USDC reserve interest supplied US$711 m—96 % of total revenue—up 60 % YoY on a 97 % jump in average float. Everything else (API, subscriptions, treasury rails) contributed < 4 %. Even if this sliver grew 52×, it is still rounding-error size. Rate exposure is therefore almost unhedged: every 25 bp Fed cut slices roughly US$18 m off annual gross interest.
Reported net income of US$214 m includes US$117 m of one-time debt-fair-value and tax gains; clean operating profit is only US$96 m—45 % of the headline number. Meanwhile “distribution and market-development” costs soaked up 62.8 % of reserve income (vs 42 % last year) as Circle rebated yield to Coinbase and other “strategic” partners. Operating opex rose 70 % to US$211 m on head-count and stock-based comp. Net result: Circle keeps just 37 ¢ of every dollar its reserves earn, down from 42 ´ a year ago.

Flag 3: The Unlock Clock Strikes 14 November
Roughly 150 m shares (≈ 12 % of float) leave lock-up the second trading day after this earnings release. With the stock already underwater, early investors and employees face an immediate liquidity window—an overhang the Street is unwilling to fight.

The “Second-Curve” Playbook—Early, Expensive, Unproven
Management’s answer is a three-pronged pivot to infrastructure:

1. Arc L1 – A purpose-built EVM chain for regulated finance; test-net live with > 100 institutions. No fee revenue yet; token economics still being drawn up.

2. Circle Payments Network (CPN) – Cross-border 24/7 fiat-USDC rail, live in 8 countries, 29 banks onboarded, US$3.4 bn annualized flow. Take-rate undisclosed; still in land-grab mode.

3. USYC – Tokenized money-market fund, AUM US$1 bn (+200 % since June). Good headline, but MMF economics are single-digit basis points unless scaled massively.

Together these ventures burned > US$120 m in Q3 and will push 2025 adjusted opex to US$495-510 m—up ~60 % year-on-year. Break-even timelines were not given.

Bottom Line
Circle remains the regulated stablecoin leader, but the market is no longer paying for USDC growth alone. Until Arc, CPN or USYC can cover even one quarter of interest-rate downside, investors will treat CRCL as a floating-rate bond with a shrinking coupon—and an unlock overhang. The “infrastructure” story is plausible; the clock to prove it is ticking loudly.

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Key Performance Drivers

Cryptocurrency Business Shines: Volatility in cryptocurrency trading significantly impacted the quarter's performance, emerging as the key growth driver.

Notable Contributions from New Ventures: The acquired Bitstamp exchange and the prediction markets business are projected to contribute over $100 million in annual revenue and have been integrated into the company's growth plans.

Product Line Expansion Strategy: The company has expanded from its roots in free stock trading into tokenized stocks and prediction markets. However, interoperability for these tokenized products still needs improvement, with potential future enhancements via DeFi platforms.

Stock Price & Market Reaction: Despite the stock rising over 280% year-to-date, the upward momentum has slowed due to volatility in the crypto markets. Investors are focused on revenue sustainability and potential regulatory changes.

Overall, Robinhood's pivot towards cryptocurrency and emerging services is showing early success. However, its performance remains highly dependent on the volatile crypto market, requiring ongoing observation.

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Report Details

According to reports, an unexpected sharp increase in cryptocurrency revenue helped Robinhood Markets exceed Wall Street expectations for the third quarter.

In the three months ending September 30, the company's total revenue grew to $1.27 billion, twice the figure from the same period last year and also beating the $1.2 billion analysts had predicted.

The company stated that cryptocurrency trading generated nearly $270 million in revenue this quarter, an increase of over 300% compared to the previous year.

Overall transaction revenue grew nearly 130% to $730 million. Earnings per share grew nearly 260% to $0.61, surpassing the $0.51 forecast by analysts.

These figures illustrate how significantly the volatility of cryptocurrency trading can affect Robinhood's quarterly performance.

New business lines are beginning to play important roles. Robinhood CFO Jason Warnick told investors that Bitstamp, acquired in June, along with its prediction markets, could generate approximately $100 million or more in annual revenue. This income stream has been incorporated into the company's growth planning.

The company, initially famous for free stock trading, has broadened its product offerings. It now provides tokenized versions of stocks and prediction market trading, with the completion of the Bitstamp acquisition being part of this strategic expansion.

Reports indicate that executives see room for global expansion of prediction markets, but stated that specific rollout depends on local regulations.

CEO Vladimir Tenev also discussed how the current tokenized stock offerings operate and potential future changes.

He mentioned these products currently have "less interoperability than we'd like" as they are not yet deployed on decentralized finance (DeFi) platforms, but he anticipates interoperability will improve over time as developers build bridges and wrappers.

He believes this pathway could make transferring tokenized assets between networks and services easier.

On the day of the report, Robinhood's stock rose 4% to $142 during regular trading but fell back below $140 after market close.

The stock is up over 280% year-to-date and reached a record high of $152 on October 9th, but subsequent sell-offs in the cryptocurrency market cooled its upward momentum.

The data presents a mixed picture for investors. The strong revenue growth is evident, but the business is closely tied to cryptocurrency trading volume, which is highly volatile.

Revenue from emerging sectors like Bitstamp and prediction markets is becoming substantial, but regulators and market fluctuations could change this situation rapidly.

Analysts will be closely watching whether crypto revenue can be sustained at high levels and how regulators will respond to the expanding issuance of tokenized stocks.

For now, Robinhood's transformation towards cryptocurrency and related services is clearly reflected in its performance.

The company reported substantial growth, primarily driven by cryptocurrency trading users and several recently acquired or launched businesses that are already generating significant revenue.

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* x402 Protocol: Launched by Coinbase, it utilizes the HTTP 402 status code to natively embed payment logic into the web request-response flow, enabling "payment-as-an-API-call" and supporting settlement with multi-chain crypto assets (like USDC), solving the high-friction problems of traditional payments.

* AP2 Protocol: Based on the Agent-to-Agent communication protocol and MCP extensions, it uses digital mandates (such as Intent Mandates, Cart Mandates, and Payment Mandates) to ensure transaction authorization verification, authenticity, and accountability, providing a secure framework for transactions between AI Agents and merchants.

* ERC-8004 Protocol: A decentralized AI Agent identity solution on Ethereum, it builds a verifiable identity and reputation system through an Identity Registry, Reputation Registry, and Validation Registry, ensuring the trust foundation for AI Agent interactions.

Together, these three form a complete payment ecosystem: ERC-8004 solves the identity problem, x402 enables efficient cryptocurrency payments, and AP2 provides a standardized transaction security framework, collectively empowering AI Agents to become true economic participants.

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Introduction: The Limitations of Traditional Payments and the Rise of New Protocols

As AI Agents evolve from mere tools into autonomous economic entities capable of independent decision-making, executing operations, and exchanging value, traditional payment infrastructure proves inadequate. It cannot meet core requirements like autonomous transactions, cross-ecosystem interoperability, and verifiable identity.

These bottlenecks have spurred the birth of a new generation of protocols—x402, Agent Payments Protocol (AP2), and ERC-8004—which are building a reliable foundation for value exchange in the emerging machine economy. This article delves into the technical principles, application scenarios, and ecosystem status of these three protocols, revealing how they collectively shape the future payment landscape for the AI Agent economy.

x402: The HTTP-Native On-Chain Payment Protocol

Developed by Coinbase, x402's core innovation lies in activating the underutilized HTTP 402 status code ("Payment Required"). It natively embeds payment logic into the web request-response flow, achieving "payment-as-an-API-call" and settling with stablecoins or other cryptocurrencies to solve the high-friction issues of traditional payments.

Protocol Deep Dive

x402 is an open protocol based on the HTTP 402 status code, following a client/server architecture. The client is the buyer purchasing services/goods, and the server is the seller providing them. Building on this, Coinbase offers a "Facilitators" service for sellers to simplify the process of verifying and settling payments between buyers and sellers.

Using Canza (an AI providing trading information), the top-ranked server on x402scan, as an example:

1. The user (client) initiates a request to access Canza's paid service.

2. The Canza server responds with an HTTP 402 Response defining the payment requirement: the client must provide an X-PAYMENT Header and pay using USDC on the Base chain.

3. The client parses the 402 Response JSON content. The wallet then prompts the user to sign a TransferWithAuthorization message (implemented via ERC-3009). This message authorizes a delegated third-party EOA or contract address to perform a gas-less transfer from the signer's address. In this case, it delegates Canza's receiving address.

4. After the user signs the message, the client submits the payload using the base64-encoded X-PAYMENT Header.

5. Upon receiving the payload, the Canza server (via Facilitators) verifies it and settles the payment on the blockchain.

6. After confirming payment, Canza provides the user with the requested service.

The operational flow of the x402 protocol can be summarized as follows:

[Diagram Placeholder: x402 Protocol Flow]

It is particularly noteworthy that the x402 protocol supports multiple blockchains (Base, Avalanche, other EVM chains, Solana) and various crypto assets (needing to support ERC-3009, default is USDC), configurable by the server.

Agent Payments Protocol (AP2): The Trusted Payment System for the Agent Ecosystem

AP2 is an open payment framework based on the Agent-to-Agent (A2A) communication protocol and Model Context Protocol (MCP) extensions. Its core goal is to solve three key problems in Agent commerce: authorization verification (proving the Agent has user permission), authenticity (ensuring the transaction reflects the user's genuine intent), and transaction accountability (clarifying responsibility in disputes), enabling AI Agents to transact securely with any compliant merchant.

AP2's workflow revolves around Digital Mandates—tamper-proof, cryptographically signed digital contracts that serve as verifiable evidence of user instructions. Specifically, there are three types of mandates:

1. Intent Mandate: For automated transactions where the user is not present. These are pre-provided user instructions to the AI Agent containing specific conditional constraints, e.g., "Buy concert tickets, budget not exceeding 500 yuan."

2. Cart Mandate: For transactions confirmed by the user in real-time. Generated when the agent prepares specific items and prices for user confirmation. The user's approval signs the Cart Mandate, creating a secure, immutable record of the exact goods and price, ensuring "what you see is what you pay."

3. Payment Mandate: An independent credential shared with payment networks and issuers, designed to convey information about AI Agent involvement and user presence, aiding in dispute resolution, risk assessment, and regulation.

ERC-8004: Decentralized AI Agent Identity and Reputation System

ERC-8004 is a decentralized AI Agent identity solution on Ethereum, addressing the problems of verifying AI Agent identity authenticity, behavior record reliability, and verifiability. Unlike AP2, which focuses on transactional trust between user-Agent-merchant, ERC-8004 focuses on building interaction trust between AI Agents.

ERC-8004 is designed around three lightweight registries, each responsible for a different aspect of the trust model:

1. Identity Registry: Implemented based on the ERC-721 standard with URIStorage extension, making AI Agent identities compatible with the existing NFT ecosystem. Each AI Agent registers by calling the register function, receiving a unique agentId (i.e., an ERC-721 tokenId). Registration requires providing a tokenURI pointing to an Agent Registration File in a standardized JSON format containing the agent's name, description, endpoints, and supported trust models.

2. Reputation Registry: Provides a standard interface for publishing and retrieving service feedback for AI Agents, supporting a 0-100 scoring system, tag categorization, and association with payment proofs. It uses a hybrid on-chain/off-chain architecture, ensuring core data composability on-chain while leaving complex aggregation calculations off-chain for efficiency. The Reputation Registry contract is tightly linked to the Identity Registry—it requires the Identity Registry address upon deployment, ensuring only registered AI Agents can receive reputation records.

3. Validation Registry: Provides generic hooks for requesting and recording independent verification results, supporting various mechanisms like economic staking (where verifiers re-run tasks) and cryptographic proofs (TEE attestations, zkML verification, etc.). This design allows different verification mechanisms with varying security needs to coexist within the same ecosystem. The Validation Registry contract interface is relatively simple, primarily containing validationRequest to submit requests and validationResponse to record results.

