC30-qTqFRxZPAOti1867U_hKjyh0BmvlTLHDjK_9KdFdWopbzBOoMr_bAR3QEsLied-egENpR65ISO_CC5HYUeP44-8IULLtGiWcz0l7DXvINg.png?w=415 415w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXc9PqxEsL0-HzHT6nTGZD-P72CC30-qTqFRxZPAOti1867U_hKjyh0BmvlTLHDjK_9KdFdWopbzBOoMr_bAR3QEsLied-egENpR65ISO_CC5HYUeP44-8IULLtGiWcz0l7DXvINg.png?w=422 422w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXc9PqxEsL0-HzHT6nTGZD-P72CC30-qTqFRxZPAOti1867U_hKjyh0BmvlTLHDjK_9KdFdWopbzBOoMr_bAR3QEsLied-egENpR65ISO_CC5HYUeP44-8IULLtGiWcz0l7DXvINg.png?w=354 354w, https://blockworks-co.imgix.net/wp-content/uploads/2025/08/AD_4nXc9PqxEsL0-HzHT6nTGZD-P72CC30-qTqFRxZPAOti1867U_hKjyh0BmvlTLHDjK_9KdFdWopbzBOoMr_bAR3QEsLied-egENpR65ISO_CC5HYUeP44-8IULLtGiWcz0l7DXvINg.png?w=80 80w" sizes="auto, (max-width: 1120px) 100vw, 1120px" /></figure>



Source: TIE Terminal



Payments, however, also saw a decent amount of activity. As did DeFi (which was the second most popular category in June for fundraising).&nbsp;



Here’s my take: DATs are the hot item of the moment, and it shows in the data. However, I’m curious to see if they can continue this momentum into August (which, like the summer months, tends to be seasonally weak) or if we’ll see a slight decline next month.&nbsp;



But overall, the data looks pretty strong at this point, and we didn’t even really touch on just how successful crypto IPOs have been.



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Crypto funding tops $6B in July: Blockworks Research

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“For new technologies to play a role in protecting Americans’ privacy, government must guard jealously the ability of Americans to use them.”



— Hester Peirce
</blockquote>



Centralized stablecoins, permissioned blockchains, corporate treasury companies…the hottest topics in crypto are not very cypherpunk these days.



Weirdly though, the SEC is.



In a <a href="https://www.sec.gov/newsroom/speeches-statements/peirce-remarks-blockchain-conference-080425#_ftn47">speech</a> last week, SEC Commissioner Hester Peirce delivered a defense of privacy that wouldn’t be out of place on the original <a href="https://mailing-list-archive.cryptoanarchy.wiki">cypherpunk mailing list</a>.



She even cited Eric Hughes, founder of the mailing list and author of <a href="https://www.activism.net/cypherpunk/manifesto.html">A Cypherpunk Manifesto</a>, as an inspiration for her surprisingly radical line of thinking.



Hughes probably never imagined he’d be approvingly quoted by a government official, as you can tell from the line Peirce chose to quote: “We cannot expect governments, corporations or other large, faceless organizations to grant us privacy out of their beneficence.”



And yet, here is one of the US’s most influential regulators not just name-dropping Hughes, but amplifying his radical views on privacy-preserving technology.



She hardly sounds like someone who works for the government, though: “Where, by design or deficiency, the law will not protect us, technology might.”&nbsp;



That’s a pretty good summation of Hughes’ core message that, because we trust governments to grant it, “privacy in an open society requires cryptography.”



Writing in 1993, Hughes spoke aspirationally about the need for “systems which allow anonymous transactions to take place.”



Writing in 2025, Peirce cites crypto mixers, privacy-preserving blockchains and even decentralized physical networks (DePIN!!!) as systems that can provide such anonymity.



She makes the case for these technologies succinctly: “New and improved technology can diminish the need for us to rely on third parties and thus to hand our information over to them.”&nbsp;



Peirce even makes explicit what Hughes diplomatically left unsaid in the Manifesto: Privacy preserving technology must be allowed “even though doing so enables people to use them for bad purposes.”



What could be more cypherpunk than that?



It’s an extraordinary turn of events to see an SEC commissioner being so closely aligned with the author of the original cypherpunk’s call to arms on privacy.



Their views are not entirely aligned, however — but in the opposite way you might expect.



Much of Peirce’s speech targets the “third-party doctrine” — the legal theory that lets law enforcement access your banking data without a warrant — which she accuses the US government (her employer!) of wielding like a “sledgehammer.”



“The third-party doctrine is a key pillar of financial surveillance in this country,” she writes, before making clear that she’d like to knock it down.



In short, she argues that your banking records deserve the same Fourth Amendment protection as whatever goes on in your home behind closed doors.



Weirdly, I think Hughes might disagree.



“If two parties have some sort of dealings,” he wrote in the Manifesto, “then each has a memory of their interaction. Each party can speak about their own memory of this; how could anyone prevent it?”



That is a tidy restatement of the government’s insistence that once you give your information to a third party, such as a bank, it’s no longer your private information.



Hughes even adds that “we seek not to restrict any speech at all” — which must therefore include banks speaking about their customers.



