Liz Coyne

In the weekly roundup episode of Blockworks&#8217; podcast &#8220;<a href="https://www.youtube.com/watch?v=Y2DPySOE1pA" target="_blank" rel="noreferrer noopener">On the Margin</a>,&#8221; Michael Ippolito, co-founder, sits down with Economic Strategist Tyler Neville to talk about the news in macro, including Mike and Tyler cover Binance’s regulatory issues, OnlyFans ban on pornography, and Jay Clayton joining Fireblocks’ board.



Watch the podcast to find out more on:



<ul class="wp-block-list"><li>The US Misery Index</li><li>Binance&#8217;s regulatory issues</li><li>OnlyFans ban on pornography</li><li>Jay Clayton joining Fireblocks’ board</li></ul>



Watch the full episode below:



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</div></figure>



&#8220;On the Margin&#8221; is a two-part show.&nbsp;Once a week, Mike interviews industry experts, and then at the end of the week he is joined by co-host <a href="https://cms.blockworks.co/newsletter/" target="_blank" rel="noreferrer noopener">Tyler Neville</a> where they break down the top crypto and macro stories. Episodes go live every Wednesday and Saturday morning.



Subscribe to &#8220;On the Margin&#8221; today on <a href="https://podcasts.apple.com/us/podcast/lyn-alden-explains-connection-between-inflation-bitcoin/id1558223079?i=1000513411286" target="_blank" rel="noreferrer noopener">Apple</a> or <a href="https://spoti.fi/3bTa9uw" target="_blank" rel="noreferrer noopener">Spotify</a>, or watch episodes on <a href="https://youtube.com/playlist?list=PLvER9nHSRN3xVs_p-dl7L7K_ZgL6lSudu" target="_blank" rel="noreferrer noopener">YouTube</a>.

Weekly Roundup: Binance, OnlyFans and Jay Clayton

Jack Kubinec

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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In 2023 and 2024, a number of Solana startups <a href="https://blockworks.co/news/jito-airdrop-value">generated native tokens</a> to reward users and let investors and early contributors book returns.



Much of the attention surrounding these tokens went to how lucrative they were for recipients of so-called airdrops — and actual utility took a backseat, especially with a US regulatory regime eager to classify tokens as securities. Now with a <a href="https://blockworks.co/news/washington-dc-blockchain-summit-takeaways">friendlier regulatory outlook</a> and the airdrop flow being stemmed, some are looking to how these new native tokens can become valuable assets.&nbsp;



One such example is early Solana investor Multicoin Capital, which recently published an asset report for JTO, the native token of its portfolio company Jito. Multicoin’s forward-looking base case priced JTO at $6.80, roughly three times its current price. I had the report’s author, Multicoin investment partner Shayon Sengupta, as a guest on the Lightspeed podcast this week to discuss his valuation further.



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“If you assume Solana <a href="https://app.blockworksresearch.com/analytics/solana">REV</a> is going to increase and you assume that demand for priority blockspace is going to increase, Jito is going to be the direct beneficiary of that,” Sengupta said.



That’s likely true. 93% of the Solana network’s stake runs on the Jito-Solana client, which offers off-chain blockspace auctions that maximize economic returns for validators and makes it easier for users to land transactions. Jito tips from these auctions made up around 56% of Solana’s total REV in February. That’s not to mention Jito offering Solana’s largest LST in JitoSOL — a product it seems to be angling to have included in Solana staking ETFs.



What I’m less convinced of is the concept that Jito’s success as a company will trickle down to the JTO token. JTO’s price-to-earnings ratio swung wildly this year when Jito’s revenue greatly increased and its token price stayed roughly the same. That’s probably because there is currently no direct connection between Jito revenue and the JTO token.&nbsp;



The Jito Foundation — which oversees Jito’s stake pool as well as JTO — takes in revenue, but if the foundation were to do things like distribute its revenue to token holders, JTO might start to look uncomfortably like a security. That’s likely part of why the Uniswap Foundation is still yet to distribute fee revenue to UNI holders. Sengupta hinted to me that this may change.



“Our general framing is that as capital markets mature, you end up in a stage where revenues are going to matter,” Sengupta said, vaguely citing “changing policy dynamics” as one potential reason why.



Donald Trump’s presidency has brought previously unheard of legal possibilities to the crypto industry. Can it make native tokens great again?



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<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.</li>
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Multicoin estimates a 3x for Jito’s token

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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The Fed’s preferred inflation gauge ticked higher in February while consumer spending continued to disappoint, painting an uncertain picture for future monetary policy moves.&nbsp;



Annual core Personal Consumption Expenditures Index (PCE) came in at 2.8%, a far cry from central bankers’ 2% target. Economists had projected a 12-month reading of 2.7%. Month over month, core PCE increased 0.4% — again higher than estimates, which were 0.3%. 



Inflation-adjusted consumer spending increased only 0.1% last month, coming in on the lower end of estimates. Analysts had hoped that warmer weather would jumpstart spending after a severe winter across most of the country.&nbsp;



Spending came in below expectations, even as personal income increased 0.8%, compared with projections of a 0.4% increase.&nbsp;



Expectations for longer-term inflation were also on the rise. The University of Michigan’s one-year projection for inflation is now 5%. It’s the third-straight month the index has increased.&nbsp;



Fed funds futures markets are now pricing in a 13% chance the Fed opts to lower interest rates in May.&nbsp;



Stocks, unsurprisingly, did not take the inflation news well. The S&amp;P 500 lost as much as 1.5% in the first few hours of Friday’s session. The index is poised to end Q1 with its worst quarterly performance since 2023. The Nasdaq Composite slid almost 2% in the first half of the trading day.&nbsp;&nbsp;



The doom and gloom may not last too long, though, eToro analyst Bret Kenwell said.



“Historically speaking, the S&amp;P 500 tends to perform pretty well in mild inflationary environments where annual core PCE is between 2% and 4%,” he explained. “But investors don’t seem to care about historical statistics right now.”



You can say that again. Have a good weekend, everyone; here’s to hoping for a better performance next week.



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<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.</li>



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<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: For crypto collectors and traders, covering apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.</li>
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Inflation, consumer spending misses push US stocks lower 

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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Felix noted he came out of the Digital Asset Summit <a href="https://blockworks.co/news/forward-guidance-stablecoins-bullish-institutional-das">“incredibly bullish”</a> on stablecoins. He’s not the only one expecting big things around that sector and the broader tokenization category.



After Galaxy CEO Mike Novogratz addressed the firm’s <a href="https://blockworks.co/news/galaxy-terra-luna-200m">$200 million settlement</a> with the New York Attorney General during this morning’s earnings call, he answered a question on where the firm would focus most of its resources in 2025.



“The first obvious answer is stablecoins, both here and abroad,” he said — for payments, cross-border transactions and beyond.



Stablecoins are “the first real-world asset that’s been tokenized,” he added. And the tokenization of mortgages, collectibles, equities, etc. is coming. “I keep saying it’s going to be like bankruptcy — it happens real slow, then real fast,” Novogratz said. “It hasn’t happened real fast, but every single TradFi participant is gearing up for that [tokenization stage], and I think the crypto world is working on that.”



The promise of crypto boosting efficiency and transparency has been held back by a lack of regulatory clarity. That’s changing.



Galaxy said it’s “close” to the euro-denominated stablecoin it <a href="https://blockworks.co/news/euro-denominated-ethereum-stablecoin-launch">plotted to bring</a> with DWS and Flow Traders. Galaxy’s <a href="https://blockworks.co/news/galaxy-eyes-custody-platform-buy-from-bankrupt-celsius">investment in GK8</a> is a way for the firm to serve as “an infrastructure technology provider” in this category as adoption picks up, firm executives added.&nbsp;



Those comments came after NYSE parent Intercontinental Exchange said it plans to explore using Circle’s stablecoin (and Hashnote’s tokenized money fund USYC) within its derivatives exchanges, clearinghouses and data services.



“We believe Circle’s stablecoins and tokenized digital currencies can play a larger role in capital markets as digital currencies become more trusted by market participants as an acceptable equivalent to the US dollar,” NYSE president Lynn Martin said in a statement.



Fidelity is reportedly exploring a stablecoin launch. And we won’t rehash <a href="https://blockworks.co/news/bitgo-to-custody-wlfi-usd1">World Liberty Financial’s USD1</a> here, but the point is there’ve been ample developments with US stablecoin legislation expected as soon as this summer.



<h2 class="wp-block-heading">A focus at DAS</h2>



There was plenty of talk around stablecoins and RWAs at DAS, too.



I was on stage with Securitize chief operating officer Michael Sonnenshein last week. It happened to be the one-year anniversary of BlackRock (with help from Securitize) launching its tokenized money market fund, BUIDL. 



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/D_e0UHWm_qI?si=88O5k333U7A5g1mh&amp;start=7925" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>







BUIDL recently hit the $1 billion AUM mark and, this week, launched a new share class on Solana. While stablecoins have “made the crypto system go ’round,” Sonnenshein said, you now have assets onchain that offer a stable value and are yield-bearing. People are waking up to that. “That conversation, I think, is well underway, and you’re starting to see OTC desks, market makers, and all kinds of participants in crypto beginning to think about these assets in a new way — in many cases the same way they historically relied on stablecoins,” Sonnenshein said.&nbsp;



Ondo Finance’s Ian De Bode noted that BUIDL and Ondo’s OUSG display the benefits of onchain assets — i.e. 24/7 movement, programmability —&nbsp; to legacy institutions who may want to follow suit with their own offerings.



Rather than believing tokenized MMFs/Treasurys (a roughly ~$5 billion market) will replace stablecoins (with a market cap of nearly $230 billion), industry execs have noted the <a href="https://blockworks.co/news/tokenized-yield-funds-complement-stablecoins">powerful combo</a> of the two. Circle alluded to the demand for moving between <a href="https://blockworks.co/news/circle-hashnote-deal-tokenized-money">yield-bearing collateral and cash</a> when acquiring Hashnote in January.



“Tokenization cannot exist without stablecoins,” Alogrand Foundation CEO Staci Warden told me on the DAS main stage. “Because if you have tokenized the asset side but you haven’t tokenized the money side, it just doesn’t work.”



Combining yield with quick transferability is “incredibly potent,” she added. And every TradFi player “will no longer tolerate that their money is just sitting there doing nothing.”



After talking about less-liquid tokenization segments (like real estate rental income or <a href="https://blockworks.co/news/nft-airline-tickets-revolutionize-travel">airline tickets</a>), she reverted to money market funds when imagining future transactions.&nbsp;



Perhaps a decade from now, she envisioned, one could buy a coffee with a tokenized MMF sliver. The person being paid then starts earning the yield tied to that fund.



“Cash is an asset, [an] apartment building’s an asset, they’re all assets,” Warden said. “This continuum will get just completely blurred and more liquid.”