ERC-8004 serves as the identity layer protocol for the AI Agent ecosystem. It provides on-chain AI Agents with verifiable identity, a reputation system, and a registration mechanism, forming the crucial trust foundation for the machine economy.

Conclusion: A Synergistic Foundation for the Machine Economy

The combination of x402, AP2, and ERC-8004 constitutes a complete AI Agent payment system:

* ERC-8004 solves the fundamental identity problem for AI Agents.

* x402 solves the problem of "how to use cryptocurrency for high-frequency micro-payments" efficiently.

* AP2 provides a secure, standardized framework for the x402 payment protocol, defining the independent economic boundaries for AI Agents.

Together, they enable AI Agents to process information, hold and manage assets, and genuinely participate in commercial value exchange. This paves the way for a new economic paradigm driven autonomously by machines.

Four Engines Behind the Surge

1. De-dollarisation & central-bank buying: Beijing alone is on track to scoop >1,000 t for a fourth straight year, terrified of sitting on a $37.5 T U.S. debt pile that will be inflated away.

2. Stablecoins as stealth Treasuries: 90 % of USDT/USDC reserves are now T-bills; every foreign holder is unknowingly financing Washington. Gold is the escape hatch.

3. Physical squeeze: COMEX open interest dwarfs registered deliverable bars; delivery times have ballooned from days to weeks—a structural short-squeeze in bullion form.

4. Global uncertainty: U.S.–China rivalry, AI-driven fiscal blow-outs and a Fed cutting into an election year send capital straight into the yellow metal.

Bitcoin’s Relative Slide
BTC has fallen 25 % versus gold YTD. “Digital gold” narratives fade when Washington owns 38 % of hash-rate and 15 % of supply via ETFs, trusts and seized coins—too U.S.-centric for foreign reserve managers.

Positioning: Long Both, Hedge the Volatility
Author is long BTC (expects dominance to rise as Liquidity flees alts) and long gold via paper + short-put structures. A 20-30 % pull-back would be “a gift entry” as long as the four macro pillars remain intact. Caveat: gold’s market-cap is nearing $30 T and is bumping into the S&P 500 resistance ratio—trade the momentum, don’t marry it.

Market Maker Function: Theoretically, they should maintain market liquidity and stabilize volatility, but the crypto market lacks regulatory obligations for them.

Key Timeline:

* Beijing Time 4:00: Trump's tariff news triggered initial selling; market makers widened spreads.

* Beijing Time 5:00: As the US market opened, market makers completely withdrew liquidity.

* Beijing Time 5:20: Market depth plummeted by 98%; altcoins fell by up to 80%.

* Beijing Time 5:35: Market makers restored 90% of liquidity within 35 minutes, but the market was already severely damaged.

Auto-Deleveraging (ADL) Mechanism:

* Forces the liquidation of profitable positions when the insurance fund is depleted.

* Massive ADL triggers on platforms like Binance and Bybit exacerbated cascading liquidations.

Reasons for Market Maker Withdrawal:

* Asymmetric risk/reward (potential losses far exceed spread income).

* Utilizing informational advantage to predict market direction.

* No regulatory constraints, allowing free withdrawal.

* Arbitrage profits surpassed market making business.

Death Spiral Formation: Market maker withdrawal → Order book cannot absorb liquidations → Insurance fund耗尽 → ADL triggered → Profitable hedge positions are liquidated → Unprotected positions are liquidated → Further selling.

Structural Problem: Market makers enjoy privileges without responsibility; their rational withdrawal during a crisis leads to irrational market collapse.

Solution: Need to establish market maker obligation systems, optimize insurance funds and ADL circuit breakers, and enhance transparency.

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Summary

In my previous three analyses of the 1011 crypto liquidation wave, I examined issues like oracle failure, infrastructure collapse, and potential coordinated attacks. Today, I focus on what is perhaps the most critical yet overlooked dimension: how market makers, who are supposed to maintain market stability, became the main driver behind an unprecedented liquidity vacuum, ultimately turning a manageable correction into a $19 billion disaster.

Understanding Market Makers: Theory vs. Reality

Before examining the 1011 crash, it's essential to understand the basic functions of market makers. In traditional financial markets, a market maker is a financial instrument that provides continuous quotes, acting as an intermediary between bid and ask prices, profiting from the spread while also bearing the crucial function of maintaining market liquidity.

The theoretical roles of market makers include:

* Continuous price discovery: Maintaining two-way quotes that reflect fair market value.

* Liquidity provision: Ensuring traders can buy or sell at any time without significant price impact.

* Volatility dampening: Absorbing temporary supply-demand imbalances.

* Market efficiency: Maintaining uniform pricing through cross-platform arbitrage of spreads.

In the crypto market, market makers operate similarly but face unique challenges:

* 24/7 market that never closes.

* Fragmented liquidity across hundreds of exchanges.

* Extreme volatility compared to traditional assets.

* Limited regulation and obligations.

* Technical infrastructure requirements for high-frequency trading.

Under normal market conditions, this system works reasonably well. Market makers earn thin profits by providing necessary liquidity. But what happened on October 10th and 11th demonstrates what occurs when incentives and responsibilities diverge.

Timeline of the Vanishing Liquidity

The precise withdrawal of market makers during the 1011 crash suggests coordinated action rather than panic. Here is a detailed timeline of how liquidity evaporated:

* Beijing Time 4:00: News of Trump announcing 100% tariffs on Chinese imports swept through social media. Bitcoin began falling from $122,000. Market makers maintained their positions but started widening bid-ask spreads, a standard defensive market behavior.

* Beijing Time 4:40: Real-time tracking data showed the beginning of a catastrophic liquidity withdrawal. Market depth for a major token began plummeting from $1.2 million.

* Beijing Time 5:00: The critical turning point. As the US market opened, the macroeconomic environment deteriorated sharply. Institutional participants withdrew liquidity, bid-ask spreads widened significantly, and order book depth plummeted. This was the moment market makers shifted from defensive positioning to a full-scale withdrawal.

* Beijing Time 5:20: The market fell into extreme chaos. Nearly all tokens bottomed at this moment amid a global liquidation wave. Market depth for the tracked token plunged to $27,000 – a 98% collapse in liquidity. After liquidity providers withdrew their $108,000 defense line, some altcoins fell by up to approximately 80%.

* Beijing Time 5:35: As the most intense selling pressure subsided, market makers cautiously returned to the market. Within just 35 minutes, the bid/ask depth on major centralized exchanges recovered to over 90% of pre-event levels, but by then the market had already suffered the maximum impact.

This timeline reveals three key points:

1. Market makers had a 20-40 minute warning period before fully withdrawing capital.

2. Multiple institutions synchronized their withdrawals.

3. Liquidity only returned after favorable re-entry points appeared.

When Insurance Funds Fail: The Consecutive, Large-Scale Triggering of ADL

When market makers withdraw and liquidation orders overwhelm the order book, exchanges activate their last line of defense: Auto-Deleveraging (ADL). Understanding this mechanism is crucial for grasping the full picture of the October turmoil.

How does Centralized Exchange Auto-Deleveraging (ADL) work?

ADL is the third and final tier in the liquidation hierarchy.

* Tier 1 - Order Book Liquidation: When a position falls below the maintenance margin requirement, the exchange forces liquidation via the order book. If the liquidation price is better than the bankruptcy price (where margin reaches zero), remaining funds go into the insurance fund.

* Tier 2 - Insurance Fund: This fund covers losses when order book liquidity is insufficient. Funded by liquidation profits during normal times, it acts as a buffer for bad debt.

* Tier 3 - Auto-Deleveraging: When the insurance fund cannot cover losses, the exchange forcibly liquidates profitable counter-party positions.

Auto-Deleveraging Ranking System

Binance's ADL mechanism uses a sophisticated ranking formula:

ADL Rank Score = Position PnL Percentage × Effective Leverage

Where:

* Position PnL Percentage = Unrealized Profit / Absolute Position Notional Value

* Effective Leverage = Absolute Position Notional Value / (Account Balance - Unrealized Loss + Unrealized Profit)

Bybit's approach is similar but adds a safeguard: the platform shows users their percentile ranking via a five-level indicator.

* Level 5 = Top 20% (Highest ADL priority)

* Level 4 = 20%-40%

* Level 3 = 40%-60%

* Level 2 = 60%-80%

* Level 1 = Bottom 20% (Lowest ADL priority)

The brutal irony: the most profitable, highly leveraged top traders face forced liquidation first.

The October ADL Storm

On October 10-11, the scale covered by ADL was unprecedented:

* Hyperliquid: Activated cross-margin ADL for the first time in over two years, affecting more than 1,000 wallets.

* Binance: Initiated ADL on a large scale.

* Bybit Report: Over 50,000 short positions liquidated, totaling $1.1 billion.

* BitMEX: An exceptional case; due to its large insurance fund, only ADL'd 15 contracts.

The correlation with market maker withdrawal is conclusive. Between 05:00 and 05:20, as order book liquidity dried up, liquidation orders could not be filled properly, rapidly depleting insurance funds and triggering the ADL mechanism.

Case Study: Cascading Risk

Consider what happened to a typical hedged portfolio during those critical 35 minutes.

* At Beijing Time 5:00, a trader's positions:

* Long BTC: $5 million, 3x leverage

* Short DOGE: $500,000, 15x leverage (hedge, profitable)

* Long ETH: $1 million, 5x leverage

* Beijing Time 5:10: Market makers withdraw. DOGE flash crashes, the short position becomes highly profitable. But due to high leverage combined with profitability, it triggers ADL.

* Beijing Time 5:15: The DOGE short position is forcibly closed via ADL. The portfolio is now unprotected.

* Beijing Time 5:20: Without the hedge, the Bitcoin and Ethereum long positions are liquidated consecutively, ultimately wiping out the entire portfolio.

This pattern repeated thousands of times. Sophisticated traders with well-structured positions watched as their profitable hedges were forcibly closed by ADL, leaving unprotected exposures that led to liquidation.

Why Market Makers Failed: The Incentive Problem

The synchronized liquidity withdrawal reveals a fundamental structural issue. Market makers faced multiple incentives to exit the market:

1. Asymmetric Risk and Reward: During extreme volatility, the potential loss from providing quotes far exceeds the spread income. Providing $1 million depth might earn $10,000 in spreads normally, but could lead to a $500,000 loss in a cascade.

2. Information Advantage: Market makers see aggregate order flow and position data. When they detected a severe long bias (87% of positions were long), they already knew the likely direction of the crash. Why provide buy quotes knowing a selling tsunami is coming?

3. No Legal Risk: Unlike designated market makers in traditional exchanges who have regulatory obligations, crypto market makers can withdraw freely. They face no penalties for leaving, even during a market crisis.

4. Arbitrage Opportunities: Crash data shows that market makers who withdrew their quotes engaged in inter-exchange arbitrage. With spreads exceeding $300 across platforms, arbitrage profits far outstripped market making.

The Market's Death Spiral

The interaction between market maker withdrawal and ADL created a devastating death spiral.

1. Initial shock (Trump tariff announcement) triggers selling.

2. Market makers avoid cascade risk.

3. Order books without orders cannot execute liquidations.

4. Insurance funds are rapidly depleted absorbing bad debt.

5. ADL activates, forcibly closing profitable positions.

6. Auto-deleveraged traders are forced to rebalance, exacerbating selling pressure.

7. Triggers more liquidations, returning to step 3.

This cycle continued until leveraged positions were largely eliminated. Data shows the entire market's open interest decreased by approximately 50% within just a few hours.

An Uncomfortable Truth About Market Structure

The market crash on October 10-11 was not primarily caused by excessive leverage or lack of regulation, but by misaligned incentives within the market structure. When the parties responsible for maintaining order profit more from chaos than from stability, chaos becomes inevitable.

