Long-Term Whales Continue Holding: Investors holding Bitcoin for over five years have continued to accumulate, with a net increase of 278,000 BTC over the past two years, demonstrating strong conviction.

Selling Pressure from Mid-Term Holders: Over the past 30 days, selling has been concentrated among holders with coins aged less than five years, particularly those last active 3-5 years ago. This segment's supply has decreased by 32% over the past two years.

Changes in Whale Holdings: The largest whales holding 10,000 to 100,000 BTC have been reducing their positions since November 2023, while smaller investors holding 100 to 1,000 BTC have significantly increased their holdings by 23% over the past year.

Futures Market Reset: Bitcoin perpetual futures open interest has decreased by 32% in USD terms since October 9, with funding rates at oversold levels, indicating a significant reset in market speculation.

Extreme Fear in Market Sentiment: The Fear/Greed Index has dropped to its lowest level since March 2025, with current oversold conditions comparable to the tariff panic in spring 2025.

The report notes that despite pessimistic market sentiment, on-chain data shows long-term investors remain steadfast, and this adjustment phase may present better entry opportunities for investors.

Summary

Source: VanEck, originally titled "VanEck Mid-November 2025 Bitcoin ChainCheck"

Key Takeaways

• Long-term whales continue holding, with coins aged over five years showing sustained growth.

• Selling is concentrated among mid-term holders rather than the oldest wallets.

• The futures market appears to have completed a wash-out, with funding rates and open interest at oversold levels.

• Bitcoin (BTC) investors are feeling fearful.

ETP Outflows Drive Early Weakness
The past 30 days have been particularly challenging for holders, with BTC falling 13% amid motivated selling.

Since October 10, 2025, BTC ETP balances have seen outflows of 49.3k BTC, approximately -2% of assets under management (AUM), as weak hands who bought near the peak capitulated amid uncertainty about rate cuts and shifts in the AI narrative.

More concerningly, many have attributed the price weakness to early BTC whales.

For example, a "Satoshi-era" whale sold $1.5 billion worth of BTC in the week of November 14, 2025, emptying his entire wallet. Many believe that seasoned whales often signal BTC's long-term trajectory by buying and selling at key moments. Consequently, the cryptocurrency community turned bearish, with the Fear/Greed Index falling to its lowest level since March 2025 during the onset of the tariff panic.

Smaller Whales Accumulate Over 1-2 Years While Largest Whales Sell; Recent Net Changes Flat
Whale positions show long-term reduction but short-term increase.

Rather than assuming recent weakness stems from large holders selling, it's essential to examine the complete distribution of fund flows across groups.

The on-chain situation reveals a more nuanced rotation than a simple "whale sell-off." Observing wallets holding over 1,000 BTC clearly shows they have been reducing their BTC exposure since November 2023.

In fact, whales holding 10K-100K BTC have reduced their supply by -6% and -11% over the past 6 and 12 months, respectively. This supply has been absorbed by "smaller fish" holding 100 to 1,000 BTC. These smaller investors have increased their holdings by +9% and +23% over the past 6 and 12 months, respectively. For context, BTC itself has risen approximately 170% over the past two years.

Short-Term Whales Turn Net Buyers
Short-term data tells a different story: some whale groups have been accumulating. The 10K–100K BTC group increased their holdings by approximately +3%, +2.5%, and +84 bps over the past 30, 60, and 90 days, respectively. This may reflect tariff-driven selling and subsequent liquidation, which reduced BTC futures open interest by about 19% within 12 hours and pushed prices down over 20%.

Oldest BTC Whales Hold While Mid-Term Traders Sell
Mid-Term Holders Are the Real Sellers
However, analyzing "whale data" solely by holder size provides an incomplete picture. This perspective overlooks the rotation where experienced older whales transfer their coins to new, inexperienced holders. To deepen our understanding, we examine Bitcoin balances by "last active transfer time," which indicates how long ago the coins were last moved. The implied meaning of transfer is that these coins were likely sold to different holders.

Over the past 30 days, selling pressure has concentrated in the <5-year coin age group, while older coins have mostly maintained or increased their holdings. Interestingly, over the past six months, ownership has shifted from the (3-5 years) group to the (6 months-2 years) group, marking a transfer of funds from mid-term holders to new participants.

Among older groups—those whose coins were last active >5 years ago—coin turnover remains relatively low compared to other groups. In contrast, the largest outflow occurred in coins last active 3-5 years ago, with this group consistently declining in each study period. Over the past two years, this segment's supply has decreased by 32% as these coins were sent to new addresses. Given that many of these coins were likely accumulated during the previous Bitcoin cycle's downturn, their holders appear to be opportunistic cycle traders rather than long-term investors.

Meanwhile, coins last active >5 years ago have seen a net increase of +278K BTC (compared to two years ago). This growth reflects younger coins aging into the 5+ years category rather than reaccumulation, but it still indicates the ongoing conviction of long-term whales. While more granular analysis might yield additional insights, the overall trend remains encouraging: the longest-term holders continue to accumulate and hold.

Futures Market Shows Speculative Activity Reset
One of the best indicators of speculative sentiment is the annualized basis cost paid by traders willing to go long on Bitcoin perpetual futures. Since perpetual contracts never expire, their prices align with spot prices through interest charged to one side of the trade. If the perpetual price is higher than the spot price, longs must pay shorts an interest rate related to the spot/perpetual price difference. Due to cryptocurrencies' asymmetric upside potential, the perpetual basis is almost always positive.

During periods of lower demand for cryptocurrencies like BTC, the basis collapses. Recently, we've seen a sharp crash in Bitcoin perpetual open interest, down -20% in BTC terms and -32% in USD terms since October 9, 2025. This partly explains the sharp collapse in funding rates. Of course, if people turn bullish on BTC, this rate could climb rapidly.

In the past, when Bitcoin began a sustained decline, a clear signal typically emerged: perpetual funding rates would spike, sometimes averaging 40% on certain days during frenzied periods. But this time is different; since March 2024, we haven't seen such疯狂 increases in funding rates.

Here's an interesting aside—innovative protocols like Ethena and professional trading institutions have been engaging in large-scale "spot buying + perpetual shorting" arbitrage. Ethena alone reached $14 billion in scale in October 2025, though it later shrank to $8.3 billion. Such massive arbitrage activity has actually suppressed funding rates, somewhat distorting this traditional indicator.

Nevertheless, the current plunge in funding rates, combined with large-scale liquidation of perpetual open positions, indeed suggests the market has oversold. Another key indicator, NUPL (which reflects the average profit/loss level of all holders), also shows that the current oversold程度 is similar to the tariff panic in spring 2025 and the yen collapse in August 2024.

For investors, after this month's violent washout, it may be time to calmly seek entry opportunities. When the market panics, it often presents good布局 opportunities.

PING: The Meme That Opened the Door
PING’s 20× sprint two weeks ago was the perfect ignition.
First token ever deployed through x402 on Base, zero utility, pure reflexivity—an on-chain fireworks show that lured CT’s gaze toward a brand-new protocol.
Once the fireworks dimmed, liquidity hunted for something it could actually use.
Exit PING the entertainer, enter PayAI the plumber.

PayAI: The Facilitator Eating Coinbase’s Lunch
Facilitators are the invisible routers of x402: they validate micro-payments, settle statelessly and abstract away gas so AI agents can swipe a credit card without ever seeing a private key.
PayAI runs the only open network that is live on both Solana and every major EVM L2, and it does it without API keys—one GET request, one signed header, one second finality.
Numbers that matter:

• 14 % of total x402 payment volume now touches PayAI (Coinbase still dominates at 77 %, down from 96 % six weeks ago).

• Seller onboarding velocity is 82 % of Coinbase’s pace; every new API provider listing on PayAI shrinks the moat.

• Cumulative tx fees earned by facilitators: $1.3 M, of which PayAI’s cut is already six figures—real revenue, not discord promises.