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<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: For crypto collectors and traders, covering apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.</li>
</ul>

Talk around stablecoins, tokenization picking up

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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Just last week at the Game Developers Conference, I caught up with two key members of the Arbitrum Gaming Catalyst Program (GCP): Daniel Peng, founding partner, and Rick Johanson, founding partner and VP.&nbsp;



During the interview, they shared a glowing vision for a gaming-focused future on Arbitrum. They said they were talking to <a href="https://blockworks.co/news/blockchain-gaming-reckoning-gdc">100 different gaming projects</a> to see which ones might build on their chain.&nbsp;



“I think where we are in the life cycle of gaming and Web3, is trying to figure out what the biggest value adds that we can provide with our resources…in order to ensure there’s some successes in our industry, right?” Peng told me.&nbsp;



“[It’s] still very much early. At the same time, I think we provide a pretty mature toolkit compared to a lot of other networks,” he added.



Arbitrum also had the largest (and therefore priciest) crypto booth at the gaming conference, featuring about a half-dozen different titles using Arbitrum in various stages of development and a challenge where you could play those games to earn Arbitrum merch.



But this week, things have gone cold. The Arbitrum DAO, which greenlit the GCP in the first place, is now considering a proposal that would claw back all unused ARB tokens allotted to fund the GCP’s ambitions. The program had previously been <a href="https://forum.arbitrum.foundation/t/catalyze-gaming-ecosystem-growth-on-arbitrum/22368">granted 200 million</a> ARB tokens last year, which was worth about $215 million at the time.&nbsp;



ARB’s now down over 76% in the past year.&nbsp;&nbsp;



“The GCP has repeatedly shown a reluctance to adequately document its activities and performance. Instead of embracing transparency, the program has recently sought to increase contributor compensation and lower its own reporting requirements,” part of the <a href="https://forum.arbitrum.foundation/t/non-constitutional-gcp-clawback/28809">proposal</a> reads.&nbsp;



“Given these failures, the risks associated with a lump-sum allocation of funds, and the mounting concerns raised by the community, it is time to cut our losses.”



Arbitrum DAO member Nathan van der Heyden co-published the proposal to kill GCP funding.&nbsp;



“The GCP was created in overly optimistic times. With key backers now gone, it’s clear the program isn’t delivering on its promises,” Heyden <a href="https://x.com/NathanVDH0x/status/1904164040261415183">argued</a>.



“The GCP was a failure,” wrote DAO participant Argonaut in agreement with the proposal.



“I fully agree with this clawback,” another participant wrote. “For the amount allocated, what has it gotten us? Arbitrum gaming will grow, but this amount of ARB was always outrageous when DeFi is what has gotten this L2 where it is.”



While some DAO participants agreed with the proposal, others — like GCP councilmember and Offchain Labs Head of Gaming and Consumer Partnerships David Bolger — <a href="https://forum.arbitrum.foundation/t/non-constitutional-gcp-clawback/28809/18">believe</a> the program is worth saving.



“No chain can remain competitive without allocating financial resources to attract and support builders,” Bolger <a href="https://forum.arbitrum.foundation/t/non-constitutional-gcp-clawback/28809/18">wrote</a>. “The industry is fiercely competitive, with rival chains routinely offering grants ranging from $5M to $100M.”



He’s not wrong about that, for sure — I’ve recently heard rumblings that other gaming-focused chains are paying game developers anywhere from $10 million to $30 million just to “partner” with them to build a game in their ecosystem.



“To date, over 50 deals have been put forward to the GCP, yet fewer than 5% have reached the final stages — demonstrating a clear commitment to due diligence,” Bolger added.



After the clawback was proposed, the GCP hired Castle Labs as its “DAO Relations partner” to see if more communication could change hearts and minds.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfqoH9PJMS6XbVzWcKOiGr6NBt3SbL5IYbrVJWEqdNL5PHUHocQVaimAfv1Wxay75I15SIVo2hUjU6GBcxMM79ABlIp1aXFWgt2lX028sLZxk3KcovUPbRKwjz9aze5Sau21q4q7Q?key=kaLfTTzvcXuvmsuUhwhA5Yyn" alt=""/></figure>



On the Arbitrum Foundation forums, Johanson said the team is taking action to improve communications between the GCP and the DAO — hiring Castle being one of those actions.&nbsp;



I reached out to Peng and Johanson for their thoughts on this proposal.&nbsp;



Johanson said: “We currently don’t have anything to share on this topic, but if that changes, we’ll be sure to update you.”&nbsp;



Overall, I’m not sure that the juice is worth the squeeze for every chain that decides it wants a gaming ecosystem.&nbsp;



Arbitrum is also an open, permissionless ecosystem, so devs don’t need the GCP’s permission — or anyone’s — to just launch a game there without getting paid.&nbsp;



Is it worth spending a hundred million just to convince some devs to make crypto games that are more likely to flop than not, some of which may ultimately leave the chain or never even launch?&nbsp;



Maybe it would be a better idea to narrow that scope to reduce risk and start small but focused — instead of trying to be the biggest player at the poker table.



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<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.</li>
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Arbitrum Gaming Catalyst hires DAO relations rep after token clawback proposal

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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On Thursday’s ACD call, Ethereum core developers reaffirmed their intent to ship Full EOF (EVM object format) with the Fusaka fork alongside the PeerDAS main driver. (Ipsilon wrote up a <a href="https://notes.ethereum.org/@ipsilon/eof_fusaka_options">thorough review</a> of the options, with Full EOF referred to as “Option A.”)



EOF is a major overhaul of the EVM that aims for long-term optimization, safety and modularity of Ethereum’s execution engine.



Its scope has <a href="https://blockworks-research.beehiiv.com/p/ethereum-s-pectra-split">stirred controversy</a>. Felix (from the Geth team) backed the more moderate Option D, putting him slightly at odds with fellow Geth college Lightclients.



From outside the client teams, Pascal Caversaccio voiced strong opposition, following up on his <a href="https://hackmd.io/@pcaversaccio/eof-when-complexity-outweighs-necessity">published critique</a>: “EOF: When Complexity Outweighs Necessity.” His main claim: No application developers are asking for EOF, and its rollout risks alienating the broader dev community.



Despite this, EF staff —&nbsp; including Piper Merriam and Ansgar Dietrichs, as well as client teams like Besu and Erigon — stood behind Full EOF. Their reasoning: It’s a clean structural reset, demanded by compiler authors, and backward-compatible for developers preferring the legacy EVM.



Tim Beiko acknowledged the complexity, but noted it emerged from years of iterative work. “We can’t decide not to do something just because it’s complex,” he told participants on the call.



“Long live Full EOF,” cheered Merriam.



So EOF is coming. For developers, the negotiation phase seems over, and the upgrade’s next chapter will focus on implementation and testing.



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<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: For crypto collectors and traders, covering apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.</li>
</ul>

EOF moves forward despite dev friction

Paul Atkins, President Donald Trump’s pick to lead the US Securities and Exchange Commission, on Thursday faced questions from lawmakers on his past regulatory stances and business dealings.&nbsp;



Democrats on the Senate Banking Committee were especially interested in hearing about how Atkins, who served as a commissioner at the SEC under former President Bush, felt securities regulators handled market risks before the 2008 financial crisis.&nbsp;



Atkins has historically maintained that the 2008 crash had “many causes,” but “deregulation,” as top Committee Democrat Elizabeth Warren suggested, was not one.&nbsp;



Read more: <a href="https://blockworks.co/news/sec-chair-nominee-crypto-past">What SEC chair nominee Paul Atkins has previously said about crypto</a>



“What really troubles me is that Congress still has yet to address the real root cause, and that was the subprime mortgage crisis,” Atkins added.&nbsp;



Some senators mentioned digital assets, and Atkins himself even took a moment to acknowledge the industry in his prepared remarks at the start of the hearing. He did not however face any specific inquiries about his plans for regulating the asset class.&nbsp;



Atkins hopes to provide “clear rules of the road” for crypto companies, he said. Committee Chair Sen. Tim Scott said he hopes Atkins and Comptroller of the Currency nominee Jonathan Gould work to address unfair discrimination against cryptocurrency firms, particularly when it comes to banking.&nbsp;



Sen. Elizabeth Warren in her opening statement accused Atkins of “helping billionaire CEOs like Sam Bankman-Fried.” She added that his personal business dealings present conflicts of interest she feels he has not adequately addressed.&nbsp;



Atkins, who founded consulting firm Patomak Global Partners after his first stint at the SEC, has a net worth of at least $327 million, according to filings with the Office of Government Ethics. Atkins has said he will sell his stake in the company should he be confirmed, but he did not confirm if he would publicly reveal the details of such a deal.&nbsp;



“No, you&#8217;re not going to tell us how much money you get — to people who will have business in front of the SEC?” Warren wondered in relation to these potential buyers. “You know, some people might call that a pre-bribe.”



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Trump’s SEC pick grilled on past agency actions, conflicts of interest 

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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After about 16 months from when the team first <a href="https://blockworks.co/news/privacy-ethereum-layer-2">announced</a> its roadmap and more than two years of R&amp;D later, COTI launched v2 of its mainnet yesterday.



COTI’s v2 mainnet marks a shift from its DAG (directed acyclic graph)-based protocol L1, launched in 2018, to a new EVM-compatible and privacy-focused L2 chain.



The goal is to gradually migrate user activity from the L1 to the L2 and eventually sunset the L1, COTI CEO Shahaf Bar-Geffen told Blockworks.



The cornerstone of COTI’s new privacy tech on its L2 chain is the use of “garbled circuits,” a kind of cryptography commonly used in multi-party computation (MPC).



Developed in partnership with Soda Labs, garbled circuits allow parties to compute functions over private data inputs that are garbled, i.e., encrypted. This works without revealing the underlying data, similar to zero-knowledge proofs.&nbsp;



“The technology was impractical to implement on the existing L1 due to its lack of smart contracts and DAG structure,” Bar-Geffen said. He explained the team’s shift in focus to an EVM L2, also citing the fact that most users are also on EVM chains.



COTI’s choice not to use zero-knowledge technology may seem like an unusual one, given the prominence of zk usage in the industry for privacy use cases.



But Bar-Geffen believes garbled circuits as a technology are far more efficient than incumbent solutions.&nbsp;



“Garbled circuits are multi-party-computing, whereas zero-knowledge is limited to a 1-to-1 relationship. You cannot build sophisticated applications with multiple users like, for instance, a DEX with zero-knowledge.”



With its privacy tech stack, COTI also plans to target enterprises and institutions with a need for regulatory compliance, what COTI touts as “privacy-on-demand.”



This points to the crypto industry’s desire to bring trillions of real-world assets onchain.



Today, most tokenized RWAs are walled off from the composability of public blockchains.&nbsp;



For instance, BlackRock’s USD Institutional Digital Liquidity (BUIDL) Fund uses a KYC whitelist enforced by its tokenization partner Securitize, though it exists as an ERC-20 token on a public chain like Ethereum. Only qualified investors with pre-approved wallets can hold BUIDL tokens.



Privacy chains like COTI could potentially solve this compliance pain point by allowing institutions to easily build smart contracts on top of its tokenized RWAs, and then choosing how the information around these assets are revealed.



“When transactions are 100% anonymous, that is illegal. But 100% transparency is also not in compliance. What COTI’s technology offers is the selective disclosure that allows institutions to reveal or not reveal exactly what they want, and [which] decides who gets to see what,” Bar-Geffen explained.



COTI’s v2 mainnet is going live with support from ecosystem partners integrating into its chain. Partners include Bancor, Carbon DeFi, Band Protocol, MyEtherWallet and PriveX.