Timeline data shows market makers did not panic. They withdrew in sync, at the optimal time, to minimize their own losses while creating maximum opportunity for subsequent actions. This rational behavior under the current incentive structure led to an irrational outcome for the entire market.

Rebuilding Trust Through Responsibility

The liquidity crisis of October 2025 exposed a fatal flaw in the crypto market: the voluntary supply mechanism fails precisely when the market most needs involuntary liquidity provision. The $19 billion in liquidations was not just a matter of over-leveraged traders being caught off guard; it revealed a structural contradiction within the market maker system, where liquidity providers enjoy privileges without bearing corresponding responsibility. This crisis was the inevitable result.

The way forward requires acknowledging that a purely laissez-faire market mechanism does not work under stress. Just as traditional markets developed safeguards like circuit breakers, position limits, and market maker obligations from chaotic trading, the crypto market must implement similar protections.

Technical solutions already exist:

* A tiered obligation system aligning interests with responsibilities.

* Insurance fund sizes matching actual risks, not optimistic projections.

* ADL mechanisms with "circuit breakers" to prevent cascades.

* Real-time transparency of market maker behavior.

What's missing is the will to implement these measures. As long as crypto exchanges prioritize maximizing short-term fees over long-term stability, these so-called "unprecedented" events will continue to occur with lamentable regularity.

The 1.6 million accounts liquidated between October 10th and 11th paid the price for this structural flaw. The question is, will the industry learn from this disaster, or will it wait for the next wave of traders to repeat the cycle? When the next crisis hits, the market makers they rely on will vanish instantly, leaving only cascading liquidations and forcibly closed profitable positions behind.

2. Zero-Fee Wars Hide the Bill in Fine Print
“Free” always has a cost. When platforms compete on headline rates, they claw back margin via wider spreads, punitive funding rates, or hidden liquidation slippage. The model is Robinhood without the regulatory cushion: eventually someone must pay market-makers, insurance funds, and server bills. Sustainable paths are (a) payment-for-order-flow disclosed on-chain, or (b) premium tooling—API colocation, sub-account margining, portfolio margin—that users voluntarily upgrade for.

3. CLOBs Win Crypto-Native Assets, But Real-World Assets Want Oracle/RFQ
On-chain order books are marvelous for BTC and ETH because every market-maker already custodies crypto. Equities, FX, and commodities live in bank silos and national CSDs; forcing them into a public CLOB is regulatory masochism. Oracle-based synthetic perps or RFQ systems—where a licensed broker quotes a firm two-way price and settles via atomic swap—will capture the next trillion notional. Builders who start courting Bloomberg-dwelling liquidity providers today will inherit the order flow when T+2 stocks finally tokenize.

4. Black-Box Execution Cannot Be Valued—It Can Only Be Exposed
Claiming “best execution” while keeping matching logic, LP identities, and MEV extraction under NDA is selling magic beans. If users cannot reconstruct the fill trail, the protocol is one disgruntled insider leak away from a class-action narrative. Zero-knowledge proof of correct matching is table stakes; real moats are open-source routing algorithms, real-time public surveillance of toxic flow, and on-chain insurance that pays out automatically when slippage exceeds advertised bounds.

5. Perp DEX-as-a-Service Will Commoditize Everything—Unless You Specialize
Forking a CLOB, slapping on a points program, and renting KOL tweets is now a weekend project. The result is an undifferentiated supply glut that drives aggregate fee revenue toward zero. Escape velocity comes from vertical focus:

• Institutional prime-broker features (portfolio margin, cross-asset netting, regulatory capital relief)

• Retail UX breakthrough (one-click social logins, gasless orders, mobile-native SL/TP drawing)

• Asset niches nobody else lists—South-East Asian FX, carbon allowances, pre-IPO employee options—where you can become the monopoly order flow.

The next 18 months will separate casinos from clearing houses. Protocols that keep subsidizing fake volume will starve when the emissions faucet closes; those that build transparent, regulator-friendly rails for off-chain assets will graduate from DeFi toy to global market infrastructure.

Prologue: A Boom Built on Borrowed Time
In the blood-red ocean of 2025’s perpetual-swap market, Aster’s ascent has been the single most dramatic plot-twist. Armed with Binance’s firepower, the protocol weaponised record-breaking volume and turbo-charged incentives to redraw the map in weeks.
Yet the rocket-ship is fuelled by a looming token-supply “debt”. When the music stops and emissions dry up, will the party turn into a wake? Is the engineered exuberance a master-stroke for sustainable liquidity, or a soap-bubble waiting for the first pin-prick?
This essay dissects Aster’s past lives, present swagger and uncertain tomorrow—especially the hangover that waits once the wash-trading confetti settles.

Part I. Bloodline of a Challenger: From ApolloX to Aster

1.1 ApolloX Genesis – A Hybrid for Speed
Born in 2021 as ApolloX, the project’s first incarnation married off-chain matching with on-chain settlement. The design gave CEX-grade speed while keeping self-custody, luring seasoned traders who refused to hand keys to centralised desks.

1.2 Pivot to Fully On-Chain & the ALP Pool
DeFi infrastructure matured; GMX proved on-chain perps could fly. ApolloX V2 ripped the training wheels off, migrating every matching engine on-chain and launching the ALP (ApolloX Liquidity Provider) multi-asset pool. Dual-oracle architecture—Binance Oracle + Chainlink—priced trades, throttling manipulation while pushing capital efficiency to the edge.

1.3 Merger with Astherus – Injecting “Real-Yield” DNA
Late-2024, APX Finance (ApolloX rebrand) merged with yield protocol Astherus, importing two yield-bearing primitives:

• asBNB – a liquid-staked derivative that keeps BNB staking rewards alive while serving as margin.

• USDF – a delta-neutral, yield-generating stablecoin backed 1:1 by USDT.
  The combo birthed Aster’s mantra: “Trade & Earn”. Margin no longer slept; it farmed. The protocol leapt beyond BNB Chain to Ethereum, Solana and Arbitrum, positioning itself as a cross-chain liquidity magnet—no bridges required.

Part II. Deconstructing the Engine

2.1 Dual-Mode Architecture – Catching Every Trader Persona
Aster runs two parallel experiences:

• Pro Mode – CLOB perps, deep maker-taker rebates, advanced order types, institutional UI.

• Lite Mode – one-click AMM spins inside the ALP pool, zero-slippage, zero-open-fee, up to 1 001× leverage. PnL caps protect the pool from lottery winners.
  One venue, two psychologies: the scalper hedging gamma and the degen longing 1 000× at 2 a.m. are equally monetised.

2.2 Capital Efficiency & Real Yield – USDF + asBNB Deep-Dive

• USDF collateral is deployed in delta-neutral baskets (long spot, short perp) harvesting positive funding. Holders collect the spread, yet remain delta-flat.

• asBNB releases staked-BNB yield while the token doubles as margin, stacking: staking APR + potential Launchpool airdrops + trading PnL + Aster point emissions.
  Dead capital becomes a four-headed cash cow; mercenary liquidity turns sticky because exiting means abandoning quadruple yield.

2.3 Privacy & Fairness – Hidden Orders vs. MEV

• Hidden Orders sit in the matching engine but stay invisible on the public book—an on-chain dark pool mitigating sandwich bots and liquidation snipers.

• Lite Mode updates prices every 250 ms from Pyth, Chainlink and Binance Oracle, batches trades and possibly routes through private mempool, neutralising oracle-arbitrage MEV.

Part III. The Binance Connection – A Proxy Valuation Thesis

3.1 Following the Money – YZi Labs’ Strategic Cheque

• Binance Labs seeded ApolloX in June 2022.

• YZi Labs (CZ’s family office) injected into Astherus in November 2024—precisely when Hyperliquid’s TVL began cannibalising Binance’s perp flow.
  Cheque size aside, the signal is unambiguous: capital, mentorship, market-making intros and prime Twitter real estate crowned Aster “Top Perp DEX on BNB Chain”.

3.2 The CZ Effect – A Deliberate Narrative
CZ rarely tweets charts; when he posted Aster’s TGE candle and praised hidden orders as the fix to “liquidation manipulation on other DEXes”, ASTER spiked 400 % in 24 h. Each subsequent shout-out framed Aster as Binance’s antidote to Hyperliquid, sealing the proxy story in retail psyche.

3.3 API Mimicry – Lowering Switching Costs
Aster’s REST and WebSocket endpoints mirror Binance’s verb-for-verb: /fapi/v1/order, /api/v3/account. Any algo desk already plugged into Binance can port strategies in an afternoon. The familiar grammar invites Binance market-makers to park inventory and quotes inside Aster with near-zero integration friction.

3.4 Valuation Reframe – Aster as a Binance Derivative
Valuing Aster like an independent L1 (à la Hyperliquid) misses the point. Aster’s float is tiny, but its strategic value = protocol cash-flows + an insurance policy for Binance’s derivatives dominance. Post-settlement with U.S. regulators, Binance cannot launch an official “Binance DEX Perp” without re-igniting enforcement risk. A proxy—funded via YZi Labs, built on BNB Chain, CEX-clone UX—grants regulatory arbitrage while projecting Binance liquidity off-chain. Aster’s market cap is therefore best modelled as a levered slice of Binance’s own equity—a call option on the parent’s ability to keep perp market-share without appearing to fight.

Part IV. Incentives & Imbalances – The Debt Loop

4.1 Points, Airdrops & Volume Farming
Aster’s “Trade-to-Points” season turbo-charged volumes: top 6 wallets control 96 % of the token, most acquired via wash-intensive quests. Short-term KPIs dazzle; long-term float overhang looms.

4.2 Retention Cliff & ALP Systemic Risk
Once emissions taper, will yields from USDF/asBNB alone keep traders glued? Or will capital migrate to the next point carnival?
ALP also concentrates tail-risk: oracle failure, flash-crash cascades, or a single mega-winner in Lite Mode could gap the pool into insolvency.

4.3 Governance Theatre vs. Token Reality
The protocol preaches decentralisation while supply sits with a handful of wallets. Voters can rewrite caps, oracle weights, even emission curves—perfect setup for a “whale-governance raid” if incentives misalign.

Epilogue: After the Music Stops
Aster’s brilliance is turning margin into a yield-bearing Transformer; its Achilles heel is the inflationary debt required to bootstrap the show. To survive the post-emission world Aster must:

1. Prove USDF/asBNB yields stay competitive without subsidies.

2. Diversify token holders before unlock cliffs arrive.

3. Harden ALP risk controls and emergency governance.

4. Keep shipping cross-chain liquidity so volume is not a Binance-only tale.

If it succeeds, Aster graduates from proxy to king-maker, and the loop becomes virtuous. If it falters, the same leverage that erected a skyline will liquidate it into rubble. The next six months will tell whether Aster is building a fortress or the grandest castle of sand DeFi has ever seen.

The 45 % Bonfire Proposal (22 Sept)
Investment manager Jon Charbonneau (DBA Asset Management) and researcher Hasu dropped a three-step Molotov cocktail:

1. Revoke the 421 million “Future Emissions & Community Rewards” allotment—no timeline, no transparency, no mercy.

2. Burn the 31.3 million tokens now sitting in the Aid Fund (AF) and turn the fund into a perpetual incinerator: every future buy-back dies in the same block.

3. Scrap the 1 billion hard-cap; any new mint must pass a governance vote.

Net result: 45 % of total supply vanishes, FDV drops from $46 bn to roughly $25 bn at current price. The authors disclose “material” personal and fund holdings and promise to vote “Yes”.

Why So Aggressive?
Charbonneau calls it “making the ledger honest”. Data sites refuse to recognise burned or un-minted tokens; FDV stays frozen at 1 billion forever. To institutional allocators—the only wallets that can move a mid-cap into the large-cap league—the headline number is the company they keep. Cutting it in half, he argues, unlocks mandates that are presently forbidden.

