Event Overview

The DeFi protocol Stream Finance suffered approximately $93 million in losses after an external fund manager (Curator) was liquidated during the market crash on October 11, 2025. This caused its stablecoin xUSD to plummet by half and exposed a potential $8 billion systemic risk across the entire DeFi ecosystem.

Root Causes

* Flawed Curator Model: Newer DeFi protocols (e.g., Morpho, Euler) introduced "Curators" to manage user funds but lack transparency and oversight. Curators aren't required to disclose their identities or strategy details, operating like a black box.

* Risk Amplification Mechanisms: Protocols employ leveraged operations like recursive lending to chase high yields. Simultaneously, Curators, incentivized by management and performance fees, are encouraged to adopt high-risk strategies (e.g., selling volatility), with users bearing the losses.

* Collusion of Interests: To attract capital, protocol teams often turn a blind eye to Curators' high-risk behaviors, sometimes even jointly marketing high APYs while neglecting proper risk assessment.

Chain Reaction

* Stream's collapse affected multiple protocols: Elixir Protocol faces a $68 million bad debt risk, Euler Protocol has $137 million in bad debt, and the total systemic exposure reached $285 million.

* Other protocols (e.g., Stables Labs) using similar models are also facing scrutiny, revealing the fragility of "Centrally-managed Decentralized Finance" (Ce-DeFi).

Key Takeaway

The core value of DeFi lies in transparency, not just the "decentralized" label. Opaque systems lack oversight and checks and balances. When users chase high yields without understanding where their money goes, they themselves may become the ultimate bearers of the risk.

---

Summary

The "fund manager," a role once trusted and then disillusioned in traditional stock markets, has re-emerged on-chain under the new name "Curator"—and the situation has become far more dangerous.

They don't need professional exams, regulatory scrutiny, or even to disclose their real identities. They just need to create a "Vault" on a DeFi protocol, lure users with outrageously high APYs, and attract hundreds of millions of dollars. Where that money goes and how it's used remains a mystery to investors.

$93 Million Gone in an Instant

On November 3, 2025, when Stream Finance suddenly suspended all deposits and withdrawals, it triggered a storm sweeping through the DeFi world.

The next day, an official statement revealed: an external fund manager was liquidated during the severe market volatility on October 11, causing approximately $93 million in losses. Stream's internal stablecoin, xUSD, crashed, plummeting from $1 to a low of $0.43 within hours.

The storm wasn't without warning. 172 days earlier, Yearn core developer Schlag had warned the Stream team. In the eye of the storm, he was blunt: "It only took one conversation with them and 5 minutes looking at their Debank to realize this would end badly."

The Fatal Mutation of DeFi

To understand this crisis, we must return to the origins of DeFi.

Traditional protocols like Aave and Compound thrived on "Code is law." Every deposit and loan followed immutable, transparent smart contract rules. The process was algorithm-driven, without human fund manager intervention.

This cycle, a new generation of DeFi protocols like Morpho and Euler, chasing higher yields, introduced the Curator model. Users don't deposit into a common pool; instead, they choose individual "Vaults" managed by Curators. Users deposit funds, and the Curator has full authority over how to invest and generate yield.

The expansion of this model is staggering. According to DeFiLlama data, the Total Value Locked (TVL) in just Morpho and Euler now exceeds $8 billion.

This means over $8 billion in real money is being managed by numerous, diverse, and often anonymous Curators.

While it sounds good—professionals doing professional work—stripping away the "on-chain wealth management" facade reveals a core reminiscent of P2P lending. The fundamental risk of P2P was that ordinary investors couldn't assess the true creditworthiness of borrowers on the other end.

The Curator model perfectly replicates this. The protocol itself is just a matching platform. Users' money, seemingly entrusted to professional Curators, is actually invested into a black box.

As Morpho CEO Paul Frambot once said, "Aave is the bank, and Morpho is the bank's infrastructure." The unspoken implication is that they provide the tools, while the actual "banking business"—risk management and capital allocation—is outsourced to these Curators.

The "decentralization" applies only to the moments of deposit and withdrawal. The most critical part, risk management, lies entirely in the hands of an unvetted, unconstrained "Curator."

When Curators and Protocols Collude

The Curator model opened Pandora's box; the tacit collusion between protocols and Curators unleashed the demons inside.

Curators typically earn management and performance fees. This creates a powerful incentive to pursue high-risk, high-reward strategies. The capital belongs to the users; losses aren't their responsibility, but success nets them a significant share of the profits.

This "privatized gains, socialized losses" incentive structure is tailor-made for moral hazard. As Arthur, founder of DeFiance Capital, criticized, the Curator mindset becomes: "If I mess up, it's your money. If I get it right, it's my money."

Worse, protocol teams, instead of acting as regulators, often become accomplices in this dangerous game. To attract TVL in a competitive market, protocols need eye-popping high APYs to lure users. These high APYs are often created by Curators employing aggressive strategies.

Thus, protocol teams not only turn a blind eye to risky behavior but may actively encourage or partner with Curators to create high-yield vaults as marketing gimmicks.

Stream Finance was a prime example of this opacity. While claiming $500 million in TVL, DeFiLlama data showed Stream's TVL peaked at just $200 million. This implied over three-fifths of user funds flowed into undisclosed off-chain strategies run by mysterious proprietary traders, completely devoid of DeFi's foundational transparency.

The Dominoes Fall

On October 11, 2025, the crypto market experienced a bloodbath, with nearly $20 billion liquidated in 24 hours. The liquidity crisis and deeper insolvencies are now emerging from within DeFi.

Analysis suggests many DeFi Curators, chasing yield, favored high-risk off-chain strategies like "selling volatility." This strategy essentially bets on calm markets; it earns steady fees when markets are quiet but can lead to devastating losses during sharp volatility. The October 11 crash became the trigger.

Stream Finance was the first major domino to fall. While the exact strategy used by the responsible Curator wasn't disclosed, market analysis widely points to high-risk derivative trades like selling volatility.

But this was just the beginning. As Stream's xUSD, xBTC, and other tokens were widely used as collateral across DeFi, its collapse triggered an industry-wide chain reaction.

According to preliminary analysis from research firm Yields and More, direct debt exposure related to Stream reached $285 million, revealing a vast contagion network:

* The biggest victim is Elixir Protocol, a major lender to Stream, with $68 million in USDC loans—representing 65% of the reserves backing Elixir's stablecoin, deUSD.

* RE7 Labs, a former collaborator, also became a victim, facing millions in bad debt risk across lending protocols due to accepting xUSD and Elixir-related assets as collateral.

Contagion spread further through complex "re-hypothecation" paths, where Stream's tokens were collateralized on major lending protocols like Euler, Silo, and Morpho, which were then nested within other protocols. The failure of one node rapidly transmitted through this web.

The hidden risks from the October 11 liquidations extend beyond Stream. As Yields and More warned: "This risk map remains incomplete, and we expect more affected liquidity pools and protocols to be exposed."

Another protocol, Stables Labs, and its stablecoin USDX, have recently faced similar community scrutiny.

The issues with protocols like Stream expose the fatal flaw in this new Ce-DeFi model: when transparency is absent and power is overly concentrated in a few hands, user fund safety relies entirely on the integrity of fund managers—an extremely high risk in an unregulated environment.

You Are the Yield

From the transparent on-chain banking of Aave to the asset management black box of Stream Finance, DeFi has undergone a fatal evolution in just a few years.

When the ideal of "decentralization" is distorted into a "deregulation" frenzy, and when the narrative of "professional management" obscures the reality of opaque fund operations, the result isn't better finance—it's a worse version of banking.

The most profound lesson from this crisis is the need to re-examine DeFi's core value: Transparency is far more important than the "decentralized" label itself.

An opaque decentralized system is more dangerous than a regulated centralized one because it lacks both the credibility and legal constraints of centralized institutions and the public, verifiable checks and balances inherent to proper decentralized systems.

As Bitwise CIO Matt Hougan famously told all investors in crypto: "There is no such thing as a double-digit yield without risk."

For every investor tempted by high APYs, before clicking that "Deposit" button next time, you should ask yourself one crucial question:

Do you truly understand where the yield from this investment comes from? If you don't, then you are the yield.

Trigger: Tariffs Are Old News—Why Did This One Hurt?
Trump’s China-tariff sound-bite was neither new nor unexpected; equities and BTC initially dipped only 2-3 %.
The real problem was market fragility:

• Post-rate-cut liquidity has barely expanded (Fed net-liquidity flat), yet positioning reached all-time highs.

• Softening U.S. labour data revived “recession” trades while inflation refused to die—leaving risk-assets with no narrative cushion.
  When positioning is stretched, even a known unknown becomes a black swan in practise.

The Four-Step Death-Spiral

1. 05:00 UTC – Thin weekend book, Asia asleep, Europe logging off. MM desks pull bids after first 3 % drop, removing the only cushion.

2. 05:20 UTC – Altcoin perp open-interest >3× spot depth; mark-price gaps 8-12 % in seconds. High-beta names enter free-fall.

3. 05:40 UTC – Collateral shock: USDe, wBETH, BNSOL all de-peg 5-15 %. These were not “broken tokens” but high-velocity margin assets inside cross-collateral unified accounts.

4. 05:45 UTC – Auto-deleveraging engines wake up. Cross-asset margin means one toxic leg nukes the whole portfolio; forced sales hit bids that no longer exist → negative-feedback loop.

USDe: A Stable-Coin That Wasn’t
USDe trades at $1 only if the derivatives hedge behind it stays dollar-flat. When perp funding flips deeply negative and arbitrageurs hit size limits, the “peg” becomes a funding bet.
Exchanges nevertheless gave USDe 85-90 % collateral weight—higher than USDC—because its “yield” looked harmless. In the spiral, a 10 % de-peg instantly doubled effective leverage, turning 2× books into 4× liquidations. The token never recovered $1 during the event, proof the issue was structural, not sentimental.

Unified-Margin: Efficiency in Good Times, Accelerator in Bad
Cross-collateral sounds user-friendly—one basket, many positions. In a crash it is a detonator.
When Asset A gaps down, the system sells Assets B, C, D to keep A alive. Every user becomes a forced seller of everything, synchronised by code. Traditional brokers call this “cross-default”; crypto rebranded it “capital efficiency”.

Lessons Learned—Again

1. Liquidity is an after-thought until it is the only thought.

2. Any synthetic stable-coin must be stress-tested for basis-risk, not just audited for code.

3. High collateral weights should require dynamic haircuts that expand automatically when volatility spikes.

4. Innovation without circuit-breakers merely moves the failure point from exchange to user.

After-Shock & Forward Look
Leverage has been flung out of the window; open-interest is back to March levels. Macro tail-winds (eventual Fed easing, trade-war détente) remain intact, but confidence heals slower than balance sheets.
Regulators will demand position-limit transparency, segregated margin and real-time proof-of-reserves for any asset used as collateral. Builders who bake those features in from day one will capture the next wave of inflows.
The storm passed; the architecture it exposed has not. In a tightly-coupled system, risk is never linear—it jumps. The only question is whether we build trampolines or keep stacking bricks higher.

Another week, another stablecoin launch—but MetaMask’s mUSD feels different. While USDH (Hyperliquid) and USDe (Ethena) fight over yield, MetaMask is betting on pure reach: 100 M annual and 30 M monthly self-custody users, most of whom have never downloaded an exchange app. mUSD is the first dollar-denominated token minted natively inside a wallet, not on a centralized exchange or a Layer-1 foundation.

---

How It Works

Each mUSD is 1:1 backed by short-dated U.S. T-bills and issued through Stripe-owned Bridge (M0 framework), ticking the regulatory box before the U.S. GENIUS Act even lands. Users buy it with fiat, swap it for any in-wallet asset, or spend it in-store via the upcoming MetaMask card—no bridges, no “add custom token,” no copy-pasting contract addresses.

---

Linea Afterburner

ConsenSys is stacking the deck: almost 90 % of early mUSD liquidity sits on its own Layer-2, Linea. In less than a week circulating supply jumped from $25 M to $65 M—an echo of Bin’s 2022 BUSD auto-conversion that doubled the stablecoin’s float overnight. Whoever owns the front-end owns the flow.

---

Yield Flip

Treasury collateral turns MetaMask from a cost center into a yield engine. At 4 % on-venue rates, every $1 B of mUSD mints ~$40 M in risk-free interest per year—closing in on MetaMask’s entire 2024 fee revenue of $67 M. The more users treat the wallet as their checking account, the larger the off-balance-sheet bond ETF becomes.

---

The Neutrality Trap

The flip side of convenience is conflict-of-interest. If MetaMask starts nudging quotes so that the “best” swap route just happens to route through mUSD—or hides USDC behind an extra click—the open-money ethos becomes a walled garden. Fragmentation risk scales quickly: imagine every major wallet (Phantom, Rabby, Keplr) launching its own dollar, each optimized for its internal loop but mutually non-fungible.

---

Oligopoly Still Rules

USDT + USDC still command ~85 % of the $300 B market; Ethena’s USDe sits third at $14 B. Liquidity begets liquidity—merchants, exchanges and offshore desks settle in the incumbents because everyone else does. MetaMask’s path from 65 M to tens of billions hinges on whether “wallet-native” is a must-have feature or a novelty that fades once the APR subsidies dry up.

---

Bottom Line

mUSD proves that in crypto the ultimate alpha is distribution, not code. MetaMask has built a closed loop: on-ramp → hold → spend, all inside one fox-branded interface. Whether that loop becomes the rails for Web3 commerce or just another garden wall will decide if the tulip actually flies—or if history repeats with a $300 B duopoly still holding the hose.

What Falcon Already Did

• USDf minted: US $1.5 B (8 months, rank #8)

• Reserves: US $1.6 B (BTC, ETH, SOL, RWAs, stables)

• Users: 58 k MAU; US $273 M TVL on Pendle

• Chains live: Ethereum, Arbitrum, Base → Solana next

No liquidation engine: you over-collateralise, mint USDf, stake it for sUSDf, pocket the spread; protocol keeps the fee.

The Good, the Bad and the Trump Card
Catalysts

1. Regulatory tail-wind: WLFI (Trump family vehicle) just wired US $10 M into the seed round.

2. Exchange plumbing: DWF can pick up the phone and get USDf/FF listed same-week.

3. RWA pipe-line: tokenised T-bills and credit funds already queued for Q4.

Red Flags

• Token is vote-only; cash-flow stays in the corporate entity.

• Stable-coin market is a USDT/USDC duopoly; PayPal, Fidelity, Ripple all launching rivals.

• DWF’s “pump-n-dump” reputation still lingers—order-flow can flip against retail fast.

Sale Mechanics – Read the Fine Print

• Double FDV: stake USDf/sUSDf before sale → US $350 M FDV; walk-in → US $450 M.

• Raise size: US $4 M hard-cap; ticket US $50 – 4 000 (USD1-only, WLFI’s stable-coin).

• Unlock: 100 % on day 1—great for flippers, scary for hodlers.

Scenarios & Price Map (personal estimate, not financial advice)

• Bull (30 %): FDV > US $1 B if Binance list + corporates adopt USDf for treasury cash → 3-4× from US $350 M entry.

• Base (55 %): FDV US $500 – 700 M on steady DeFi integration → 1.5-2× in 6-12 m.

• Bear (15 %): FDV drifts to US $200 – 300 M on regulatory noise or DWF exit → break-even to -15 %.