According to COTI’s official <a href="https://cotinetwork.medium.com/coti-mainnet-launch-wrap-up-2f00d0b89f2e">blog</a>, about 15,000 wallets were airdropped COTI tokens to celebrate the launch.



COTI is not the only chain with a privacy focus.&nbsp;



Other similar privacy-focused chains, like the Aztec Network L2 and Aleo L1, are building toward a similar niche within privacy, though both have opted to use zero-knowledge tech rather than garbled circuits.



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COTI launches V2 mainnet: A new era of privacy-focused L2 solutions

David Canellis

Pete Rizzo

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>.



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Greetings, and <a href="https://x.com/pete_rizzo_/status/1905199552266649871">happy 41st birthday</a> to Ross Ulbricht!



By now, rehashing the Silk Road timeline — from a secret psychedelics lab in an off-the-grid Texas cabin to a global clandestine operation with half a dozen employees — doesn’t seem totally useful.



Besides, long-time Bitcoin History readers have already walked through the events that led to Ulbricht’s dramatic 2013 arrest in a San Francisco public library.



Anyone who missed our email from last year can <a href="https://bitcoinhistorynl.beehiiv.com/p/paid-price-200000-btc?utm_source=bitcoinhistorynl.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=he-paid-the-price-200-000-btc">find it in our archives</a> — it’s definitely still worth the read!



Keep in mind, though: That telling of the story misses its happy ending. It was written before President Trump <a href="https://www.newyorker.com/news/the-lede/why-trump-freed-ross-ulbricht-the-silk-roads-dread-pirate-roberts">pardoned</a> Ulbricht earlier this year, releasing him from a double-life prison sentence after serving nearly a decade.



To celebrate Ulbricht’s first birthday since his release, let’s instead pay homage to the way he integrated bitcoin payments into Silk Road, for reasons that have been largely lost on modern-day crypto.



<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">First birthday in freedom today. Beautiful day grilling by the pool. I&#39;ve been given a new life. It&#39;s like being born again.&mdash; Ross Ulbricht (@RealRossU) <a href="https://twitter.com/RealRossU/status/1905404620878590447?ref_src=twsrc%5Etfw">March 27, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Onto this week’s Bitcoin Legend.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdY_VBTwQDI8dZGPhvQqbQns7ZO-IpZKxOxpWS4bgm8C-M7Qn_X5JOQh70u7NjT_GbB6Cb9rkEYhG7FZ6RzGyltQVe2JbGSnG1ssgThmqLI6K2oCSDfCoP_C7A316Hzu_fYw-v81g?key=v4uBzLAEjvmSTiGzzRF8icXB" alt=""/><figcaption class="wp-element-caption">Silk Road founder Ross Ulbricht | Freeross.org modified by Blockworks</figcaption></figure>



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



Bitcoin was the obvious fit for Silk Road. It uniquely separates global payments from both governmental and corporate control, imbuing the user with financial self-sovereignty that goes beyond real-world cash.&nbsp;



“Every single transaction that takes place outside the nexus of state control is a victory for those individuals taking part in the transaction,” Ulbricht <a href="https://www.forbes.com/sites/andygreenberg/2013/04/29/collected-quotations-of-the-dread-pirate-roberts-founder-of-the-drug-site-silk-road-and-radical-libertarian/">wrote</a> in 2012.



It was bitcoin’s uncontrollable nature that matched his vision: a worthy complement to Silk Road’s hidden existence through Tor.&nbsp;



Ulbricht fully understood that bitcoin transfers are immutable. This property, combined with its pseudonymity, forms the basis for what makes bitcoin so interesting as the currency for underground activity: autonomy.



Applied in the right way — with stringent opsec in mind — bitcoin would enable true freedom of commerce on Silk Road.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc3NOKb1sfJDVeEKdcZQhf3OoTWE43EdMwy16Z35HP_5TUhJYdtilCI-O0vw-_7CyR1d_5q0hMhktvL_uxEAH2PQVGPHyZHrwdinr4VPCgED0qgkaedi51Ch3477qqTubGfTGyAKQ?key=v4uBzLAEjvmSTiGzzRF8icXB" alt=""/><figcaption class="wp-element-caption">Silk Road was active during one of bitcoin’s first great bull runs, but was taken down just before it hit $1,000 for the first time. (Onchain volume = total onchain volume, not just on Silk Road.)</figcaption></figure>



Ulbricht intended the platform “to be about giving people the freedom to make their own choices, to pursue their own happiness, however they individually saw fit,” and not the “convenient way for people to satisfy their drug addictions” it had partly become, as he <a href="https://bitcoinmagazine.com/culture/the-long-and-winding-story-of-silk-road-bitcoins-earliest-major-application">once</a> put it.



Silk Road needed guardrails if it was to solely accept bitcoin for payment. Quality control was crowdsourced via a public review system, and to protect users from fraud, Ulbricht positioned Silk Road as mediator for all transactions on the platform.



That meant escrow. In an automated system, any time a purchase was made, the buyer’s bitcoin payment was temporarily held in a wallet controlled by Silk Road admins, including Ulbricht.



Silk Road then notified the seller that payment was received, and the seller could then proceed with shipment. Once the package arrived on the other side, the buyer would lodge a confirmation on the Silk Road site, after which the bitcoin was released to the seller, who could then withdraw the coins to their own wallets.



Moderators manually handled disputes on a case-by-case basis via a ticker system, similar to how Amazon, eBay and Airbnb operate today.



There’s no question that these processes were riddled with trust assumptions. Both buyers and sellers were required to trust that Silk Road wouldn’t simply vanish with all their bitcoin, and that Silk Road was well equipped to safeguard user funds at all.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcVfTQZJbeeZarnXH4pkN5Zgf-PqRarafAZBsIz84WxnU_-hOG5MTTZMLsKHif57mcJ_LE0FVSpKT0iZ7EXpMWbVPnAt3zkDs66bHRMfe_RqpezValUaTkTDmOHw46h0yM11uz5ag?key=v4uBzLAEjvmSTiGzzRF8icXB" alt=""/><figcaption class="wp-element-caption">This Silk Road payment flowchart was Exhibit 113 A during Ulbricht’s trial</figcaption></figure>



Users also had to believe that moderators would manage disputes appropriately. At times, mods required users to submit potentially-incriminating photographic evidence, including shipping labels and tracking information, which would also need to be protected against leaks and theft.



Regardless, the system worked. By the time the Feds shuttered Silk Road, it had processed 9.5 million BTC in sales — 80% of bitcoin’s circulating supply at the time — and earned 600,000 BTC in commissions, which in September 2013 was <a href="https://web.archive.org/web/20140220003018/https://www.cs.columbia.edu/~smb/UlbrichtCriminalComplaint.pdf">equivalent</a> to $1.2 billion and $80 million, respectively.



Still, Silk Road largely integrated bitcoin in all the right ways. The platform automatically generated a new bitcoin address for every transaction — making them harder to trace. All transactions also took place over Tor, which, when used correctly, can keep IP addresses hidden.



If Silk Road had been built today, maybe it might’ve held escrowed coins in a multisig wallet. At least that would spread some of the trust around. Bitcoin multisigs wouldn’t be <a href="https://en.bitcoin.it/wiki/Pay_to_script_hash#:%7E:text=342ftSRCvFHfCeFFBuz4xwbeqnDw6BGUey%20is%20a%20Bitcoin%20address,good%20example%20to%20understand%20P2SH.">enabled</a> until April 2012 — more than a year after Silk Road first launched.



<h2 class="wp-block-heading">Fit for purpose</h2>



Setting aside those concerns, bitcoin and only bitcoin could do what Ulbricht needed.&nbsp;



This is especially true, considering there were only a <a href="https://coinmarketcap.com/historical/20130428/">handful</a> of alternative cryptocurrencies in Silk Road’s heyday, including Litecoin, Peercoin and Namecoin, all of which had a tiny fraction of bitcoin’s market cap and liquidity.



Let’s say Silk Road was launched on Ethereum in 2025. Perhaps for faster payments, more flexible escrow functionality, or stablecoin support (Silk Road actually allowed users to lock the dollar value of their bitcoin at time of purchase to minimize the impact of price volatility).



If that was the case, hypothetically, <a href="https://blockworks.co/news/ethereum-is-not-under-attack-understanding-mev-boost-relays">one OFAC sanction</a> on Silk Road’s contracts would immediately make it somewhat harder for its transactions to be processed — 31% of all Ethereum blocks right now are <a href="https://www.mevwatch.info/">configured</a> to uphold OFAC directives through censorship. In November, that figure was over 70%.



Not to mention, practically all major stablecoins have in-built functionality that allows their issuers to freeze and confiscate tokens at will, which they regularly do upon request from law enforcement.&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"><a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a> price: $12.20 <a href="https://t.co/w3yalprfg6">pic.twitter.com/w3yalprfg6</a>&mdash; The Bitcoin Historian (@pete_rizzo_) <a href="https://twitter.com/pete_rizzo_/status/1862866887899541947?ref_src=twsrc%5Etfw">November 30, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Such features clearly clash with the notion of an independent, libertarian marketplace, regardless of the power held by Ulbricht and the rest of the Silk Road team on the platform.&nbsp;



Silk Road’s legacy is then this: For all the philosophical distance separating “bitcoin” from “crypto” today, the idealistic platform that Ulbricht built was the divergence catalyst. It was a schism point that cracked open the massive fault line now dividing the space.&nbsp;



Through bitcoin, Silk Road undermined the traditional financial system and, even more critically, the entire social order. Ulbricht acted as a freedom maximalist building freedom tech, with none of the cosplay.&nbsp;



It’s a goal far removed from the compliant commerce that stablecoins and their smart contract platforms — which emerged in the wake of Silk Road’s demise — aspire to serve.&nbsp;



Those systems have grown to augment legacy finance rather than free us from it in the ways Ulbricht had hoped.



<h2 class="wp-block-heading">Unexpected results</h2>



Of course, even Bitcoin’s robust censorship resistance was not enough to protect Ulbricht from the US government. The same goes for other Silk Road operators and power users.



In total, more than 144,000 BTC ($26 million then, $12.6 billion today) was seized from wallets initially controlled by Ulbricht, plus an additional 120,000 BTC from two hackers who’d separately stolen bitcoin from Silk Road while it was active.



It’s likely that tens of thousands more coins were seized from Silk Road users in less high-profile cases over the years.



Therein lies the rub. Bitcoin is clearly resistant in digital space, and Ulbricht was brilliant enough to understand that Silk Road could be the very first killer crypto app. In many ways, there’s been no second-best to this day.



The same can’t be said in our physical meatspace. Ulbricht’s coins were literally taken from him by force and <a href="https://jlopp.github.io/us-marshals-bitcoin-auctions/">sold for relative pennies</a> on their current dollar value.



<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">There were no stars in prison. The overhead floodlights drowned them out completely. It was like a 5th wall above, cutting me off from the world. I went far from all the lights last night, laid down on a boulder, and looked up at the stars. No more walls. <a href="https://t.co/9StRTIjt77">pic.twitter.com/9StRTIjt77</a>&mdash; Ross Ulbricht (@RealRossU) <a href="https://twitter.com/RealRossU/status/1902450286469509275?ref_src=twsrc%5Etfw">March 19, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



In turn, the US government response to the Silk Road case has formed the playbook for what’s become the Feds’ strategic bitcoin reserve.&nbsp;



Seized coins may never be sold again, and at this stage, the only way the reserve can get any bigger is for authorities to seize even more coins from even more sovereign individuals, no doubt landing some in prison for a sentence comparable to the time Ulbricht served.