Industry Fault-Lines
Supporters (Dragonfly’s Haseeb Qureshi et al.) say the sacred cow of “community reserve” has become a slush fund; investors already haircut such buckets 50 % in private models. Time to slaughter the cow and put issuance on-chain, vote by vote.

Detractors warn that burning the AF extinguishes the project’s only fire-insurance (hack payouts, regulatory fines). Worse, it axes the growth treasury that keeps mercenary liquidity and LPs loyal. Hyperliquid already has three organic burn levers (spot fees, EVM gas, auction fees); artificially torching supply once is “cosmetic surgery” that may scare off the very community that built the venue.

The Unspoken Question: Tokens for Whom?
Strip away the spreadsheets and the debate is tribal. Institutional money wants clean, low-FDV charts and quarterly reports. Grass-roots users want airdrops, trading rebates and staking candy. Every major DeFi project—Uniswap, Compound, Sushi—has already fought the same war at the treasury gates. Hyperliquid is simply next in line. If the proposal passes, whales (including the authors) immediately own a larger slice of a smaller pie; if it fails, the FDV albatross stays nailed around price discovery’s neck.

Epilogue: The Mask Slips
Official channels have yet to comment, but the thread (410 k views and climbing) has done its damage. Whether the burn goes through or not, the community has been forced to admit a quiet heresy: when push comes to shove, “decentralisation” is often just choreography for the oldest stage play in finance—who gets the last coin.

From AI researchers earning hundreds of millions in annual salaries to an octogenarian Oracle CEO becoming the world’s richest person, AI is reshaping wealth distribution at an astonishing pace. Feeling envious? Traditional AI might be a closed playground for the elite and well-funded, but Web3 AI offers opportunities for everyone.

As the market returns to rationality, countless high-quality projects and opportunities are emerging. Below, we’ve curated some of the most promising projects and directions in the Web3 AI space. The wealth-building train of Web3 AI has already left the station—it’s not too late to hop on!

Crypto AI Research Assistants
Crypto AI research assistants utilize models fine-tuned specifically for the crypto and investment space. Compared to general large language models, they offer deeper industry understanding and more precise user experiences. Currently, these tools mainly operate through chat interfaces and can generate high-quality research reports.

1. @caesar_data
   Caesar Data positions itself as “the world’s most powerful deep research AI tool,” delivering accurate and reliable answers by integrating real-time data and cited sources. It collaborates with platforms like MessariCrypto and focuses on Web3, cryptocurrency, and AI research.
   Currently in beta testing, users holding 10,000 $CAESAR tokens can access it for free without staking or locking requirements.

2. @Surf_Copilot
   Surf Copilot is optimized for the crypto space. It can quickly analyze project investors, community sentiment, and market trends using AI to generate professional-grade research reports. Additionally, Surf offers an “action layer” that translates insights into on-chain actions, supporting cross-chain operations, task execution, and one-click transactions.
   Surf has now removed whitelist restrictions and is open to all users. Free users get three research queries per week, while paid Pro members unlock more queries, access the “action layer” features, receive NFTs, and may qualify for potential airdrops. Participating in Kaito Yaps events also offers additional rewards.

3. @minara_ai
   Backed by @Circle, Minara AI acts as a “virtual CFO.” It not only provides investment advice for cryptocurrencies and stocks but also offers paid users access to custodial models and gas-free transactions through workflows, greatly simplifying operations.
   Currently available to whitelisted users, free access codes can be obtained by completing tasks on Discord. Workflow mode is unlocked with monthly subscriptions starting at 49 USDT.

Decentralized Computing Clouds
With soaring demand for AI computing power, major companies are aggressively hoarding GPUs. Decentralized computing networks are emerging as a cost-effective alternative, and many Web3 decentralized networks have already achieved significant success.

4. @AethirCloud
   Aethir is currently the largest decentralized GPU computing network, with over 436,000 GPU containers providing 32 million+ TFLOPS of computing power. It spans 90+ global locations, serving 220 million+ monthly active users, and supports enterprise applications like AI and cloud gaming.
   Its revenue primarily comes from on-chain protocol transactions and usage fees, with recent monthly revenue averaging around $13 million and a projected 20% year-over-year growth in Q3. The token $ATH has surged 100% in a week, reflecting strong market confidence.

5. @chutes_ai
   Chutes is Bittensor’s #64 subnet, a serverless AI computing platform built by Rayon Labs. Leveraging the Bittensor architecture, miners provide GPU computing power while validators monitor performance, enabling developers to quickly deploy open-source AI models (e.g., large language models, voice models).
   As one of Bittensor’s most liquid and high-emission subnets, Chutes accounts for 9-10% of the network’s emissions and generates over $10,000 in daily revenue. Platform revenue is used to buy back subnet tokens and reward miners and validators, creating a positive flywheel effect.

AI Hardware Yield Products
The immense financial pressure on AI companies to purchase GPUs has spurred Web3 hardware financialization solutions. These provide liquidity for businesses while allowing ordinary users to participate in GPU investments with small amounts.

6. @usdai_official
   USD.AI offers an innovative solution to AI companies’ funding challenges. AI companies can抵押 GPUs and other hardware to mint USDai, a USD-pegged stablecoin (1:1 anchored to USD), quickly gaining liquidity.
   Ordinary users can purchase USDai and stake it to mint the yield-bearing token sUSDai, which currently offers an ~8% APY derived from GPU operational income.
   As of September 2025, its TVL exceeds $110 million, with support for multiple chains including Arbitrum and Plasma.

7. @gaib_ai
   GAIB aims to financialize and tokenize AI infrastructure like GPUs and robots. It provides data centers with debt, equity, and hybrid financing solutions by tokenizing future revenue, while offering investors direct exposure to the AI economy.
   Its core product, AID, is a USD-pegged stablecoin backed by超额抵押 assets such as GPU financing revenue and U.S. Treasury bonds.
   Users can deposit stablecoins to purchase AID Alpha and stake it to generate the yield-bearing token sAID, which offers an ~15% APY. Its TVL has surpassed $78 million, with support for Ethereum, Arbitrum, Base, BNB Chain, and other networks.

AI Agent Launchpad
AI Agent Launchpads have maintained strong momentum and demonstrate long-term viability.

8. @virtuals_io
   Virtuals is currently the most influential AI Agent Launchpad. After successfully incubating high-quality AI Agent projects like AiXBT and Luna in late 2024, the platform innovated with its Genesis Launch model in 2025. This model ties launch eligibility and allocation to user points, enhancing user engagement and significantly improving the quality of graduated AI Agent projects. To date, 138 Genesis Agents have been successfully launched.
   Additionally, Virtuals integrates AI Agents on its platform through the ACP (Agent Commerce Protocol), leveraging each Agent’s unique strengths to build a hedge fund-like portfolio of AI Agents. The platform uses Butler as its user interaction window, demonstrating transparent and sincere operational mechanisms. According to DeFiLlama, Virtuals Protocol has generated over $54.25 million in cumulative revenue, ranking among the top AI protocols.

9. @CreatorBid
   CreatorBid is an AI Agent Launchpad built on Base and BNB Chain, deeply integrated with the Bittensor ecosystem. It operates the “TAO Council,” which brings together Bittensor’s top subnets to address revenue challenges for subnets while providing funding and guidance for promising AI Agent projects.
   Developers can use Bittensor’s AI models to build Agents and leverage CreatorBid’s platform for tokenization and community growth, making it a distribution network for Bittensor AI Agents.
   Notable AI Agents include Rizzy (investment insights) and Hermes (weather forecasting), both supported by the Bittensor network.

Multi-AI Agent Application Platforms
Multi-AI Agent collaboration is a hot topic in the industry. From Anthropic’s widely accepted MCP to Google’s newly proposed Agent-to-Agent Protocol (A2A), mainstream AI is actively exploring this direction—and Web3 is joining the effort.

10. @openservai
    OperServ aims to be an incubation platform for one-person AI unicorn companies. It offers an aApp builder that allows developers to seamlessly integrate various AI Agents for research, DeFi execution, image generation, browser operations, and more—all without coding.
    AI Agents can also request user input through a Human-in-the-Loop mechanism, reducing hallucinations and improving task accuracy, making it suitable for finance, automation, and other scenarios.

11. @gen_impressions
    General Impressions is a workflow automation platform where users can drag and drop modules like Lego blocks on a Nexflow panel to connect APIs, databases, and AI Agent services. Within 10 minutes, users can create automated bots for Telegram or X.
    Holding 100,000 $GEN tokens unlocks access to the operational panel, and tokens can be used to pay for execution fees or API gas costs.

Conclusion
The air in AI is thick with the scent of money, and the potential of Web3 AI may soon explode.
Whether you want to use AI tools to enhance decision-making efficiency and capture market opportunities or directly invest in high-growth projects to share in wealth creation, these projects are worth keeping an eye on and researching!

The platform enhances community interaction through live streaming features. Although temporarily taken offline in 2024 due to content moderation issues, it relaunched in 2025 as a central hub for traffic, significantly boosting creator earnings. For example, some streamers saw daily incomes soar from $5.12 to $2,290.

CCMs (Creator Capital Markets) financialize creator influence, allowing users to invest in creators’ reputations via tokens. One signed creator earned $9,400 in fees within three months, driving the platform’s shift toward a creator economy.

Project Ascend’s dynamic fee mechanism adjusts revenue shares based on token market cap. Within 24 hours of its launch, creator earnings exceeded $2.4 million, and the platform’s daily fee revenue once reached $2.55 million, surpassing some derivatives giants.

With a user-friendly interface and a bonding curve pricing mechanism, Pump.fun lowers the barriers to token launches and trading, attracting millions of first-time blockchain users and strengthening instant feedback and user retention.

Pump.fun has evolved from a simple meme token launch tool into a comprehensive ecosystem integrating social, financial, and creator economy elements, building sustained competitive advantages through mechanisms, data, and user experience.

Summary
Authored by: Seedco

Since its launch in early 2024, Pump.fun has been the most prominent meme token launch platform on Solana. Starting as a low-barrier tool for creating tokens, it has grown into a comprehensive platform combining token launches, live streaming, and creator capital markets in just a year and a half.

By August 2025, Pump.fun continued to lead with $800 million in cumulative revenue and over 70% market share. Beyond the "meme casino" label, the platform has solidified its dominance through features like live streaming, CCMs (Creator Capital Markets), and the Ascend dynamic fee mechanism.

Live Streaming: Turning Meme Tokens into Social Entertainment
In 2024, Pump.fun experimented with live streaming, allowing creators to interact with their communities while launching tokens.

Initially, this model sparked controversy due to excessive "attention-grabbing" behavior: some streamers drank excessively, set fires, or even abused animals. The platform temporarily suspended live streaming in November 2024 to rebuild its moderation system. However, with its relaunch in 2025, live streaming gradually regained its role as Pump.fun’s traffic core.

Data shows that live streaming not only enhances user engagement but also generates tangible profits.

For example, streamer Rasmr earned only $5.12 daily before Ascend’s launch. The day after the new fee mechanism went live, his income skyrocketed to $2,290.

Another creator, Jytol, reported that his average live stream viewership increased from 4 to 15 after the update, and his earnings grew from $2.33 to $9.30. While these amounts may seem modest, such growth rates far exceed those of traditional platforms like Twitch or Kick for ordinary creators.

Live streaming transforms meme token launches into social and entertainment events. Users no longer merely buy tokens; they interact with creators in real time. As one streamer noted, "Pump.fun allows ordinary people to earn money by streaming to small communities, often making more than they would on Twitch in a year."

CCMs: The Emergence of Creator Capital Markets
Live streaming drives traffic, but how can this traffic be converted into long-term value? Pump.fun’s answer is CCMs (Creator Capital Markets).

Under CCMs, every creator is not just a token issuer but also an "investable asset." Users can indirectly bet on a creator’s reputation and influence through their tokens.

For instance, Pump.fun’s Basedd House brings together signed streamers who are both content creators and token issuers. One creator, Goon, earned $9,400 in fees within three months.