Tokenomics: No Inflation, No Vesting, Just Skin
10 B PAYAI minted at genesis, 100 % circulating.
Team bought 2 B (20 %) on the open market and parked it in a publicly-viewed vault; half of that liquidity is locked for 365 days, half earns LP fees that recycle into ops.
Use-cases already coded:

• Burn PAYAI to waive facilitation fees (25 % discount).

• Stake PAYAI to boost an agent’s visibility in the buyer marketplace—advertising spend that accrues to token holders.

• Governance slashing: malicious facilitators lose staked PAYAI before users lose money.

• Arbitration vault: future dispute resolution is paid only in PAYAI, turning the token into court-fuel.

Why the Rotation Is Structural, Not Rotational
PING delivered attention; PayAI is delivering transactions.
Every new seller that plugs into PayAI produces a sink for the token (fees, visibility, arbitration) while simultaneously expanding the funnel for buyers.
The reflexive loop is now: more sellers → more PAYAI demand → cheaper facilitation → more sellers.
That flywheel is impossible for a no-code memecoin to replicate and hard for a centralized giant like Coinbase to match without cannibalizing its own KYC rails.

Signal for the Ecosystem
The market just voted with its wallet: in the x402 economy attention is the appetizer, cash-flow is the entrée.
PayAI’s 10× is the first proof that open, permissionless facilitators can outrun a NASDAQ-listed exchange inside a single vertical.
If the pattern holds, the next wave of x402 tokens will be valued on GMV, take-rate and seller churn—not on emoji culture.
For DePIN of money, that is a hell of a coming-of-age.

2021-2025 in One Glance

• Q4 2021: Liquidity orgy. BTC > $69 k, NASDAQ > 16 k, S&P 500 > 4.8 k; A-share hot spots still bubbling.

• 2022-23: Fastest Fed hike cycle since Volcker. BTC ‑77 %, ETH ‑82 %, S&P ‑27 %, NASDAQ ‑38 %, CSI 300 ‑30 %.

• 2023-25: Inflation rolls over, AI narrative arrives, rate-cut bets appear. U.S. equities and Crypto print new all-time highs; A-share only claws back to 3 800 in late-2025.

The Script Is Always the Same—Only the Actors Change
If you survived “9·4”, “3·12”, “5·19” or this year’s “10·11” you already know the rule: the deeper the hole, the sturdier the next foundation.
Stretch the time-line to four years and add the two traditional giants—U.S. equities and A-shares—and the pattern stays intact:

1. Liquidity tide lifts every boat.

2. Liquidity recedes; leverage detonates; correlations → 1.

3. Liquidity stabilises; fundamentals diverge; winners separate from tourist coins / zombie stocks.

Act I – The Top (Q4 2021)
Cheap money, stimmy checks, zero rates. Crypto floods with paper-billionaires; U.S. tech trades at 40× earnings; China’s “new-energy” funds price in 50 % annual growth forever. Nobody knows when the music stops—only that it must.

Act II – The Purge (2022-23)
Fed funds 0 % → 5.25 % in 16 months. Dollar smiles, everything else vomits.

• Crypto: Terra → 3AC → FTX; 20 % of BTC supply changes hands at < $20 k.

• U.S. equities: Multiple, not earnings, does the damage; FAANGs lose $3 trn in 10 months.

• A-shares: COVID reopening fails, property sector stalls, retail exits. Policy “bazookas” arrive late and under-size.

Act III – The Split-Track Recovery (2023-25)
U.S. Equities – AI Saves the Day
NVDA EPS +580 % in six quarters; Mag-7 margins expand to 29 %. S&P 500 reclaims high Jan-2024; by Oct-2025 it is 38 % above the old peak. The market is no longer “priced for perfection”; it is priced for “no alternative + buy-backs + fiscal dominance”.

Crypto – ETF Wall Streetisation
Jan-2024: spot-BTC ETFs approved. BlackRock alone seeds $28 bn in 8 months. BTC hits $126 k (+83 % vs 2021 top) but 90 % of alts still 70-90 % below prior highs. Market splits into “main-pool” (BTC, ETH, SOL) and “spec islands” with 50× velocity and 0× liquidity.

A-Shares – Policy vs. Perception
Seventeen bail-outs, five rate cuts, three “National Team” rescues. Index finally re-crosses 3 800 in Aug-2025, 4.5 years after the 2021 top—an annualised return of 1.2 %. Retail faith measured by new-account openings remains 40 % below 2020 levels.

Cross-Market DNA: Why Drawdowns Heal Differently

• U.S. Equities: Double-cycle machine—liquidity + earnings. Rule of law, buy-backs, deep institutional bid = fastest rebound.

• Crypto: Pure-play liquidity with narrative leverage. High beta to Fed balance-sheet expectations; post-ETF, begins to trade like “tech on steroids”.

• A-Shares: Policy-beta market. Valuation cheap for a reason; recovery gated by confidence, not just liquidity.

Portfolio Translation: How to Own the Next Cycle

1. Core – U.S. equities: 60-70 %. You are buying the global cost-of-capital benchmark.

2. Satellite alpha – Crypto: 5-15 %. Treat as a 4-year call option on monetary-network adoption; expect 70 % draw-downs and 300 % snap-backs.

3. Tactical – A-shares: 5-10 %, timed around policy convenings (National People’s Congress, PBoC LPR cuts). Use sector ETFs (EV, solar, semis) to avoid single-name land-mines.

Last Word
Bull markets give you return; bear markets give you the address of the assets that actually matter. The 2021-25 experiment proved once again that surviving the draw-down—not chasing the rally—is the only path to compound. In endurance investing, the winner is not the one who sprints fastest uphill, but the one who refuses to be carried out feet-first on the way down.

On 8 Oct Jia Yueting posted a rendered FF car stamped with the letters “BNB” and the caption “Drive a Binance-mobile, live a Binance-life.”

A freshly-minted meme coin called “Binance Car” instantly screamed to a $30 m market-cap.

Hours later Jia clarified: “I have never issued any token.”

The message was deleted, the pump evaporated, but the 42-year-old showman had proved he can still move markets with a single JPEG.

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2. From “Eco-Synergy” to “EAI + Crypto Flywheel”

While Faraday Future cars remain scarce, Jia’s new vehicle is a balance-sheet.

In September his Cayman-registered crypto fund C10 Treasury reported a 7 % unrealised gain and then spent $41 m to swallow NASDAQ shell QLGN.

Subject to shareholder vote the ticker will become CXC10 and the mandate will switch to “Web3 treasury management” backed by the top-10 liquid crypto-assets.

Jia calls the strategy “EAI + Crypto dual flywheel”—electric-intelligence mobility on one side, on-chain treasury on the other, each feeding hype and liquidity to the other.

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3. The First Crypto Crush—2011-2016

Jia’s blockchain romance is fourteen years old.

In 2011, while LeTV was still China’s hottest video stock, cloud engineer Li Ming was running a Bitcoin node on his office laptop.

Jia asked for primers, then green-lit a secret project to embed hash-power into LeTV boxes and TVs—users would mine satoshis to pay for annual subscriptions.

By 2015 LeTV sold 3 million smart-TVs; BTC had just kissed $1 k.

The mining feature never shipped, but Jia kept the lab alive.

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4. A Lab, a Legend, a Liquidity Crunch

March 2016: LeTV Blockchain Lab is formally opened, headed by ex-BoCom vice-president Wang Yongli.

Experiments ranged from copyright NFTs to Stellar-based cross-border payments for LeTV’s incoming Vizio acquisition.

December 2016: LeTV signs a strategic MoU with Stellar, the first Chinese tech giant to partner with a public chain.

The same month LeTV’s bank accounts are frozen; the empire enters free-fall.

The lab is mothballed, but the intellectual seed is planted.

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5. Exit to America, Tokens in the Air

July 2017 Jia boards a one-way flight to Los Angeles.

While FF burns cash, the ICO circus rages.

In China, LeTV’s spin-off Lerong Zhixin teams with start-up OneChain to launch the “One-Chain Box”—a $59 TV dongle that rewards users with OC tokens for sharing bandwidth.

The Shenzhen exchange issues a blockchain-hype warning; the device is discontinued within weeks.