Who Should Click “Buy”
✓ Stable-coin/RWA bulls who want a venture-style punt.
✓ Short-term traders planning to exit first week post-TGE.

Who Should Pass
✗ Yield seekers—no fee switch today.
✗ Low-conviction buyers forced to swap into USD1 first.

Action Checklist

1. Stake USDf/sUSDf on Falcon before snapshot → lock US $350 M tier.

2. KYC on Buidlpad; fund wallet with USD1 (only ticket in town).

3. Decide time horizon: flip the unlock or watch for governance proposal to flip on fee share.

If you can live without cash-flow for now and simply want leveraged exposure to the next stable-coin regulatory pump, the 350 M FDV slice is attractive. Otherwise, wait on the sidelines—governance tokens without dividends are only worth what the next narrative is willing to pay.

1. Protocol-Layer Contracts: The Network Owns Itself

• Beacon Deposit Contract: ≈ 68 million ETH (56 %)
  Every validator’s 32-ETH stake is parked here; withdrawals still require a 27-hour exit queue, making this the largest single “black-box” on any public chain.

• WETH Wrapper: 2.26 million ETH (1.9 %)
  The ERC-20 liquidity rail that underpins all of DeFi.

2. Exchange & Custody Rails: Always-on Liquidity

• Coinbase cold/hot clusters: 5.16 million ETH (4.2 %)

• Binance umbrella wallets: 4.06 million ETH (3.3 %)

• Robinhood, Upbit, Kraken: 1.3–1.4 million ETH each
  These addresses move coins in and out 24/7 for spot, derivative and bridge withdrawals; they are the busiest transaction counterparties on the network.

3. U.S. Spot ETFs: Four Tickers, >5 % of Supply

• BlackRock iShares ETHA: > 3 million ETH (2.5 %, $9.7 B in-flows)

• Grayscale ETHE: 1.13 million ETH

• Fidelity FETH + Bitwise ETHW: ≈ 1 million ETH combined
  Held by regulated custodians, available for creation/redemption and increasingly staked, they are the default gateway for traditional capital.

4. Listed Companies: “Treasury 2.0” With Staking Coupons

• Bitmine Immersion (NYSE: BMNR): 1.8 million ETH

• SharpLink Gaming (NASDAQ: SBET): 797 k ETH

• Bit Digital, BTCS, Phunware: 70–120 k ETH each
  Most of the coins are staked at 3–5 % APY; management frames the position as a “programmable T-bill” that also powers their product ecosystems.

5. The Last Individual Billionaires

• Vitalik Buterin: 250–280 k ETH (~$950 M across vb3.eth etc.)

• ConsenSys founder Joseph Lubin: ~500 k ETH (unconfirmed)

• Winklevoss twins: 150–200 k ETH (excluding Gemini corporate)

• Rain Lõhmus (LHV Bank co-founder): 250 k ETH stuck in a 2014 ICO wallet—worth $900 M but lost keys.

Bottom Line

• Circulating supply ≈ 120.7 million ETH; top 200 addresses already >52 %.

• “Personal whale” share has shrunk to low-single digits; ownership is now institutional, contractual and platform-mediated.

• Track live changes in Nansen’s Token God Mode, Dune’s labels.addresses table or Etherscan’s rich-list, but remember exchange clustering and privacy tech can skew totals in either direction.

TL;DR

• Polkadot’s current 8% annual inflation has expanded its supply to 1.6B DOT, with only 20M DOT historically burned.

• Three reform proposals aim to reduce inflation to 3–6% by 2026, aligning with mainstream PoS chains.

• Lower inflation may initially cut staking yields, but integrating LSTs (Liquid Staking Tokens) and DeFi incentives can redirect capital to productive use.

Polkadot’s Current Dilemma

Since its launch, Polkadot’s inflation mechanism has been contentious. Despite 2024’s Ref #1139 proposal (cutting inflation from 10% to 8% and capping annual issuance at 120M DOT), progress remains slow. At this pace, reaching 4.3% inflation could take a decade.

Key Issues:

1. Excessive Inflation & Staking Rewards

   • Continuous DOT minting creates sell pressure, undermining scarcity.

   • High staking APY (8–10%) locks capital in native staking or Nomination Pools, leaving DeFi underutilized.

2. Lack of Utility

   • New DOT stems solely from inflation (staking rewards), with minimal burn mechanisms (e.g., transaction fees, Coretime sales).

   • TVL of $400M pales against rivals, reflecting scant killer apps and weak demand for DOT beyond governance/staking.

High Staking Rates, Low Liquidity Utilization

While Ethereum’s staking rate is 29.7%, other PoS chains exceed 50% (e.g., Aptos: 96.5%, Solana: 67.3%, Polkadot: 49.2%). Yet, Ethereum’s LST penetration (36%) dwarfs Polkadot’s 3% (Bifrost’s vDOT dominates with 70% market share but only 19M DOT staked).

Why This Matters:

• High native staking APY disincentivizes DeFi participation.

• Without yield opportunities (e.g., lending, LP farming), even LST holders lack reasons to engage, creating a vicious cycle.

Inflation Reduction Proposals: Impact Assessment

Trade-offs:

• Short-term: Lower APY may deter stakers, especially whales.

• Long-term: Reduced inflation strengthens value accrual, attracting long-term holders (akin to Ethereum’s 3–4% staking yield + EIP-1559 deflation).

Lesson from Ethereum: Low inflation + high capital efficiency → Ecosystem growth → Fee burns → Scarcity. Polkadot must replicate this by coupling inflation cuts with DeFi incentives.

Beyond Inflation: Unlocking Liquidity

Lower inflation alone isn’t enough. Polkadot needs:

1. LST Integration

   • Expand vDOT use in lending, LP farming, and cross-chain yield strategies (Bifrost’s 900M TVL is a start).

2. Cross-Chain Bridges

   • Leverage Hyperbridge/Snowbridge to attract Ethereum/Solana users, backed by treasury incentives.

3. External Asset Incentives

   • Programs like Gigahydration (2M DOT rewards over 6 months) have brought ETH, SOL, and AAVE into Polkadot, boosting TVL.

A Pivotal Moment for Polkadot

Polkadot’s high inflation vs. low utility paradox demands action. The community must:

• Short-term: Adopt a moderate inflation model paired with phased DeFi incentives.

• Long-term: Foster real DOT demand via DeFi, stablecoins, and payments.

Balancing short-term pain and long-term growth will test Polkadot’s collective vision. The chain’s future hinges on transforming stagnant capital into a dynamic, multi-layered economy.

Abstract

Welcome to GCC Research’s "Tragedy of Crypto Commons" series, where we explore essential but underfunded and overstressed public infrastructures in Web3. These systems face incentive misalignment, governance failures, and creeping centralization—testing crypto’s ideals against real-world demands.

Today, we focus on Polymarket, the decentralized prediction market platform that gained notoriety for high-stakes bets on Trump’s election, Ukraine’s rare earth trades, and even Zelensky’s suit colors. But beneath its hype lies a critical question: Is its data indexing truly decentralized? Why has The Graph, the flagship decentralized indexing protocol, failed to dominate this role? And what would a sustainable, decentralized indexing solution look like?

I. A Centralized Outage That Paralyzed Ethereum

In July 2024, Goldsky—a Web3 data infrastructure provider—crashed for six hours, freezing DeFi frontends, breaking Polymarket’s feeds, and exposing a harsh truth: While blockchains are decentralized, most apps rely on centralized data pipelines.

Why Does This Happen?

• Blockchain indexing is a non-excludable, non-rivalrous public good: Users expect free/low-cost access, but providers bear high hardware, storage, and maintenance costs.

• Without sustainable monetization, winner-takes-all centralization emerges. Once a provider (like Goldsky) gains speed and scale, developers flock to it, recreating single-point dependencies.

• As Gitcoin’s research notes: "Open-source infra generates billions in value, but its builders struggle to pay mortgages."

Our Call to Action:

• Developers must design local-first apps that function even if indexing fails.

• The community must fund and diversify Web3’s infra stack—or risk re-centralization.

II. Where Does Your DApp’s Data Come From?

To grasp the Goldsky incident, we must dissect how DApps fetch data.

The Indispensable Role of Indexers

Imagine building a lending protocol:

• Smart contracts don’t natively support queries like "Show all user positions."

• Scanning the chain manually is like "searching a million-page ledger"—possible but impractical.

This is where indexers (Goldsky, The Graph) step in, preprocessing and serving structured data.

The Graph vs. Goldsky: A Technical Divide

1. SubGraph Framework: A tool to extract and store on-chain data (e.g., contract events) in query-friendly databases.

2. Operators: Services like The Graph (decentralized) or Goldsky (centralized) that host SubGraphs.

Key Differences:

Why Developers Choose Goldsky

• The Graph’s UX is notoriously poor:

  • Developers must buy GRT, stake it to attract indexers, and wait indefinitely.

  • Accounting for GRT-based fees baffles traditional finance teams.

• Goldsky offers predictability: Pay → Use → Done.

As Sablier’s founder Paul Razvan Berg tweeted: "Publishing a SubGraph on The Graph is a UX nightmare."

III. Existing Alternatives

1. Ponder: A Self-Hosted Solution

• No vendor lock-in: Just plug in an RPC URL + Postgres DB.

• Dev-friendly: TypeScript-based, built with viem.

• Emerging monetization: Its Marble service (auto-deployment) applies "Isolation Theory"—charging only those who opt for convenience, while keeping the core open-source.

2. Local-First Design

• Apps should remain functional even if indexers fail, leveraging direct chain access when possible.

Risks Remain

• Goldsky-style outages demand self-hosted backups.

• RPC reliability issues (e.g., Safe’s recent crash due to corrupt RPC data) hint at deeper infra fragility.

Conclusion: The Path Forward

The Goldsky incident underscores a crisis in crypto’s public goods:

• Decentralized indexing (The Graph) is hampered by poor UX.

• Centralized alternatives reintroduce systemic risk.

Our Recommendations:

1. Improve The Graph’s UX: Mask GRT’s complexity behind simplified payment flows.

2. Adopt hybrid models: Use ponder for resilience + Goldsky for scale.

3. Fund infra diversity: DAOs and protocols must subsidize competing indexers.

The stakes are high: If we don’t fix indexing, "decentralized" apps will remain hostage to centralized data gatekeepers.

Unlike GENIUS, CLARITY zeroes in on first principles: what counts as a public chain, how DeFi is treated, who may issue a token, and where the lines are drawn between the SEC and the CFTC. It is explicitly the sequel to 2024’s FIT21 Act.

Only by understanding how we arrived here can we read the road ahead.

Financial Liberalization and the New Wild West
Monetary sovereignty versus inflation: the Fed protects the former in the name of controlling the latter; Trump expands the former by abandoning the latter.

The GENIUS Act cracked open the era of free-market stablecoins, slicing the Fed’s monopoly and handing slices to Silicon Valley upstarts and the Wall Street ancien régime. Yet Peter Thiel still wants the libertarian’s absolute freedom.

Flash back to 2008. The crisis turned derivatives into public enemy №1. Obama needed a technocrat to rein in a $35 trillion futures market and a $400 trillion swaps market. Enter Gary Gensler as CFTC Chair. The 2010 Dodd-Frank Act swallowed the derivatives Wild West. “We must civilize the Wild West,” Gensler declared—his first regulatory victory over markets.

History loops. In 2021, Biden nominated Gensler to chair the SEC, unleashing him on the newest frontier: crypto.

Two battlefronts emerged:

1. BTC and ETH were labeled commodities, but every other token and IXO was deemed an illegal securities offering—SOL, Ripple, and beyond.

2. High leverage on exchanges was cast as “predatory,” triggering enforcement blitzes against Coinbase, Binance, and offshore venues.

Yet Gensler’s armor had a chink: the ETF. In 2021 the SEC green-lit Bitcoin futures ETFs while stonewalling spot ETFs from Grayscale et al. By 2024, after a partial court loss against Ripple, the SEC capitulated on spot Bitcoin ETFs—crowning MicroStrategy’s circular BTC-equity-bond strategy.

Crypto, the wilder party, had conquered the SEC, CFTC, White House, Congress, the Fed, and Wall Street. The age of zero defenses was here.

Footnote: SBF’s 2022 mega-donations to Biden ended with him behind bars—arguably the trigger for Gensler’s harsher stance.

CLARITY: Crypto Gets Its Legal Name
Trump repays favors; crypto steps into daylight.

In 2025 the newly inaugurated Trump fired Gensler—Democratic relic—and installed Paul Atkins, an ally since 2016, ushering in laissez-faire maximalism.

Introduced in this backdrop, CLARITY (still mid-process: through the House, awaiting the Senate) is the capstone. The Senate’s own Digital Asset Market Structure and Investor Protection Act will almost certainly pass under Republican control.

Drawing the Lines: Digital Commodity, Digital Asset, Stablecoin
CLARITY’s current draft builds a three-tier scaffold:

1. Stablecoins are ring-fenced as payment instruments.

2. Digital commodities fall under the CFTC.

3. Digital assets remain with the SEC.

CFTC Wins Big: ETH, Decentralized Chains, and the 75-Million-Dollar Safe Harbor
ETH is a commodity; any truly decentralized L1 token is a commodity—trading supervised by the CFTC.

IXOs and SAFTs still start life as securities under the SEC, but enjoy a $75 million exemption window. If the token decentralizes within four years—no enforcement.

Digital commodities are redefined: not mere “virtual assets” but digitally embodied commodities that serve real utility for public chains, DeFi, or DAOs. They are not securities.

Caveat:

• NFTs are assets, never commodities—they are unique and lack fungibility.

• Yield, rewards, or profit-sharing tokens are commodities only if they sustain protocol decentralization. Anything else stays with the SEC.

Three Real-World Scenarios
To translate theory into practice:

1. IXO launch: securities at birth; tokens may exit that label if they meet the digital-commodity test.

2. Airdrop: points = securities; tokens that clear the test = commodities.

3. Exchange distribution: not securities unless any yield is promised.

The key test: the project must credibly evolve into a decentralized protocol, tradeable without intermediaries, and participants must not be promised profits.

Case Studies from the Past

• ETH itself is a commodity; SAFT-based fundraising for an ETH project is a securities offering. Once the protocol decentralizes, the token graduates to commodity status under the CFTC.

• Native ETH staking is a commodity—system-level behavior securing PoS. Whether third-party liquid-staking tokens (Lido, EigenLayer) qualify is still TBD.

• New L1/L2 chains that launch via SAFT or IXO have four years to decentralize—no single entity may control >20 % of tokens or votes. Generic foundations or DAO wrappers may not suffice; token dispersion will be scrutinized.

Joint Oversight and the Missing DeFi Act
CLARITY meticulously choreographs a dual-agency waltz between the SEC and the CFTC, acknowledging that digital commodities straddle virtual securities and physical commodities.

Yet DeFi operations remain gray. CLARITY has already rewritten the Securities Act, but DeFi is too consequential to be crammed into a stablecoin-chain-token omnibus. It deserves its own DeFi Act.

This is not mission creep. Consider the ongoing Tornado Cash case; co-founder Roman Storm’s fate may yet force the judiciary to accelerate legislative clarity.

Conclusion
CLARITY is the keystone of U.S. crypto regulation. It gives tokens and public chains their legal identities, delineates digital commodities, and relegates everything else—NFTs, stablecoins, tokenized real-world assets—to the asset bucket.