(Wouldn’t it be funny if the prosecution cited Hughes in the next Roman Storm trial.)



But this is why both Peirce and Hughes put their faith in technology: Even if the current government chooses to respect your privacy, the next one probably won’t.



“We must come together and create systems which allow anonymous transactions to take place,” Hughes wrote.



But not just that.



“For privacy to be widespread it must be part of a social contract,” he added. “Privacy only extends so far as the cooperation of one&#8217;s fellows in society.”



This will be a hard sell, I think.



Most people say they are in favor of privacy. But most people also say they’re against money laundering and terrorist financing.



Few are as radical as Peirce and Hughes in believing that privacy is so fundamental that its benefits outweigh any harm it might enable (or fail to prevent).



If Peirce’s speech finds its way to Hughes (wherever he is), I’m sure he’d recognize and appreciate it as an effort to win the not-yet-radicalized over to the cause.



“We the Cypherpunks seek your questions and your concerns and hope we may engage you,” he wrote in 1993.



Hester Peirce can count herself among the “we.”



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A regulator’s radical defense of privacy

Jeff Albus

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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Lightspeed has exclusively learned that Maple — one of Solana&#8217;s largest onchain asset managers — is bringing its yield-bearing syrupUSDC stablecoin into perpetual futures markets operated by Drift, Solana&#8217;s flagship perps DEX.



Drift, known for its deep onchain liquidity and capital-efficient margins, will accept syrupUSDC as margin collateral, allowing traders to earn a 7-8% APY on their margin while trading.



This will be the first time the exchange has allowed a collateral asset to serve dual purposes, earning yield while backing positions — sweetened by $100,000 in incentives and an initial $50 million cap.



One of Solana&#8217;s biggest wins is that its DeFi ecosystem can move at the speed of centralized markets. It doesn&#8217;t matter how advanced your strategies are or how complex your positions get.



The network&#8217;s speed means traders can rebalance instantly, while staying entirely onchain. That&#8217;s more than competing ecosystems like Ethereum can often promise without high fees or serious latency.



Often, though, the very need for collateral means capital ends up sitting idle as margin, earning nothing while waiting for trades to play out. That leads to higher opportunity costs, less capital efficiency and slower compounding for active traders.



But because users can now post syrupUSDC as margin on Drift, those same dollars can both secure your trades and earn passive income. Traders will be able to offset funding costs, free up cash flow and keep capital productive without changing their trading style.



More capital will flow into Solana&#8217;s onchain perps market, which also means Drift&#8217;s open interest should climb, and we&#8217;re more likely to see syrupUSDC adoption spread across more protocols.



SyrupUSDC is backed by Maple&#8217;s institutional lending pools and earns a steady yield from over-collateralized loans. Drift&#8217;s cross-collateral system treats it like USDC for margin purposes, but allows the yield stream to keep running while positions are open.



Altogether, their goal is to allow money to multitask, cutting out the dead time it would otherwise spend doing nothing.



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Yield-bearing margin arrives on Drift

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



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We watched what happened when Circle listed on the NYSE two months ago. Today, the industry looked on as crypto exchange Bullish did the same.



BLSH jumped to more than triple its IPO price minutes after going public before losing momentum later in the session.&nbsp;



The company yesterday revealed IPO pricing of 30 million shares at $37 per share — up from the $32-33 estimate it shared in a Monday <a href="https://www.sec.gov/Archives/edgar/data/1872195/000110465925075896/tm2421409-23_f1a.htm">filing</a>.



Shares opened at $90 around 1 p.m. ET — roughly 143% higher than the IPO price. The company’s stock quickly <a href="https://blockworks.co/news/bullish-stock-surges-ipo-110/">surged to $118</a>, but had dropped below the opening price when the market closed.



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcdjt8d5uKtuNatOpxA_h_zUgWoGg422vRMyjCVViVkBuHvRVDUcwlIfd2-EjDKmncnQTkTWnXnhMKsK_yT8pxC4WLf76EydDFaT51a6ThvvxTSSfyAtjE2jXxBA9yMxa-BBz5TgA?key=ugntXJX7FAzGhfsEJue-hA" alt="" style="width:602px;height:auto"/><figcaption class="wp-element-caption">Source: Yahoo finance</figcaption></figure>



<a href="https://blockworks.co/news/circle-shares-nyse-day-one">Circle stock debuted</a> at $69 per share on June 5 (more than double its IPO price of $31). Though the USDC issuer’s stock price peaked near $300 on June 23, CRCL shares were trading for around $156 midday Wednesday.&nbsp;



All’s to say: Where Bullish’s stock price goes from here is anyone’s guess.&nbsp;



Led by former NYSE president Tom Farley, Bullish launched in 2021 with backing from Block.one, Thiel Capital, Galaxy Digital, Nomura and others. It offers a spot and derivatives exchange, as well as liquidity services; Bullish also owns crypto media company CoinDesk.



As of March 31, Bullish held $1.7 billion worth of bitcoin, $144 million of US dollar stablecoins, $28 million in cash and $55 million of ether and other digital assets.