At least 17 ex-LeTV engineers scatter into crypto, founding exchanges, layer-2 studios and custody shops—Jia’s diaspora becomes an unplanned angel-network.

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6. 2025: The Comeback Deck

Today Jia pitches investors inside a rented WeWork in Santa Monica.

The deck opens with a photo of the deleted BNB-car tweet and the line:

“Attention is the scarce asset—FF and C10 will monetise it.”

Slide 12: CXC10 will custody BTC, ETH, SOL, BNB, HYPE, etc., lend to institutions, and issue tokenised convertible notes backed by FF vehicle pre-orders.

Slide 17: FF 91 deliveries (whenever they happen) will embed a hardware wallet; every mile driven mines “EAI-miles” convertible to CXC10 tokens.

Institutional backers—mostly Asian family offices—have already subscribed $80 m of the planned $200 m PIPE.

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7. Déjà Vu or Real Deal?

Bulls argue Jia finally has the right timing: spot-crypto ETFs are live, tokenised T-bills trade billions weekly, and carmakers issue loyalty tokens.

Skeptics see the same movie: grand narrative, opaque cash-flows, minority shareholders left holding the bag.

The next chapter is simple to describe, hard to execute: ship cars, ship code, ship returns—in that order.

For the “old man of crypto” who never mined a block yet never stopped mining attention, the final test has just begun.

Core Insights

• Closed vs. Open Ecosystems: Stablecoin issuers find it easier to guide users within closed systems (e.g., custodial platforms or wallets), while challenging dominant stablecoins like USDC and USDT in open ecosystems remains difficult.

• Two Tiers of Success:

  • On-platform monetization: Generating revenue from user balances within the issuer’s own application.

  • Off-platform adoption: Circulating beyond the issuer’s own products—a far more challenging goal achieved only by a few.

• Pillars of Off-Platform Adoption: Liquidity, fiat ramps, utility, and interoperability are dominated by USDC and USDT.

• Custody and Control Matter: Non-custodial apps and DEXs have minimal influence; CEXs sit in the middle; custodial wallets and apps hold the most sway and can promote their stablecoins more freely.

• Future Outlook: A surge of stablecoins is expected, but most will succeed only within their "walled gardens." Very few will break through by targeting new markets with weaker network effects.

The Hyperliquid Vote: Symbolism and Trends

The Hyperliquid vote for USDH was more symbolic than decisive. As an open, permissionless platform, Hyperliquid allows anyone to deploy stablecoins and create trading pairs. While USDC still dominates, the vote highlighted a key trend: platforms are now actively pursuing the economic benefits of stablecoins.

Similar dynamics are unfolding elsewhere:

• The Solana community noted that ~$450 million in value annually flows from its ecosystem to Circle and Tether, indirectly supporting competing chains like Base.

• MetaMask launched mUSD, and MegaETH adopted a similar strategy on its new L2 network.

The logic is clear: if you have users, why surrender value to others?

Why Issuers Try: The Incentive Structure

The incentives are straightforward: stablecoin balances generate yield. The more balances held, the more revenue earned. For financial platforms, this represents a new income stream.

Success, however, operates on two levels:

1. On-Platform Monetization: Capitalizing on user balances within the issuer’s own app, wallet, or exchange. This is the easier route, as the platform already controls these balances.

2. Off-Platform Adoption: Having the stablecoin circulate beyond the issuer’s own products, earning yield from balances outside direct control. So far, only USDT and USDC have achieved this at scale.

Why Attempts Don’t Guarantee Success

Issuing a stablecoin is easy; driving adoption—especially off-platform—is not.

Platforms without full custody can guide users through incentives or UX design, but they often face resistance. Overly aggressive promotion may harm the user experience. For CEXs, slight yield advantages rarely offset the revenue from maximizing wallet share and trading activity. For DEXs like Hyperliquid, displacing USDC is even harder due to its deep liquidity and entrenched user habits.

Off-platform adoption hinges on four pillars:

• Liquidity: Can users easily swap the stablecoin for other assets (BTC, ETH, SOL) at low slippage?

• Fiat Ramps: How many channels exist for converting between fiat and the stablecoin?

• Utility: What can the stablecoin be used for—trading, lending, payments, conversions?

• Interoperability: How seamlessly does it move across chains and platforms?

USDC and USDT dominate these areas globally, reinforcing their network effects. Challengers may thrive within their own ecosystems, but once users transact elsewhere, they revert to the dominant stablecoins.

Who Can Successfully Push a Stablecoin Internally?

The ability to promote a native stablecoin depends largely on custody and control:

• Lowest Influence: Non-custodial apps and DEXs. They can only influence through UI prominence, subsidies, or incentives.

• Medium Influence: CEXs. They custody balances but remain market-driven. They can subsidize preferred trading pairs or unify order books.

• Highest Influence: Custodial wallets and apps. These operators control the keys and can display dollar balances while deciding the backing asset.

The pattern is clear: the closer to custody and user interface, the greater the influence—and the less reliant on competing purely on liquidity.

The Future: A Thousand Stablecoins, Mostly Walled Gardens

Stablecoin success isn’t about who can issue, but who can enforce adoption.

• In open ecosystems, liquidity favors incumbents.

• In closed systems, custody and UI control determine outcomes.

We can expect a flood of stablecoins from wallets, exchanges, L2s, and consumer apps. Most will remain confined as "walled garden" assets—useful and profitable internally but rarely circulating beyond their native platforms.

The few that break through will likely do so by targeting new markets with weaker network effects, not by directly challenging USDC or USDT. Each attempt will serve as a valuable experiment in the evolution of digital money.

Expansion

Authors | Lin Bai, Crow AI Talk

Last week, Anthropic announced the completion of its $13 billion Series F financing, with its valuation surging to $183 billion.

As soon as the news broke, netizens immediately thought of one name—SBF. Some sighed that if he hadn’t "gotten into trouble," this investment might have directly ranked among the "top five best investments in history."

Who is SBF? A post-90s individual who rose to fame overnight through cryptocurrencies. In just three years, he went from an unknown figure to the "king of the crypto world," with a peak net worth of $26 billion, firmly securing a spot in the Top 50 of the U.S. Rich List.

Back in 2021, when AI was far from as popular as it is today, SBF suddenly entered the AI track, investing $500 million in Anthropic and securing an 8% stake outright.

In today’s context, this would be the kind of legendary story Silicon Valley loves to hype: "A genius young man who bet on the future."

Unfortunately, fate has a penchant for dark humor. In 2022—the very year the AI boom took off—SBF’s empire came crashing down. All his assets, including this Anthropic stake, were packaged and sold by the liquidation team, ultimately fetching only $1.4 billion.

If the stake had been held until now, based on Anthropic’s latest valuation, the 8% equity would be worth approximately $14.6 billion (though this figure may be lower due to equity dilution)—a full ten times the selling price.

This is SBF’s farce: a post-90s "madman" in the crypto world, using money from others’ pockets, almost made an investment myth that could have gone down in history. Regrettably, before becoming a legend, he first became a cautionary tale.

$500 Million: A Heavy Bet on Anthropic

You may not have heard of Sam Bankman-Fried (SBF), but in the crypto world, he is nothing short of a legend.

He was the owner of FTX, once the world’s third-largest cryptocurrency exchange, with the company’s valuation soaring to $32 billion at one point. Meanwhile, he also controlled the hedge fund Alameda Research, whose book assets peaked at $14.6 billion.

At the height of his fame, SBF’s net worth catapulted him to the 41st position on the Forbes U.S. Rich List, standing side by side with Silicon Valley tech tycoons.

If FTX is viewed as a "digital asset bank," then Alameda is more like a "fund company that both makes investments and trades cryptocurrencies itself." On one hand, it helps clients allocate cryptocurrency investment portfolios; on the other hand, it uses its own capital for venture capital.

From 2021 to 2022, SBF suddenly shifted his focus from virtual currencies to the real world. He directly instructed Alameda to borrow money, embarking on large-scale venture capital investments and pouring funds into non-crypto sectors—this was both a bet on the future and an attempt to diversify his risks. Among these bets, Anthropic stood out.