But DeFi still wanders the frontier. Until a dedicated DeFi statute arrives, the industry will watch every courtroom as closely as every congressional hearing.

The line between digital banking and cryptocurrency is blurring fast. Fintech groups are rushing to harness the explosive growth of crypto assets to win U.S. customers, and they’re doing it by barging straight into traditional finance.

---

New York-Based Circle: A National Trust Charter Would Be “Pivotal”

Circle, headquartered in New York, says securing a national bank-trust charter from the Office of the Comptroller of the Currency (OCC) would mark “an important step” toward weaving digital assets into the wider financial system. At present, Anchorage Digital remains the only crypto-native company to hold such a federal charter.

---

Ripple, Circle, BitGo, and Kraken File or Plan Banking Moves

Crypto-payments giant Ripple, stable-coin issuer Circle, and custody specialist BitGo have all submitted applications for national trust-bank charters—licenses that allow limited banking services without taking retail deposits. Exchange Kraken, meanwhile, expects to roll out debit and credit cards next month.

“It’s a natural convergence,” Kraken co-CEO Arjun Sethi told the Financial Times, adding that the cards should launch “around the end of this month.”

---

From “We Don’t Need Banks” to “Please Regulate Us”

The scramble underscores how crypto companies now aspire far beyond trading tokens. Confidence has soared under President Donald Trump’s crypto-friendly White House, a sharp reversal from the perceived hostility of the Biden era.

“This is the exact opposite of the original crypto ethos—‘we don’t need banks, we don’t need laws, we’re above it all,’” notes Max Bonici, partner at law firm Davis Wright Tremaine. “Now the refrain is ‘please regulate us.’”

---

What a National Trust Charter Actually Does

National trust banks can safeguard assets and process payments, but they cannot make loans or accept deposits directly. The charter also spares firms the patchwork of state-by-state licensing and smooths their on-ramps into the broader financial plumbing.

---

Stablecoin Legislation Looms

Washington is actively debating a stable-coin bill that would tether dollar-pegged tokens even closer to the traditional system.

“It effectively opens the U.S. financial market to stable-coins,” says Adam Chernichaw, partner at Pillsbury.

The draft Genius Act would tighten oversight and require issuers to back tokens with U.S. Treasuries—permissioned only for regulated banks and certain OCC-licensed non-banks.

---

Ripple Eyes a Fed Master Account

Ripple CEO Brad Garlinghouse revealed the company has also applied for a Federal Reserve master account, which would let it park stable-coin reserves directly at the central bank.

---

Robinhood, Revolut, and Klarna Join the Banking Push

Retail brokerage Robinhood—whose crypto trading revenue surpassed 50 % of total revenue last year—plans to launch limited banking services this autumn.

“We should be able to satisfy all of your financial needs,” CEO Vlad Tenev told the FT. “No need to worry about taxes, estate planning, or moving money around.”

London-based neobank Revolut, likewise reliant on crypto trading for a sizable slice of income, still eyes a full U.S. bank license. Klarna CEO Sebastian Siemiatkowski intends to fold crypto products into the buy-now-pay-later platform.

---

Big Banks Plot Their Own Stablecoins

Even traditional giants like Bank of America are preparing to issue their own stablecoins once U.S. rules are finalized.

“This administration has signaled it will open the chartering process in ways previous administrations did not,” says David Portilla, partner in the financial-services group at Davis Polk.

---

Not Everyone Wants a Banking License

Yet not every crypto firm believes a federal charter is necessary. Kraken, already licensed in Wyoming, is rolling out a new consumer app without pursuing either a national trust charter or a master account.

“We don’t want to be the bank that gives you a mortgage,” Sethi explains. “We just want to partner with whoever provides the best service.”

The ICM (Internet Capital Market) narrative, fueled by $Launchcoin's explosive 300x surge in May, has become a magnet for Web2 entrepreneurs and crypto traders alike. However, early hype-driven projects like $goonc and $startup, lacking real utility, raised sustainability concerns—especially after incidents like deleted tweets and disappearing founders.

Now, as the dust settles, quality projects with solid fundamentals are emerging, restoring faith in the Believe platform and pushing $Launchcoin back above a $200M market cap. Here’s a deep dive into five standout projects poised for growth.

1. Kled: The On-Chain Middleman for AI Data

Overview:

• A decentralized marketplace connecting AI developers with data providers (video, audio, text).

• Backed by K5 Capital ($2M funding), founded by Avi Patel (ex-Nitrility music copyright platform).

Recent Catalysts:

• V2 launch with enterprise deals: Partnerships with YouTube, Twitch, Google Classroom.

• Hackathon collaboration with Stanford & UC Berkeley.

• Tokenomics: 8% of supply burned via transaction taxes (deflationary model).

Price Action:

• Survived early "contract bug" FUD, now $40M+ market cap (Believe’s top project).

2. Polycule: Polymarket’s Telegram Trading Bot

Overview:

• A Telegram bot enabling seamless trading on Polymarket (bypassing U.S. geo-blocks).

• Funded by AllianceDAO ($560K), endorsed by Polymarket’s CEO Shayne.

Recent Catalysts:

• X (Twitter) x Polymarket partnership: Predictive data integrated with Grok AI.

• Revenue model: 0.01–0.05% fee per trade, with 30% used for token burns.

Why It Matters:

• Solves Polymarket’s #1 adoption barrier (U.S. restrictions).

3. Knet: AI-Powered Game Development (Backed by a Public Co.)

Overview:

• AI-native game dev platform (natural language coding).

• Supported by Kaiying Network (SZ:002517, $510M revenue in 2024).

Key Advantages:

• Partnerships with Alibaba Cloud (GPU resources) and Sequoia-backed ARAI.

• Corporate backing reduces "rug risk"—rare in crypto.

Recent Momentum:

• Alibaba Cloud’s public shoutout triggered a price surge.

4. Jatevo: Decentralized LLM Inference

Overview:

• GPU rental + AI inference for models like DeepSeek R1/V3, Llama 4.

• Partners: LandingCraft.id (SME solutions), hardware providers.

Token Utility:

• Pays for AI model calls and GPU leases.

• Future: Staking for fee discounts + governance.

Growth:

• 70x pump in a week ($100K → $7M MC).

5. Fitted: AI Fashion & On-Chain Commerce

Overview:

• AI stylist app + NFT-based二手 fashion marketplace.

• 30M+ downloads, 120K+ uploaded outfits.

Big-Name Collabs:

• Paramount (Clueless 30th-anniversary NFTs).

• Nike, The North Face brand integrations.

Tokenomics:

• $FITCOIN used for AI services, governance, and burns.

• Loyalty program: Earn tokens via engagement.

The Future of ICM

Believe’s new anti-sniping mechanism (high initial taxes to deter flippers) aims to foster long-term projects. With Solana endorsing ICM and Web2 talent flooding in, the ecosystem’s next phase could be even bigger.

Key Takeaway:
After the hype cycle, real utility wins. Watch these five projects—they’re leading Believe’s comeback. 🚀

(For more alpha, follow BlockBeats’ real-time updates.)

• Wrapped Bitcoin (e.g., WBTC and cbBTC) extends Bitcoin's utility beyond its native network, enhancing cross-chain accessibility and interoperability.

• Different wrapped Bitcoin variants employ distinct custody models and governance structures—ranging from fully centralized issuers (e.g., Coinbase’s cbBTC) to decentralized, smart contract-based systems (e.g., Threshold’s tBTC).

• WBTC has the largest supply (~129K BTC), but cbBTC is rapidly gaining share (~43K BTC on Base and Solana). Combined, they represent over 172K wrapped BTC, utilized differently across blockchains.

• Wrapped Bitcoin is widely adopted in DeFi: WBTC dominates Ethereum DEXs (led by Uniswap v3), while cbBTC sees more activity on platforms like Aerodrome. Over $7B in WBTC and cbBTC is locked in lending protocols (e.g., Aave, Morpho) for borrowing/lending.

Introduction

Bitcoin’s scarcity and predictable monetary policy make it an ideal "store of value," with ownership increasingly concentrated among long-term holders, ETFs, and corporations. But as BTC is "hoarded," its $2T native token remains underutilized—what does this imply?

To address this, a growing ecosystem of products aims to put Bitcoin to work: from BTC-backed lending (e.g., Coinbase’s partnership with Morpho, Cantor Fitzgerald’s credit facilities via Maple Finance) to Bitcoin L2s, cross-chain wrapped assets, and treasury tools like Strategy.

This article explores the evolving landscape of tokenized Bitcoin, focusing on WBTC and cbBTC, and how they expand BTC’s utility across chains.

The State of Tokenized Bitcoin

Demand for using Bitcoin on smart contract platforms has spawned tokenized variants, the largest category being wrapped Bitcoin—BTC-pegged tokens issued on other blockchains, backed 1:1 by custodial BTC via mint/burn mechanisms.

Wrapped Bitcoin enhances accessibility and interoperability, offering programmability and low-cost execution unavailable to native BTC. Below is a comparison of major variants:

While all aim to extend Bitcoin’s utility, their trust assumptions vary: from fully custodial (cbBTC) to DAO-managed (WBTC) to trustless (tBTC). Users relinquish custody to third parties in exchange for tokenized representations.

Beyond these, liquid staking Bitcoin derivatives like Lombard’s LBTC (secured via Babylon Protocol) are emerging, allowing BTC holders to earn staking yields on PoS chains.

WBTC vs. cbBTC: A Shifting Landscape

Since January 2023, the market cap of wrapped Bitcoin has grown 5x, driven by BTC’s price surge and new cross-chain offerings. The two largest tokens—WBTC (BitDAO) and cbBTC (Coinbase)—collectively represent 172K BTC (~$12B).

• WBTC (launched in 2019) once dominated but has seen slowing demand since BitDAO assumed control in September 2024.

• cbBTC, launched on Base, Ethereum, and Solana, has rapidly gained traction, offsetting WBTC’s decline.

As of June 1, 2025:

• WBTC: 128.8K BTC (81% market share).

• cbBTC: 43K BTC (19%), distributed across Ethereum (27.6K), Base (13.2K), and Solana (23K).

Cross-Chain Bitcoin Activity

Active addresses and transfer volumes reveal how tokenized BTC is used across ecosystems:

1. User Adoption

• Base’s cbBTC leads with ~7K daily active addresses (low fees, Coinbase integration).

• Solana follows with growing activity since April (low-cost, high-throughput).

• Ethereum sees fewer but larger transactions, indicating lower retail engagement.

2. Transfer Volume

• Base’s cbBTC dominates with ~$40B weekly transfers (excluding April’s exploit-related outliers).

• Ethereum’s WBTC trails at ~$1B weekly.

3. Velocity

Wrapped Bitcoin circulates faster than native BTC, underscoring its role in DeFi:

• Base cbBTC > Solana cbBTC > Ethereum cbBTC > WBTC.

Wrapped Bitcoin in DeFi

WBTC and cbBTC unlock Bitcoin’s use in trading, lending, and liquidity provision without selling holdings.

1. DEX Trading

• Ethereum: WBTC dominates (Uniswap v3). cbBTC volume is minimal.

• Base: cbBTC leads, with Aerodrome peaking at $2.5B daily volume in early 2025.

2. Lending Markets

Over $7B in WBTC/cbBTC is locked in protocols like Aave, Morpho, and Spark:

• WBTC: $5B (mostly Ethereum).

• cbBTC: $2B (Base/Ethereum).

However, custodial risks persist. Users must weigh convenience against centralization.

Conclusion

While Bitcoin’s "store of value" narrative remains entrenched, WBTC and cbBTC are expanding its utility:

• Enabling cross-chain mobility.

• Powering DeFi applications.

• Bridging Bitcoin’s monetary reserve status with programmable economies.

As rollups and sidechains evolve, tokenized Bitcoin will likely remain a critical bridge—balancing trust assumptions with the demand for liquidity and innovation.

Data adjustments: Excluded outlier transactions (e.g., Impermax exploit on Base) to reflect organic activity.

On September 15, 2008, Lehman Brothers collapsed, sending global financial markets into panic. The Federal Reserve’s response was astonishing—it launched a near-magical operation: Quantitative Easing (QE). Within years, the Fed’s balance sheet ballooned from 800billionto4.5 trillion, creating trillions of dollars out of thin air.

Meanwhile, across the Atlantic, a mysterious figure using the pseudonym Satoshi Nakamoto was testing a new monetary system on internet forums. On January 3, 2009, Nakamoto embedded a message in Bitcoin’s genesis block:

"The Times 03/Jan/2009 Chancellor on brink of second bailout for banks."

This was a declaration of war—Bitcoin’s birth was a mockery of the traditional financial system.

By 2022, another collapse occurred. Bitcoin plummeted from 69,000to16,000, wiping out countless speculators. The Fed intervened again, but this time, its enemy wasn’t banks—it was cryptocurrencies.

These two seemingly unrelated crises point to the same question: What determines the value of money?

The "Anchor" of Money: Who Controls Your Wealth?

Throughout history, money has taken many forms—shells, gold, paper, digital codes. But no matter the form, money must have an "anchor", a basis for its issuance. Without one, it’s like a skyscraper without a foundation—destined to collapse.

The anchors of traditional money have undergone three major shifts:

1. The Gold Anchor (19th Century–1971):

• Your $1 could be exchanged for 0.888 grams of gold. The Fed had to hold enough gold to print money.

• In 1971, Nixon decoupled the dollar from gold, ushering in the "credit era"—money’s value was no longer backed by gold but by government promises.

2. The Debt Anchor (1971–2008):

• Modern money is debt. The dollar no longer relies on gold but on U.S. Treasuries—the Fed prints money to buy Treasuries, and the government repays with taxes, forming a closed loop.

• After 2008, this system began to unravel. Central banks stopped buying just Treasuries—they bought corporate bonds, ETFs, even junk bonds. The "anchor" became increasingly vague.

3. The Algorithmic Anchor (2009–Present):

• Bitcoin’s anchor is mathematics—a fixed supply of 21 million coins, coded and immutable.

• But the 2022 crash proved that even "decentralized money" isn’t immune to liquidity crises and market manipulation.

The Secret War: Central Banks vs. Cryptocurrencies

In 2020, former Fed Chair Alan Greenspan said cryptically:

"Bitcoin reminds me of gold in its heyday, but gold is at least physical. Bitcoin is just a string of code."

This reveals the fear of financial elites—not Bitcoin’s price volatility, but its philosophy:

• Fed’s money = Infinite issuance, controlled by central banks.

• Bitcoin’s money = Fixed supply, controlled by code.

This is a war over monetary issuance rights.

In 2023, global central banks struck back:

• China launched the digital yuan, with every transaction traceable.

• The Fed secretly studied the "digital dollar", trying to reclaim crypto territory.

• The Bank for International Settlements (BIS) warned: "Stablecoins threaten financial stability."

But Bitcoin believers held firm. They believe the future monetary system has only two possibilities:

• Central Bank Digital Currency (CBDC) → Totalitarian money, mass surveillance.

• Bitcoin & Decentralized Money → Free money, censorship-resistant.

Contact for inquiries: Real-World-Assets

The Anchor of Real Money: From Gold to Debt

The Golden Age: Money’s "Divine" Anchor

London’s Vaults and the World’s Shackles

In 1815, Napoleon was defeated at Waterloo. While Europe cleared the rubble, City of London bankers smelled wealth. Rothschild’s carrier pigeons brought news faster than the British army. Nathan Rothschild dumped British bonds, creating panic, then bought them at rock-bottom prices. Overnight, the Jewish banking family controlled Britain’s economic lifeline.