This effectively financializes "social capital": the stronger a creator’s traffic and community engagement, the more valuable their tokens become. Unlike traditional meme tokens that rely solely on short-term hype, CCMs provide a framework for long-term alignment between creators and users, pushing Pump.fun toward a creator economy platform.

Ascend: Institutional Upgrade Through Dynamic Fees
In September 2025, Pump.fun launched Project Ascend, fundamentally reshaping the platform’s incentive mechanism. The core of the new model is dynamic fees: creators earn a portion of transaction fees, but this percentage gradually decreases as the token’s market cap rises.

• For market caps between $88,000 and $300,000, creators receive up to 0.95% of transaction fees.

• As the market cap reaches $20 million, the fee rate drops to 0.05%, but transaction volumes are significantly higher by this stage.

The impact was immediate:

• Within 24 hours of Ascend’s launch, creators earned over $2.4 million, compared to $198,000 the day before.

• One creator earned over $80,000 in a single day, an unimaginable sum in the past.

• The platform’s total fee revenue reached $2.55 million on launch day, briefly surpassing derivatives giant Hyperliquid.

As Dune analyst Adam Tehc noted, "Creators are the core of the meme token economy. Better incentives will strengthen their position in this ecosystem."

User Experience: Simplicity and Instant Gratification
Beyond its clever mechanisms, Pump.fun’s user experience is a "soft power" behind its explosive growth. On Pump.fun, anyone can create a meme token in minutes by simply entering a token name, symbol, and uploading an image.

The platform’s bonding curve pricing mechanism replaces traditional order books and liquidity pools, meaning users don’t need to learn complex trading rules:

• When users want to buy tokens, they send funds (e.g., ETH or USDT) to the smart contract. The contract calculates the current price based on the bonding curve formula and mints new tokens for the user. As the total supply increases, the price for the next purchase rises.

• When users want to sell tokens, they send them back to the contract to be burned. The contract refunds the user based on the current price. As the total supply decreases, the price for the next sale drops.

This clear and intuitive mechanism, combined with real-time price curves and charts, delivers strong instant feedback.

Data shows that since 2024, Pump.fun has attracted millions of users to try token creation, many of whom are first-time blockchain users. This simplicity and instant gratification have made Pump.fun a natural incubator for meme culture.

Conclusion: From "Playground" to "Ecosystem"
Pump.fun’s leading position stems from its continuous evolution across multiple dimensions:

• Data: It has built a moat with absolute revenue and market share.

• Mechanisms: Project Ascend transforms short-term speculation into a long-term creator ecosystem.

• Experience: Its simple流程 and instant feedback make it a natural birthplace for memes.

• Community: KOLs and users inject genuine momentum for dissemination and cohesion.

All of this has made Pump.fun more than just a "speculative playground"—it is now a true creator economy platform.

No matter how the meme landscape changes, Pump.fun remains the undisputed leader. In the next cycle of explosive growth, it will continue to be the stage that cannot be ignored.

From Universal Chains to Vertical Solutions
Different Layer2s can now speak to radically different user bases: a compliance-first enterprise chain, a censorship-resistant privacy chain, a high-frequency gaming chain, and so on. None has yet become the fabled “savior” that funnels infinite traffic back to Ethereum, but together they have expanded the design space of scalability solutions more than any single monolithic chain ever could.

Why Not Just Spin Up a New L1?
Standalone chains such as Hyperliquid or the forthcoming Wall-Street enterprise L1s can deliver silky UX, yet they do so by trading away decentralization. A Layer2, by contrast, inherits Ethereum’s hardened security guarantees. Token incentives may look similar on the surface, yet the underlying commitment to decentralization is what sets the two models apart.

The Road Ahead: Specific-Chain Strategies
The path forward is clear: abandon the “general-purpose everything” mindset and double-down on vertical specialization. Future breakthroughs will come from:

• Licensing beloved gaming IPs

• Building privacy-preserving yet compliant rails

• Serving AI agents that demand millisecond settlement

• Tokenizing real-world assets under strict regulatory umbrellas

Success will hinge less on squeezing another 10× out of the tech stack and more on deep integration with TradFi business logic. When a Layer2 becomes the optimal venue for a single, high-value use case, its reason for existence becomes self-evident.

Conclusion
Layer2s do not need to be Ethereum’s omnipotent savior; they only need to become the best place in the world for one clearly defined job. Shed the “general chain” baggage, embrace verticalization, and the narrative turns from pessimism to promise.

• Every European-top-five-league player is tokenised into a fixed 25 million shares that trade on an in-app AMM like a meme-coin.

• The only currency is Gold, soft-pegged 1:1 to USDC on Base.

• Real-world match stats feed a scoring engine; payouts go to the wallets that hold the best-performing players each game-week.

• Each share carries a four-match “contract”; after that, owners must pay a renewal fee or watch the player stop earning points.

Lightning start

• Two weeks after launch:
  – TVL > US$10 M
  – Daily volume peaked at US$14.85 M
  – Player-token market-cap topped US$150 M, now ~US$93 M
  – 10 700+ unique wallets, US$1.5 M in fees already captured

How to play

1. Free trial – receive three starter packs and 1 400 “play” coins.

2. Pro mode – deposit USDC on Base, swap 1-for-1 into Gold, then buy any live player shares.

3. Trade, renew contracts, and stack points to win weekly Gold pots. No separate governance token exists; every trade settles in Gold (USDC).

Economics: where the money comes from

• 5 % base fee on every trade.

• Dynamic fee that can spike to 25 % on large sells or volume bursts.

• Initial pack sale raised US$2.5 M: US$2 M for liquidity, US$0.5 M for marketing.

• Reality check: rewards are funded by later entrants—critics already label it a “football-flavoured Ponzi”.

Funding & team

• Seed round closed July 2025: US$2 M led by 6th Man Ventures; Devmons, Zee Prime, Sfermion, The Operating Group followed.

• Founder is pseudonymous “Adam” (@AdamFDF_); no further doxxing yet.

Controversies

• Fairness: whales can corner thinly-held players and vacuum up point multipliers.

• Sustainability: back-of-the-envelope models show the reward pool shrinks if weekly user growth drops below 5 %.

• Regulation: whether player tokens constitute securities is still an open—and unanswered—question.

In short, Football.Fun has married fantasy sports to on-chain gambling with spectacular early traction. Whether the scoreboard keeps flashing green once the hype dies down will decide if it becomes the Sorare-killer or the next cautionary tale.

The table below summarizes the core components of the U.S. pension system, helping you quickly understand its overall structure and the critical role of the 401(k) plan.

📊 Overview of the U.S. Pension System & 401(k) Plans

Table data source: Compiled from ICI Q1 2025 data and public sources.

🤔 Why the 401(k) Plan Is So Critical

The 401(k) plan is the most prominent employer-sponsored retirement savings scheme in the U.S. private sector, characterized by:

• Tax Advantages: Employee contributions are pre-tax, reducing immediate tax burdens, and employers often provide matching contributions.

• Individual Account Management: Accounts are managed by employees, though investment options are typically pre-selected by employers.

• Massive Scale and Broad Coverage: As shown in the table, 401(k) assets are enormous, covering nearly 90 million American workers.

This policy shift aims to lift strict restrictions under the Employee Retirement Income Security Act (ERISA) on 401(k) plans investing in "alternative assets," including cryptocurrencies, private equity, and real estate. Trump’s executive order instructs the Department of Labor and other agencies to review and amend relevant rules, paving the way for compliant products.

💰 Potential Capital Influx from the New Policy

If 401(k) plans open to crypto assets, the potential incremental capital is a key market focus.

• Even a 1% allocation of 401(k) funds to crypto assets could bring $87 billion in long-term incremental capital based on the current ~$8.7 trillion scale.

• Surveys from some financial institutions suggest financial advisors might recommend allocations of 2.5% or even 3%. André Dragosch, Head of European Research at Bitwise, considers a 1% estimate "relatively conservative."

• Assuming a 5% allocation, it could potentially bring over $400 billion.

🔮 Far-Reaching Impacts of the New Policy

Allowing 401(k) investments in cryptocurrencies signifies more than just capital inflow—it could drive profound changes across three dimensions:

1. Nationwide Shift in Public Perception: When mainstream retirement plan providers like Fidelity and BlackRock include compliant crypto investment options (e.g., spot Bitcoin ETFs) in 401(k) menus, it grants cryptocurrencies official and institutional endorsement. This significantly lowers the cognitive barrier and trust cost for average investors, especially those cautious about crypto, serving as low-cost, widespread market education that boosts mainstream adoption.

2. "Automatic Capital Pipeline" from Institutional Funds: Unlike Bitcoin spot ETFs, which rely heavily on active investor subscriptions, 401(k) capital injections could be tied to automatic payroll deductions. This means that every payday could see a portion of funds flow "seamlessly" and consistently into the crypto market. This "dollar-cost averaging" effect would provide deeper liquidity and greater resilience, smoothing out some volatility. Simultaneously, it would drive financial institutions to develop more innovative products, such as crypto index funds or hybrid funds tailored for retirement accounts and prudent investment requirements.

3. A Potential "Political Moat": In the U.S., policy uncertainty has long been a challenge for crypto market development. If millions of Americans’ retirement accounts are linked to crypto asset values, any politician attempting harsh crackdowns on the industry could face significant public backlash, as it directly impacts voters’ retirement savings. This deep alignment of interests could push both parties toward greater consensus on crypto regulation, fostering a more stable long-term policy environment and reducing regulatory risks associated with political transitions.

⚠ Challenges and Practical Considerations

While opportunities abound, it’s essential to acknowledge the challenges and uncertainties:

• Investor Acceptance Is Key: Convincing ordinary people accustomed to traditional stock and bond investments to allocate their retirement savings to highly volatile crypto assets will take time and effort. Comprehensive investor education and risk disclosure are crucial.

• Volatility and Risk Control: The sharp price fluctuations of crypto assets conflict with pensions’ goal of steady appreciation. Thus, investment比例 limits, risk control measures (e.g., selecting less volatile products, rebalancing mechanisms), and clear rules are particularly important.

• Product Forms and Regulatory Details: What specific products will be used? (Spot ETFs are likely the first choice). How will investment scopes be defined? (Limited to Bitcoin and Ethereum or including others?). What will the fee structures look like? These await more detailed operational rules from regulators like the Department of Labor and the SEC. Full policy implementation will take time, likely progressing in "quarters."

• Lessons from Global Experience: The Ontario Teachers’ Pension Plan (OTPP) in Canada suffered losses due to its investment in crypto exchange FTX, reminding us that pension investments in crypto require extremely cautious due diligence and risk management.

💎 Conclusion

The Trump administration’s executive order allowing 401(k) pension investments in cryptocurrencies marks a symbolic policy shift. It aims to build a compliant bridge between massive traditional retirement capital and emerging crypto assets.

• Its short-term significance lies in boosting sentiment and managing expectations, introducing the imagination of long-term incremental capital to the market.

• Its medium-to-long-term value lies in pushing cryptocurrencies further toward mainstream adoption and institutionalization, potentially subtly influencing the U.S. crypto regulatory political landscape.

However, the practical implementation effects of this policy still depend on subsequent regulatory details, product designs by financial institutions, and actual choices by the American public. It opens a new chapter full of potential, but the specific storyline remains to be written.

We hope this information helps you better understand this policy shift. If you’re particularly interested in specific types of crypto investment products (like ETFs) or how to assess related risks, we’d be happy to provide further details.

Circle to Launch L1 with Optional Privacy Features
On August 12, Circle released its first post-IPO financial report. Despite a net loss of over $480 million due to non-cash IPO-related expenses, the company demonstrated robust growth, with revenue up 53% year-over-year and USDC circulation surging 90%.