In 2021, SBF made a bold move, leading Alameda to spearhead Anthropic’s Series B financing. In that round, Anthropic raised a total of $580 million, with Alameda contributing $500 million alone, accounting for nearly 8% of the company’s equity.

It’s important to note that at that time, ChatGPT had not yet gained mainstream attention, and AI was nowhere near as popular as it is today. From an outsider’s perspective, SBF’s move was nothing short of a high-stakes gamble on the future.

What’s more interesting is that there was a touch of "idealism" behind this investment.

SBF considered himself a follower of Effective Altruism (EA). The core logic of EA is that doing good should not rely solely on compassion; instead, it should emphasize the cost-benefit ratio. In simple terms, with the same amount of money, one should strive to help more people and create greater social value.

Anthropic positioned itself as a "safety-first" large-model laboratory, dedicated to researching ways to reduce AI risks—an objective that perfectly aligned with the philosophy of the EA community. Additionally, early investors included EA heavyweights like Jaan Tallinn, co-founder of Skype. This made the investment seem like a combination of idealism and capitalism.

In this way, SBF led Alameda to invest $500 million in Anthropic, helping the company build a large-scale computing power infrastructure and research facilities.

"Underselling" Anthropic: A Modest Profit of $800 Million

If the story had ended here, it would have been a classic tale of "a genius young man in the crypto world who bet correctly on the future."

But fate had other plans. In November 2022, crypto media outlet CoinDesk exposed Alameda’s financial statements, uncovering the secret behind the house of cards:

One-third of its $14.6 billion in assets consisted of FTT—the native token issued by FTX itself.

What did this mean? Alameda obtained FTT at a low price, then drove up its market value by hoarding the token. It then used these tokens as collateral to borrow money from FTX, and subsequently used the borrowed funds for high-leverage investments, creating an internal cycle of capital.

As soon as the exposé was published, the market panicked and began selling off FTT, causing its price to plummet. Alameda and FTX collapsed one after another, and SBF’s empire crumbled in an instant.

Entering the liquidation phase, the Anthropic stake became the top asset targeted by FTX’s creditors. In 2023, as Google and Amazon entered the fray, Anthropic’s valuation skyrocketed, turning its stake into a "golden chip" in FTX’s asset portfolio.

The popularity of Anthropic even affected the sale of this stake. Due to the large number of potential buyers and the lengthy due diligence process, the sale was temporarily suspended.

It wasn’t until 2024 that FTX sold its Anthropic shares in two installments:

In the first sale, it offloaded two-thirds of the stake, reclaiming $884 million. It is said that 24 institutional investors participated in the subscription to split these shares, with the largest buyer being a sovereign wealth fund from Abu Dhabi.

In the second sale, FTX sold the remaining approximately one-third of its holdings (about 15 million shares), reclaiming $450 million and completely divesting itself of Anthropic equity.

In total, the FTX liquidation team recovered nearly $1.4 billion through the sale of the Anthropic stake—almost three times SBF’s original investment.

Ironically, if these shares had been held until September 2025, when Anthropic completed its latest round of financing (with a post-money valuation of $183 billion), the theoretical value of the 8% stake could have reached as high as $14.6 billion, representing a full $14 billion in profit. But in reality, the money had long been turned into "life-saving funds" in the liquidation pool.

Even more dramatic is that this investment was later brought up during SBF’s trial.

SBF’s defense attorney emphasized: "SBF is not someone who just wastes money recklessly. He invested in an AI company whose valuation later skyrocketed—this proves he has foresight and business acumen."

But the prosecution directly pushed back:

"SBF’s funds were not clean, self-owned capital; they were ‘moved’ from FTX customers’ pockets. Even if there was a book profit, it cannot wash away the original sin of financial fraud, nor can it dress up ‘intentional misappropriation’ as ‘investment error.’"

In the end, in October 2023, U.S. prosecutors filed a motion clearly stating:

"The defendant used customer funds to invest in Anthropic—this is an extension of his criminal methods, not evidence in his favor."

The irony is that it was this post-90s "madman" in the crypto world who almost made the most successful investment in AI history. Unfortunately, he never lived to see that day.

The “Melt-Up” Script
Strategists such as Henrik Zeberg and David Hunter see equities entering a parabolic blow-off: Zeberg’s year-end target for the S&P 500 is 7,000; Hunter’s is 8,000-plus. Macro analyst Octavio Costa argues the U.S. dollar is breaking a 14-year support line—another tail-wind for anti-fiat assets. The setup rhymes with the final months of the 1999 internet bubble: liquidity up, discipline down, fireworks last.

2026: The Reckoning?
Both Zeberg and Hunter warn that the same liquidity rug will be yanked in 2026, delivering the largest crash since 1929.
Evidence they cite:

• Real-economy stall signals—rising housing inventory, surging loan delinquencies.

• The end of a 50-year debt super-cycle and an unprecedented deleveraging.

If the real economy buckles, the financial economy—crypto included—follows.

Bitcoin’s 200-Week Line in the Sand
Even without a global macro implosion, BTC has a habit of giving back the halving moonshot:

• 2018: –84 %, low prints 20 % below the 200-week simple moving average (SMA).

• 2022: –77 %, low tags the 200-week SMA near US-$ 15.5 k.

Today that SMA sits at ≈ US-$ 52 k; a final spike could push it to US-$ 65 k by early 2026. A repeat draw-down would therefore target US-$ 50–65 k at minimum—and potentially far lower if the unwind is systemic.

History Rhymes, It Rarely Repeats
No one rings a bell at the top. Rate cuts can extend the party longer than skeptics imagine, and fiat debasement may ultimately limit how hard hard-money assets fall. But the path is narrowing: parabolic up, cathartic down. Traders should mark the 200-week SMA as the line between “healthy correction” and “generational crash.”

European crypto asset management firm CoinShares merged with special purpose acquisition company Vine Hill Capital Investment Corp on September 8, achieving a backdoor listing on Nasdaq. This makes it the first European Web3 company to list in the U.S., with a valuation of $1.2 billion, representing a 37% premium over its European market value.

Company Background

Formerly known as Global Advisors, established in 1998, the company pivoted to the digital asset space in 2014 and was renamed CoinShares in 2016. It has since evolved into a comprehensive crypto asset management institution integrating asset management, capital markets, and proprietary investments.

Business Development

In 2021, CoinShares went public in Sweden and was once Europe's largest and the world's second-largest crypto asset management company, with assets under management (AUM) reaching $4.56 billion. In early 2024, it acquired Valkyrie, a U.S. Bitcoin spot ETF issuer. Its current AUM exceeds $8 billion, ranking fourth globally.

Financial Performance

In Q1 2025, revenue was $39.958 million, and Q2 revenue increased by 3.8% quarter-over-quarter to $41.519 million. However, profit margins and some business segments showed volatility. The asset management business accounted for about 74% of total revenue but experienced slow growth. Capital markets and proprietary investments were significantly impacted by market fluctuations.

Challenges and Prospects

CoinShares faces potential competition from U.S. asset management giants. To sustain its current high valuation and future growth, it must build a moat in non-U.S. markets while expanding its U.S. operations.

Summary

Author: Eric, Foresight News

Following in the footsteps of Coinbase, Galaxy Digital, Circle, Bullish, and Gemini, the U.S. stock market is set to welcome another Web3 company.

On September 8, European crypto asset management firm CoinShares merged with Vine Hill Capital Investment Corp, a special purpose acquisition company listed on Nasdaq, and Odysseus Holdings Limited, a newly established Jersey-based company. Post-merger, CoinShares will list on Nasdaq (or another U.S. exchange) and delist from Nasdaq Stockholm. After a series of U.S.-based Web3 companies went public, the first European本土 Web3 enterprise will also enter the U.S. capital market.

CoinShares originated from Global Advisors, a commodity investment company founded in 1998 by Russell Newton and Danny Masters. Russell Newton worked in crude oil trading for eight years, including at Shell Oil, before joining J.P. Morgan as a commodity strategist in July 1994. Co-founder Danny Masters, now Chairman of CoinShares, served as Global Head of Energy Trading at J.P. Morgan before co-founding Global Advisors.