But real power lay not in bonds, but in gold.

In 1816, Britain passed the Gold Standard Act, legally binding the pound to 7.322 grams of pure gold—the first time in history. London bankers laughed—they controlled not pounds, but global gold flows.

The "Perfect Lie" of the Gold Standard

The gold standard seemed fair:

• You needed gold to print money.

• Paper notes were receipts for gold, redeemable anytime.

But reality was dirtier:

1. Bankers’ "Alchemy"

   • The Bank of England could issue 100% pounds with just 20% gold reserves.

   • 80% of money was "created out of thin air" as debt.

2. Colonial Gold Plunder

   • Britain enforced pound settlements in India and South Africa while looting gold mines.

   • Indian farmers exchanged grain for paper notes, unaware there wasn’t enough gold backing them.

3. Rothschild’s "Gold Cartel"

   • The family controlled gold pricing in London, Paris, and Frankfurt.

   • In 1869, they shorted silver, destroyed the U.S. silver standard, and forced the world onto gold.

1929: The Death Sentence for the Gold Standard

On October 24, 1929, the New York Stock Exchange crashed. Few knew the real culprit wasn’t speculators—it was the gold standard.

• Fed’s Folly: To protect gold reserves, it hiked interest rates, causing mass bankruptcies.

• France’s "Gold Hoarding": Paris suddenly demanded gold repayment for war debts, draining global liquidity.

• Hoover’s Despair: In 1931, he begged France to halt gold demands but was ignored.

In 1933, Roosevelt confiscated U.S. citizens’ gold by executive order, fining violators 10,000(equivalentto200,000 today). Overnight, the dollar devalued 40%, robbing Americans of their savings.

But who really won?

• J.P. Morgan and Rockefeller cartels transferred gold to Switzerland in advance.

• The Bank of England snapped up global gold at fire-sale prices, cementing London’s financial dominance.

The End of the Golden Age: Bankers’ "Deicide"

In 1944, the Bretton Woods Conference convened. Ostensibly, allies debated the postwar monetary system. In reality, it was a carve-up by British and American bankers.

• Keynes’s Proposal: Create a super-sovereign currency, "Bancor," rejected by the U.S.

• U.S. Treasury Secretary Morgenthau’s Smirk: "The future currency will only be the dollar."

But the dollar’s gold standard was a fraud. On August 15, 1971, Nixon decoupled the dollar from gold—ushering in the "anchorless era" of human currency.

Ironically, when the public demanded, "Why is the dollar valuable?" Fed Chair Burns replied dismissively:

"The dollar has value because foreigners believe it has value."

Bretton Woods: The Dollar’s "Pseudo-Gold Standard"

1944’s Backroom Deal: The Dollar’s Coronation

In July 1944, the Bretton Woods town in New Hampshire was heavily guarded. Delegates from 44 nations gathered to rebuild the postwar monetary order—or decide who would dominate global finance.

• Britain’s Keynes proposed a revolutionary "Bancor," issued by an international clearing union. But U.S. delegate Harry Dexter White (later exposed as a Soviet spy) sneered: "The world needs only one currency—the dollar."

After two weeks of clashes, the U.S., with 70% of global gold reserves and the only unscathed economy, forced through an unprecedented agreement:

• Dollar tied to gold ($35/ounce).

• Other currencies tied to the dollar.

• IMF established, with U.S. veto power.

Keynes fumed: "This isn’t a monetary system—it’s dollar imperialism!"

De Gaulle’s Gold Uprising: Exposing the U.S. Scam

In 1965, French President de Gaulle did something that enraged Washington—he sent warships to the New York Fed to demand France’s gold reserves.

"The dollar has been printed recklessly!" de Gaulle waved a dollar bill in a TV speech. "America exchanges our goods for ‘pieces of paper’ but refuses gold!"

The numbers were shocking:

• 1944: U.S. gold reserves = 20,000 tons (70% global).

• 1970: U.S. gold reserves = 8,000 tons; European vaults overflowed with dollars.

The U.S. played a game of "empty-handed swindling":

• Flooded Europe with dollars via the Marshall Plan.

• Paid trade deficits (oil, arms) in dollars.

• When foreign governments demanded gold, pressured them with "threats to financial stability."

August 15, 1971: Nixon’s "Monetary Coup"

In summer 1971, Britain demanded $3 billion in gold. Nixon’s economic advisor Paul Volcker (later Fed Chair) warned: "If we pay, U.S. gold reserves will empty in three months."

On August 15, Nixon announced in a national TV address:

"The U.S. will suspend dollar-gold convertibility."

The "Nixon Shock."

Global markets collapsed. Gold soared from 35to800.

• Bank of Japan governor knelt, weeping: "Our dollar reserves are worthless!"

• Saudi king secretly contacted de Gaulle: "Can we settle oil in francs?"

Petrodollar: America’s New "Anchor"

In 1973, the U.S. and Saudi Arabia struck a secret deal:

• All Saudi oil sales must be in dollars.

• The U.S. provides military protection to the Saudi royal family.

• Excess dollars recycle into U.S. Treasuries.

This birthed the "petrodollar" system—the dollar no longer needed gold but black gold (oil) as its new anchor.

Ironically, the Keynesians who opposed the gold standard now cheered: "The era of flexible credit money has finally arrived!" They didn’t realize this handed monetary issuance power entirely to the Fed’s printing press.

The Modern Monetary "Black Hole": Debt as Money

The Fed’s "Alchemy": Creating Trillions Out of Thin Air

After the 2008 financial crisis, Fed Chair Bernanke did something unprecedented—he opened a computer, typed a few zeros, and created $1.7 trillion out of thin air to buy toxic bank assets.

"Where does this money come from?" a reporter asked.
Bernanke smiled: "We just issue credit via electronic bookkeeping."

This is the truth of the modern monetary system:

• Money isn’t printed—it’s "lent."

• Every dollar in circulation corresponds to a dollar of debt.

• The Fed doesn’t need gold—just a keyboard.

"Too Big to Fail" Banks: Guardians of the Debt Black Hole

In 2012, JPMorgan lost $6.2 billion in derivatives gambling. CEO Jamie Dimon called Treasury, and the next day, the Fed launched "emergency liquidity support."

Ironically, that same year, a U.S. college student committed suicide over unpaid loans. Treasury’s response: "Individual debt is your own responsibility."

The unspoken rules of modern finance are stark:

• Bank debt = Taxpayer bailout (U.S. spent $23 trillion post-2008).

• Personal debt = Credit ruin (U.S. student loans hit $1.7 trillion in 2023).

A BIS confidential report revealed: Global debt-to-GDP ratio hit 356%, yet central banks keep printing to delay crisis.

China’s "Dual Anchoring": Land and Forex

While the West obsessed over debt monetization, China invented a stealthier anchor:

Anchor 1: Foreign Exchange Reserves

• After joining the WTO in 2001, China’s mandatory forex settlement converted export dollars into RMB base money.

• At its peak, every $1 inflow led to 6.2 RMB issuance.

Anchor 2: Land Finance

• Local governments earned revenue from land sales; banks issued loans secured by land.

• In 2021, China’s M2 was 2.2x GDP—a global anomaly.

But these anchors are loosening:

• 2023: Forex reserves fell by $200 billion.

• Land auction failure rate exceeded 30%.

Negative Interest Rates: The Last Gasp of the Monetary System

• 2016: Bank of Japan owned 80% of the ETF market.

• 2019: Germany issued the world’s first 30-year negative-yield bond.

• 2020: Fed balance sheet surpassed $8 trillion...

These surreal realities reveal debt monetization has hit its limits. When asked, "How will you exit QE?" BOJ Governor Kuroda fell silent, then said:

"We haven’t considered that."

The Ultimate Question: How Far Can Anchorless Money Go?

In March 2023, Silicon Valley Bank collapsed in 48 hours. Investigations found it invested deposits in "risk-free" U.S. Treasuries but lost $25 billion due to Fed rate hikes.

This exposed modern money’s Achilles’ heel:

• Dollar’s anchor = U.S. Treasuries.

• Treasuries’ anchor = Tax capacity.

• Tax’s anchor = Real economy.

With U.S. manufacturing at 11% of GDP, how much credit remains? As Soros warned:

"The global monetary system is sliding from ‘credit economy’ to ‘fraud economy.’"

The Anchor of Virtual Money: Code and Faith

The Cypherpunks’ Revenge: The Birth of Bitcoin

October 31, 2008: An Email That Changed the World

As Lehman’s collapse rocked global markets, a mystery figure—or group—using the pseudonym Satoshi Nakamoto posted a paper to a cryptography mailing list:

"Bitcoin: A Peer-to-Peer Electronic Cash System"

This 9-page paper, lacking grandiloquence, concealed a bomb capable of upending financial order:

"What we need is an electronic payment system based on cryptographic proof instead of trust."

This struck at modern finance’s core—central banks’ monopoly on money issuance.

Three Decades of Cypherpunk Dormancy

Nakamoto wasn’t a sudden arrival. His ideas trace back to:

• 1992: Mathematician Timothy May founded the "Cypherpunks," declaring:
  "States can’t control crypto forever—this is a war of technology against tyranny."

• 1998: Chinese engineer Wei Dai proposed B-money, the first decentralized currency concept.

• 2005: Computer scientist Nick Szabo invented Bit Gold but couldn’t solve the "double-spending" problem.

All failed due to one fatal flaw: How to prevent spending the same money twice?

Until Nakamoto solved it with blockchain—

The Genesis Block’s Hidden Code

At 18:15:05 on January 3, 2009, Bitcoin’s first block (height 0) was mined. Nakamoto permanently embedded that day’s Times headline:

"Chancellor on brink of second bailout for banks."

This was no coincidence.

• Timing: Coincided with Britain’s second bank bailout.

• Metaphor: Traditional finance was rotten—it needed to be rebuilt.

Early miner Hal Finney (who died of ALS in 2014) recalled:
"Nakamoto felt like someone from Eastern Europe who’d witnessed hyperinflation."

Dark Economics: Bitcoin’s "Anti-Central Bank" DNA

Every Bitcoin design mocks the current monetary system:

On May 22, 2010, programmer Laszlo bought 2 pizzas for 10,000 BTC (now worth >$600 million). This first Bitcoin transaction inadvertently revealed Nakamoto’s ultimate goal:

Not to create "digital gold," but to build a "parallel financial system beyond central bank control."

Nakamoto’s Final Warning Before Disappearing

On April 23, 2011, Nakamoto’s last email to developers read:

"I’ve moved on to other things... Gavin [Bitcoin Core developer] now has full control over the code."

Then vanished.

Conspiracy theories abounded:

• NSA agent? (Bitcoin’s algorithm relies on NSA-developed SHA-256.)

• Assassinated? (Bitcoin Foundation chief scientist "committed suicide" after FBI investigation in 2013.)

• AI? (Code style suggests non-human authorship.)

But more likely—he/they completed their mission. As the genesis block’s code implied:

Money shouldn’t be a toy of power—it should be a crystallization of mathematics.

Ethereum and "Smart Contracts": Redefining Money

Winter 2013: A 19-Year-Old’s Fury

In his dorm at the University of Waterloo, 19-year-old Vitalik Buterin (Russian-Canadian) angrily closed a Bitcoin forum page.

His proposal—"Bitcoin should support more applications"—was ridiculed by core developers:
"Bitcoin just needs to be digital gold—don’t complicate things!"

This teenager did what geeks do best—he wrote code to overthrow the old system.
In November 2013, he released the Ethereum White Paper, opening with a provocative line:

"Bitcoin is a calculator—we’re building a computer."

Smart Contracts: A "Genetically Modified" Revolution in Money

Ethereum’s core innovation was a dangerous yet captivating concept—smart contracts.

• Traditional money: Only for payment (e.g., Bitcoin transfers).

• Genetically modified money: Programmable (e.g., "auto-repay loan + invest when salary arrives").

2016 Real-World Case:
A German company issued bonds via Ethereum with a clause:
"If stock price falls below €5, automatically trigger debt-to-equity conversion."

No lawyers, no courts—code is law.

JPMorgan CEO Jamie Dimon panicked:
"This is 100x more dangerous than Bitcoin—it’s dismantling the entire financial intermediary system!"

The DAO Hack: A $60 Million "Code Jailbreak"

On June 17, 2016, Ethereum faced an epic crisis.

The DAO, a decentralized fund managing 150millioninETH,washackedviaasmartcontractflaw,losing3.6millionETH(60 million).

The absurdity:

• Technically, it wasn’t theft (the hacker followed contract rules).

• Community proposed "transaction rollback" (equivalent to rewriting blockchain history).

Ethereum hard-forked into ETH and ETC. This moral dilemma exposed decentralized worlds’ fatal flaw:
When code conflicts with humanity, who has the power to hit "undo"?

DeFi (Decentralized Finance): Wall Street’s Nightmare

In summer 2020, an Ethereum app called Uniswap quietly launched. With no corporate entity, it achieved:

• 24/7 automated market-making (replacing Goldman Sachs traders).

• 0-human-review loans (replacing Citi’s risk departments).

• 1000% annualized liquidity mining (mocking the Fed’s 0% rates).

Traditional finance’s fig leaf was torn off:

In September 2021, U.S. SEC Chair Gary Gensler admitted:
"DeFi could make securities laws obsolete."

Vitalik’s Ambition: Ethereum’s "Ultimate Weapon"

On September 15, 2022, Ethereum completed "The Merge," switching from energy-guzzling Proof-of-Work (PoW) to Proof-of-Stake (PoS).

• Energy use cut by 99.95% (debunking "Bitcoin isn’t green" claims).

• Stake ETH to "print money" (4-12% annual yield, rivaling Treasuries).

But the scariest detail: The Ethereum Foundation holds over $10 billion in ETH.

This raises a soul-searching question:
When a "decentralized" project’s founding team holds more monetary issuance power than the Fed,
have we escaped centralization or created new gods?

Stablecoin Shadow Wars: The Dollar’s Ghost in USDT

2014’s Magic: Dollars Appearing Out of Thin Air

In 2014, obscure Hong Kong firm Tether Limited launched USDT, claiming each token was backed by $1.

But the mysteries:

• No bank publicly admitted holding its funds.

• Audit reports remained vague.

• Founders overlapped heavily with Bitcoin exchange Bitfinex.

This resembled the wildcat banknote chaos before Britain’s 1844 Bank Charter Act—except this time, the dollar was on the blockchain.

The "Fractional Reserve" Crypto Version

In 2021, the New York Attorney General’s office exposed:

• Only 2.9% of Tether’s reserves were cash; over 65% were commercial paper (short-term corporate debt).

Even more shocking:

• Most commercial paper came from Chinese real estate firms (Evergrande’s 2021 collapse caused USDT to briefly de-peg).

• Bitfinex used $850 million in client funds to plug Tether’s hole.

This revealed a dark reality:
USDT essentially uses crypto investors’ money
to issue "shadow loans" to high-risk enterprises!

The Fed’s "Trojan Horse"

After TerraUSD (UST) collapsed in 2022, people discovered:

But the paradox:

• The U.S. Treasury investigated USDT multiple times but never shut it down.

• USDT’s daily trading volume exceeds $60 billion (70% of all crypto trading).

Former CFTC Chair Christopher Giancarlo revealed:
"Some ‘compliant stablecoins’ may be test beds for CBDCs."