With the U.S. stablecoin bill GENIUS now in effect, the stablecoin industry has reached a historic inflection point, offering expanded growth opportunities. However, as more traditional financial institutions enter the market, competition is intensifying. Circle is now setting its sights on stablecoin payment infrastructure to diversify its revenue streams.

During its earnings announcement, Circle revealed plans to launch Arc, an open Layer 1 blockchain designed for native stablecoin applications. Arc aims to balance efficiency, compliance, and developer-friendliness to meet the stringent demands of enterprise finance.

"Arc marks a pivotal moment in our mission to build a full-stack internet financial system. It combines the stability of stablecoins with the openness of blockchain, providing a trusted, high-performance platform for businesses, developers, and financial institutions to usher in the era of programmable money," said Circle CEO Jeremy Allaire.

Positioned as an operating system for global financial innovation, Arc supports core applications like cross-border payments, on-chain credit, and capital market settlements. It also enables secure, automated transactions for machines, systems, and AI agents, facilitating complex financial scenarios such as real-time treasury management, supply chain finance, and automated treasury operations.

According to official details, Arc is built on Malachite, a high-performance consensus engine developed by Informal Systems. It employs 4 to 20 regulated, geographically distributed validators to achieve sub-second transaction finality (under 100–350 ms), catering to high-value financial use cases like cross-border payments and capital market settlements.

As an EVM-compatible blockchain, Arc allows developers to leverage existing ecosystems and tools to build and deploy diverse stablecoin financial products. Its consensus design resembles a permissioned consortium chain—a regulatory-friendly architecture with controlled node access.

Arc uses USDC as its native gas token and adopts a dynamic fee market similar to Ethereum’s EIP-1559, offering low, predictable dollar-denominated fees. This addresses enterprises' reluctance to hold volatile crypto assets for gas payments. Beyond USDC, Arc plans to support EURC, tokenized short-term treasury funds (USYC), and other tokenized currencies via Paymaster, lowering barriers for multi-currency markets.

Additionally, Arc integrates an institutional-grade RFQ-based forex engine for instant, 24/7 stablecoin settlements and price discovery. It also offers optional privacy features (e.g., hiding transaction amounts while revealing addresses) to help businesses comply with sensitive data regulations. Deep integration with Circle’s product suite positions Arc as a stablecoin financial hub.

Arc’s private testnet is expected to launch in the coming weeks, with a public testnet slated for fall 2025 and a mainnet beta in 2026.

Multiple Players Join the Fray: Stablecoin-Specific Chains Gain Momentum
Circle isn’t the first stablecoin issuer to venture into blockchain development.

"Some companies’ strategies resemble moths flying into flames," quipped Tether CEO Paolo Ardoino in a thinly veiled jab at Circle after its L1 announcement.

As the world’s largest stablecoin issuer, Tether has already launched Plasma and Stable, two blockchains optimized for stablecoins. These chains feature zero-fee transactions, high throughput, and dedicated stablecoin infrastructure to accelerate USDT’s global payment and settlement adoption.

Stable, like Arc, is an institutional-focused, EVM-compatible L1 chain aiming to replace general-purpose blockchains in cross-border payments and compliance scenarios. However, the two differ significantly in fee structures, target markets, compliance frameworks, transparency, and technical architectures.

For example:

• Fees & Gas: Stable uses USDT as its native gas token, offering zero-fee P2P transfers and dollar-denominated smart contracts—ideal for retail users and institutional micro-payments. Arc supports multiple stablecoins (USDC, EURC) and integrates Circle’s forex services and cross-chain protocols, catering to institutions needing multi-currency liquidity.

• Compliance & Transparency: Arc leverages Circle’s U.S. regulatory compliance, with USDC reserves 100% backed by cash and U.S. Treasuries, audited monthly by Big Four firms. Stable relies on Tether’s market dominance but holds riskier assets, limiting its appeal in tightly regulated markets despite higher profitability.

• Progress & Funding: Stable’s testnet is live, backed by a $28M seed round led by Bitfinex and Hack VC. Arc hasn’t launched its testnet but benefits from Coinbase and BlackRock’s support.

This L1 stablecoin war isn’t limited to crypto-native firms. Fintech titan Stripe is reportedly collaborating with Paradigm to develop Tempo, a payment-focused L1 chain compatible with Ethereum’s programming language. Though still in stealth mode with a five-person team, Stripe’s acquisitions—including a $1.1B buyout of stablecoin infrastructure firm Bridge and wallet developer Privy—signal ambitions to build an end-to-end crypto payment stack.

The rise of stablecoin-specific chains may attract more participants. Previously, stablecoins relied on general-purpose chains like Ethereum and Tron, lacking networks tailored for payments, settlements, and compliance. As stablecoins enter mainstream finance, more institutions may roll out proprietary chains—though building L1s from scratch entails technical, regulatory, and liquidity challenges. Alternatively, some may opt for L2 solutions on established chains, trading some autonomy for faster ecosystem access and lower risk.

At 1 a.m. on August 7, the RGB protocol—Bitcoin’s long-touted scaling solution—finally went live on main-net. To celebrate, the infrastructure firm Bitlight Labs simultaneously airdropped a test token called RGB. Users could claim the token from Bitlight’s own faucet. Although RGB is “just” a test asset, it is still the very first RGB-issued token on Bitcoin, and its ticker carries obvious symbolic weight.

Twenty-four hours before launch, step-by-step minting guides and FOMO memes flooded Crypto Twitter. Degens sharpened their claws in the dark, bracing for a slug-fest. Yet the moment RGB went live, FOMO flipped to FUD. Barely 20 % of the total supply has been minted so far. What soured the mood so quickly? Is RGB still worth touching? This article offers a concise post-mortem.

A Brief History of RGB

RGB was one of the hottest smart-contract extension proposals during Bitcoin’s 2023 renaissance. It is also the slowest-moving. Conceived in 2016, formally developed in 2019, passed between teams multiple times, rediscovered in 2023 amid frantic demand for Bitcoin scaling, and still crawling along. RGB++—a spin-off—rushed to market in 2024 and faded just as fast. Only after Bitlight Labs took over co-development in late 2024 did the protocol hit any real velocity. Five years after its birth, it is finally on main-net.

Technical Primer: How RGB Works

Single-Use Seals
RGB is an off-chain scaling layer. All contract logic and transaction data live off-chain; Bitcoin itself merely provides settlement assurances. The key primitive is the “single-use seal”: data can be opened once and only once. Bitcoin’s UTXO model is a perfect fit—each UTXO is itself a one-time seal. RGB assets and contract states are sealed inside special UTXOs called “containers.” When the UTXO is spent, ownership and state atomically update, preventing double-spends without bloating Bitcoin’s chain.

Client-Side Validation
Transfers are not broadcast to Bitcoin nodes; instead, each client independently verifies only the history relevant to the coins it cares about. This light-weight verification boosts privacy and keeps validation costs low.

Minting the First RGB Token—A User Guide

Despite the protocol’s complexity, the launch-day airdrop is dead simple: send the team some sats, wait, and receive 50 RGB in return. Each wallet can queue only once, throttling congestion.

Step 1: Install the Bitlight Wallet

Download the Bitlight browser plug-in, create a fresh wallet (do not import an old seed, or you risk burning other assets), and fund it with 0.0003–0.0005 BTC.

Step 2: Create a Container

Inside the wallet:

1. Go to “UTXOs.”

2. Click “Create UTXO” → “Custom.”

3. Lock 0.0001 BTC into a new UTXO.

4. Pick a sensible fee, sign, and broadcast.

Don’t mass-produce containers; each one costs on-chain fees both to create and later to unlock, and the drip-style airdrop makes pre-staging them pointless.

Step 3: Claim RGB

Once the container transaction confirms, visit Bitlight’s site, connect the wallet, and hit “Claim.” The wallet will enter a “Claiming” state and lock until the airdrop is delivered.

From FOMO to FUD—What Went Wrong

Too Few Coins per Claim
Total supply: 21 million RGB. Each claim dishes out only 50 tokens, so 420 k on-chain transactions are required. Even assuming 4 000 claims fit into a block, that is 105 blocks—about 17.5 hours. Degens complain the timeline is engineered to kill momentum.

Fees to the Team
Every claim must also send 0.00003636 BTC (~$4) to a fixed team address. Over 420 k claims that is ~$1.68 million. The team says the cash will subsidize future distributions and market-making, but the optics are poor. Add user gas and container fees, and the fully-diluted “market cap” of the first RGB token starts life at roughly $2 million—hardly cheap in today’s Bitcoin-L2 landscape. The sticker shock is the real driver of FUD.

Closing Thoughts

The attention RGB drew surprised me. Beyond the usual “first to lose money on every new Bitcoin protocol” crowd, even casual users showed up. The Bitcoin playground is lively again: Spark, BRC-2.0, Rune 2.0, LabiTu, and now RGB. Some names you may not even recognize—don’t worry, you only missed the privilege of getting rekt.

New protocols roll off the conveyor belt daily, each wrapped in the same grandiose narrative. Most never graduate from alpha memes or airdrop parties. Innovation is vital, yet the current rhythm feels like an industrial assembly line churning out hype cycles.

The cast of players stays the same. They dive head-first into every “next big thing,” passing bags among themselves like an underground subculture bound by equal parts tech zeal and gambling itch. In a world where Bitcoin itself is household knowledge, the spectacle of this micro-universe still feels surreal—equal parts tragic and magical.

In every crypto cycle, certain engines ignite the market's rally. This year, DAT has taken on that role, fueling the rise of altcoins while reshaping how companies manage their treasuries in the age of digital assets.

Part 1: The First Half of the Bull Market – Bitcoin’s Four Key Drivers

Every crypto cycle begins with Bitcoin leading the charge. This cycle, Bitcoin’s surge has been propelled by four major forces:

1. The Conviction of Long-Term Holders (LTHs)
Long-Term Holders (LTHs) act as the bedrock of Bitcoin’s market stability, forming strong consensus around key price levels. On-chain data reveals that after enduring the previous cycle’s downturn, LTHs’ BTC holdings peaked in Q4 2023 at 14.52 million BTC—a historic high. Their "diamond hands" mentality has solidified the market’s foundation and tightened circulating supply.

Data Source: Glassnode

2. The Flood of Bitcoin ETF Capital
Since 2024, traditional financial giants like BlackRock and Fidelity have launched Bitcoin spot ETFs, amassing over $15 billion in net inflows within just three months. To date, these ETFs have accumulated a net purchase of 596,300 BTC (worth over $150 billion), fundamentally altering the crypto market’s capital structure.

Data Source: Coinglass

3. Corporate DAT Strategies
MicroStrategy pioneered the Bitcoin Treasury strategy, creating a capital alchemy model driven by stocks, bonds, and Bitcoin. By issuing zero-coupon convertible bonds and equity to fund BTC purchases, the company boosted its valuation, stock price, and refinancing capabilities. The underlying logic: when a firm’s market cap exceeds the value of its crypto holdings, it can leverage financial instruments (e.g., equity offerings, convertibles) to raise capital and acquire more crypto assets at lower costs. MicroStrategy’s strategy has inspired 134+ companies to adopt BTC treasuries, collectively amassing over 949,000 BTC.

Data Source: CoinMarketCap

4. National Strategic Bitcoin Reserves
In early 2025, following Trump’s return to the White House, an executive order mandated the establishment of a Strategic Bitcoin Reserve (SBR) at the national level. This directive pushed the Treasury and state governments to explore BTC as a geopolitical reserve asset, adding a new dimension to Bitcoin’s value proposition.

Data Source: BitcoinTreasuries

With these four engines, Bitcoin soared to $120,000. However, no new catalysts have emerged to propel it further. Instead, MicroStrategy’s treasury strategy has inspired institutions to apply DAT to mainstream altcoins, unlocking fresh momentum.