And those coins are only valuable, in part, due to the implicit promise that they can’t be tampered with under normal circumstances.&nbsp;



Nothing can square that irony in any way that’s satisfactory, and when bitcoin does indeed become a boon to the Treasury Department, then it will awkwardly have Ulbricht and Silk Road to thank.



Luckily for Ulbricht, he’s just received a gift far greater than any bitcoin stash — freedom — leading to what I can only imagine is the happiest of 41st birthdays.



To Ross. Bitcoin could never be what it is today without him.



— David



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



<h2 class="wp-block-heading">Rizzo’s take, from the Bitcoin Historian</h2>



“What did you get done this week?” Such was the subject line for Elon Musk’s now infamous emails to the US government, but as David points out above, that same email could be sent to the crypto industry today.



Or I’d imagine that might be Ross Ulbricht’s reaction to his realization this week that <a href="https://x.com/RealRossU/status/1904577765434941886">eBay is slow on verifying his identity</a>, a fact that is momentarily keeping him from auctioning his belongings. Is it real user friction? An elaborate troll? On today’s hyper commercialized internet, where Snoop Dogg might “<a href="https://www.liebertpub.com/doi/10.1089/can.2024.0003#:~:text=On%20November%2016%2C%202023%2C%20the,what%20seemed%20like%20a%20decision">give up smoke</a>” and then sell you a grill, perhaps you can forgive the incredulity. Ross, I would hope, has skipped the web’s descent into a maze of ref-links.



Still, one can’t help but think that Ross might be wondering what bitcoin and crypto have accomplished in his absence, perhaps now more than ever. As the eBay example shows, online commerce frictions remain substantial, despite bitcoin’s initial promise to quell them.



Indeed, there were a host of social commentators who suggested as such, proposing that Ross should relaunch the Silk Road or something like it.



Certainly if there’s someone who could help us chart a course forward, it would be Ross. Far-fetched? Maybe. Then again, so was the idea that any president would pardon him in the first place. If there’s anything I’ve learned in bitcoin, it’s to expect the improbable.&nbsp;



— Rizzo



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How Silk Road carved the fault line that separates ‘bitcoin’ and ‘crypto’

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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Two weeks ago, Solana validators <a href="https://blockworks.co/news/what-simd-0228-failing-means-for-solana">voted down SIMD-0228</a>, a proposal that would have significantly cut network inflation. Still, core Solana stakeholders seem interested in cutting inflation at some point, a prospect that would hurt the bottom line for validators.



Validators run Solana’s software to help add blocks to the blockchain, and they’re paid for the labor partly via inflation. Validators can be pretty much anyone with some pricey hardware and internet access, but in a world of lower SOL inflation, it may become less worthwhile to run a Solana validator for financial reasons. Instead, startups building businesses on Solana can reap unique benefits from running a validator, and some have already taken the leap.



“[We] have seen a big push over the past six months,” InfStones head of global sales Parker Poor said when I asked about Solana-native teams wanting to spin up validators.



The Solana payments business Sphere is one such <a href="https://x.com/0xdirichlet/status/1902359663842058379">example</a>, although it runs its validator nodes itself rather than through a staking provider.



“[SOL] issuance getting cut is probably inevitable,” Sphere CEO Arnold Lee said, but he added that running a validator “would probably still be worth it for distribution and alignment,” even if it failed to turn a profit.&nbsp;



Solana’s <a href="https://blockworks.co/news/lightspeed-newsletter-solana-core-governance">process for protocol governance</a> involves validators voting on proposals based on their share of delegated staked SOL. Solana startups need to run validators if they want a direct say in the future direction of the network.



“[C]ontested votes like [SIMD-228] underscore the strategic importance of having a seat at the table to make these decisions,” Bernat Fages, co-founder of the node operator firm Firstset, said in a text.



Beyond the rare contested vote, running a validator can confer “soft power” on startup teams as well, Lee said. Users who like the startup’s product might delegate some stake, Lee added. Or it could be even simpler than that: “Toly [Solana’s co-founder] will probably want to retweet you if you’re really active in governance.”



A Solana validator’s financial prospects mainly revolve around the validator’s ability to attract stakers. Solana startups with significant distribution can effectively monetize that mindshare with a validator.&nbsp;



The RPC provider Helius is a popular example of this: The company’s CEO (and Lightspeed podcast co-host) Mert Mumtaz is big on Crypto Twitter, which partly helped Helius to become the largest Solana validator based on publicly available <a href="https://solanabeach.io/validators">records</a>. Solana prioritizes network traffic based on stake, so Helius has an incentive to gather more stake to make its RPCs more effective.&nbsp;



Down the line, there are other ways Solana startups could make use of validator operations. Lee offered an interesting thought: Apps could give users perks like lower fees in exchange for staking with the app’s validator, kind of like a Solana-native customer loyalty program.



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Solana startups spin up validators for revenue and ‘soft power’

Every interaction in the onchain ecosystem starts with a wallet. Whether signing transactions, managing assets, or accessing apps, wallets serve as the critical gateway to digital ownership. But a wallet alone isn’t enough. It needs a way to connect, communicate, and function without friction across an expanding ecosystem, from gaming, finance, marketplaces, social and payments.



This is where WalletConnect comes in. More than just a communications network, WalletConnect is the foundation for onchain interactions, ensuring wallets can operate securely, reliably, and at scale. As onchain activity grows, so does the need for decentralized, efficient, and permissionless connectivity. If you have engaged with the onchain economy you have used the WalletConnect Network.



<h2 class="wp-block-heading">Wallets and WalletConnect: The Invisible Infrastructure</h2>



Since its inception, WalletConnect has served as the backbone of onchain connectivity. Originally an open-source protocol for connecting wallets to apps, it has evolved into an essential piece of infrastructure. Today, WalletConnect enables millions of wallet connections, supporting everything from finance and digital assets to gaming and enterprise applications.



Wallets rely on WalletConnect to establish secure connections, enable multi-chain interactions, and improve UX with transaction signing and execution. The WalletConnect Network is taking this a step further by decentralizing how connections are made, ensuring that no single entity controls the flow of transactions between wallets and apps. This shift is necessary as onchain activity scales, relying on centralized relays is not a sustainable path forward.



<h2 class="wp-block-heading">The Role of WCT: From Past to Future</h2>



<h3 class="wp-block-heading">What It Was</h3>



Since its inception, WalletConnect has played a critical role in the onchain economy but it lacked a mechanism to sustain itself independently. The WalletConnect Token (WCT) was introduced to make decentralization possible, moving beyond a centralized model to a network where incentives drive participation.



<h3 class="wp-block-heading">What It Is</h3>



Today, WCT powers the WalletConnect Network by enabling network participation, governance, and long-term sustainability. Node operators earn WCT for relaying messages, ensuring decentralized and censorship-resistant connections. Token holders shape the evolution of WalletConnect’s infrastructure, ensuring the network remains aligned with the needs of the ecosystem. WCT also establishes an economic model that incentivizes developers, wallets, and apps to contribute to the network’s growth.



<h3 class="wp-block-heading">What It Will Become</h3>



The vision for WCT extends beyond what exists today. Over time, it will expand participation, bringing more wallets, apps, and relayers into the ecosystem, beyond the already huge adoption WalletConnect has seen. It will enable additional use cases, such as staking, reputation systems, and service-level guarantees for network reliability. As the WalletConnect Network matures, WCT will be the foundation for ensuring that wallets and apps remain interoperable without reliance on centralized systems.



<h2 class="wp-block-heading">Underlying Infrastructure of Onchain Connectivity</h2>



Wallet infrastructure is often overlooked, but without it, the onchain ecosystem would not function. As the industry moves toward an onchain-first future, WalletConnect is cementing itself as the essential connectivity layer, ensuring wallets remain the entry point for billions of users.



The WalletConnect Network, powered by WCT, is more than a network, it is the next phase of decentralized infrastructure, designed to meet the demands of the next era of onchain applications. Every wallet connection, every signed transaction, every seamless app interaction reinforces this vision.



With WCT, the network moves beyond reliance on a single entity, ensuring it remains permissionless, scalable, and sustainable. This is the path forward: to become the underlying infrastructure of connectivity.



This content is sponsored and does not serve as an endorsement by Blockworks. The veracity of this content has not been verified and should not serve as financial advice. We encourage readers to conduct their own research before making financial decisions.



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WCT’s Role in the Onchain Economy

Katherine Ross

Michael Novogratz’s Galaxy has been ordered to pay New York State $200 million after it was accused of market manipulation.



A legal filing from this morning accuses the firm of manipulating the price of luna, the token tied to the now-failed algorithmic stablecoin Terra.&nbsp;



“This was not an easy decision and one that we considered carefully. Settling this matter will help Galaxy move forward and minimize distractions so that we can focus on our mission of driving innovation and growth in digital assets and artificial intelligence infrastructure,” Galaxy’s Michael Novogratz said in a statement.&nbsp;



Back in 2020, the legal filing claims, Terra founder Do Kwon sought out Galaxy to help purchase and promote Luna tokens.&nbsp;



“Galaxy bought more than 18.5 million LUNA from Terraform in October 2020 at $0.22 per token, a nearly 30% discount to LUNA’s then-market price of $0.31 and began endorsing Luna,” the <a href="https://ag.ny.gov/sites/default/files/settlements-agreements/galaxy-digital-holding-ltd-et-al-assurance-of-discontinuance-2025.pdf">filing</a> said.&nbsp;



But, after Novogratz got his Luna tattoo once the price hit $100, Galaxy was quietly selling LUNA without disclosing the sales to the public.&nbsp;



“Galaxy helped a little-known token increase its market price from $0.31 in October 2020 to $119.18 in April 2022.”



The filing claims that Galaxy and Luna went back and forth before beginning their business relationship, given that Galaxy sought to understand any potential use cases for Luna.&nbsp;



“Galaxy met with Terraform’s co-founders, reviewed Terraform’s public materials — including its white papers and public posts, spoke to node operators to confirm blockchain activity, reviewed blockchain data on the Terra blockchain explorer, and conducted background checks on Terraform’s co-founders,” the document said.&nbsp;



The offer Terra put on the table was simple: a 30% discount to market price, with tokens vesting monthly over the next year. Galaxy received a total of 18 million tokens, with Terra handing over 1/12 of those each month during that timespan.&nbsp;



Galaxy’s “Vice President explained that this was better than prior deals Terraform had offered to other investors. It meant Galaxy would be able to sell its LUNA when it received them each month.”



The signed agreement has Galaxy investing $4 million in exchange for a 30% discount to the spot price of luna — which was around $0.31 at the time. In total, Galaxy purchased 18,513,120 LUNA at $0.22 per token.