2023: Stablecoins’ "Nuclear Button" Moment

In March 2023, SVB’s collapse caused USDC (the second-largest stablecoin) to briefly de-peg.

• Circle admitted $3.3 billion in reserves were trapped in SVB.

• USDC price plunged to $0.87, triggering a crypto market crash.

This crisis exposed stablecoins’ fatal flaw:
They’re never truly "decentralized"—
they just swap dependence on central banks for dependence on commercial banks like JPMorgan.

The Digital Yuan’s "Dimensionality Reduction" Attack

In September 2023, China’s digital yuan cross-border payment system launched, offering:

• Zero-fee currency swaps (challenging USDT’s cross-border remittance business).

• Traceable but anonymous transactions (more regulatory-friendly than Bitcoin).

A BIS report revealed:

• 83% of central banks are developing CBDCs,

• Main motive: curbing private stablecoins.

This signals the future monetary war’s main battlefield:
Not Bitcoin vs. dollar,
but USDT-style private stablecoins vs. national CBDCs.

The Future Monetary War: Who Will Control Anchoring Rights?

The Great Reset: The Collapse and Reconstruction of the Global Monetary System

2024 Black Swan: Sovereign Debt Default Dominoes

In January 2024, the Bank of Japan abruptly abandoned yield curve control (YCC), sending its 10-year bond yield soaring to 2%. This tipped the first domino:

• Italian bonds dumped (debt/GDP = 150%).

• U.S. corporate bond ETFs plunged 7% in a day (junk bond yields topped 12%).

• U.K. pension funds faced margin calls again.

The Institute of International Finance (IIF) warned urgently:
"Global sovereign debt crisis has spread from emerging markets to developed nations."

This crisis’s roots trace back to 2008—central banks delayed it with $14 trillion in QE but worsened the debt tumor.

The Goldbugs’ Last Stand

In March 2024, hedge fund titan Paul Singer and Saudi’s sovereign fund launched the largest gold acquisition in history:

• Secretly bought 300 tons of physical gold (10% of global annual output).

• Launched "GLD-C," a gold-backed stablecoin (1 token = 1g London vault gold).

In his letter to investors, Singer wrote:
"When central banks start dumping each other’s debt,
only gold is the ultimate settlement tool."

Meanwhile, Bitcoin extremists held a secret conference in El Salvador, plotting:

• Building a decentralized sovereign debt market (issuing bonds collateralized by BTC).

• Developing quantum-resistant privacy coins (to counter government blockchain surveillance).

CBDCs’ "Orwellian" Nightmare

In June 2024, Nigeria erupted in nationwide protests—the government mandated eNaira and declared:

• Cash transactions illegal.

• Citizens not using CBDCs ineligible for fuel subsidies.

The IMF hailed this as a "success case" and recommended Egypt, Pakistan follow suit.

Scarier technical details:

• China’s digital yuan can set "spending ranges" (e.g., poverty relief funds only buy rice, flour, oil).

• EU’s digital euro proposal includes "negative interest rates to penalize savings."

Former Fed Governor Kevin Warsh warned:
"CBDCs will be history’s most powerful social control tool—
100x scarier than ID cards or credit scores."

Ordinary People’s Survival Rules

In this monetary reset, asset class performances shocked:

Survival strategies polarized:

• Singapore family offices: Hold BTC + gold + Swiss private bank accounts.

• U.S. middle class: Stockpile ammo, canned food, medicine (2024 Walmart empty shelves photos went viral).

2030 Ultimate Prediction: What Lies at Money’s End?

When a Nobel laureate in economics, Paul Krugman, was asked, "Which currency will win in the future?" he gave a shocking answer:

"Maybe in-game currency—like Genshin Impact’s Primogems.
After all, global gamers already outnumber central bank currency users."

This isn’t entirely absurd:

• Tencent’s Q-coin has a grey economy circulation value exceeding $10 billion in China.

• Musk’s X platform is testing "tipping tokens."

The endgame of monetary evolution may be:
No need for an "anchor," as humanity returns to tribal economies based on attention/credit.

Conclusion: The Ultimate Disillusionment and Rebirth of Money’s Anchor

History’s Irony: We’ve Come Full Circle

In 1971, when Nixon decoupled the dollar from gold, economist Milton Friedman cheered:
"Money is finally freed from the barbaric metal shackles!"

Half a century later, we see:

• Bitcoin extremists bury cold wallets at El Salvador’s volcanoes, like medieval monks guarding vaults.

• Fed officials secretly study embedding blockchain into the digital dollar but publicly insist "crypto is a scam."

• African farmers buy Ukrainian wheat with USDT while both nations’ fiat currencies collapse under sanctions.

Humanity’s quest for money resembles a lost traveler in a desert—
thinking they’re marching toward an oasis,
only to return to their original footprints.

AI and Money: The Final Transfer of Power?

In 2024, ChatGPT’s financial derivative AutoTrader-7 demonstrated terrifying capabilities:

• Predicting Fed rate decisions 12 hours early by analyzing officials’ microexpressions.

• Shorting national currencies with "too high CBDC social scores."

When asked about the "ideal monetary system," it replied:
"The optimal solution is algorithmically adjusted ‘carbon credit coins.’
Human carbon emissions rights are the best anchor."

This hints at the most likely future scenario:

• AI takes over money issuance (adjusting supply based on real-time economic data).

• Humans become "credit miners" (mining via eco/social behaviors).

• The last rebels retreat to privacy coins and barter.

A confidential report from Swiss private bank EFG revealed:
"Since 2023, ultra-high-net-worth clients allocate 11% of assets on average to ‘AI-resistant currencies’ (e.g., Monero, physical platinum)."

The Essence of Money: A Quantum State of Collective Hallucination

Looking back at monetary history, a paradoxical pattern emerges:

Yale professor Chen Zhiwu declared:
"Money’s essence isn’t value storage—
it’s human faith that ‘others will accept it.’"

When Gen Z on TikTok uses Bilibili coins for cross-border代购, when Russia bypasses SWIFT with Bitcoin + gold, we finally understand:

The real "anchor" is never in metal or code—
it’s in the collective will of a billion people clicking "confirm transaction."

Final Advice for Doomsday Survivors

If the 2030 monetary war erupts, remember three iron laws:

1. Don’t迷信 any "absolutely safe" asset

   • Bitcoin may be cracked by quantum computers.

   • Gold may face "synthetic precious metal" competition.

   • Real estate may devalue due to climate migration.

2. Master at least three payment system survival skills

   • Cryptocurrency (censorship-resistant).

   • Barter (end-of-days hard currency).

   • Cross-border social networks (Asia’s "guanxi economy" model).

3. Beware the gentlest tyranny—convenience

   • When CBDCs lure users with "scan code for red packets,"

   • When brain-machine interfaces promise "thought payment with no fees,"

   • That’s the start of new monetary slavery.

Final Conjecture: Will Money Disappear?

On Lake Titicaca’s shores in the Andes, indigenous tribes still use potato starch blocks as debt tokens. These "currencies" have no interest rates, need no blockchain, and their shelf life syncs with potato harvest cycles.

Perhaps as anthropologist David Graeber argued in Debt: The First 5000 Years:
"Money was never a tool naturally born from markets—
it’s the scar of eternal power vs. resistance struggles."

When a solar flare one day destroys all electronic ledgers,
we’ll finally remember—
money’s most primitive anchor
is merely human beings gazing at each other’s promises.

Today, Bitcoin’s ecosystem is undergoing a profound transformation. The emergence of Layer 2 (L2) solutions is injecting new life into this "sleeping giant." This article delves into Bitcoin’s current state, the evolution of its L2 ecosystem, and the promising future ahead.

Bitcoin’s Status Quo and Limitations

Since its inception in 2009, Bitcoin has proven its mettle as a decentralized store of value. However, compared to smart contract-enabled blockchains like Ethereum, Bitcoin lags significantly in application development. This is primarily due to several key limitations:

1. Limited Programmability: Bitcoin lacks flexible smart contract capabilities.

2. Slow Transaction Speeds: A new block is generated every 10 minutes, with confirmations typically taking 10–30 minutes.

3. Scalability Issues: The network processes only ~3–7 transactions per second (TPS).

4. Lack of Interoperability: BTC assets are confined to the Bitcoin network, making cross-chain interactions difficult.

These constraints are not design flaws but intentional trade-offs to prioritize security and decentralization. Yet, they have stifled Bitcoin’s application-layer growth.

In contrast, Ethereum’s total value locked (TVL) stands at ~51.6billion,whileBitcoin−basedapplicationsholdonly 5.59 billion. Given Bitcoin’s market cap is ~7.3x larger than Ethereum’s, this suggests a staggering 67x potential growth opportunity for Bitcoin’s ecosystem.

Turning Points in Bitcoin’s Ecosystem

2023 marked critical milestones that reshaped Bitcoin’s trajectory:

1. The Ordinals and Inscription Boom

The Ordinals protocol introduced NFT functionality to Bitcoin, sparking an innovation wave. According to CryptoSlam, inscription sales have surged to nearly $3 billion, generating over 91 million transactions. This surge pushed Bitcoin’s transaction fees from 1–3 sat/vB in 2022 to hundreds of times higher, with a 280% annual increase—a testament to rising network activity but also a clarion call for scaling solutions.

2. Key Technical Upgrades

• Segregated Witness (SegWit) (July 2017): Improved transaction efficiency by separating signature data, effectively expanding block size from 1MB to ~4MB.

• Taproot (November 2021): Enhanced transaction efficiency and privacy via Schnorr signatures and Merkelized Abstract Syntax Trees (MAST).

• BitVM: Enabled off-chain computation verification, paving the way for innovations like rollups, decentralized bridges, and EVM-compatible smart contracts.

These upgrades laid the groundwork for Bitcoin’s L2 evolution.

Bitcoin’s Layer 2 Ecosystem: Key Players

The L2 landscape is dominated by four major solutions, each with unique strengths:

1. Stacks

• Purpose: Enables smart contracts on Bitcoin.

• Key Features:

  • Uses Clarity language for smart contracts that respond to Bitcoin transactions.

  • Operates in parallel with Bitcoin’s PoW via Proof-of-Transfer (PoX).

  • Stacking mechanism allows STX holders to lock tokens for transaction validation, earning BTC rewards.

  • Upcoming Nakamoto upgrade will reduce settlement time from 10–30 minutes to ~5 seconds.

2. Lightning Network

• Purpose: Optimized for instant, low-value payments.

• Key Features:

  • Leverages smart contracts to create payment channels, combining on-chain settlement with off-chain processing.

  • Uses native BTC; no additional tokens required.

  • Processes ~213,000 routed transactions daily (~47% of Bitcoin’s on-chain volume).

  • Near-zero-cost, instant transactions.

3. RSK (Rootstock)

• Purpose: Brings EVM-compatible smart contracts to Bitcoin.

• Key Features:

  • Developers can deploy Ethereum contracts on Bitcoin.

  • Uses Smart Bitcoin (RBTC) as a native asset, pegged 1:1 to BTC.

  • Secures blocks via merged mining.

4. Liquid Network

• Purpose: Provides fast, secure, and confidential transactions.

• Key Features:

  • Operated by the Liquid Federation (~60 members).

  • Uses Liquid Bitcoin (L-BTC) as a wrapped version of BTC.

  • Independent ledger with its own consensus rules.

Emerging Innovations

Beyond these, ~70 new projects are pushing Bitcoin’s boundaries:

• Ark: An experimental L2 protocol for low-cost, privacy-preserving off-chain payments.

• Babylon: A PoS network with security-sharing protocols between Bitcoin and other PoS chains.

• MintLayer: A PoS sidechain optimized for DeFi.

• GOAT Network: Offers sustainable yields via decentralized sequencers and BTC yield tokenization.

Community-driven token standards like BRC-20, BRC-721E, and ORC-20 further fuel token innovation on Bitcoin.

The L2 Trilemma: Trade-offs in Design

L2 developers face a "trilemma"—they can only optimize two of the following three:

1. Open Network vs. Federation: Should it be permissionless or governed by a specific group?

2. Token Economics: Introduce a new token or rely solely on BTC?

3. Full Functionality: Offer a global VM for complex apps or limited off-chain contracts?

Examples:

• Lightning Network: Open network, no new token, but lacks global state or a full VM.

• Stacks: Open network, full VM, but introduces STX.

• Liquid: No new token, full functionality, but operates as a federation.

Over time, Bitcoin’s ecosystem may require multiple L2 solutions to cater to diverse needs—akin to a city needing highways, subways, buses, and bike lanes.

Market Potential and Future Outlook

Bitcoin’s L2 potential stems from two main drivers:

1. Speculative Markets: Ordinals proved demand for speculation on Bitcoin.

2. Activating Dormant Capital: Over $1.69 trillion in BTC is underutilized.

Projections for Bitcoin’s L2 market cap:

• Pessimistic: $4.8B (~10% of Ethereum’s L2 market).

• Base Case: $24B (~50% of Ethereum’s L2 market).

• Optimistic: $48B (matches Ethereum’s L2 market).

Given Bitcoin’s brand and scale, these estimates may be conservative.

Short-Term Outlook

• Ordinals’ Cultural Impact: Drives ecosystem growth, with platforms like Citrea and BOB emerging.

• Rising Bitcoin NFT Adoption: Spurs interest in DeFi, gaming, and other use cases.

Medium-Term Outlook

• Breakthroughs in L2 Tech: Upgrades like Stacks’ Nakamoto and sBTC introduction will be transformative, especially for Bitcoin DeFi.

• Faster Block Times and Enhanced Security: Critical for a seamless user experience, attracting developers and fostering innovation.

Long-Term Vision

• Institutional Adoption: A game-changer. Approval of a Bitcoin spot ETF will drive institutional inflows, increasing demand for "Bitcoin-native" financial products. Institutions will seek yield, propelling L2 development.

Bitcoin stands at a crossroads:

• A hard-money asset favored by institutions.

• A platform for mediums of exchange, digital marketplaces, yield-generating assets, and settlement layers for broader ecosystems.

Conclusion

While Bitcoin wasn’t designed for L2 ecosystems or speculative NFTs, technological progress is unstoppable. Teams are pursuing diverse goals:

• Stacks and Merlin for L2 scaling.

• Babylon for staking and yield.

• BitVM for smart contracts.

• Taproot Wizards for cultural revival.

The critical question is timing: Will Bitcoin’s L2 solutions be ready before Ethereum’s L2s dominate the market? It’s reminiscent of iOS vs. Android—iOS started early but faced ecosystem constraints, while Android’s openness unlocked possibilities.

Bitcoin’s strengths—brand power, security, and user trust—are unmatched. Coupled with evolving L2 solutions, they could usher in a vibrant new era for Bitcoin.

Final Thought:
The race is on. Will Bitcoin’s L2 ecosystems redefine decentralized finance, or will they play catch-up? Only time will tell. But one thing is certain: the "sleeping giant" is awakening.

1. Ostium

The perpetual contract exchange space is an intensely competitive arena with shifting leaders: dydx → GMX → Hyperliquid.

However, Ostium stands out as a unique protocol. It introduces leveraged trading of the S&P 500 index, Dow Jones, Nikkei, gold, copper, and numerous other TradFi assets on-chain.

Ostium is built on Arbitrum. These "risk-weighted assets" (RWAs) have no real backing, but Ostium provides synthetic on-chain price exposure through oracle price information.