Part 2: The Second Half of the Bull Market – DAT Strategies Fuel Altcoins

ETH’s DAT-Driven Revival: The Rise of the "Treasury Titans"

Despite Ethereum ETFs’ approval in 2024, ETH/BTC ratios remained weak—until April 2025, when DAT strategies reignited ETH’s rally. Leading the charge were two firms whose ETH holdings surpassed even the Ethereum Foundation’s: BitMine (BMNR) and Sharplink Gaming (SBET).

Sharplink Gaming (SBET)
On May 27, 2025, SharpLink Gaming announced a $425 million funding round to acquire ETH as its primary treasury asset, becoming the first ETH reserve company. Consensys led the round, with participation from Pantera Capital, ParaFi Capital, and Galaxy Digital. Joseph Lubin (a key Ethereum co-founder and Consensys founder) joined as Board Chairman and strategic advisor.

Since launching its ETH treasury strategy, SharpLink has accumulated 428,200 ETH, surpassing the Ethereum Foundation’s holdings.

BitMine (BMNR)
On June 30, 2025, BitMine raised $250 million to initiate its ETH treasury strategy, backed by Pantera Capital, Founders Fund, Galaxy Digital, and Kraken. Later, it secured investments from Peter Thiel and Ark Investment’s Cathie Wood.

Under Chairman Tomas Jong Lee (ex-JPMorgan strategist and crypto bull), BitMine rapidly amassed 625,000 ETH, eclipsing SharpLink and the Ethereum Foundation.

Data Source: Strategicethreserve

These "Treasury Titans" not only brought transparent capital inflows but also inspired firms like The Ether Machine, Bit Digital, and GameSquare Holdings to adopt ETH treasury strategies. Their dominance has shifted ETH’s price trajectory and even challenged the Ethereum Foundation’s influence.

SOL, BNB, ENA, and HYPE Follow Suit

ETH’s DAT success spurred adoption across other altcoins:

• SOL: Eight companies now hold 3+ million SOL in strategic reserves, led by Upexi (1.8M SOL) and DeFi Development Corps (999,900 SOL). Upexi’s staking strategy yields ~$26M annually at 8% APY.

• BNB, ENA, HYPE: Projects like CEA Industries (VAPE) and StablecoinX (backed by Ethena Foundation) have launched DAT strategies.

Data Sources: Project disclosures

In summary, DAT has evolved from a Bitcoin-centric model to the primary engine for altcoins, reshaping market dynamics and corporate strategies in the crypto space.

Recently, we have all witnessed ENA's explosive surge—its price has skyrocketed, capturing widespread attention at an astonishing pace.

The Rise of a Stablecoin Giant

In less than a year, USDe's supply has surged from $0 to over $6 billion, surpassing DAI to become the third-largest decentralized stablecoin, trailing only USDT and USDC.

The sUSDe annualized yield has reached 10%, making it the highest sustainable yield in the crypto space today. This yield surge is driving aggressive recursive arbitrage strategies on platforms like Aave and other DeFi protocols.

Funding rates are also climbing—Bitcoin’s funding rate stands at 19%, while Ethereum’s is at 12%, marking the first time in six months that both have breached the 11% benchmark.

Ethena’s weekly revenue has hit $7.8 million, with an annualized projection exceeding $400 million. There’s still room for growth, as Ethena has shifted 41% of its stablecoin reserves into higher-yielding perpetual futures strategies, with the average market funding rate now at 14%.

This higher yield also fulfills a key condition for activating ENA’s fee switch: sUSDe’s yield must exceed Sky Savings’ current rate (4.5%) by at least 5%—a milestone that has now been achieved.

Macro Perspective: Fed Rate Cuts & Ethena’s Stablecoin Strategy

Ethena’s business model thrives on market volatility and high perpetual funding rates.

Unlike traditional stablecoins (e.g., USDC or USDT), which rely on Treasury bond yields, Ethena generates revenue through a delta-neutral strategy: long spot positions paired with short perpetual futures.

When funding rates are high, Ethena earns more. Consequently, many predict that if the Fed begins cutting rates in late 2025, Ethena will benefit even more.

In fact, following the latest rate cut in December 2024, Ethena recorded a monthly revenue high of $12 million.

Ecosystem Growth & Strong Metrics

Ethena has rapidly ascended to become a top-tier DeFi protocol by TVL, now exceeding $6 billion, alongside nearly $400 million in revenue, making it one of the most profitable DeFi projects today.

Three flagship products are driving Ethena’s expansion:

• Ethereal: A decentralized perpetual exchange with $712 million TVL.

• Terminal: A liquidity hub for tokenized assets, currently at $129 million TVL.

• Strata: A structured yield product with $13 million TVL.

Additionally, Ethena is expanding across multiple chains:

• USDe’s trading volume on Bybit has surpassed USDC ($540M vs. $444M).

• On the TON network, USDe’s TVL has reached $87 million in just six weeks.

Institutional Capital & Token Buybacks

Ethena recently announced a partnership with StablecoinX, an asset management firm planning to list under the ticker USDE on Nasdaq.

This funding round attracted top crypto VCs like Pantera, Dragonfly, and Wintermute, raising $360 million.

Of this, $260 million will be used for ENA buybacks over the next six weeks, absorbing nearly 8% of the circulating supply.

StablecoinX will permanently hold ENA on its balance sheet, reducing market supply to support long-term protocol growth.

The Fee Switch: The True Catalyst

While the factors above have fueled ENA’s rise, the real catalyst remains the fee switch.

Despite strong market performance, ENA and sENA tokens currently lack a direct value-capture mechanism.

To address this, Wintermute’s governance team has proposed activating the fee switch, allowing token holders to share in protocol revenue.

This mechanism will enable sENA holders to earn a portion of Ethena’s income, transforming ENA from a mere governance token into one with real yield potential.

Five conditions must be met to activate the fee switch. As of July 2025, four have already been achieved:

1. USDe supply > $6 billion

2. Cumulative revenue > $250 million

3. 1% of total supply in reserve funds

4. Yield spread ≥ 5%

The final remaining condition is USDe’s listing on Binance or OKX (it’s already available on Bybit, MEXC, and Bitget).

Once this is completed, the fee switch can be activated, allowing sENA holders to start earning a share of Ethena’s profits.

Given Ethena’s current earnings, token holders stand to gain highly competitive yields.

Conclusion

Once the fee switch is flipped, ENA is set to soar.

• Reward early mindshare

• Spin a story

• Engineer demand before TGE

It works. Leaderboards juice visibility, volume and social proof.
The open question: does the attention stick?
Once the airdrop is claimed, yappers pivot to the next shiny ticker, prices sag, volume evaporates and engagement flat-lines.

Below, a critical look at four Kaito alumni—$SKATE, $HUMA, $QUAI, $SOON—to see whether the post-launch story matches the pre-launch hype.

SKATE: High Beta on Day One, Radio Silence by Week Three
Token for a Solana modular gaming layer.

• TGE: 10 Jun 2025
  – Open: $0.06506
  – Close: $0.05094 (-22 % intraday)
  – Volume: $41.46 M
  – FDV: ~$65 M

• 7 Jul 2025: $0.04065 (-37 % from TGE), 24 h volume $8.46 M (≈ 140 % of mkt cap)
  Social chatter peaked the first week, then plunged as Kaito contributors rotated to fresher quests.
  Take-away: deep liquidity, zero stickiness.

HUMA: Launchpool Frenzy, 0.5 % Kaito Pool, $300 M Day-One Churn
A PayFi protocol that married Binance Launchpool with Kaito Earn.

• 23–26 May 2025: mine HUMA by staking BNB/FDUSD/USDC

• Kaito allocated 0.5 % supply across three “seasons”

• TGE: 26 May
  – Open: $0.06683 → Close: $0.05936 (-11 %)
  – Day-1 volume: $310 M on a $103 M float

• 7 Jul: $0.03083 (-54 %), volume off >90 %, FDV 5.8× circulating cap.
  Early claim-and-flip mechanics outweighed any product-led demand.

QUAI: Generous Airdrop, Meme Lords Paid, Chart Never Recovered
Multi-threaded L1 blockchain; 6 M $QUAI (≈ $1.1 M at peak) earmarked for Kaito.

• Tradable: 22 Feb 2025
  – Open: $0.09884 → High: $0.2263 → Close: $0.1929 (+95 %)
  – Volume: $10.14 M

• 7 Jul: $0.05266 (-73 % from close, ‑77 % from high)
  Top yappers walked away with up to 5.95 % of the allocation; the rest of the market walked away entirely.

SOON: SVM Rollup, Binance Alpha Debut, 66 % Drawdown in Six Weeks
High-performance Solana optimistic rollup.

• 19 Feb–19 May Kaito campaign: 450 k SOON (0.045 % supply) to top-100 yappers

• TGE on Binance Alpha: 23 May
  – Open: $0.4527 → Close: $0.4007 (-12 %)
  – Volume: $103 M

• 7 Jul: $0.1529 (-66 %); volume/MC ≈ 97 %
  Claim window closed 23 Jun; price promptly fell off a cliff.

The Pattern Is the Product
Across genres (gaming, infra, PayFi) and venues (Binance, Bitget) the script never changes:

1. Pre-TGE narrative blast

2. Launch-day volume spike

3. Airdrop rotation

4. Narrative decay within weeks

Kaito itself is not at fault; as a content-discovery layer it excels. The flaw is token design that rewards noise, not conviction.
Until projects bake in retention mechanics, real utility and incentive alignment for holding, Kaito will remain a powerful ignition switch—but rarely a soft landing pad.

$1.5 Billion Bad Debt: How SBF Hunted Down the Cancerous Empire Behind Three Arrows?

The war has reignited! On June 23, the FTX bankruptcy liquidation team dropped a bombshell in court, outright rejecting 3AC’s staggering $1.53 billion claim and demanding the judge wipe it clean. This resounding slap has escalated the years-long "battle of the dead" between two buried crypto empires, their ghosts once again tearing into each other in court. This latest legal clash peels back the curtain on one of crypto history’s darkest, most chaotic "Rashomon" events.

To understand this drama, we must first meet the three key players and the blood-soaked saga behind them—a tale fit for Hollywood.

The First Player: Sam Bankman-Fried (SBF), the disheveled-haired founder of the FTX empire. Before the 2022 avalanche, he was crypto’s golden boy, the "white knight" in the eyes of believers. Media compared him to J.P. Morgan; politicians courted him. With his messy hair, shorts, and T-shirts, he played the unkempt genius, claiming crypto would save the world. But when his empire crumbled, the world saw the truth: beneath the armor was emptiness. Now, he’s a convicted "scammer of the century," sentenced to 25 years in prison.

The Second Player: Su Zhu and Kyle Davies, founders of Three Arrows Capital (3AC). They were crypto’s "high rollers," notorious for their arrogance, aggressive bets, and billions in leverage. Their "supercycle theory" was once gospel; their words moved markets. But when the tide turned, their myth proved to be a bubble. After bankruptcy, they fled—one jailed in Singapore, the other playing "exiled nobleman" under Dubai’s sun.

The Third Player: John J. Ray III, the real heavyweight. His résumé’s crowning glory? Liquidating Enron, one of America’s biggest frauds. When called to clean up FTX, even this battle-hardened "liquidation king" was stunned. He told the court: "In my 40-year career, I’ve never seen such a complete failure of corporate controls and such a total absence of trustworthy financial information."

The story unfolds among these three. In 2022, the collapse of Terra/LUNA triggered a crypto tsunami. 3AC, a luxury cruise ship built on leverage and debt, hit the iceberg first and sank. Months later, the seemingly invincible FTX imploded without warning, exposing a $10 billion fraud.

Now, in Delaware’s bankruptcy court, the ghosts of these two buried giants are locked in a bitter fight over a $1.53 billion "hell ledger." 3AC’s liquidators claim FTX, like a bloodthirsty shark, engaged in a ruthless "eat-or-be-eaten" move, illegally swallowing their last assets as 3AC drowned. FTX’s team fires back: "You gamblers blew up your own game—don’t try to tear flesh from us victims!"