Lawyers laid out in the filing that Novogratz was quick to start endorsing Luna, misleading investors into thinking that they could make Luna transactions on Chai, which wasn’t true. Through press, Novogratz continued to promote Luna and the price quickly began climbing.&nbsp;



But behind the scenes, Galaxy was selling off its luna.&nbsp;



“On March 2, 2021, Terraform issued the fourth tranche of 1,542,764 LUNA to Galaxy, and on March 3, Galaxy sold all 1,542,764 LUNA at prices between $7.35 and $7.70.”



The settlement announcement coincided with Galaxy’s earnings, which were announced Friday.&nbsp;



“We only recently became aware that the NY attorney general was going forward with this matter, which led to settlement discussions that culminated with the outcome today,” a Galaxy spokesperson explained to Blockworks.



Updated March 28, 2025 at 10:03 am ET: Added comment from Galaxy. 



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Galaxy to pay $200M to New York over alleged LUNA manipulation

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 tech fund portfolio manager at T. Rowe Price is keeping an eye on crypto, noting that the benefit of stablecoins is bringing more attention to the space.



Dominic Rizzo, who leads the financial giant’s global technology equity strategy, called stablecoins “the most obvious use case for crypto” at the Exchange ETF conference Tuesday. They clearly have “big, big potential,” he added.



The comments may prove timely, given the stablecoin headlines we’ve seen over the past week. We heard about <a href="https://blockworks.co/news/bitgo-to-custody-wlfi-usd1">World Liberty Financial’s USD1</a> and that <a href="https://blockworks.co/news/fidelity-stablecoin-launch-market-yiel">Fidelity is reportedly exploring</a> its own stablecoin launch.



Just this morning, New York Stock Exchange parent company Intercontinental Exchange said it’s looking into using Circle stablecoin USDC (and its tokenized money market fund, <a href="https://blockworks.co/news/circle-hashnote-deal-tokenized-money">USYC</a>) to develop products for customers.&nbsp;



It’s important to be thoughtful about where it makes sense to use DeFi vs. TradFi, Rizzo told me.



“Pound to USD conversion — where you have bank accounts on either side of the pond — is actually a really cheap transaction, and probably not the best use case for stablecoins,” he said. “Stablecoins into different countries that might not have that same level of FX liquidity may make a lot more sense.”&nbsp;



Also invaluable is using them to move between fiat currencies and crypto assets, he added.&nbsp;



Stablecoins are just one of many use cases for crypto, Rizzo believes. He considers bitcoin a “productivity-enhancing technology” — and while it is susceptible to bubbles, Rizzo said he owns some nevertheless.



In the T. Rowe tech ETF that Rizzo manages (just equities), crypto exposure is limited to <a href="https://blockworks.co/news/crypto-trowe-price-tech-etf">Coinbase and Robinhood</a> for now. He struggles with the premium to NAV that MSTR trades at and what he considers to be a lack of differentiation among bitcoin miners.



Rizzo didn’t want to name private companies to which he would be interested in allocating, if and when a <a href="https://blockworks.co/news/crypto-ipo-boom-etoro-kraken">crypto IPO boom</a> occurs.



But based on his belief in stablecoins, <a href="https://blockworks.co/news/circle-plans-to-redomicile-usa">Circle</a> seems like a clear choice.



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T. Rowe Price PM touts ‘big potential’ of stablecoins

Felix Jauvin

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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DAS was incredible.&nbsp;



It was a jam-packed session of inspiring and motivating discussions about how the institutional adoption of digital assets is unfolding. I was honored to be at the center of it all, hosting a number of panels.&nbsp;



Here are my top takeaways from the conference:



<h2 class="wp-block-heading">Stablecoins are taking over</h2>



I had the good fortune of meeting Austin Campbell a couple of times during the week, and we discussed, at length, the innovations around stablecoins. I came out of the conference incredibly bullish on them.&nbsp;



The climax of this discussion emerged during a panel I hosted with Campbell and Joseph Wang. We nerded out on the cross-currents between macro and digital assets.&nbsp;



Austin’s explanation of how he thinks about stablecoins:



“So if we think about marginal buyers of US debt, a lot of foreign governments have been reducing their holdings of treasuries. And the great irony…[and] countervailing weight is that the people in those countries are increasing their holdings of US Treasurys through stablecoins.&nbsp;



“Generally, people overcomplicate the discussion around stablecoins, and also call a lot of things ‘stablecoins’ that shouldn&#8217;t be called stablecoins. But a properly constructed stablecoin is just a box that basically holds stuff that looks like T-bills and treasuries. Very simple. And it&#8217;s just represented on a blockchain. Now the important part of that is, there&#8217;s two criteria. One is that you&#8217;ve got the internet, and the other one is that you have something of value to exchange for it.”



If that quote got your wheels turning, check out the rest of the panel here:



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/GIl0PFVWbQM?si=mf1_M0YFhmeuKC_n" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>







<h2 class="wp-block-heading">Institutions are just getting started</h2>



One of the biggest themes for me was just how bullish institutions are on the digital asset industry. This bullishness comes at a time when the entire retail industry has been imploding via the nuclear detonation that is memecoins. The dispersion between the two worlds is quite incredible.&nbsp;



One of my favorite institutional bullposters is Bitwise CIO Matt Hougan. Matt’s good at eloquently explaining why digital asset adoption by TradFi is just beginning.&nbsp;



We sat down to discuss this dispersion, to which he said:



“That&#8217;s the biggest dichotomy in crypto right now. The crypto-native, degen world is in existential depression, while all of the institutional players are coming into the market thinking that this has never been better and [that] we are on the cusp of a multi-year bull market — the scale of which you haven&#8217;t even imagined. And I think that&#8217;s absolutely true.&nbsp;



“Look, I think memecoins will always exist. I also think they were <a href="https://blockworks.co/news/memecoins-stress-test-crypto-infra">great stress tests</a> of this infrastructure that we&#8217;ve built, and they showed it can handle real throughput. But…from an institutional perspective, when I look at what&#8217;s happening on stablecoins, tokenization and institutional investment — those are all up and to the right.&nbsp;



“The crypto-native world will come back to that in the future.”



To listen to the rest of our interview, check it out here:



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/p-i8dJoUwI4?si=rQBtyUf2wVz9PcEu" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>







<h2 class="wp-block-heading">Chatting with a fixed income legend</h2>



Interviewing someone like Mohamed El-Erian in front of tens of thousands of listeners was a career highlight for me, full stop.



The way El-Erian can clearly and simply explain complex macro topics shines a light on how much more I can improve within this realm.



The context for our conversation was fascinating. It feels like every major trend of the last 30 years is being reversed. For the first time in decades, investors are more excited about European equities over US ones. That is a wild change.&nbsp;



El-Erian unpacked just how unique this situation is right now:



“We are living in a really fluid world. I mean, the word ‘uncertainty’ is used a lot, but ultimately, there are three things that people care about. Fundamentals, technicals and valuation. And all three, Felix, are being upended right now. And that is a world [the likes of which] we haven&#8217;t seen for quite a long time.&nbsp;



“[In terms of fundamentals], these are things that are being created internally, endogenous to the system. That means that the operating paradigm on fundamentals is in play. What does the trade regime look like? What does the public sector look like? How would other countries react? Lots of uncertainties [including] the positive ones, the innovations…[like] how quickly will it take for AI life sciences and quantum robotics?



“Then you have the technicals. Before, it was ‘The US is better’; now we&#8217;ve had the largest drawdown in the US relative to Europe.&nbsp;



“And then even when you go to the third one, valuations: it&#8217;s no longer clear what valuations should be in a world like this. So this is a really, really tricky time, and it doesn&#8217;t surprise me that gold is at a record high.”



El-Erian’s excerpt really hits home about how significantly the world is changing right now.&nbsp;



When you have fundamentals, technicals and valuations all going through regime shifts at once, you need to pay attention.&nbsp;



Find the rest of our conversation here:



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/u6D3_DS3SP4?si=Iqq0tX8fSZZrPCaf" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>







This was by far the most exciting and inspiring digital asset conference I’ve ever attended. I’ve seen a lot of chatter from people saying this was the best conference they’ve been to and that the vibe was completely different from the crypto native corners of the internet.&nbsp;



I’m here to tell you that’s a fact.



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Stablecoins and the bullish institutional outlook: DAS takeaways

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Yesterday, Hyperliquid — the onchain perps DEX standard-bearer — faced an arguably <a href="https://blockworks.co/news/hyperliquid-jelly-short-blockworks-research">existential stress test</a>.



A trader opened an $8 million short on JELLYJELLY, a low-cap memecoin, then pumped its onchain price, triggering a liquidation cascade that dumped the position onto Hyperliquid’s communal risk vault, HLP. As JELLYJELLY soared, <a href="https://blockworks.co/news/hyperliquid-liquidation-market-uncertainty">the vault bled</a>: At peak, onchain watchers tracked over $10 million in unrealized losses.



Then, Hyperliquid made its move. Validators delisted the market and forcibly settled all JELLYJELLY perp positions at $0.0095 — the entry price of the attacker’s short. The vault was magically spared. In fact, it booked a $700k profit.



But in the process of of breaking the glass in an emergency, the protocol seems to have shattered any illusions about one of Hyperliquid’s core aspirations: decentralization.



The key takeaway wasn’t that Hyperliquid acted — it’s what that action revealed. The validator set not only delisted the asset but set the price at which all open positions were forcibly closed. This was more than an oracle tweak — it was an override of the market. And one that benefited the protocol’s own balance sheet.



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</div></figure>



In effect, Hyperliquid demonstrated what Galois Capital <a href="https://x.com/Galois_Capital/status/1904942479608312301">dubbed</a> a “validator put”: an implicit backstop where, if losses to the HLP vault grow too large, the protocol will intervene to cap them.&nbsp;



That changes the nature of the game. HLP becomes an asymmetric bet: full upside during normal operation, downside protection when markets go wild. It’s attractive for stakers, but dangerous for everyone else — including external market makers, who now know they’re competing with an entity that doesn’t always play by known rules.



And that’s the second break: the illusion of neutrality. While Hyperliquid claims the delisting was a validator vote — and some validators did confirm quorum was reached — the governance set is top-heavy. More than half the stake belongs to five “Hyper Foundation” validators. Whether it’s <a href="https://www.youtube.com/watch?v=cxyUtPoC1-E">Jeff</a> or the foundation, the practical result is the same: Core protocol actors made a discretionary call to save protocol capital.



Critics like <a href="https://x.com/hasufl/status/1904922139200725201">Hasu</a>, <a href="https://x.com/zachxbt/status/1904920202560647635">ZachXBT</a> and Wintermute’s <a href="https://x.com/evgenygaevoy/status/1905101423508873721">Evgeny Gaevoy</a> weren’t subtle: You can’t claim to be a DEX and then override prices when it suits you. Others drew parallels to FTX and Alameda, pointing out that Hyperliquid’s internal liquidity engine (HLP) now acts as both market participant and protocol beneficiary — with all the risk of favoritism and opaque intervention implied.



Managing director of Bitget Gracy Chen was quick to <a href="https://x.com/GracyBitget/status/1904941729834557453">denounce</a> Hyperliquid’s handling of the incident — calling it “immature, unethical and unprofessional.” But the critique rang hollow for those who <a href="https://x.com/matrixbt/status/1904946393631858701?s=46&amp;t=yjAdM2ddX0KgGQimu7jcDQ">remembered</a> that just last year, Hyperliquid founder Jeff Yan publicly accused Bitget of dishonest matching — alleging it didn’t route user trades to the open market, but rather through an internal trading desk.