While Ostium is not the first in this space, it's gaining momentum (source: Dune):

• Total TVL in Ostium Liquidity Pool (OLP) is $46 million, functioning similarly to HLP on Hyperliquid for generating trading and liquidation fees.

• 845 daily active users, 2,225 weekly active users.

• Total trading volume of $2.1 billion.

• Ostium has offered points to traders and OLP depositors since March 31.

On-chain RWA trading, even synthetic, holds great potential for many crypto-native users. It allows them to keep stablecoins on-chain instead of withdrawing them to traditional finance platforms.

This could be a good airdrop opportunity for early users.

2. Axiom

You might have heard of Photon, BullX, GMGN, BonkBot, and other Solana-based trading platforms.

But those are from 2024.

Y Combinator-backed Axiom launched in February and has already dominated the category (44% total share, dark blue section in the dashboard below).

Source: Dune

Interestingly, Axiom's official X account and co-founders are very low-key on X, posting rarely. It seems marketing is done through word-of-mouth.

Moreover, Axiom's ultimate goal is to trade any asset on any chain, including perpetuals (via real-time trading on Hyperliquid), yield protocols, wallet tracking, and more.

When the speculative fervor of Solana network trading returns, Axiom stands to benefit.

Currently, the points event is ongoing, with participation possible through trading, tasks, and referrals.

3. Fragmetric

If you missed Solayer, Fragmetric might be your second chance (since LAYER is actually rising post-airdrop).

Two things to know about Fragmetric:

Bad news: It's not too early, as deposit services opened in October 2024.
Good news: It's not too late yet, the token isn't live, and points are still being counted. It's a simple "deposit-to-mine" model.

In summary, Fragmetric is a liquidity restaking protocol built on Solana.

When you deposit SOL or LST into Fragmetric, you receive LRTs like fragSOL or fragJTO.

Restakers become SANG (SolanA Network Guard), a community of guardians protecting the Solana ecosystem. Additionally, you can earn extra rewards by guarding NCN/AVS (new decentralized services).

If you have idle SOL and want to diversify away from Kamino, Marginfi, and Solayer, this is a straightforward strategy.

TVL has reached $125 million, so it's not too early.

F Points are Fragmetric's loyalty system, awarded to users just for holding LRTs. You can also earn more points by wrapping LRTs (e.g., wfragSOL for DeFi).

Fragmetric has raised 12million.Thelatest5 million funding round was led by RockawayX, Robot Ventures, Amber group, and BitGo.

In short: Fragmetric is a very simple SOL farm.

4. Loopscale

Now, Loopscale allows you to earn more yield with your newly acquired fragSOL. More on that later.

Loopscale brings modular, order-based lending innovation to Solana DeFi.

This is different from the liquidity pool model used by Kamino, Marginfi, and even Aave:

As Loopscale writes in its official documentation: "By replacing liquidity pools and algorithmic interest rates with direct order book matching, Loopscale increases capital efficiency, enables more precise risk management, and supports new markets that are difficult to realize with traditional DeFi architectures."

Users can lend/borrow, Loop (one-click leverage multiplication like Kamino), or join Vaults.

Since Loopscale ended its closed beta 5 days ago, it has launched Genesis Vaults, offering over 6x points before they reach their cap.

A simple strategy is JUPSOL looping, yielding over 22% APY (similar to Kamino multiply). Double points can be earned.

Additionally, the official statement says short-term LST/LRT depegging won't liquidate users' loops, "but staking yields lower than borrowing costs or validator underperformance could lead to liquidation."

For users who are more degen and want 32% APY on SOL, there's another Vault to deposit fragSOL:

• Deposit SOL into Fragmetric.

• Get PT-fragSOL on Exponent (Solana's Pendle).

• Loop PT-fragSOL on Loopscale for 32% APY.

Currently, TVL is around $40 million, so it's still early.

Loopscale is backed by: CoinFund, Solana Ventures, Coinbase Ventures, Jump, and Room40.

5. Upshift

Do you feel DeFi is getting more complex and time-consuming to find high-risk-reward opportunities?

At Upshift, you can deposit your crypto into Vaults managed by "seasoned hedge funds" and investment managers.

Yield strategies range from looping to more complex products, including delta-neutral hedging, OTC options, or systematic stablecoin DEX market-making.

Upshift has four core products:

• Lending: On-chain over-collateralized loans to verified institutions.

• DeFi Yield: Curated Vaults by top DeFi funds.

• Vaults-as-a-Service: Plug-and-play protocol Vaults.

• Synergies: Borrowing against Vaults to enhance yield and capital efficiency.

At the time of writing, total TVL is a decent 236million.Additionally,5xpointsareoffereduntildepositsreach750 million.

Personally, I prefer the Hyperbeat Ultra HYPE strategy, which manages HYPE token yield farming on the HyperEVM ecosystem.

The project is backed by Dragonfly VC, Hack VC, 6MV, and Robot Ventures.

6. Level

If you hold any stablecoins, pay attention:

Level is a stablecoin protocol issuing lvlUSD. lvlUSD itself is also a stablecoin, backed by USDC and USDT, and generates yield through premium lending protocols.

You deposit USDC → USDC is deposited into platforms like Aave/Morpho → You receive lvlUSD and use it elsewhere in DeFi.

You simply stake lvlUSD as accrual-enhanced slvlUSD to get 8.48% APY.

But to earn XP points, you need to mine with lvlUSD in DeFi protocols: deposit lvlUSD into Curve, Spectra, or Pendle (currently 13% PT yield), etc.

At the time of writing, TVL is a decent $138.26 million. Level's social account followers on X are also growing, a good sign for token upside.

The project is backed by Dragonfly VC and Polychain.

Level isn't the first protocol to try this strategy, and many have failed to achieve PMF. However, given the decent yield and upcoming airdrop, this could be a promising opportunity.

7. Huma

Stablecoins and RWAs are the hottest topics, but they're hard for users to access. Maybe wait for Circle's IPO, but don't expect 10x in a day.

The PayFi network Huma recently raised $38 million from Hashkey Capital, Folius Ventures, Stellar, etc.

Previously, Huma merged with Arf, a Circle-backed protocol providing liquidity and settlement services for cross-border payments.

Huma's uniqueness lies in:

Traditional cross-border payments take days, with high fees, and banks capture most of the profit. Huma solves this by using blockchain and stablecoins (USDC), enabling instant, global, and low-cost transfers.

Huma leverages stablecoins and on-chain liquidity to accelerate real-world payments. Financial institutions can settle large amounts of funds globally, replacing the need for legacy systems like SWIFT or pre-funding mechanisms.

Two ways to earn:

• Classic mode: Stable monthly yield + Feathers (points). Currently over 10% yield.

• Maxi mode: 0% APY, but if bullish on Huma's future governance token $HUMA, you can get 5x Feathers.

Users can now also deposit USDC → get $PST (PayFi Strategy Token), a yield-bearing token usable on Solana DeFi (can be swapped on Jupiter, used as collateral for borrowing on Kamino).

Even locked positions can be exited early via the PST liquidity pool.

Data source: Dune

As of now, Huma:

• Pays 10.5% APY on USDC.

• Has $74.7 million in PayFi transaction volume that can earn yield.

• Holds $7.2 million in liquid assets (stablecoins) for a rainy day, not earning yield.

• TVL is $81 million.

8. DeFi App

You might often see DeFi App advertised on X, but the amount and manner of its ads might be off-putting. It always makes one more vigilant and gives a strange intuition.

But there are reasons to be bullish:

• Third-ranked DEX aggregator with 229millionindailytradingvolumeand991 million in weekly trading volume.

• Raised 6millionfromVCsata100 million valuation, including Mechanism Capital, Selini Capital, North Rock Digital, and about 50 angel investors.

DeFi App is an all-in-one superapp that makes DeFi simple.

From the beta app, the cross-chain swap functionality is excellent. No annoying gas fees, supporting Solana and EVM chains. Future features like yield farming and perpetual contract trading will be added.

The token HOME isn't live yet, and users can earn yield through simple token swaps.

Additionally, users can earn points by swapping tokens and joining the Degen Arena.

The top 50 factions get extra rewards and early access to new features of Defi App. Why join a faction? In the first season of Degen Arena, there's a higher allocation ratio for $HOME:

• 60% of season 1 experience points will go into the faction experience pool.

• 40% of season rewards will go into the faction reward pool.

9. Slingshot

If there's one mobile app to swap all tokens cross-chain, it might be Slingshot.

Before trying it, here's what you need to know:

• Creating an account is super simple, just like a Web2 app.

• Magic Eden recently acquired Slingshot, reducing the likelihood of a Slingshot token airdrop.

• Users will soon be able to swap Bitcoin Rune tokens.

So, if you primarily trade crypto on mobile, Slingshot is a must-have app.

The model’s estimated total PROMPT points = Number of PRIME locked × Duration × Multiplier. Stakers receive a proportional share of points based on their staking ratio.

When comparing the model with three different wallets (including my own), the estimated model predicted approximately 20% more PROMPT received than actual. I attribute this to two primary reasons:

1. I originally estimated that 40% of PRIME in circulation would be staked, but the actual staking ratio reached 45%. This means the total number of points exceeded expectations, leading to a more pronounced dilution effect.

2. The total number of PROMPT points remains uncertain because some stakers may unstake (reducing total points) or extend their staking (increasing total points).

Staking PRIME or Buying PROMPT? A Wayfinder Yield Maximization Study

Beyond this, yield estimates heavily depend on the prices of PRIME and PROMPT. When PRIME prices fall, yields rise, incentivizing users to buy more tokens and stake them. Of course, yields also depend on the final valuation of PROMPT.

With more information disclosed post-TGE, I believe the following table represents the most accurate prediction of PRIME staking yields. This update accounts for more PRIME being staked (by generating more PROMPT points) while maintaining a $500 million Fully Diluted Valuation (FDV). Additionally, a new column excludes the 28% token allocation airdropped to the community at TGE:

Staking PRIME or Buying PROMPT? A Wayfinder Yield Maximization Study

Quick Summary: Maximize staking PRIME tokens immediately to earn 106% returns in PROMPT over 797 days.

As evident from the table, yield opportunities have significantly declined since June 2024. This decline manifests in two ways: the multiplier effect continues to diminish, and PROMPT points accumulate over time, reducing the share available to later participants. This is particularly pronounced post-TGE, when 28% of the total supply has already been released, and new tokens enter circulation weekly for users to claim.

Scenario Analysis: Staking PRIME vs. Buying PROMPT

The following analysis compares two options faced by current market participants: buying PROMPT directly on the open market or buying PRIME and staking it (earning PROMPT in the process). We assume PRIME will be staked maximally with a 49.8x yield multiplier over 797 days, as previously described.

Buying $1,000 worth of PRIME tokens today yields approximately 333 PRIME. According to the table, staking these tokens maximally generates 333 × 39,690 points, or 13.2 million points.

Given the plan to distribute 400 million PROMPT tokens proportionally to all point stakers based on 1.8 trillion total points, the current 13.2 million points should yield approximately 2,944 PROMPT tokens. Considering 28% of PROMPT has already been distributed, we adjust this proportionally downward to about 2,119 PROMPT. Note that this calculation is not absolute, as PROMPT distribution actually depends on daily point accumulation, but this method provides a clear, intuitive framework for understanding yields, with values in a reasonable range.

The table below applies this figure to PRIME and PROMPT valuation scenarios at the end of the staking period:

Staking PRIME or Buying PROMPT? A Wayfinder Yield Maximization Study

On the other hand, calculating returns for those buying PROMPT directly is simpler. Ultimately, assuming a PROMPT price of 0.50,a1,000 investment yields 2,000 PROMPT tokens, fewer than obtained by buying PRIME and staking it fully.

Of course, the advantage of buying PROMPT directly on the open market is the ability to cash out at local highs whenever they appear.

Assuming a 1billionPROMPTvaluationattheendofstakingandstablePRIMEprices,tokenvalueatstakingexpirationwouldreach3,118, as described above.

However, given cryptocurrency volatility, PROMPT could likely reach all-time highs within the next two years (e.g., a 4billionfullydilutedvaluation,similartotheFDVlevelVIRTUALreachedduringtheAIagentcraze)beforerevertingtoamorereasonable1 billion FDV range.

If you buy 1,000worthofPROMPTtodayontheopenmarketandsellatthecurrentlocalhigh,youwouldearn8,000, more than double the value obtained by staking PRIME.

Summary

Those seeking PROMPT exposure, whether through fully staking PRIME or buying directly on the open market, should consider the following:

• What do you believe the final values of PRIME and PROMPT will be at the end of the 2-year staking period?

• What do you think PROMPT’s all-time high will be in the next two years, and more importantly, can you sell at that peak?

Ultimately, this depends heavily on individual circumstances. It’s undeniable that most investors fail to sell at market highs. Meanwhile, as many PRIME holders have experienced, locking tokens for over two years while watching their value plummet 90% is agonizing. Of course, given PRIME’s leading position in the Web3 gaming space and upcoming catalysts this year—including the highly anticipated releases of Colony and Sanctuary—it’s hard to imagine PRIME falling more than 50% from its current price.

Additionally, the team is already considering new tokenomic mechanisms to achieve PRIME token deflation and enhance value accumulation, assuring me that the downside risk for this gaming token is effectively contained at this stage.

A chatbot suggested dividing the trade deficit by imports—a formula seemingly adopted by the White House.

2. Everything Studio Ghibli-Style
From Studio Ghibli-esque images to manga storytelling and meme generation, users now leverage ChatGPT to craft any visual they can imagine.

Non-artists are unleashing creativity, producing polished artworks for their content.

3. Video Generation AI Powers Ahead
Runway just launched Gen-4 Turbo, generating 10-second high-quality videos in 30 seconds.

Pika Labs’ multi-frame feature converts up to 5 frames from your photos into 25-second videos.

4. AI Emulates Human Speech with Natural Delivery
Eleven Labs, known for lifelike voices and advanced voice cloning, just unveiled its MCP server.

You can now deploy voice agents to automatically call local pizza restaurants for orders.

5. AI Proficiency Is Now a Job Requirement
Shopify CEO Tobi Lutke stresses that AI is a mandatory tool (and KPI metric) for all employees.

This underscores the trend of AI-augmented roles: AI + high-performing employee = 100x productivity.

6. Autonomous Crypto Trading Agents Edge Closer
Cod3x is advancing toward v0.6, introducing trading templates, knowledge graphs, target chains, and UX improvements for trades and portfolios.

Version 0.6 sets the stage for Sophon’s $1.5 million agent trading competition.

7. Personal AGI?
Eternal AI previewed v2 of its “Personal AGI,” aiming for 100% local operation and privacy, with no data shared with centralized entities.

The team’s commitment to decentralized AI is evident in prior products like tokenized decentralized video.

8. Vibe-Coding Surges to New Heights
Vibe-coding and no-code tools continue to draw users, heralding an era where anyone can develop AI apps without coding.

Not using these tools is the new “digital Stone Age.”

9. With Great Vibe-Coding Power Comes Great Responsibility
Low switching costs between platforms drive high churn rates.

When apps or agents underperform, users easily migrate to competitors offering better features or pricing.

10. Bittensor Subnets: The New PvE Battleground
Several Bittensor subnets have skyrocketed in recent weeks:

• Gradients SN56: +650% since March lows

• Chutes SN64: +120%

• Nova SN68: +250%

Plus, numerous subnets are outperforming the broader market.