The company’s roughly $1.8 billion in cash and crypto makes it one of the most well-financed companies in the space, noted Architect Partners VP Ryan McCulloch.



“By buying this stock, you are heavily invested in their future potential to invest this cash,” he told Blockworks.



McCulloch labeled Amber Group and OSL Group as the most similar public companies to Bullish, given that they are Asia-focused exchanges offering a similar suite of services.&nbsp;



But Amber Group and OSL Group are trading at enterprise values around $600 million and $1.4 billion, respectively — significantly lower than the roughly $13 billion valuation Bullish went public with,&nbsp; he explained.



“They get significantly more public exposure via the media business, which likely serves as free lead generation for the trading business and vice versa,” McCulloch said. “This is far different than any others and seems to provide a unique market positioning.”



Matthew Sigel, who manages the VanEck Onchain Economy ETF (NODE), also noted Bullish’s sizable bitcoin treasury — enabling tighter spreads and “competitive positioning” in both spot and derivatives markets.&nbsp;



“These capabilities can compound across trading, data and index businesses,” Sigel added. “In a bull scenario based on our internal modeling, there is a path to $600 million in revenue and $200 million in EBITDA.”



More crypto company IPOs are expected in the coming months, as Gemini, <a href="http://grayscale">Grayscale</a>, BitGo and Figure Technology have confidentially filed draft registration statements with the SEC.



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Bullish closes 89% above IPO price after up-and-down NYSE debut

Five years ago today, Curve Finance — now one of DeFi’s longest-running protocols — saw the launch of its governance token CRV in what remains one of the most unusual moments in crypto history.



On August 13, 2020, an anonymous Twitter account, @0xc4ad, announced that they had gone ahead and deployed the CRV token and DAO contracts before the Curve team themselves had done so.



“Yo, @CurveFinance! Saw your DAO is ready to rock and I gots to MAXIMIZE MY ALPHA! So I went ahead and deployed it for you,” the account posted.



<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">Yo, <a href="https://twitter.com/CurveFinance?ref_src=twsrc%5Etfw">@CurveFinance</a> ! Saw your DAO is ready to rock and I gots to MAXIMIZE MY ALPHA ! So I went ahead and deployed it for you. Get at me in DM to verify and lets get this party started!! <a href="https://t.co/D0KqEg4Ldr">pic.twitter.com/D0KqEg4Ldr</a>&mdash; 0xc4ad (@0xc4ad) <a href="https://twitter.com/0xc4ad/status/1293977012550467584?ref_src=twsrc%5Etfw">August 13, 2020</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



They linked to the deployment address, token contract, and even the freshly created Aragon DAO, assuring followers the contracts matched Curve’s specifications.



“You guys ready to harvest some CRV with me or what?!?” they <a href="https://x.com/0xc4ad/status/1293978460411568131">wrote</a>, tagging a who’s-who of early DeFi influencers.



The Curve team, ostensibly blindsided, responded carefully. “Interesting. We are proceeding with caution here, so far looks like contracts are the correct ones,” the official account <a href="https://x.com/CurveFinance/status/1294007705263386631">tweeted</a>, noting they would verify before endorsing the launch.



Once confirmed, the deployment effectively became the official CRV token launch, initiated — the story goes — not by the team, but by an opportunistic outsider. The @0xc4ad account soon vanished from Twitter, leaving behind one of DeFi’s most enduring origin stories.



Asked if the mystery will ever be solved, founder Michael Egorov told Blockworks, “Good question! I still don&#8217;t really know today. Looks as hard to know as Satoshi&#8217;s identity.”



Since that chaotic start, <a href="https://blockworks.co/tag/curve-finance">Curve Finance</a> has grown from a <a href="https://blockworks.co/tag/stablecoins">stablecoin</a>-focused AMM <a href="https://blockworks.co/tag/dex">DEX</a> into a core layer of DeFi’s liquidity stack, influencing protocol design across the industry. Reflecting on its rise, Egorov said: “What went as calculated is market sizing of stablecoin swaps,” though he added Curve’s centrality in DeFi infrastructure “was a bit surprising, but not totally unexpected.”



Today’s anniversary coincides with a <a href="https://blockworks.co/price/crv">CRV</a> inflation drop, reducing the token’s emission rate. Egorov sees ongoing misunderstandings around Curve’s governance design: “Many projects think that token burn is better (<a href="https://blockworks.co/tag/changpeng-zhao">CZ</a> thinks that!),” he said, but noting that, to him, “it appears that token locking is simply much more efficient for reducing circulated supply as well as in aligning people with governance.”



Egorov is now focused on <a href="https://blockworks.co/news/michael-egorov-yield-basis-protocol">Yield Basis</a>, an AMM-based solution to impermanent loss. “I think ve-tokenomics is good, so I apply it there,” he said, adding that Yield Basis will split rewards between LP tokens and real yield without a boosting mechanism.



From an unplanned, community-triggered launch to becoming a foundational DeFi protocol, Curve’s story is proof that sometimes chaos — and a little mystery — can yield lasting decentralized infrastructure.



Correction Aug 14, 2025 at 5:20 am ET: Description of Yield Basis.



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