This practice, known as B-booking — or profiting when users lose — is “unequivocally unethical,” Jeff <a href="https://x.com/chameleon_jeff/status/1643610601065955329">wrote</a> in 2023, and “probably illegal in any jurisdiction.” So we have a Bitget exec framing that exchange as a paragon of transparency while calling out a rival for discretionary intervention. The pot may be calling the kettle opaque.



Meanwhile, Binance and OKX were <a href="https://www.binance.com/en/square/post/22072846141889">listing</a> JELLYJELLY perps mid-crisis, pouring fuel on the fire and capitalizing on the volatility in a way that may have forced Hyperliquid’s hand.



There’s no question the system held up. Hyperliquid users weren’t rugged, but rather were defended from loss. The cost was clarity: Is Hyperliquid a rules-based DEX, or a discretionary platform with validator-administered emergency powers?



Decentralization doesn’t fail in moments like this — it’s revealed. And what Hyperliquid has shown is that it can, and will, act to protect itself first. That may be rational — maybe even necessary. But let’s not pretend it’s neutral.



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A perp too far: Hyperliquid’s ‘validator put’

Tools for Humanity, the for-profit firm behind Sam Altman’s crypto-powered <a href="https://blockworks.co/news/world-id-verification-gaming">World Network</a>, has updated its “Mini Apps” with Mini Apps 1.2. The company is also launching a $300,000 Developer Rewards pilot program, Tools for Humanity exclusively shared with Blockworks.



Mini Apps version 1.2 makes mini apps load faster within the <a href="https://apps.apple.com/no/app/world-app-worldcoin-wallet/id1560859847">World mobile app</a>, adds haptic feedback, enables customization, and allows you to pin your favorite mini apps to your phone’s home screen without needing to open the Worldcoin Wallet app, according to the company. Mini apps will also be accessible through the search bar on iOS. The app is currently available in 30 countries, including the US.&nbsp;



World now supports more than 150 mini apps, according to data provided to Blockworks. The vast majority of those are from third-party developers.



Tools for Humanity’s Developer Reward pilot program starts April 1, letting devs earn from a pool of $300,000 worth of Worldcoin or WLD to develop and update a mini app.&nbsp;



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="946" height="596" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXdbMvdy1_3U3xcpFRiL2lhBn4xS11OpOf7orM8IKAIgT6kLN6AiHyRUfZBjTrz6weicqP4-6AArroUFbJc1yHlD2Tmu9czgGz77b5l_LvxZEpHv7CVgyvYJhOmhyyVtowmLJBPZIA.png" alt="" class="wp-image-99653" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXdbMvdy1_3U3xcpFRiL2lhBn4xS11OpOf7orM8IKAIgT6kLN6AiHyRUfZBjTrz6weicqP4-6AArroUFbJc1yHlD2Tmu9czgGz77b5l_LvxZEpHv7CVgyvYJhOmhyyVtowmLJBPZIA.png?w=946 946w, https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXdbMvdy1_3U3xcpFRiL2lhBn4xS11OpOf7orM8IKAIgT6kLN6AiHyRUfZBjTrz6weicqP4-6AArroUFbJc1yHlD2Tmu9czgGz77b5l_LvxZEpHv7CVgyvYJhOmhyyVtowmLJBPZIA.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXdbMvdy1_3U3xcpFRiL2lhBn4xS11OpOf7orM8IKAIgT6kLN6AiHyRUfZBjTrz6weicqP4-6AArroUFbJc1yHlD2Tmu9czgGz77b5l_LvxZEpHv7CVgyvYJhOmhyyVtowmLJBPZIA.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXdbMvdy1_3U3xcpFRiL2lhBn4xS11OpOf7orM8IKAIgT6kLN6AiHyRUfZBjTrz6weicqP4-6AArroUFbJc1yHlD2Tmu9czgGz77b5l_LvxZEpHv7CVgyvYJhOmhyyVtowmLJBPZIA.png?w=408 408w, https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXdbMvdy1_3U3xcpFRiL2lhBn4xS11OpOf7orM8IKAIgT6kLN6AiHyRUfZBjTrz6weicqP4-6AArroUFbJc1yHlD2Tmu9czgGz77b5l_LvxZEpHv7CVgyvYJhOmhyyVtowmLJBPZIA.png?w=414 414w, https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXdbMvdy1_3U3xcpFRiL2lhBn4xS11OpOf7orM8IKAIgT6kLN6AiHyRUfZBjTrz6weicqP4-6AArroUFbJc1yHlD2Tmu9czgGz77b5l_LvxZEpHv7CVgyvYJhOmhyyVtowmLJBPZIA.png?w=348 348w, https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXdbMvdy1_3U3xcpFRiL2lhBn4xS11OpOf7orM8IKAIgT6kLN6AiHyRUfZBjTrz6weicqP4-6AArroUFbJc1yHlD2Tmu9czgGz77b5l_LvxZEpHv7CVgyvYJhOmhyyVtowmLJBPZIA.png?w=80 80w" sizes="auto, (max-width: 946px) 100vw, 946px" /><figcaption class="wp-element-caption">WLD price over time, from Blockworks Research</figcaption></figure>



Devs can earn up to $25,000 a week in Worldcoin if they’re building a top-performing app, Tools for Humanity Chief Product Officer Tiago Sada told Blockworks.&nbsp;



Rewards will be distributed based on the number of World ID-verified users engaging with each mini app.&nbsp;



“Games have been popular,” Sada said of what’s been trending within the World ecosystem. AI apps/assistants, finance apps, lending apps, airdrop apps, payment apps that let you pay with WLD, and eSIM apps have also been gaining traction. They can be used with stablecoins or WLD, and transactions take place on World’s Ethereum L2, World Chain.



<figure class="wp-block-image"><img loading="lazy" decoding="async" width="1044" height="756" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXcQqzd0aH98OB9UkKBiKGEfzrBG8d-7-GYXe_gh9twrdl5xxxLcnMAjPuLg8Varc1IyR62u-0mvKfMhDLNsS-hK9Y2kq76rL4T6ulkaafA3RhAGkygMJCJvTkKfETb2kibCEgXW.png" alt="" class="wp-image-99652" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXcQqzd0aH98OB9UkKBiKGEfzrBG8d-7-GYXe_gh9twrdl5xxxLcnMAjPuLg8Varc1IyR62u-0mvKfMhDLNsS-hK9Y2kq76rL4T6ulkaafA3RhAGkygMJCJvTkKfETb2kibCEgXW.png?w=1044 1044w, https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXcQqzd0aH98OB9UkKBiKGEfzrBG8d-7-GYXe_gh9twrdl5xxxLcnMAjPuLg8Varc1IyR62u-0mvKfMhDLNsS-hK9Y2kq76rL4T6ulkaafA3RhAGkygMJCJvTkKfETb2kibCEgXW.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXcQqzd0aH98OB9UkKBiKGEfzrBG8d-7-GYXe_gh9twrdl5xxxLcnMAjPuLg8Varc1IyR62u-0mvKfMhDLNsS-hK9Y2kq76rL4T6ulkaafA3RhAGkygMJCJvTkKfETb2kibCEgXW.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXcQqzd0aH98OB9UkKBiKGEfzrBG8d-7-GYXe_gh9twrdl5xxxLcnMAjPuLg8Varc1IyR62u-0mvKfMhDLNsS-hK9Y2kq76rL4T6ulkaafA3RhAGkygMJCJvTkKfETb2kibCEgXW.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXcQqzd0aH98OB9UkKBiKGEfzrBG8d-7-GYXe_gh9twrdl5xxxLcnMAjPuLg8Varc1IyR62u-0mvKfMhDLNsS-hK9Y2kq76rL4T6ulkaafA3RhAGkygMJCJvTkKfETb2kibCEgXW.png?w=355 355w, https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXcQqzd0aH98OB9UkKBiKGEfzrBG8d-7-GYXe_gh9twrdl5xxxLcnMAjPuLg8Varc1IyR62u-0mvKfMhDLNsS-hK9Y2kq76rL4T6ulkaafA3RhAGkygMJCJvTkKfETb2kibCEgXW.png?w=360 360w, https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXcQqzd0aH98OB9UkKBiKGEfzrBG8d-7-GYXe_gh9twrdl5xxxLcnMAjPuLg8Varc1IyR62u-0mvKfMhDLNsS-hK9Y2kq76rL4T6ulkaafA3RhAGkygMJCJvTkKfETb2kibCEgXW.png?w=302 302w, https://blockworks-co.imgix.net/wp-content/uploads/2025/03/AD_4nXcQqzd0aH98OB9UkKBiKGEfzrBG8d-7-GYXe_gh9twrdl5xxxLcnMAjPuLg8Varc1IyR62u-0mvKfMhDLNsS-hK9Y2kq76rL4T6ulkaafA3RhAGkygMJCJvTkKfETb2kibCEgXW.png?w=80 80w" sizes="auto, (max-width: 1044px) 100vw, 1044px" /><figcaption class="wp-element-caption">Transactions on World Chain, per World</figcaption></figure>



Sada said many of these mini apps are rewarding users as well, as opposed to extracting funds from them. User monetization will come eventually, but that’s not the focus right now.



Concepts like play-to-earn, tap-to-earn and move-to-earn have been challenging to balance over time, with token prices often crashing as earners cash out (like Pegaxy’s PGX, Notcoin, or Stepn’s GMT).



“It was really difficult to have a sustainable system,” Sada said, adding that now we’re seeing the emergence instead of apps “that are able to reward users for actions that are actually valuable for something, and developers can pay for that because it’s not going to be gamed.”



For now, the transactions side of things can be a bit tricky because of Apple and Google’s app store rules. Apple’s rules on mini apps, for example, state that in-app purchases are required for “digital goods or services to end users.”



“All the transactions that we support in mini apps go directly to developers. There’s some kinds of transactions — for example, buying an NFT — that would require in-app purchases. We do not currently support in-app purchases on mini apps,” Sada explained.&nbsp;



But he said transactions such as buying a plane ticket or an eSIM card with a credit card within a mini app wouldn’t incur the so-called “Apple tax” within the World app.



The main appeal of World right now over Telegram or X/Twitter is that it’s easier to tell who is — and isn’t — a bot. Telegram can also feel a bit overwhelming if you’re new to that world, and X is a sea of politics, memes, bots and chaos these days.



When I asked Sada for his thoughts on competitors like Telegram embracing bots across its app, he said: “I think chatbots and AI are awesome. You just want to know what is what.”



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



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Sam Altman’s World launches Mini Apps 1.2, lets devs build-to-earn

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Let’s talk about HyperLiquid.&nbsp;



To recap: A trader took out a relatively large short position on JELLY, then, when the short position was liquidated, HyperLiquid’s vault, HLP, took on the position to wind it down. That’s according to Blockworks Research Analyst Boccaccio.



However, JELLY kept rising, which led to the HLP taking losses, so the team overrode the oracle price — a controversial move —&nbsp;and closed the position.&nbsp;



The choice to shut the position was perhaps a wise one, despite the controversy. Because then both OKX and Binance listed JELLY futures —&nbsp;a move that Boccaccio called “shady.” While we don’t know exactly what the motives were to list the futures, it was clear that HyperLiquid was struggling at the time, and this context “made it seem like an attack on HyperLiquid.”