The market's hopes for a rebound were dashed. In the early hours of today, the White House press secretary announced that the additional 104% tariffs on China had taken effect at noon Eastern Time, causing another plunge in global financial markets.

On April 3rd, when Trump's tariff policy was introduced, US Treasury Secretary Bessen had suggested that all countries refrain from retaliatory actions and wait for any negotiations before April 9th. There was even a replay of the "fake news" drama, with hopes that Trump might be willing to negotiate the trade barriers he had imposed on multiple countries and specific products, leading to a short-lived "resurrection" in global capital markets.

However, after several days of博弈, the market did not receive any good news. From the initial 10% at the beginning of the year to 20% in March, and then to 34% in early April, now compounded by a 50% "retaliatory increase," the Sino-US trade friction has escalated into an "economic nuclear war."

Can the Stock Market Hold Up Amidst the Sino-US Trade War?

Since the Trump administration announced a new round of tariff policies last week, international capital markets have experienced severe turbulence, with US stocks being hit the hardest. As of Tuesday's close, the S&P 500 index broke below 5,000 points for the first time in nearly a year, down 18.9% from its peak on February 19th, just a step away from the 20% decline threshold of a "technical bear market." It is estimated that the market value of S&P 500 index components evaporated by $5.8 trillion in just four trading days, setting the record for the worst four-day consecutive decline since the index was established in the 1950s.

Trade War Escalates: Can Bitcoin Hold the $70,000 Mark?

At the same time, the US tariff policy has triggered a chain reaction in global capital markets. Bloomberg statistics show that since Trump proposed the so-called "reciprocal tariffs" on April 3rd, the total market value of global stocks has shrunk by $10 trillion, slightly more than half of the EU's GDP. US tech giants have become the hardest-hit areas, with the combined market value of seven major tech companies, including Apple and Microsoft, evaporating by $1.65 trillion. Among them, Apple's stock price plummeted nearly 23% in four days due to its heavy reliance on overseas supply chains, marking its largest weekly decline since the outbreak of the pandemic in 2020.

Previously, many opinion leaders in the crypto community firmly believed that the crypto asset class would not be affected by traditional tariffs because their transactions do not go through national borders and customs. They argued that in the face of a new round of mercantilism and trade barriers worldwide, the value proposition of cryptocurrencies would become even more prominent. Strategy founder Michael Saylor posted on April 3rd that "Bitcoin has no tariffs."

However, the total market value of cryptocurrencies has fallen by 35% from its peak in December 2024, dropping from $3.9 trillion to $2.5 trillion. The "Crypto Fear and Greed Index" shows a reading of 17, in the extreme fear zone, indicating a pessimistic market sentiment.

Last night, Bitcoin once again broke below $75,000, while BTC's market share continued to rise, the altcoin market was in a sorry state, and Ethereum once again broke below $1,400.

Trade War Escalates: Can Bitcoin Hold the $70,000 Mark?

In the past 12 hours, the crypto market has seen a total of $243 million in liquidations, with $192 million in long positions and $51.03 million in short positions.

Trade War Escalates: Can Bitcoin Hold the $70,000 Mark?

The continuous decline in Bitcoin prices may even force Strategy, which has been buying all along, to sell Bitcoin. According to the 8-K form submitted by Strategy to the SEC on April 7th, if Bitcoin prices continue to fall, Strategy may be forced to sell its Bitcoin holdings to repay debts, breaking Michael Saylor's promise of "never selling Bitcoin."

Since Trump won the election in November 2024, Strategy has bought 275,965 BTC at an average price of $93,228 ($25.73 billion), and this part has already suffered a floating loss of $4.6 billion.

Pessimistic Expectations Intensify: What Analysts Think of the Current Market

In the past week, several Wall Street banks, including Goldman Sachs and JPMorgan, have warned that if the trade war continues to escalate, the US and even the global economy may fall into recession this year, further weakening the attractiveness of financial markets.

However, the White House team is cheering victory, "We are bottoming out, really bottoming out," Trump's chief trade advisor Peter Navarro said on Fox News on Monday evening, "It will turn around next, and those companies in the S&P 500 that first move production back to the US will drive the recovery, which will happen soon. I guarantee the Dow will hit 50,000 points, and there will be no recession."

However, Navarro's optimistic remarks were not endorsed by JPMorgan CEO Jamie Dimon, who warned in his annual letter to shareholders on Monday that Trump's tariffs would push up prices, drag down the global economy, and weaken the US global position by undermining its alliance system. Even some of Trump's allies, including Elon Musk and Bill Ackman, have recently warned that this tariff policy logic is seriously flawed and is the wrong path.

Crypto analyst Phyrex believes that from the Federal Reserve's behavioral logic, unless inflation drops significantly, even a "defensive rate cut" will be hard to implement quickly. The real turning point may be when the US GDP data is released at the end of April.

From the crypto market perspective, BTC's turnover rate has declined today. URPD data shows that even though the price broke below $77,000, investors in the $93,000 to $98,000 range hardly reduced their positions. This indicates that the current selling pressure is not from high-position holders, and there has been no panic selling at the top. The on-chain structure is relatively healthy. As long as subsequent policies do not change frequently, BTC and risk markets may still have room for phased repair.

As US Treasury bonds no longer play the role of a safe haven, the yield on 10-year Treasury bonds has risen to around 4.3%, higher than the level at the end of March, pushing up the cost of mortgages and other types of loans. The 30-year Treasury bond yield closed at 4.76%, up nearly half a percentage point from Monday's low. The spread between the yields of the US two-year and ten-year Treasury bonds widened to 48 basis points, the steepest level since May 2022.

BitMEX co-founder Arthur Hayes posted that "The Fed doesn't have much time left. The situation is getting out of control. Previously, when the stock market fell, it would lead to a decline in the yield of US 10-year Treasury bonds, which was beneficial to risk assets. Now, the stock market is falling, and the yield of US 10-year Treasury bonds is rising. This is bad. The market has finally realized that if dollar export income decreases, there will be no more buyers for Treasury bonds or stocks. The game is over."

Trade War Escalates: Can Bitcoin Hold the $70,000 Mark?

Pessimistic expectations are intensifying. Trader Eugene posted that "The introduction of global trade tariffs marks a change in world order that has not been seen in over 50 years. Free trade has been a key factor in driving productivity and economic growth, leading to the largest long-term bull market in history. The shift from openness to protectionism will have far-reaching effects that will gradually emerge over years, unless Trump completely abandons his tariff plan. I think the likelihood of this is very low. This will pose a significant long-term resistance to global risk assets."

In the cryptocurrency space, the recent structural decline in active developers is perhaps the most worrying. In the last cycle, we could observe developer activity and take comfort in knowing that our industry was still benefiting from long-term tailwinds. Fast forward 2-3 years, and not only have we not produced anything particularly interesting or important, but the future outlook is even worse than before.

In the last cycle, we were looking forward to the launch of ETFs and a better regulatory environment under a crypto-friendly government as a glimmer of hope at the end of the tunnel. Now that these have been realized, they have once again failed to meet expectations. I don't see anything on the horizon that could free cryptocurrencies from their natural "Ouroboros" (self-cycling, self-consuming dilemma).

From a broader perspective, the world situation is in a great change unseen in a century. Billionaire hedge fund manager and Bridgewater Associates founder Ray Dalio posted that while the current market and economic focus on tariffs is important, it should not distract from deeper global issues. He pointed out that we are in a "classic collapse" phase of monetary, political, and geopolitical order, something that may happen once in a lifetime but has occurred multiple times in history.

Dalio suggested not to be distracted by short-term events like tariffs, but to focus on the interaction of five major forces (economic, political, geopolitical, natural, and technological). Studying similar historical cycles (such as currency crises) can help predict the future.

"The current changes are part of a historic grand cycle, and tariffs are just the surface. The real drivers are the structural collapses of monetary, political, and geopolitical orders. Understanding the interaction of these forces and learning from historical experience can better prepare us for the future."

Since its testnet launch over four months ago, Mango Network has delivered exceptional performance, offering seamless cross-chain interoperability without compromising its lightning-fast public chain experience. A mainnet release and TGE (Token Generation Event) are strong possibilities!

As the mainnet approaches, Mango Network is poised to become a focal point in the market. Its launch will unlock real-world applications, attract developer support, and provide users with a more efficient, secure, and scalable blockchain experience.

🔗 Quick Guide to Mango Network
Introduction: Mango Network’s unique Multi-VM architecture, combined with its high-performance Layer 1 network, delivers unparalleled cross-chain interoperability, liquidity support, and low-latency transactions for developers and users alike.

🔗 Combining Strengths, Uniting Visions, Elevating Excellence
Mango Network merges the core advantages of OPStack and the Move language, creating a full-chain infrastructure that supports both EVM and MoveVM. This positions Mango Network at the forefront of technological innovation.

✨ Core Advantages of Mango Network

Multi-VM Support: EVM and MoveVM Compatibility
Mango Network’s multi-VM architecture integrates Ethereum Virtual Machine (EVM) and MoveVM, enabling cross-VM compatibility via OPStack. While EVM ensures seamless compatibility with existing Ethereum smart contracts, MoveVM enhances security and performance through resource-oriented programming.

High-Performance Layer 1 Network: Optimized Throughput and Low Latency
Mango Network’s Layer 1 solution features an optimized consensus mechanism and transaction processing architecture, supporting hundreds of thousands of transactions per second. This ensures low latency and high throughput for DeFi, NFTs, and other applications, avoiding congestion common in traditional blockchains.

Cross-Chain Asset Management and Privacy Protection
Mango Network strengthens cross-chain asset flows while integrating ZK-SNARKs and ZK-STARKs for transaction privacy and data integrity. This addresses critical privacy challenges in conventional blockchain systems.

🔗 Why the Mainnet Launch Matters (Key Benefits)
The mainnet marks a new phase of growth for Mango Network. After over four months of testnet refinement, its technology is now stable and ready for large-scale adoption.

⚡ Developers and Ecosystem Growth
The mainnet will provide robust developer tools and infrastructure, accelerating the creation of decentralized applications. Its cross-chain capabilities and high performance are expected to attract more projects and users, fueling rapid ecosystem expansion.

⚡ Security and Decentralization
Mango Network employs advanced consensus mechanisms and blockchain security designs, ensuring decentralization and resilience against attacks for a secure and stable mainnet.

Potential Benefits of Mainnet Launch:

• Enhanced Security: Validates network stability and boosts user trust.

• Ecosystem Growth: Drives DApp and DeFi adoption with developer incentives.

• Increased Liquidity: Attracts users and investors, raising token demand.

• Technical Maturity: Optimized infrastructure for reliable performance.

• Market Visibility: Media attention and partnership opportunities.

• Competitive Edge: Positions Mango as an innovative industry leader.

• Trust Building: Demonstrates team capability and project viability.

🔗 Conclusion: Mango Network’s Future Potential
With its imminent mainnet launch, Mango Network is set to bring groundbreaking advancements to Web3 and DeFi. Its Multi-VM architecture, cross-chain support, high-speed transactions, and privacy features position it as a future leader in blockchain.

The mainnet signifies not just technical maturity but also Mango Network’s leap into the global blockchain arena. As its ecosystem grows, Mango Network could emerge as a cornerstone for cross-chain and decentralized applications.

🔗 Final Thoughts
Mango’s vision is clear, but the path is challenging. In today’s blockchain landscape, full-chain support and high TPS are among the rarest and most sought-after resources, making Mango a critical player.

With these dual strengths, Mango exhibits unmatched compatibility, ready to harness future opportunities—much like Solana did with the MEME boom. Its potential is limitless. To capitalize on this growth, close attention to ecosystem development is essential—it’s the key to long-term value.

On March 31, Tea announced the launch of Tea Sepolia, the final stage for testing all Tea products, which will last until April 20. The project has resolved authentication issues on the Sepolia Testnet 2.0 and hinted at the imminent mainnet launch. The period from April 11 to 18 is the second phase of the final sprint before the mainnet.

Tea Protocol Overview

Tea Protocol is a decentralized, open - source software platform built on the Layer 2 blockchain Base. It fairly incentivizes open - source developers based on their contributions to the ecosystem, recognizes their contributions, and empowers them.

Tea Protocol employs a novel consensus mechanism: Proof of Contribution. Inspired by Google's PageRank, it uses an algorithm called teaRank to measure the impact of each contribution, ensuring that only truly valuable contributions are rewarded and filtering out low - quality inputs.

Components of Tea Protocol

• Package Manager: Provides four components for engineers to develop applications: browser, terminal, editor, and package manager. Each project and package version meticulously records all necessary components and their corresponding versions.

• Decentralized Registry: Utilizes blockchain technology to create a decentralized registry. As an immutable distributed ledger, blockchain ensures the security, verifiability, and prevention of adverse operations for all version data.

• Storage System: The Tea system connects to multiple storage systems, including those that prove packages have not been tampered with and correctly replicate decentralized storage systems. Package maintainers can choose the storage system that best suits their needs to securely store and distribute these software packages.

Tea Team

Tea's co - founder and CEO, Max Howell, is renowned for creating Homebrew, one of the most widely - contributed open - source software programs globally. Daniel Mulligan serves as Tea's CMO and CEO of Tidus, with degrees from Empire State College and Rutgers University.

Tea Financing

Tea Protocol has raised a total of $16.9 million:

• In March 2022, Tea completed an $8 million seed round led by YZi Labs, with participation from Woodstock, Lattice Capital, XBTO Humla Ventures, RockTree Capital, Coral DeFi, SVK Crypto, Darma Cash, and others.

• In December 2022, it secured an additional $8.9 million in an extended seed round supported by WAX, StrongBlock, Betaworks, Percival VC, and others.

Tea Airdrop

The airdrop process is now open:

1. Open settings and set the Airdrop Destination to the wallet address you intend to use for receiving the airdrop.

2. Enter the new address: Log in with the airdrop - receiving wallet address, bind GitHub, and add Tea testnet information.

3. Once on the webpage, locate and start the authentication process.

Tea Summary

As the Tea Protocol system matures, the community will govern and drive changes and expansions to the protocol. The goal is to create a sustainable open - source community that brings fairness and rewards to the open - source world. By valuing the efforts of every developer, it ushers in a more equitable and innovative future for digital development.

Introduction

When we talk about "money," what comes to mind? Cash? Dollars? Price tags in supermarkets? Or taxes? In these contexts, money essentially serves as a conventional unit of measure for the value of various different and heterogeneous goods and services.

Initially, money took the form of shells and salt, then evolved into copper, silver, and gold coins, and eventually to today's dollars/fiat currencies. Focusing on the dollar (and modern fiat currencies, which are government-issued and not backed by physical assets), it has gone through several developmental stages. In the U.S., the initial dollar bills (bank-issued notes) were private. At that time, individual banks could freely print money, a model somewhat similar to Hong Kong's HKD system. However, due to numerous issues with this model, the government eventually intervened, took over the issuance of the dollar, and legally tied the dollar to gold.

1. A Brief History of the Dollar

The dollar (and modern fiat currencies) has gone through several developmental stages:

• 1871: Western Union completed the first telegraphic transfer, enabling fund transfers without physically moving large amounts of paper currency. This innovation significantly enhanced the efficiency of the financial system by eliminating the physical constraints of money circulation.

• 1913: The Federal Reserve System was established, beginning to regulate the issuance of the dollar and monetary policy.