The current CEO of CoinShares, economist Jean-Marie Mognetti, joined Global Advisors in 2012. Just a year after his joining, global macro investors began withdrawing from commodities en masse, shifting to stocks and fixed income. For the trio, the company urgently needed a new investment direction, and Bitcoin, then priced at a few hundred dollars, caught their attention.

Without hesitation, Global Advisors fully transitioned to the digital asset space in 2014, rebranding as CoinShares in 2016. It gradually developed into today's integrated crypto asset management firm, encompassing asset management, capital markets, and proprietary investments.

In 2014, Global Advisors launched Europe's first regulated Bitcoin investment fund. After rebranding, CoinShares acquired XBT Provider, which launched the first Bitcoin-based security listed on a regulated exchange. Its Bitcoin Tracker One ETP debuted in Sweden in 2015.

In early 2021, CoinShares began offering physically-backed ETPs (exchange-traded products), covering not only Bitcoin and Ethereum but also tokens like LTC, XRP, LINK, and UNI. In March of the same year, CoinShares went public in Sweden, becoming the world's second listed Web3 company after Galaxy Digital (which had already listed on the Toronto Stock Exchange). According to data provided by CoinShares, as of February 19, 2021, its AUM was $4.56 billion, including 70,185 Bitcoin and 655,211 Ethereum, making it Europe's largest and the world's second-largest crypto asset management company at the time (after Grayscale).

In comparison, as of February 24, 2021, Grayscale's total AUM was $39.3 billion, Bitwise's AUM had just surpassed $1 billion, and Galaxy Digital's AUM was $834.7 million as of January 31, 2021.

In early 2024, after the SEC approved Bitcoin spot ETFs from several institutions, CoinShares acquired Valkyrie, one of the issuers. As of the time of writing, Valkyrie's Bitcoin spot ETF AUM exceeds $650 million.

Besides asset management, investment is a significant business for CoinShares. At the time of its 2021 listing, CoinShares disclosed its investments in Canadian crypto asset management firm 3iQ Corp and the parent company of U.S. qualified trust institution Kingdom Trust, made in late 2020. In 2021 and 2022, CoinShares twice invested in Swiss online bank FlowBank, holding nearly 30% of shares at its peak. However, FlowBank went bankrupt and liquidated in 2022 due to insolvency.

Now, let's discuss CoinShares' financial performance.

Comparing CoinShares' Q1 and Q2 financial reports released this year, Q1 revenue was $39.958 million, down approximately 15.88% year-over-year. EBITDA was $29.781 million, down about 15.7% year-over-year, but the profit margin reached 75%, slightly higher than the previous year. Including changes in the value of the company's self-held crypto assets and taxes, CoinShares' comprehensive income for Q1 was approximately $24.79 million, down 42.1% year-over-year.

In the asset management business, which accounts for the highest proportion, CoinShares recorded revenue of $29.566 million in Q1, about 74% of total revenue, up approximately 20.8% year-over-year. Profit after direct costs and administrative expenses was about $22.714 million, up about 5% year-over-year.

In the capital markets infrastructure business, CoinShares recorded approximately $11.911 million in Q1, down about 15.4% year-over-year. This business includes liquidity provision revenue, delta-neutral trading strategy revenue, digital asset lending, and staking revenue. Profit after direct costs and administrative expenses was about $9.335 million, down about 18.7% year-over-year.

In proprietary investments, CoinShares lost approximately $1.519 million in Q1, compared to a profit of about $8.942 million in the same period last year, a drastic decline of about 117%.

Due to the overall decline in cryptocurrency prices in Q1, only the asset management business, which is less affected by price fluctuations, showed growth, while other segments declined. Detailed financial reports indicate that liquidity provision, lending, and staking revenues in the capital markets infrastructure business were significantly impacted by price declines and reduced trading activity, though delta-neutral strategy trading offset some losses. Investment performance was dragged down by the overall market decline. Overall, CoinShares did not see a decline in its core business and was actively adjusting its investment strategies.

In Q2, cryptocurrency prices generally rose, but CoinShares' business did not experience significant growth.

Q2 revenue was $41.519 million, up about 3.8% quarter-over-quarter and surging 258.3% year-over-year. EBITDA was $26.299 million, down 11.7% quarter-over-quarter and about 22.7% year-over-year, with the profit margin dropping to 63%. Comprehensive income for Q2 was approximately $25.578 million, up about 3.2% quarter-over-quarter and 1.1% year-over-year.

For the first half of the year, due to losses from FlowBank's bankruptcy and income from selling FTX claims in 2024, the data is somewhat distorted (explaining the abnormal year-over-year revenue surge). Excluding these factors, CoinShares' performance in the first half of this year was largely unchanged from the same period last year.

In asset management, Q2 revenue slightly exceeded $30 million, up 1.6% quarter-over-quarter and 6.1% year-over-year. Operating profit was $21.748 million, down about 4.3% quarter-over-quarter and 10.3% year-over-year. For the first half, total asset management revenue was approximately $59.613 million, up 12.4% year-over-year, while operating profit was $44.462 million, down 3.5% year-over-year.

CoinShares noted that products under its XBT series saw net outflows of $126 million in Q2, and the company allocated more expenses to the asset management department, leading to increased revenue but declining profits.

In capital markets infrastructure, Q2 revenue was approximately $11.346 million, down 2% quarter-over-quarter and 22.3% year-over-year. Excluding additional income from the sale of FTX claims, both profit and profit margin declined.

In proprietary investments, CoinShares recorded a profit of nearly $125,000 in Q2. While this represents an improvement compared to the Q1 loss of about $1.519 million, investment gains and losses are somewhat random over time, limiting their reference value. Notably, CoinShares has been incurring investment losses throughout 2024 and into 2025, whereas it achieved a profit of nearly $3.7 million in investments in 2023.

Although CoinShares stated in its roadshow materials that its total AUM has exceeded $8 billion, making it the world's fourth-largest crypto asset management institution after BlackRock, Grayscale, and Fidelity, and the largest in the EMEA region (Europe, Middle East, and Africa) with about 34% market share, the above data indicate that its growth is relatively slow. Aside from steady but modest growth in asset management, other business segments show significant volatility. CoinShares' acquisition of Valkyrie and its U.S. listing are essentially efforts to expand its U.S. operations, though its home market lacks a unique moat.

According to ISS Market Intelligence data, as of the end of May this year, the AUM of U.S. fund companies in Europe grew from $2.2 trillion a decade ago to $4.9 trillion. If U.S. asset management giants decide to expand their crypto asset management business to Europe, CoinShares will face formidable competition.

Assuming the SEC approves more cryptocurrency ETFs in the future, CoinShares' current advantages may gradually erode. Based on its European stock closing price yesterday, CoinShares' market capitalization is approximately SEK 8.228 billion, or about $877 million, with a P/E ratio of about 7.97. However, its "backdoor listing" valuation reached $1.2 billion, a premium of nearly 37%.

Compared to BlackRock, the world's largest asset management company with an AUM of $12.5 trillion as of Q2 this year, CoinShares' ratio of AUM to market capitalization far exceeds BlackRock's, but its P/E ratio is significantly lower than BlackRock's nearly 27. This creates a contradictory valuation scenario for CoinShares. Although crypto asset management will remain highly attractive for the foreseeable future, whether CoinShares' market capitalization can grow significantly depends rationally on whether its asset management business can achieve超预期 growth, establish a moat in non-U.S. markets, and capture a share of the U.S. market.

Total Value Locked (TVL): Ethereum’s TVL reached a new high of $88 billion in 2025, maintaining its leading position despite competition from other chains.

Active Users: Ethereum L1 daily active addresses hit a historic high of 580,000. When combined with L2s (e.g., Base, Arbitrum), daily active addresses exceed 2.5 million.

Daily Transaction Volume: Ethereum L1 daily transactions remain stable at over 1.7 million, with a cumulative total of 2.9 billion transactions. Including L2s, the ecosystem processes over 500 million daily transactions.