“Notably, HyperLiquid is the only DEX that has been able to compete with CEX volumes,” Boccaccio told me.&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">weekly MA&#39;s of Hyperliquid volume as a % of other CEX&#39;s volume ATH&#39;s vs every CEX except Gate &amp; Coinbase <a href="https://t.co/OkHolFLaC9">pic.twitter.com/OkHolFLaC9</a>&mdash; R🐮 (@Ren_gmi) <a href="https://twitter.com/Ren_gmi/status/1894717834619470040?ref_src=twsrc%5Etfw">February 26, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



We’re not going to get too into the weeds about the DEX vs. CEX debate or some of the other controversy that’s arisen since, though I know my colleagues at <a href="https://x.com/0xResearch">0xResearch</a> have been closely following this.&nbsp;



However, the nuance of the situation is pretty important.



“All positions on Hyperliquid are onchain (unlike some other DEXs). The oracle price being overriden was decided by the validator set. This was clearly a nuanced situation, so the team had to take some serious, and potentially controversial action (even though it was decided by the validator),” Boccaccio noted.



“It&#8217;s a tough situation: Either let people lose money in the HLP and erode confidence, or close somebody&#8217;s position by overriding the oracle price. I think, to an extent, you want your money in a semi-controlled environment, where there aren&#8217;t nefarious actors taking advantage of the situation at the expense of your funds/users.”



So, HyperLiquid and HLP will need to adjust both the risk and margin moving forward to try to prevent another similar situation, Boccaccio said. 



But is it anything like what happened at FTX, like BitGet’s Gracy Chen <a href="https://x.com/GracyBitget/status/1904941729834557453">tried to claim</a>? Let’s not kid ourselves.



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



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<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.</li>



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<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: For crypto collectors and traders, covering apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.</li>
</ul>

HyperLiquid faced a ‘tough situation’: Blockworks Research

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Samara Cohen, Senior Managing Director, is BlackRock’s Chief Investment Officer of ETF and Index Investments and a member of the firm’s Global Executive Committee (GEC).



As CIO for ETF and Index Investments, Samara leads the teams delivering the market quality and investment integrity of roughly $6.6 trillion of BlackRock’s index funds and iShares ETFs. Encompassing portfolio managers, risk managers, platform architects, and market structure developers, her teams continuously pursue better ways for clients to access expanding investment opportunities and seek to lead in the modernization of the indexing industry and ETF markets.



Samara is a member of the GEC Investment Subcommittee and the GEC Talent Subcommittee. She is also the GEC sponsor for BlackRock’s Women’s Initiative &amp; Allies Network (WIN) and Co-Head of the Global Diversity, Equity, and Inclusion Steering Committee.



Prior to rejoining BlackRock in 2015, Samara was a Managing Director in the Securities Division of Goldman Sachs, where she built and led the Global Market Transition team to develop and deliver solutions to clients in the evolving market structure and regulatory environment following the 2008 global financial crisis. Samara first joined BlackRock in 1993 as an analyst in the Institutional Client Business.



Samara has been recognized for her leadership in the financial services industry. In 2023, she was named one of American Banker’s Most Powerful Women in Finance and she has been honored as one of Barron’s Most Influential Women in U.S. Finance in 2022, 2023, and 2024. She is a member of the Board of the Directors for the Securities Industry Financial Markets Association (SIFMA), and a member of the Board of the BlackRock Foundation.



She earned a BS Econ in Finance from the Wharton School and a BA in Theatre Arts from the College of Arts and Sciences of the University of Pennsylvania. She earned an MBA from Harvard Business School.

Samara Cohen

Kain Warwick is a DeFi pioneer - the Founder of <a href="https://www.synthetix.io/" target="_blank" rel="noreferrer noopener">Synthetix</a> in 2017 and <a href="https://infinex.xyz/" target="_blank" rel="noreferrer noopener">Infinex</a> in 2023. In 2020, Kain popularized the concept of yield farming, helping spark the DeFi Summer boom and earning the moniker, ‘The father of modern agriculture’. Today, Infinex is his focus.



Infinex is a new kind of crypto app that provides access to onchain protocols, services and applications. It is designed to replace centralized platforms as the primary point of interaction for crypto users. Infinex has an extraordinary story so far. In 2024 it netted $67.70m from a sale of Patron NFTs, which sold 43,284 NFTs to venture capitalists, angel investors and the community. Peter Thiel’s Founders Fund were among the participants, alongside angel investors such as Ethereum co-founder, Vitalik. To learn more, please visit <a href="https://infinex.xyz/" target="_blank" rel="noreferrer noopener">https://infinex.xyz</a> and Infinex on <a href="https://x.com/infinex_app" target="_blank" rel="noreferrer noopener">X</a>.

Kain Warwick

Jesse Pollak is the creator of Base and is the Head of Protocols at Coinbase, where he works on Ethereum L1, L2, and new onchain efforts. Prior to Base, Jesse led all of Coinbase’s consumer-facing engineering from early 2017 to middle 2021, including building Coinbase, Coinbase Pro, and Coinbase Wallet. Jesse joined Coinbase through the acquisition of Clef, a company he founded and ran for five years that built passwordless identity solutions for crypto companies.

Jesse Pollak

Hayden Adams&nbsp;is the Founder and CEO of Uniswap Labs and inventor of the Uniswap Protocol, the largest decentralized exchange protocol. He began building in crypto in 2017. As his first project, he set out to build an application that fully embodied the unique properties of Ethereum: decentralized, trustless, permissionless, and secure. This project eventually became Uniswap.



As of April 2024, the Uniswap Protocol has processed over $2 trillion in lifetime volume. It competes head-on with centralized exchanges, offering 2x more liquidity than both Binance and Coinbase (two of the largest centralized exchanges) for popular pairs like Ethereum to stablecoin trades.



Today, Uniswap Labs contributes to the development of the Uniswap Protocol and builds products for users to safely and securely access DeFi — including the Uniswap Interface and the Uniswap Wallet, which collectively have served millions of users.

Hayden Adams

Keone Hon is the co-founder/CEO of Monad Labs, a team of systems engineers bringing parallel execution and high performance to the Ethereum Virtual Machine.

Keone Hon

With 7 years of experience across investment banking, hedge funds, and private equity, Guy has built a strong foundation in the financial sector. Prior to founding Ethena, he spent 6 years at Cerberus Management, a firm with $60 billion in assets under management, where he focused on investing in financial services businesses across the capital structure.

Guy Young

Uma Roy is the co-founder and CEO of Succinct, which builds infrastructure tooling to make zero-knowledge proofs accessible to any developer.

Uma Roy

Smokey is one of the original co-founders of Berachain, an EVM-identical L1 powered by Proof of Liquidity. He studied engineering at the University of Waterloo, and was previously a healthcare startup founder, then seed/growth stage VC prior to founding Berachain. He has been a cryptocurrency investor since 2015, and is an active angel in infrastructure, DeFi, and UX tooling startups, while serving as a venture partner at Hack VC.

Smokey the Bera

Bryan Pellegrino is a co-founder of LayerZero. He is focused on building an interoperability solution that scales to every chain while maintaining the core principles of censorship resistance, permissionlessness, and immutability. Before LayerZero, Bryan worked in AI research and ranked among the best poker players in the world.

Bryan Pellegrino

Ceo @ <a href="http://helius.dev/" target="_blank" rel="noreferrer noopener">helius.dev</a>, co-host of the Ligntspeed podcast.

Mert Mumtaz

Zano Sherwani

Jordi Alexander is the Founder of Selini Capital, a leading firm within Digital Assets trading and investing. Selini has its roots in traditional markets and High-Frequency Trading, but is currently one of the most active firms in onchain DeFi as well as early stage venture investing. Jordi is an advisor to projects innovating in the space including Mantle, and is cohost of the weekly Steady Lads podcast.

Jordi Alexander

Kyle Samani is a Co-Founder and Managing Partner at Multicoin Capital, a thesis-driven cryptofund that invests in tokens and companies reshaping entire sectors of the global economy. Prior to Multicoin Capital, he co-founded Pristine (Upskill, 2017), an enterprise software company that enables deskless workers with solutions for smart glasses. Based in Austin, Texas, Samani is widely recognized as a thought leader on blockchain and cryptoeconomics. He holds degrees in Finance and Management from NYU Stern and has been programming since he was 10 years old. 



Follow him on Twitter @KyleSamani.

Kyle Samani

Zon is the co-founder of initia. He likes opinionated infra and uses the chain everyday. He’s one of the last defenders of the appchain thesis, spends too much time in etherium DeFi, and was originally a smart contract dev in cosmos. Zon studied computer science at Penn and operations at Wharton.

Andre Cronje is a pioneering blockchain architect and the "Godfather of DeFi," whose innovations have reshaped decentralized finance. With over 25 years of experience in the financial and technology sectors, his contributions have led to the creation of multiple unicorn projects, including Yearn Finance (YFI), Fantom (FTM), Keep3r Network (KP3R), and Sonic (S).



Cronje's ve(3,3) tokenomics model has become the foundation for leading billion-dollar decentralized exchanges on most major Layer 2 networks, optimizing liquidity incentives and governance. His smart contract designs have set new standards in automated yield strategies, decentralized liquidity management, and protocol sustainability.



Beyond development, Cronje is also a published researcher, with peer-reviewed papers on ArXiv, contributing to blockchain and financial cryptography. His work has accumulated hundreds of citations, reinforcing his influence in both academic and applied DeFi innovation.



Recognized as one of the most influential figures in crypto, Cronje has received multiple "Most Influential in Crypto" awards from major media outlets. His work continues to shape the future of decentralized finance and blockchain infrastructure.

Andre Cronje

Haseeb is a Managing Partner at Dragonfly. He was previously a partner at Metastable Capital, and has a background in software engineering at Airbnb and Earn.com (acquired by Coinbase).

Haseeb Qureshi

Barry is the cofounder of <a href="https://events.trustifi.com/api/o/v1/click/65c23bc8f626382a3afbcd5b/fff0f6/330618/38c45c/eb3beb/0a1240/119436/f394ce/c4bf49/e8666a/ef542d/85972d/627493/9a11d6/1f4096/1d247f/d58d79/c530d9/839df2/bdfa01/7316c5/c788a3/f74902/a30c45/38dabe/f58113/4f8f27/36d8f7/9ee4f4/99129c/db2655/8d1e66/9e626e/290212/fc3550/6d7b1f/38082b/616b1b/af8c50/8ebcbb/0df7b0/6423c4/c07c0b/e6dd1c/ba8ce6/6803c4/c37876/920221/297bc7/5a440b/f85ffc/ca2926/bacf60/3d1195/dc47d9/40aefc/e48a96/0052d7/57fa75/8cf655/c16b6b/f92718/0e7d73/abcb55/0dd73b/1b064a/069f8a/d5bc25/7c51b1/b0bcbd/28ac11/48d164/a0df45/7476ec/8558c8/dbcc78/521501/f2f211/13e330/aab4a2/b0ca1a/dd21ab/280ef4/e749da/debe9d/4974dc/0fb4a3/78f438/fb99c5/187646/4b3a51/0845db" target="_blank" rel="noreferrer noopener">Skip</a> — the leading infrastructure platform for app chains. Skip's products deliver users, tokens, and data to the best app chains in crypto — Osmosis, Stride, dYdX, Celestia, and many more.