• 1971: Nixon terminated the gold standard, and the dollar became a free-floating currency no longer tied to gold.

• 1950: The first credit card was introduced, ushering in the era of non-cash payments.

• 1973: The SWIFT payment network was established, making dollar transactions faster and more global.

• 1983: The first digital bank account was set up at Stanford Federal Credit Union, initiating the digitization of banking.

• 1999: PayPal was born, enabling pure digital payments without a bank account.

• 2014: Tether launched the first dollar-backed stablecoin (USDT), laying the foundation for today's stablecoin market.

2. Why Are Stablecoins So Popular?

Despite the rapid growth of stablecoins, there is relatively limited content on why they are so popular. Tens of millions of users are replacing the traditional financial system with stablecoins, but the true driving factors are little understood. Additionally, research on the platforms and projects supporting the stablecoin ecosystem and different user groups is even scarcer. Therefore, this article will delve into why stablecoins are so widespread, who the main players in the stablecoin space are, and which user groups are driving this trend, analyzing how stablecoins are gradually becoming the next stage in the evolution of money.

3. Stablecoins vs. Bank Transfers: Two Stories in One City

Stablecoins are essentially tokens backed by fiat currencies (such as the dollar or euro).

Stablecoins vs. Bank Transfers

Many readers of this article may come from developed countries in North America, Europe, or Asia, where financial systems are relatively efficient, smooth, and stable. In the U.S., there are PayPal and Zelle; in Europe, SEPA; and in Asia, numerous fintech companies, most notably Alipay and WeChat Pay.

In these regions, people are accustomed to depositing money in banks without worrying about their balances disappearing the next day or facing hyperinflation. Small transfers can usually be completed quickly, and even large fund movements, though they may take longer, are not unbearably slow. Additionally, most businesses mandate that customers use the local banking system because it is considered safer and more convenient.

However, the reality is vastly different in other parts of the world.

In Argentina, bank deposits have been repeatedly confiscated by the government, and the local currency is one of the worst-performing in history.

In Nigeria, the official exchange rate is severely disconnected from the black market rate, making it extremely difficult to move funds in and out of the country—a situation ironically also applicable to Argentina.

In the Middle East, bank accounts can be arbitrarily frozen by the government, leading many ordinary people (especially those without political connections) to be wary of depositing most of their liquid assets in banks and instead choosing alternative means of storing funds.

Not only is holding funds risky, but transferring and remitting money is often even more challenging. SWIFT (Society for Worldwide Interbank Financial Telecommunication) cross-border transfers are expensive, cumbersome, and in these countries, most people do not have bank accounts for the aforementioned reasons.

As for alternatives like Western Union, while they can complete cross-border remittances, they typically charge exorbitant fees (you can check their fee calculator). What's worse, they often settle transactions at the official exchange rate, which is usually much higher than the actual market rate, resulting in significant "hidden" costs for users.

Stablecoins: A New Financial System or a Thing of the Past?

Stablecoins allow people to hold funds outside of the local financial system because they are essentially global, relying on blockchain for transfers rather than local bank servers. This characteristic stems from their historical background—cryptocurrency exchanges faced challenges in opening bank accounts, processing large-scale deposits and withdrawals, and transferring funds across trading platforms.

One of the most famous cases is Japan. Due to the cumbersome bureaucratic system and strict capital controls of the Japanese banking system, there has long been an arbitrage gap between global cryptocurrency prices and local Japanese prices.

In 2017, Binance announced in its whitepaper that its trading platform would only support stablecoin-cryptocurrency trading pairs to accelerate settlement speeds. This move directly drove market trading volumes towards stablecoin pairs. In 2019, Binance launched USDT perpetual contracts, allowing users to margin trade with USDT instead of BTC, further solidifying the dominant position of stablecoins. Today, stablecoins have become a recognized base asset in the cryptocurrency market, and this acceptance is gradually expanding to applications beyond cryptocurrency.

4. Stablecoins vs. Fintech: Speed, Innovation, and Solutions to Global Financial Problems

If we look at transaction speed, innovative design, and the ability to solve global financial problems, stablecoins have significant differences from fintech (financial technology).

So far, the main contribution of fintech has been to optimize and beautify existing payment infrastructure rather than completely change its underlying architecture. Essentially, they just add a layer of "paint" on top of the traditional financial system but do not address its inherent inefficiencies and complexities. In contrast, stablecoins represent the most significant change in the global financial system in 50 years.

Fast, Reliable, and Transparent: Stablecoin transfers are much faster than traditional banking systems and are verifiable on-chain, making fund flows more efficient.

Low-Cost Remittances: Compared to traditional payment methods like bank wires or Western Union, stablecoins virtually eliminate high fees (though this also means losing some of the protections provided by the traditional financial system).

Competitors to Cash and Payment Processors: Stablecoins can not only replace cash but also compete with payment processors like Western Union, being safer and more durable than cash.

Not Easily Damaged or Stolen: Unlike cash, which can disappear due to floods, fires, or theft, stablecoins cannot be lost and can be exchanged for local currency at any time.

Low Transaction Fees: The cost of transferring stablecoins depends on the blockchain network but is usually less than $2 and a fixed fee, far below the transaction fees of traditional payment systems like Western Union (typically ranging from 0.65% to over 4%).

All of this indicates that stablecoins not only dominate the cryptocurrency space but are also challenging the foundations of the traditional financial system.

Stablecoins: A New Financial System or a Thing of the Past?

Once stablecoins are widely accepted and mature, they will inevitably fill the gaps in the global financial system not covered by traditional financial institutions. As stablecoins continue to gain popularity, financial services and complex products around them are also rapidly growing.

For example, @MountainUSDM has already introduced RWA (Real-World Assets) yields on multiple platforms in Argentina, while @ethena_labs allows users to profit from delta-neutral trades without relying on traditional banking systems or trading platform custody.

Today, the use of stablecoins has gone far beyond simple payment processing or hedging. More and more people are using stablecoins to earn yields and even for local payments. As this trend develops, stablecoins are gradually becoming an important part of global financial planning and are even being included in corporate balance sheets.

It is worth noting that many users of stablecoins do not even realize they are using cryptocurrency technology—this is a significant breakthrough in product innovation around stablecoins in recent years. Companies continuously optimize user experiences, making the use of stablecoins more seamless and intuitive, further driving their global adoption.

5. Companies Driving the Adoption of Stablecoins

The main stablecoin projects start with the companies that issue these stablecoins. These include:

• @Circle, the issuer of USDC

• @Tether_to, the issuer of USDT

• @SkyEcosystem, the issuer of DAI/USDS

• PYUSD, jointly launched by @PayPal and @Paxos

Of course, there are many other stablecoins not mentioned here, but these are the main stablecoins used for payment purposes. These companies typically have bank accounts, receive traditional bank wires, and convert these funds into stablecoins for users.

1) The Funding Model of Stablecoins

Stablecoin issuers hold the funds deposited by users and charge extremely low fees (usually 1-10 basis points). Users can transfer these assets at any time, while the issuers earn interest on the funds in their bank accounts (i.e., "floating yield" or "yield" in DeFi terminology).

Trading companies play an important role in this process, handling large-scale conversions between fiat and stablecoins (on/off ramps). As more and more trading platforms begin to crack down on users who only use stablecoins for deposits and withdrawals without paying trading fees, the role of trading companies in this market becomes increasingly crucial.

Trading companies often offer better prices than local trading platforms, further enhancing the efficiency and competitiveness of stablecoins.

Since all major trading companies are fiercely competing in this market, they continuously optimize liquidity and services, making stablecoin trading smoother.

Stablecoin issuers earn interest rather than charging users high fees, which is the core of their business model.

It is worth mentioning that @SkyEcosystem (formerly Maker) has a different model.

SkyEcosystem uses a hybrid model, with its stablecoin USDS backed by a variety of collateral assets (including other currency reserves).

Users can deposit these collateral assets and borrow USDS at a predetermined interest rate.

They can choose to deposit in the "savings rate module" (similar to a risk-free rate) or borrow USDS on platforms like @MorphoLabs and @Aave, or simply hold USDS.

This model allows users to choose safer yield options or take on higher risks for higher returns.

2) Stablecoin User Growth: Not Directly Consumer-Facing

Currently, most major stablecoin issuers do not directly target ordinary consumers but provide stablecoin support indirectly through different financial service companies. This model is similar to MasterCard—it partners with banks but does not directly interface with end-users.

You may rarely hear names like @LemonCash, @Bitso, @Buenbit, @Belo, and @Rippio in the crypto community (CT), but they play important roles in the stablecoin trading market. For example:

Just the above few Argentine trading platforms alone have over 20 million KYC-verified users, almost half of Coinbase's user base, while Argentina's population is only 1/7 that of the U.S.

Lemon Cash had a trading volume of $5 billion in 2023, a large part of which was stablecoin-stablecoin trades or ARS (Argentine Peso)-stablecoin trades.

These platforms serve as the entry point for most non-peer-to-peer stablecoin trades and also hold a significant amount of crypto trading volume and stablecoin deposits. However, except for Rippio, most platforms do not have their own order books but rely on order routing systems to complete trades.

This model is very similar to Robinhood—Robinhood is not a real trading platform but routes pricing through liquidity providers (Market Makers). I call these platforms "Retail Venues" because their focus is on optimizing user experience and retail products, not on building their own trading platform infrastructure.

Robinhood's API does not allow high-frequency traders or market makers to use it because its target users are not professional traders but ordinary investors.

Similarly, BuenBit and Lemon do not attract market makers to reside on their platforms; their main target users are ordinary consumers, not professional trading companies or high-frequency traders.

Under this model, stablecoins are entering the global financial system in a low-cost, high-efficiency manner, not only impacting the crypto market but also changing the landscape of traditional payments and remittances.

Stablecoins: A New Financial System or a Thing of the Past?

Next, let's look at the blockchains where stablecoins actually operate, i.e., where stablecoin transfers, trades, and balance records are stored. Currently, the main chains for stablecoin transactions include:

• @justinsuntron's @trondao (Tron)

• @binance's Binance Smart Chain (BSC)

• @solana (Solana)

• @0xPolygon (Polygon)

The primary use of these chains is value transfer and does not necessarily involve DeFi interactions or yield generation.

Although Ethereum still leads in TVL (Total Value Locked), its high transaction costs make it unattractive for most stablecoin transactions. Data shows:

• 92% of USDT transactions occur on the Tron chain.

• About 96% of transactions on the Tron network are related to stablecoins.

• In comparison, on Ethereum, stablecoin transactions still account for a high percentage but only 70%.

Additionally, some new blockchains are trying to handle stablecoin transactions efficiently and at low cost, with LaChain being notable among them.

LaChain is operated by a consortium composed of Ripio, Num Finance, SenseiNode, Cedalio, Buenbit, and FoxBit, primarily targeting users and platforms in Latin America.

This also indicates that as the stablecoin market continues to mature, the ecosystem is becoming more complex and diversified.

6. The Evolution of Stablecoin Payments: From Cross-Border Remittances to Local Payments

Stablecoins have become a primary tool for cross-border remittances, but now they are increasingly being used for local payments.

This involves cryptocurrency payment gateways and payment portals, namely:

• Exchanging stablecoins for fiat currency, or

• Allowing merchants to directly accept stablecoin payments denominated in fiat currency.

For example, a merchant can "accept" crypto payments, but in reality, the cryptocurrency is immediately converted to dollars and then settled into the merchant's bank account. Of course, merchants can also directly accept stablecoin payments.

However, since stablecoin redemption still involves some friction (either in terms of time or fee costs), there are many companies in the market dedicated to optimizing this process, offering solutions ranging from simple and efficient to complex and comprehensive.

Pomelo (https://www.pomelogroup.com/): A platform supporting cryptocurrency debit card payments, enabling users to spend stablecoins directly.

@zcabrams's Bridge: Provides convenient conversions between stablecoins, different chains, and fiat currencies, significantly reducing friction costs for merchants and payment platforms.

@stripe even acquired Bridge to enhance the efficiency of its own payment system.

Currently, payment gateways like Bridge are mainly used in scenarios where merchants have not yet directly accepted USDC or USDT. They help users complete conversions first and then charge a fee.

As stablecoin payments become more popular and their lower costs compared to traditional bank cards and banking systems become more apparent, the usage of stablecoin-stablecoin trades will continue to rise. In the future, more and more merchants will directly accept stablecoin payments to optimize unit economics and drive the construction of a post-banking payment system with stablecoins.

7. The Financialization of Stablecoins: How to Make Stablecoins "Yield"

In addition to payments and remittances, more and more companies are exploring how to put stablecoins to use to improve their asset utilization rates, for example:

• Lemon Cash: Offers @aave deposit functions, allowing users to deposit funds to earn yields.

• @MountainUSDM's USDM: Allows stablecoin holders to earn yields and has been integrated into multiple Latin American trading platforms and payment services.

Many trading platforms and retail financial platforms view stablecoin yields as a stable source of income, hoping to use it to balance income fluctuations caused by market cycles.

Traditional trading platforms heavily rely on trading fees, which leads to a surge in income during bull markets but a dramatic drop by several orders of magnitude during bear markets.

By offering stablecoin deposit yields and related services, these platforms can obtain more stable income and reduce the impact of market volatility on their profitability.

8. The Future of Stablecoins?

Stablecoins: A New Financial System or a Thing of the Past?

Non-crypto uses of stablecoins: Expansion of international transfers and payments

The main non-crypto application of stablecoins is international transfers, and they are increasingly being used for payments. However, as the infrastructure for stablecoins continues to improve and become more widespread, they may also be used for savings, especially in developing countries, where this trend is already beginning to emerge.

A few weeks ago, @tarunchitra told me a story: In Georgia, a convenience store owner would accept deposits of Georgian Lari (GEL) from customers, convert it into USDT to earn interest, and record customer balances in a simple paper ledger, taking a cut from the interest. Notably, Georgia's banking system is relatively healthy, but this alternative financial model still developed there.

In Argentina, according to the Financial Times (FT), the total amount of U.S. dollars held by citizens outside the traditional financial system is estimated to exceed $200 billion. If even half of these funds enter the on-chain or crypto ecosystem, the DeFi market size would double, and the total market cap of stablecoins would increase by about 50%—and this is just the potential of one country. Similar situations exist in China, Indonesia, Nigeria, South Africa, and India, where the informal economy is large or there is a certain degree of distrust in the banking system.

As the use of stablecoins grows, so do their potential use cases.

Credit lending: Currently, stablecoins are mainly used for fully collateralized credit lending, which is extremely rare in the global credit market. However, with new tools launched by institutions like Coinbase, KYC verification data may be used in the future to expand credit markets and potentially introduce negative credit record mechanisms (i.e., non-repayment will affect credit scores).

Yield distribution: Stablecoin issuers are gradually allowing yields to be "passed through" to holders, for example:

• USDC offers an annualized yield of 4.7%.

• Ethena's USDe has a dynamic yield, usually exceeding 10%.

Cross-fiat transactions: Currently, many trades are conducted through a "double conversion" method— for example,

a transaction first converts local currency to dollar stablecoins and then

converts to the target currency (such as Argentine Peso or Nigerian Naira).

This approach means users have to pay fees twice, but as blockchain technology matures, future conversions may directly target the stablecoin of the destination currency to reduce costs.

As more capital flows into stablecoins, the variety of on-chain financial products will further enrich, making the use of cryptocurrencies in daily life more mainstream.