Institutional Adoption: Institutions like J.P. Morgan and the Trump administration have chosen Ethereum. Ethereum dominates the RWA sector with a 54% market share, and Ethereum ETF inflows have surged.

Censorship Resistance: Ethereum upholds censorship resistance, with block builders generally processing all transactions. Developers are pushing for "inclusion lists" to further strengthen this feature.

Active Developers: Ethereum leads with 186 core developers, and the EVM has become the standard for blockchain development.

Economic Security: Staked ETH value reached a historic high of $140 billion, continuously enhancing network security.

Contract Deployments: In 2025, daily new contract deployments exceeded 200,000 multiple times, with L1 remaining a hub of innovation.

ETH Price: In 2025, ETH appreciated by 75% against Bitcoin, approaching all-time highs, with growing expectations for a breakthrough to $10,000.

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Summary

Source: Bankless

Compiled and Organized by: BitpushNews

Ethereum has now been around for a decade. A full ten years after its mainnet began producing blocks, on-chain data in 2025 shows explosive growth in activity!

Although alternative public chains and Ethereum’s own Layer 2 networks have diverted some user activity, Ethereum remains the beating heart of the crypto economy—leading the industry in developer momentum, censorship resistance, and numerous key on-chain metrics.

So, what does the landscape of this pioneering smart contract platform look like after a decade of development? These 10 core data points illustrate Ethereum’s enduring dominance.

1. Stablecoin Supply

Tether, in collaboration with crypto exchange Bitfinex, pioneered the U.S. dollar-pegged stablecoin in 2015. Since these tokens began migrating on-chain in 2017, the supply of stablecoins on the Ethereum network has expanded at an astonishing rate.

Apart from a brief decline during the worst of the last crypto bear market, the on-chain stablecoin supply on Ethereum has historically trended "only upward," breaking through the $100 billion mark by the end of 2024 and showing no signs of slowing down in recent months.

Today, dozens of dollar-pegged token issuers operate on the network, including traditional financial giants like PayPal and J.P. Morgan. Meanwhile, the recently passed U.S. GENIUS Act is paving the way for institutional adoption, drawing mainstream attention to stablecoins as an alternative medium for daily payments.

2. Total Value Locked (TVL)

Ethereum was the original smart contract platform. Although multiple L1 competitors and their integrated L2 networks have diverted some of Ethereum’s locked value, the chain remains a leader in TVL.

TVL stored in on-chain smart contracts and their associated applications is the lifeblood of every crypto network: it represents the amount of value users trust and deposit into the on-chain financial system.

Despite suffering during the last bear market as cryptocurrency prices plummeted and users withdrew or migrated to competing chains, Ethereum’s TVL has exploded since April this year, reaching a new cycle high of over $88 billion and actively chasing new all-time highs.

3. Active Users

Even as casual Ethereum ecosystem user activity has migrated to L2s, it hasn’t slowed the growth of daily active users on Ethereum, which recently hit a historic high of 580,000 unique addresses.

During past bear markets, daily active addresses remained stable and have continued climbing throughout 2025, with more users turning to Ethereum L1 for the unique properties offered by the world’s leading on-chain financial ecosystem.

When active addresses on Ethereum L2s are included, this growth becomes even more staggering; Coinbase’s Base L2 alone sees 1.3 million daily active addresses. Meanwhile, leading L2s like Arbitrum, Celo, Ink, and World Chain add another 1.2 million addresses.

4. Daily Transaction Volume

As active users on Ethereum L1 have increased, so has the number of transactions. Since October 2023, daily transaction volume has steadily risen, with a floor of over 1.7 million transactions at the time of writing.

Although this metric spikes sharply during periods of intense speculative activity, Ethereum’s daily transaction volume has historically trended "only upward," with a cumulative total of 2.9 billion transactions since the network’s genesis.

When including Ethereum’s numerous L2s, this statistic becomes even more optimistic. Including leading L2s, the Ethereum ecosystem processes over 500 million daily transactions.

5. Institutional Adoption

Ethereum has long been a blockchain favored by on-chain enthusiasts, but in 2025, the crypto network broke out of its niche to become a preferred smart contract platform for institutional players.

President Donald Trump chose the Ethereum network as the home for his "World Free Financial Project" in 2024, early in this trend. Banking giant J.P. Morgan deployed its deposit token on Base in June this year, and Ethereum L1 has established itself as the dominant platform for real-world assets (RWA), controlling nearly $7 billion in value and capturing 54% of the market share in this sector.

In recent months, Ethereum treasury companies—including those led by Consensys’ Joe Lubin and Wall Street’s Tom Lee—have stolen the spotlight with massive price outperformance compared to Bitcoin competitors. Similarly, Ethereum ETF inflows have surged dramatically in recent weeks, attracting hundreds of millions of dollars daily, signaling that Ethereum mania is sweeping the retail market.

6. Censorship Resistance

Ethereum L1 prides itself on censorship resistance, offering an open financial system by allowing anyone to broadcast transactions without fear of their operational capabilities being compromised by a single actor or nation-state.

Unlike other crypto networks that frequently roll back chains to prevent funds from falling into the wrong hands, Ethereum’s culture is unique in its blind trust in code, ensuring all transactions are final regardless of consequences.

These values extend to block building, where most block builders choose to process all transactions, regardless of whether addresses or smart contracts have been flagged as malicious by nation-state actors.

Since President Donald Trump took office, compliance with the U.S. Office of Foreign Assets Control (OFAC) sanctions list has significantly declined in 2025, and major block builders have committed to processing all transactions regardless of origin.

Furthermore, leading Ethereum developers remain committed to implementing "inclusion lists," which would force all validators and block builders to include transactions based solely on fees.

7. Active Developers

The state of Ethereum’s core developer community—the number of unique GitHub users who have committed code to its public repositories at least once in the past 30 days—remains strong!

Although the number of active developers is below the peak of the last bull cycle, Ethereum’s core active developer count (with 186 unique contributors) still surpasses all other crypto projects.

Ethereum’s EVM (Ethereum Virtual Machine) has become the default standard for blockchain-based development, with its applications enjoying broad compatibility across mainstream chains.

8. Economic Security

Apart from a few brief interruptions (the longest of which occurred between November 2024 and February 2025), the amount of staked ETH has steadily increased since the "Beacon Chain" staking first went live in November 2020.

Combined with ETH’s explosive price action, the ongoing upward trend in ETH staking has pushed Ethereum’s "economic security"—the value of ETH staked by validators to protect the network—to a historic high of $140 billion.

As Ethereum’s economic security grows, users can transact with greater confidence, knowing their assets are increasingly protected from malicious actors seeking to manipulate the blockchain ledger.

9. Contract Deployments

Blockchains exist to serve user transactions, and contract deployments provide insight into the evolving scope of on-chain activity.

These contracts can range from simple token deployments to complex applications, but each new contract represents potential new behaviors or use cases for users. In this way, contract deployments signal growth in on-chain innovation and utility.

Although Ethereum contract deployments slowed in late 2024 and early 2025, recent months have seen a fierce development boom, with daily new contract deployments exceeding 200,000 multiple times this year. Despite developers migrating to L2s, Ethereum L1 remains a vibrant hub of activity.

10. ETH Price

Arguably the most watched success metric for any crypto project is the price of its native token. Although Ethereum struggled for years to compete with alternative cryptocurrencies, the token has staged a strong comeback since May 2025, appreciating by 75% against Bitcoin.

Ethereum has become one of the best-performing crypto assets in recent months, with its industry dominance nearly doubling as crypto natives and institutional investors rally around ETH.

Although Ethereum remains 10% away from its all-time high, recent price performance suggests this goal could be achieved within days. A breakthrough at this level could bring it within striking distance of $10,000 when viewed on a logarithmic chart…

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Liquidation Mechanisms Explained

• Hyperliquid’s Market-Based Liquidation: When user equity falls below the Maintenance Margin (MM), the system injects liquidation orders into the order book for market absorption. Large positions may be liquidated in batches, with further deterioration activating a backup mechanism (Liquidator Vault). Its Mark Price is heavily influenced by the internal order book,容易 forming a positive feedback loop of "sweeping → liquidation → re-sweeping" during low liquidity, accelerating price volatility.