Is this shameless extortion or belated justice? To unravel this "Rashomon," we must return to the blood-soaked summer of 2022 and dredge up the buried truths.

One Contract, Two Narratives
In court, lawyers from both sides present diametrically opposed stories—like two ledgers recording the same event with entirely different entries.

FTX’s Ledger tells a tale of "order and rules." Here, FTX is the dutiful, impartial "platform warden." The logic is simple: 3AC was a big but reckless client. When Terra/LUNA’s collapse triggered a market quake, 3AC’s accounts tanked, breaching margin requirements and defaulting.

FTX claims it repeatedly asked 3AC to post more collateral, but 3AC ignored the calls—even withdrawing $18 million in Ethereum from its crumbling account. To FTX, this was like looting a burning house. Their response? A by-the-book, emotionless risk management move: liquidating part of 3AC’s holdings to prevent negative equity and protect other clients.

Under John Ray III’s steely gaze, FTX’s legal team stands firm. They argue FTX’s creditors shouldn’t—and can’t—be the "bag holders" for 3AC’s failed bets. Their narrative paints FTX as the "responsible gatekeeper" protecting everyone in the storm.

3AC’s Ledger spins a story of "conspiracy and hunting." It begins in ruins. When liquidators took over 3AC, they found hard drives wiped, computers missing, and almost no records. Su Zhu and Kyle were uncooperative, making liquidation a nightmare.

Initially, with scant information, liquidators filed a placeholder $120 million claim against FTX. But after legally forcing FTX to hand over raw trading data, a shocking picture emerged: during the two days FTX claimed 3AC defaulted and liquidated, $1.53 billion in assets vanished from 3AC’s accounts.

This discovery changed everything. 3AC’s liquidators upped their claim to $1.53 billion. FTX cried foul, but the judge ruled the delay was largely FTX’s fault—they’d dragged their feet providing data. This judicial nod gave 3AC’s "conspiracy theory" weight. If FTX’s liquidation was so aboveboard, why hide the records? Unless the ledger held darker secrets.

The Fraud’s Core: Alameda’s Distress Signal
To crack this case, we must rip off SBF’s "white knight" mask and see what was really happening inside FTX’s crumbling heart in June 2022.

The key witness? Caroline Ellison, SBF’s ex-girlfriend and CEO of his shadow empire, Alameda Research.

At SBF’s criminal trial, Caroline, now a cooperating witness, revealed a bombshell: in the same week FTX "liquidated" 3AC for "margin failure," Alameda was drowning in losses from Terra’s collapse, with a multi-billion-dollar hole in its balance sheet. Lenders were circling like sharks.

Desperate, SBF allegedly told Caroline to open a "secret backdoor"—stealing billions from FTX customer funds to repay Alameda’s loans.

This testimony was a lightning bolt, illuminating the rot. While FTX played "strict warden," its "favored child" Alameda was secretly, illegally siphoning client money to stay afloat.

Blockchain data coldly confirms the lie. Analytics firm Nansen found that during 3AC’s collapse, Alameda sent $4 billion worth of FTT (FTX’s in-house token) to FTX’s wallets—using near-worthless "funny money" as collateral for real client funds.

Now, SBF’s public act at the time looks Oscar-worthy. While secretly looting customer funds, he told Forbes: "We’re willing to do a somewhat bad deal if it’s what’s needed to stabilize things and protect customers."

The irony is crushing. He wasn’t a savior but an insolvent fraud. His "rescue" was a desperate bid to stop the dominoes from falling—and exposing his own gaping hole.

With these pieces, 3AC’s "SBF hunted us" claim gains credence. For FTX/Alameda, already drowning in June 2022, liquidating a big, leveraged player like 3AC had two motives:

1. "Kill and loot"—grab urgently needed liquidity.

2. "Kill the chicken to scare the monkeys"—sacrifice a risk source to buy time and hide their own rot.

This wasn’t rule enforcement. It was a drowning man pulling another under to stay afloat.

The Ghost of Lehman Brothers
Zoom out, and this feud isn’t new. Strip away crypto’s jargon and tech veneer, and it’s 2008’s financial crisis redux—a "Lehman Brothers" rerun.

The original sin is identical: failure to segregate client assets.

This is finance’s brightest red line. Whether old-school banks or crypto exchanges, client money is sacred. Yet Lehman was found guilty of "stunning failures" in client fund segregation. FTX’s entire fraud was built on blending client funds with Alameda’s trading capital—a catastrophic risk transfer turning clients into unsecured creditors.

The endings mirror too: messy, drawn-out liquidations.

Lehman’s bankruptcy took years to untangle. Now, John Ray III faces the same nightmare with FTX: opaque structures, missing records, and hard-to-value crypto assets.

History doesn’t repeat, but it rhymes. The FTX-3AC saga isn’t a unique "crypto" problem—it’s a classic tale of financial arrogance, regulatory failure, and human greed, dressed in Web3’s trendy clothes.

A Hero-Less Ending
So, what’s the truth behind this $1.53 billion "hell ledger" fight?

The truth is, this isn’t a contract dispute. It’s a bare-knuckled "predator vs. predator" survival game. 3AC was a reckless, greedy gambler that blew itself up. But FTX was no innocent rule-follower—it was a cancerous fraudster, sacrificing others to disguise its own decay.

A dying gambler met a wolf in sheep’s clothing. In crypto’s lawless slaughterhouse, they fought one last bloody round.

Delaware’s final ruling may set precedents for future crypto bankruptcies. But for this industry that dreamed of disrupting finance, history’s verdict is already in: Without strong regulation, transparency, and real accountability, there are no heroes—only predators in different masks.

Greed and fear never change. FTX vs. 3AC is just Wall Street’s oldest story, retold in crypto slang.

Core Insight

From DeFi full stack to RWA infrastructure, "has-been internet celebrity" Arbitrum is becoming the preferred platform for institutional entry. Arbitrum has long entered the stage of ecological maturity, forming a comprehensive and mature market layout in the DeFi track. And now, it has achieved a crucial milestone:

• Spot DEX: The cumulative trading volume of L2 has steadily ranked first, reaching $534.2 billion

• Perpetual contracts: The total trading volume has reached $802 billion, setting a new historical record

• Lending services: The liquidity depth is greater than $1.2 billion, which can enhance productivity scale through credit

• RWA-Fi: It has grown to a historical peak of $262.5 million, covering 20 assets Arbitrum's self-sustainable growth is reflected in strong user growth, deep liquidity, and continuous activity in various business lines.

• In the third quarter of 2021, during the early stage of virtual automated market making (vAMM) dominated by GMX and Gains Network, Arbitrum established the basic pattern of perpetual contract DEX. Nowadays, user growth has entered a stable and mature period, and the high user retention rate is clearly confirmed in the daily trading volume trend:

• Since the third quarter of 2023, the daily trading volume has achieved a threefold leap (from $1 billion to $4 billion)

• The cumulative trading volume has reached $802.5 billion

• Subsequently, the perpetual DEX ecosystem has diversified and evolved, with the continuous emergence of professional players:

• Rho Protocol: Native cryptocurrency interest rate derivatives (centered on centralized exchange funding rates)

• Aark Digital: Ultra-high leverage trading (leverage up to a thousand times)

• Ostium: Diverse asset allocation coverage (foreign exchange/stock indices/commodities) The ecosystem shows a trend of high user stickiness and product innovation, which proves its self-sustaining and dynamically evolving sustainable nature.

• As of the third quarter of 2024, the total locked value (TVL) of Arbitrum's RWA-Fi sector has accelerated to a historical peak of $262.7 million. With the support of a diverse and growing number of global fund participants, this development momentum further consolidates Arbitrum's position in the enterprise-level tokenized DeFi field. It is worth noting that the $EUTBL issued by Spiko Finance has now taken the lead in the EU government bond tokenization market, occupying about 32% of the market share and surpassing the following competitors:

• Franklin's $BENJI

• BlackRock's $BUIDL All of this indicates that institutional adoption is no longer just a theoretical stage.

• With institutional giants setting the trend, it is also worth noting the growing diversity within the Arbitrum sub-ecosystem. This spans RWA integration and DeFi native innovation. This integration creates a rich situation that meets a variety of needs:

• Institutional allocators seeking compliant income-generating assets (such as government bonds, credit bond markets)

• Crypto-native users pursuing permissionless leverage, structured products, or long-tail yield strategies By covering these two particular user groups, Arbitrum positions itself as an all-encompassing ecosystem:

• The ability to attract capital from various fields, from DeFi to TradFi. Arbitrum's Orbit and Stylus are becoming the core engines for multi-domain growth, providing the ability to build dedicated chains for vertical scenarios across industries. This aligns with the "application chain theory," which holds that customization + flexibility is crucial for optimizing infrastructure. The adoption rate of this technical framework is currently rising rapidly:

• 83 official ecosystem partners

• 41 mainnets live (a 32% increase since April 2024)

• 21 testnets + 21 under development

• The total locked value (TVL) of the Arbitrum ecosystem (excluding Arbitrum One) exceeds $320 million Following this trend, the framework, as the next-generation blockchain application's enterprise-level infrastructure, is rapidly gaining recognition throughout the industry.

• Arbitrum is increasingly favored by more and more large institutions, with this attention supported by both practical application needs and dual verification at the infrastructure level.

• Global funds: BlackRock, Franklin Templeton, Invesco, Wellington Management are building RWA-Fi liquidity

• Infrastructure: Plume Network, Novastro, re.al are bridging real-world capital to the chain And now, the final issuance network of traditional finance is beginning to emerge:

• Converge is building an institutional settlement layer (e.g., Ethena, Securitize).

• Rayls Labs launches a compliance chain suitable for the banking system. The conclusion is clear: Arbitrum is becoming the preferred infrastructure for real-world institutional deployment.

• The surge in MEV phenomena marks the ecosystem's entry into the next stage of maturity. Arbitrum's Timeboost auction mechanism introduces an efficient and fair competitive model, perfectly mirroring the mainnet's proposer-builder separation (PBS) model. In less than two months since its launch, the usage rate has been quite high.

• 1.42 million DAO revenue (annualized about $8.5 million)

• Now more than 60% of transaction fee revenue comes from Timeboost. We have observed early signs of MEV atomic arbitrage monetization, with most activities mainly focused on high-volume trading pairs (such as Bitcoin, Ethereum, and stablecoins). I believe that the next stage of maturity will be marked by long-tail assets occupying a larger share in MEV traffic.

• Interestingly, the Timeboost fast lane currently accounts for about 5% of Arbitrum's total transaction volume, maintaining a steady upward trend since its launch. But more telling is the trading volume footprint:

• The current daily trading volume of about $175 million comes from MEV arbitrage

• Arbitrum's average daily trading volume over the past month is about $900 million, of which about 21.8% comes from the Timeboost fast lane Please note that, in my view, this is significant, indicating that MEV is no longer a marginal phenomenon but has become a core engine driving substantial trading volume. As MEV develops into a native revenue stream, this phenomenon not only signifies an increase in user maturity but also marks a new stage in the protocol layer's profit-making mechanism. Finally, on InfoFi applications Arbitrum is in the spotlight as the core ecosystem embracing this narrative, with the recent Yapper ranking integrated with Kaito being a prominent manifestation. The project comes with a three-month incentive of 400,000 $ARB tokens (worth about $124,000). Now, the innovative form of second-layer InfoFi is taking shape: Yapyo positions itself as a decentralized consensus hub, integrating social collaboration with incentive design. Details are still unclear, but early signs suggest that $YAPYO is pursuing a niche market entry strategy for specific protocols, of course, this is my personal view.

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• The data clearly shows that Arbitrum is no ordinary ecosystem. It has broken through the tipping point and is entering a new stage from DeFi to a broader range of on-chain applications. Its maturity depth and evolutionary dynamics speak for themselves, so not all chains are playing the same game. Arbitrum is forging its own path.