Barry Plunkett

Wei is a research partner at 1kx, where he focuses on research and investment around crypto deep tech and infrastructure. Before joining 1kx, he was a research partner at Bain Capital Crypto and served as technical advisor to numerous crypto startups. Prior to his investment career, he has published over a dozen academic papers around Cryptography and blockchains. He holds a PhD in Computer Science from University of California San Diego.

Wei Dai

Alex Watts

John Adler is co-Founder and CRO at Celestia Labs. He is the creator of Optimistic Rollups, previously scalability researcher at ConsenSys

John Adler

Eugene is a cofounder at Ellipsis Labs, which designs and builds sustainable DeFi protocols from first principles. Ellipsis Labs is a core contributor to Phoenix, a limit order book DEX on Solana. Prior to co-founding Ellipsis Labs, Eugene worked on DeFi protocol design, MEV, and HFT. He is also a contributor at Umbra Research.

Eugene Chen

Jon is the co-founder of Hyperlane, the open framework for interoperability and the CEO of Abacus Works, a core contributor to Hyperlane. Prior to founding Hyperlane he had spent several years co-leading Galaxy's investment team, while also leading many of the firm's bleeding edge initiatives. He spent the years prior to Galaxy as a crypto investor at Passport Capital, and Fixed Income trader at Morgan Stanley.

Jon Kol

Jon Charbonneau

Stani Kulechov is a pioneer in decentralized finance and web3 social, a strong believer in decentralized solutions, and an advocate for a more open and fair internet. He is the Founder and CEO of Avara, the software development company behind decentralized finance (DeFi) protocol Aave, stablecoin GHO, web3 social protocol – Lens, and mobile crypto wallet, Family. Avara’s vision is a people-powered internet that benefits all.

Stani Kulechov

David Hoffman is co-founder of Bankless and is a steward of crypto culture. David focuses on writing fundamental investment theses for Ether&nbsp;and Ethereum, while also making deep connections to impacting culture and the psyche of those who adopt a crypto lifestyle. David&nbsp;holds 99% of&nbsp;his wealth outside of Banks and inside of Ethereum, and is focused on leading the way for others to do the same.&nbsp;

David Hoffman

Sam Kazemian is the founder of Frax Finance, a DeFi stablecoin protocol that bills itself as the decentralized central bank of crypto. Frax Finance also develops the modular rollup, Fraxtal. Before founding Frax, Sam was cofounder of IQ.wiki, a decentralized knowledge base on the blockchain.

Sam Kazemian

Sreeram Kannan is Founder of EigenLayer and CEO of Eigen Labs, a Seattle-based technology company pioneering protocols for verifiable applications and services. Previously, he was a tenured associate professor at the University of Washington, where he directed the UW Blockchain Lab. He holds a PhD from the University of Illinois at Urbana-Champaign and completed postdoctoral research at UC Berkeley. Kannan left academia in 2018, recognizing blockchain's potential to accelerate human coordination. At Eigen Labs, his team is building the tools to extend crypto's trustless verification to any developer building any application. Today, hundreds of applications and rollups are building on EigenLayer's verifiable services (AVS) backstopped by billions of dollars in staked Ethereum and EIGEN.

Sreeram Kannan

I do research at Scroll. Specifically, I focus on bridge design and protocol decentralization. My background is in computer science and I have been in crypto full-time since 2018.

Toghrul Maharramov

Ed Felten is Co-Founder and Chief Scientist at Offchain Labs, the team behind Arbitrum, a leading Ethereum Layer 2 scaling solution. His recent work focuses on blockchain scalability and security, including significant contributions to EIP 4844 and innovative research on Layer 2 data availability solutions. He previously served as Deputy U.S. Chief Technology Officer (2015-2017) and Chief Technologist at the FTC (2011-2012). A member of the U.S. National Academy of Engineering and a Fellow of the ACM, and Professor Emeritus at Princeton University, Felten's current research advances crucial blockchain infrastructure development and security mechanisms.



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<li><a href="https://x.com/EdFelten" target="_blank" rel="noreferrer noopener">Twitter</a></li>



<li><a href="https://www.linkedin.com/in/ed-felten-275171/" target="_blank" rel="noreferrer noopener">LinkedIn</a></li>
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Ed Felten

5+years of online business experience, self-made entrepreneur. Attended University of FL, dropped out after two years to start online marketing business. Grew it for two years, helped dozens of clients scale to 6-7 figures with email marketing, sales letters, paid ads, funnels and info products. Andy, Co-Founder of the Rollup and The Rollup Ventures is a crypto visionary who believes in the transformative power of AI agents and modular blockchains for the future of finance. He's betting big on 2025 being a breakout year for crypto, especially for those who've been building during the bear market.

Andy

A graduate of UF with a BA in Mathematics and Philosophy, he co-founded The Rollup (formerly DeFi Slate) in 2020, building one of the most respected media platforms in crypto. Now, Robbie consults for early-stage blockchain startups, exploring Bitcoin rollups, AI-driven finance, and tokenized governance while pushing the frontiers of knowledge through The Rollup Podcast and The Rollup Ventures.

Robbie

Alex Blania is the CEO and co-founder of Tools for Humanity, the technology company building tools for World Network. He is also a co-founder of World Network with Sam Altman and Max Novendstern. Alex is responsible for leading strategy, development and execution of the technology and tools enabling World Network to ensure everyone benefits fairly from the opportunities AI presents.



World is a network of real humans built on a privacy-preserving proof of human and a globally inclusive financial network. Alex led the development of World’s custom, privacy-protecting device, the Orb, which has verified proof of human and uniqueness of 11+ million individuals worldwide; World ID, which is a privacy-preserving proof of human for the internet; and World App, which is one of the fastest-growing and most accessible self-custodial wallets available.



Alex holds degrees in Industrial Engineering and Physics from the University of Erlangen-Nuremberg in Germany and studied physics at Caltech before dedicating his full time and attention to supporting World. You can follow and interact with him on X/Twitter&nbsp;<a target="_blank" href="https://x.com/alexblania" rel="noreferrer noopener">@alexblania</a>.

Alex Blania

Lead Economist at Anza

Max Resnick

Robert Habermeier is a founding engineer of the Polkadot Network. During his 7-year tenure at Parity, Robert was responsible for the vast majority of Proof-of-Stake and consensus code for Polkadot and its underlying framework Substrate, including the code for parachain consensus. His technical leadership actively informed and shaped the Polkadot protocol design we know today. Prior to his work on Polkadot, Robert was a core developer on the Parity-Ethereum client, the first production-ready third-party Ethereum node.

Robert Habermeier

Patrick is the Founder of Commonware, a new company building an optimized stack for vertical blockchain applications. Before Commonware, Patrick served as the led engineering at Ava Labs and led the development of Rosetta (now Mesh) at Coinbase.

Patrick O'Grady

Jill is co-founder and Chief Strategy Officer of Espresso Systems, working on bringing interoperability and decentralization to rollups. Previously, Jill ran crypto investments for early stage venture capital fund, Slow Ventures. Jill was also a co-founder of the Open Money Initiative, a non-profit organization that researches how those without access to a free and open financial system manage their money. Jill has also conducted academic research on the use of cryptocurrencies in emerging markets as part of her graduate studies at Oxford University. She started her career as a fixed income trader at Goldman Sachs. She received an A.B. in Classics from Harvard University.

Jill Gunter

Armani Ferrante is the founder and CEO of Backpack. The Backpack ecosystem is composed of  <a href="https://www.backpack.app/" target="_blank" rel="noreferrer noopener">Backpack wallet</a>, the <a href="https://www.madlads.com/" target="_blank" rel="noreferrer noopener">Mad Lads NFT collection</a>, and <a href="https://www.backpack.exchange/" target="_blank" rel="noreferrer noopener">Backpack Exchange</a>. Before founding Backpack in April 2022, he was the creator of <a href="https://www.anchor-lang.com/" target="_blank" rel="noreferrer noopener">Anchor</a>, a groundbreaking developer tool that revolutionized programing on Solana. Anchor has become an integral part of numerous Solana projects and protocols, and bonding its commitments to simplifying the developer experience. Armani graduated from UC Berkeley with a degree in Computer Science and before dedicating all his effort into crypto and web3, he used to work for Apple as a software engineer.

Armani Ferrante

Permissionless III will gather the most influential minds in crypto for three days of networking, engaging content, and live conversations. Align your brand with the most pressing topics, latest technology, and innovations influencing our industry.
We&#8217;ll work with your team to tailor the perfect sponsorship opportunity that aligns with your needs and budget. Get in touch with us today at <a class="c-link" href="mailto:sales@blockworks.co" target="_blank" rel="noopener noreferrer" data-stringify-link="mailto:sales@blockworks.co" data-sk="tooltip_parent" aria-haspopup="menu">sales@blockworks.co</a>.

Sponsor

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for 36 hours of intense hacking.  Learn more <a href="https://blockworks.co/event/permissionless-iii-hackathon">here</a>.

Hackathon

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<div>The Permissionless III Call for Speakers is now closed. If you&#8217;ve applied, you will receive confirmation of status no later than April 30, 2024 (All submissions will be notified of status. Please don’t contact the organizers to check on your submission).</div>
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Call for Speakers

June 24-26, 2025

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Permissionless IV

Join global sovereigns, endowments, pensions, foundations, and family offices as they explore this new asset class.


Allocators

Meet with VCs, hedge funds, private equity, global investment firms, and the likes as they build crypto strategies across their portfolios.


Asset Managers

Engage with banks, brokerages, credit unions, payment processors, fintechs, and insurance providers as they develop internal digital asset strategies.


Financial Institutions

Experience

Who you can expect to meet at DAS

Stats from our previous Digital Asset Summits

By The Numbers

BUY WITH CRYPTO 

GENERAL ADMISSION PASS 

Bundle and save! Get 10% off orders of 4 or more tickets. 

GENERAL ADMISSION 4-PACK

Prices are subject to increase. Register today and save!  *Mainstage sessions on Day 1 will follow Chatham House Rules and will be closed to press. Tickets cannot be transferred once checked in to the conference.

Hear from the world's most sophisticated investors about how liquidity, interest rates and economic drivers are shaping their digital asset portfolios.

Macro Case for Digital Assets

Institutional investment will continue to drive this crypto cycle. At DAS you'll hear from investors on strategy, portfolio allocation, and more.

ETFs & Institutional Investment

Hear allocator's perspectives from the top funds in the world on how they are navigating the expanding public & private digital asset markets.

Allocator's Perspective

This year's programming will explore the evolution of global standards and regulatory frameworks that policy makers are crafting for the maturing digital asset ecosystem.

US & Global Digital Asset Policy

The largest financial institutions like Blackrock & JPMorgan are moving onchain to settle treasuries, collateral, and other securities. At DAS, these partnerships and innovations will be at the forefront of conversations.

Tokenization & Real World Assets

DAS will delve into the evolving landscape of stablecoins and digital asset payments. Consumers and institutions alike will gain from their insight into these payments innovations.