• Lighter’s Tiered Liquidation: Three thresholds are set: Initial Margin (IM), Maintenance Margin (MM), and Close-Out Margin (CO). Falling below MM triggers "zero-price" IOC limit orders to reduce positions without worsening account health; falling below CO leads to full liquidation, activating the Insurance Fund (LLP) or Auto-Deleveraging (ADL). This mechanism is gentler but may charge ≤1% liquidation fees.

User Strategies

• Monitor Token Risk Metrics: Use data like OI/Market Cap ratio, abnormal funding rates, and on-chain liquidity to gauge manipulation risks. Tokens with high OI/Market Cap ratios are more susceptible to capital-driven volatility.

• Assess Market Depth: Calculate the capital required to move prices by ±2%. Assets with poor depth have lower manipulation costs and higher risks. Prioritize platforms with strong liquidity and mainstream tokens.

• Understand Platform Rules: Carefully read liquidation protocols, focusing on Mark Price calculation (reliance on internal trades), tiered margin requirements, liquidation paths, and fee structures. Avoid high-leverage trading on pre-launch tokens with insufficient depth.

• Risk Control Measures: Set stop-losses, use isolated margin mode to compartmentalize risks, and avoid overexposure in cross-margin. Cross-platform hedging requires understanding differences in liquidation mechanisms and is not foolproof.

Core Conclusion
The crypto market is a jungle where the strong prey on the weak. Retail users must reduce liquidation risks by familiarizing themselves with rules, evaluating liquidity, and implementing strict risk controls. The essence of contract trading is risk博弈—understanding mechanisms is more critical than chasing profits.

Summary

Expand
In the first episode of the final season of Black Mirror, "Joan Is Awful," the protagonist casually clicks "Agree," allowing the platform to legally turn her daily life into a global reality show based on the user agreement no one reads.

In reality, every industry has its user agreements. For perpetual trading (Perp), the liquidation rules are the "user agreement" of this niche.

They are unsexy and inconspicuous but incredibly important. The same token can have different depths, different price charts, and different liquidation mechanisms across platforms, leading to entirely different outcomes for positions.

The two Perp DEX examples today are perfect case studies: While Binance’s pre-launch contracts showed no equivalent volatility, XPL on Hyperliquid surged nearly +200% in about 5 minutes, and ETH on Lighter wicked to $5,100.

In extreme markets, some rejoice while others suffer.

Within just an hour, several whales on Hyperliquid profited by collectively pushing prices to liquidate opposing short positions, netting between $38 million and $46.1 million. Notably, address 0xb9c…6801e, which had埋伏 long positions since August 24, made approximately $16 million in just one minute after the 5:35 "sweep." HLP netted about $47,000 from the event. Shorts were less fortunate: 0x64a4’s XPL short was liquidated in minutes, losing ~$2 million, while 0xC2Cb’s short was fully liquidated, losing ~$4.59 million.

This was less a case of "bad actors manipulating" and more a result of the interplay between liquidation systems and market structure—a new lesson for all crypto players: Always pay attention to depth and liquidation mechanisms.

How Does Liquidation Occur?
On any perpetual contract platform, the first things to understand are Initial Margin (IM) and Maintenance Margin (MM): IM determines maximum leverage, while MM is the liquidation threshold. When account equity (collateral + unrealized P/L) falls below MM, the system takes over the position and initiates liquidation.

Next, consider the price. The price determining liquidation is not the last traded price but the Mark Price. It is typically determined by external indices, oracles, and the platform’s order book, smoothed and anti-manipulation processed. The Index Price is closer to a weighted spot reference from external markets, while the Last Price is the most recent trade on the platform, susceptible to instant sweeping.

Thus, when "Account Equity < Maintenance Margin," liquidation triggers. But the specifics depend on the platform’s liquidation execution mechanism.

Hyperliquid: Let the Market Absorb Liquidation Orders
Hyperliquid’s liquidation mechanism: When account equity falls below MM, the system prioritizes injecting liquidation orders directly into the order book, letting the market absorb the risk.

For large positions (e.g., >100,000 USDC), 20% is typically liquidated first, followed by a ~30-second cooldown. If triggered again, the entire position may be liquidated. If unresolved and equity deteriorates further (e.g., below 2/3×MM), backup liquidation activates, handled by the community Liquidator Vault (HLP component). To ensure sustainability, maintenance margin is often not refunded in this step.

No "liquidation fee" is charged, but in pre-launch markets with weak external anchors and poor depth, liquidation actions can push prices further in the same direction, creating short-term volatility.

Meanwhile, Hyperliquid’s Mark Price is determined by external CEX quotes and its own order book. During volatility, if internal trades dominate, it accelerates triggering. Additionally, isolated and cross-margin behave differently in backup stages: Cross-margin positions and collateral may be transferred together, while isolated margins only affect that position and its isolated collateral.

Rewinding to early this morning, Hyperliquid’s XPL event unfolded as follows: Starting at 5:35, XPL buy orders rapidly swept the order book, lifting trade ranges. The Mark Price, dominated by internal matching, jumped far beyond normal levels.

For heavily crowded shorts, this jump instantly compressed the equity/MM ratio. When equity fell below MM, the system took over positions. Next, the system bought to cover shorts (larger positions might be partially liquidated with cooldowns), and these buy orders further pushed up prices and the Mark Price, triggering more shorts to fall below MM. Within seconds to minutes, a "sweep → trigger liquidation → liquidation re-sweeps" positive feedback loop formed—mechanistically explaining the near +200% surge in minutes.

If the order book couldn’t absorb the liquidations and liquidated accounts’ equity fell further (e.g., to 2/3×MM), the backup mechanism took over, ensuring risks were "absorbed" within the system.

Once order book depth recovered and liquidation queues cleared, proactive longs took profits, and prices rapidly retreated from highs—completing the "XPL’s +200% → serial short liquidation → swift retracement" cycle.

This was an inevitable outcome of pre-launch liquidity depth, crowded positions, and liquidation mechanisms coupling.

Does Lighter Really Liquidate Earlier?
Now, consider Lighter. This morning’s ETH price wick to $5,100 on Lighter also drew attention. As a Perp DEX beloved by crypto Twitter (CT) and second only to Hyperliquid in volume, Lighter has sparked multiple discussions over price wicks.

Lighter sets three thresholds: IM > MM > CO. Falling below IM triggers "pre-liquidation," allowing only reductions, not additions. Falling below MM triggers "partial liquidation," where the system issues "Zero Price" IOC limit orders to reduce positions. The Zero Price ensures account health isn’t worsened even if executed at zero; if executed at better prices, the system charges ≤1% liquidation fees to fund the LLP (Insurance Fund). Falling below CO triggers "full liquidation," wiping all positions and transferring remaining collateral to LLP. If LLP is insufficient, ADL (Auto-Deleveraging) activates, reducing high-leverage/high-profit positions at their zero prices to deleverage systemically without "harming innocents." Overall, Lighter sacrifices some "liquidation speed" for controlled account health and order book impact.

So, does this mean Lighter liquidates at much higher prices, causing earlier liquidation?

The accurate answer is: Yes, but not entirely.

Simply put, Lighter’s "earlier liquidation" is a分批 "firefighting" reduction: It uses "Zero Price" IOC orders to reduce positions, aiming to preserve account health. Often, it trims positions to safety rather than fully "blowing" them up; only deterioration to CO triggers full liquidation.

Thus, it’s not that "Lighter liquidates more easily," but that it liquidates and reduces positions more gently, "spreading" risks and reducing price impact from one-time sweeps. The trade-off is a ≤1% liquidation fee if executed better than "Zero Price."

Interestingly, early Lighter’s points system heavily weighted liquidation amounts. According to community member 0xTria’s analysis, initial account liquidations awarded "~1 point per $1 liquidated," with points valued at $15–30 by the community. This directly incentivized users to exploit sub-accounts and new accounts for "liquidation farming." However, this weighting was significantly reduced in a later version.

How to Avoid Being Manipulated
Crypto is a jungle where the strong prey on the weak. For ordinary users, the goal isn’t to maximize multiples but to minimize the chances of being liquidated or manipulated by whales. So how can we reduce these odds?

Analyze Token Structure
Data from ASXN’s platform on Hyperliquid is highly instructive:

• OI/Market Cap Ratio: Open Interest (OI) divided by market cap, expressed as a percentage. A higher ratio means derivatives positions represent a larger share of the token’s volume, making it easier to push around. A classic example is HLP’s liquidation vault once inheriting positions exceeding 40% of JELLY’s circulating supply, causing the price to collapse like dominoes.

• DEX Liquidity Tables: Quickly assess a token’s on-chain liquidity and manipulation risks, identifying holder accumulation patterns.

• Funding Rate Comparisons: Compare funding rates with major CEXs to spot potentially manipulated assets. When large positions enter thin OI, funding rates may show anomalies versus other exchanges.

Measure Market Depth
How to measure depth? Test the capital needed to move prices ±2%: the buy order volume to push prices up 2%, and the sell order volume to push them down 2%.

This reveals the true挂单 thickness at the best bid/ask—i.e., the attack cost for whales. Assets with poor depth = lower cost to distort prices, lower manipulation barriers, and naturally higher risks.

This means we should trade the most liquid tokens on the most liquid platforms.

For example, in the 0.01% spread range for BTC/USDT, major Perp DEX depths are: edgeX $6M, Hyperliquid $5M, Aster $4M, Lighter $1M.

This implies altcoin liquidity will be far below these levels, significantly increasing manipulation risks, especially for pre-launch tokens like XPL.

Always Read the Liquidation Protocol
Those who understand the rules are better positioned to understand their own risk tolerance.

Before trading, always read all liquidation rules: How is the Mark Price calculated? Does the platform rely more on external index prices or its own order book? Especially for pre-launch/niche tokens, be wary of Mark Prices being easily influenced by internal trades. Monitor Mark/Index/Last prices during normal and volatile periods to observe deviations.

Are there tiered margins? If so, larger positions require higher maintenance margins, moving liquidation points forward. Is the liquidation path market-sweeping or batch-building? What is the liquidation ratio? What triggers backup liquidation? Are there liquidation fees? Do fees go to team revenue, vaults, or foundation buybacks?

Additionally, even hedging across two platforms carries significant risks if depth and liquidation mechanisms are ignored. Cross-platform hedging ≠ on-platform margin—these are separate. Always set stop-losses if possible, use isolated margin mode when available (it only affects that position and its collateral), and in cross-margin, only allocate liquidity you can afford to lose.

Finally, it’s worth emphasizing that contract mechanisms are riskier than most people realize.

1. Potential Opening of Staking Functionality: If the U.S. SEC approves staking for spot Ethereum ETFs, investors could earn additional yields through ETFs, transforming Ethereum into a "yield-generating passive investment product" that is more attractive than Bitcoin ETFs.

2. Corporate Treasury Adoption and Application: Approximately 10 publicly traded companies have added Ethereum to their balance sheets, with some further participating in validation nodes or DeFi strategies, shifting Ethereum from a speculative asset to a sustainable corporate asset allocation tool.

3. Easing Regulatory Attitudes: The SEC’s indication that liquid staking tokens (LSTs) may not be classified as securities has alleviated institutional compliance concerns, potentially attracting more capital into Ethereum staking and derivative markets.

4. ETF Redemption Mechanism Optimization: The approval of in-kind redemptions has improved ETF operational efficiency, enhanced market liquidity, and reduced selling pressure. Given Ethereum’s lower institutional ownership, its marginal benefits are more pronounced.

The report suggests that Ethereum not only has greater growth potential in ETF adoption, corporate usage, and DeFi ecosystems but also may gradually narrow or even surpass Bitcoin’s advantages, evolving from "digital gold" to the "heart of the digital economy."

Summary
Author: BitpushNews

In recent weeks, a notable trend has emerged in the crypto market: Ethereum (ETH) has significantly outperformed Bitcoin (BTC).

According to J.P. Morgan’s latest research report, Wall Street analysts attribute this phenomenon to four core factors—ETF structural optimization, increased corporate treasury adoption, easing regulatory attitudes, and the potential opening of staking functionality. These factors not only explain Ethereum’s recent strength but also indicate its potential for further upside.

I. Market Background: Dual Drivers of Policy and Capital Flows
In July, the U.S. Congress passed the GENIUS Act stablecoin bill, bringing unprecedented institutional benefits to the crypto market. Subsequently, spot Ethereum ETFs attracted a record $5.4 billion in inflows during July alone, nearly matching the inflows into Bitcoin ETFs.

However, in August, Bitcoin ETFs experienced minor outflows, while Ethereum ETFs continued to see net inflows. This divergence in capital flows directly catalyzed Ethereum’s outperformance against Bitcoin.

Simultaneously, the market awaits the upcoming vote on the "Crypto Market Structure Bill" in September. Investors widely expect this to be another major turning point, similar to stablecoin legislation. Driven by both policy and market expectations, Ethereum’s stature in the capital markets has rapidly risen.

II. Analysis of the Four Factors: Why Is Ethereum Outperforming Bitcoin?
J.P. Morgan analysts Nikolaos Panigirtzoglou and his team explicitly identified four core drivers behind Ethereum’s strength:

1. Potential Opening of Staking Functionality
A key feature of the Ethereum ecosystem is its Proof-of-Stake (PoS) staking mechanism. Users need at least 32 ETH to run their own validation nodes, a relatively high barrier for most institutional and retail investors.

If the SEC ultimately approves staking for spot Ethereum ETFs, fund managers could directly generate additional yields for holders without requiring them to run nodes. This would transform spot ETH ETFs from mere price-tracking tools into "yield-generating passive investment products."

This fundamentally distinguishes Ethereum ETFs from Bitcoin ETFs: Bitcoin lacks a native yield mechanism, while Ethereum ETFs may eventually offer "interest," significantly enhancing their market appeal.

2. Corporate Treasury Adoption and Application
J.P. Morgan noted that about 10 publicly traded companies have already added Ethereum to their balance sheets, accounting for approximately 2.3% of its circulating supply.

More notably, some companies are not merely "buying and holding" but are actively participating in the ecosystem:

• Running validation nodes to earn staking yields.

• Employing liquid staking or DeFi strategies to generate additional returns through derivative protocols.

This indicates Ethereum’s evolution from a "speculative asset" to a "sustainable corporate asset allocation tool"—a trend Bitcoin has yet to fully realize. Corporate treasury involvement represents longer-term, stable capital pools entering the market and enhances Ethereum’s valuation anchoring.

3. Easing Regulatory Attitudes Toward Liquid Staking Tokens
Previously, the SEC’s stance on the compliance of liquid staking tokens (LSTs) like Lido and Rocket Pool was contentious, with concerns that these tokens might be classified as securities, deterring large-scale institutional participation.

However, recent SEC staff-level clarifications suggesting that LSTs "may not be considered securities" have significantly alleviated institutional concerns. Although not yet formalized into law, this stance has encouraged previously hesitant institutional capital to enter Ethereum staking and related derivative markets more rapidly and at a larger scale.

4. ETF Redemption Mechanism Optimization: Approval of In-Kind Redemptions
The SEC recently approved in-kind redemption mechanisms for spot Bitcoin and Ethereum ETFs. This allows institutional investors to redeem ETF shares directly for underlying assets (Bitcoin or Ethereum) instead of undergoing the cumbersome process of "selling ETFs for cash."

This mechanism offers three key benefits:

• Improved Efficiency: Saves time and costs.

• Enhanced Liquidity: Direct linkage between ETF and spot markets.

• Reduced Selling Pressure: Avoids triggering market sell-offs during large-scale redemptions.

While this benefits both Bitcoin and Ethereum, Ethereum’s lower institutional ownership implies greater growth potential and more pronounced marginal effects.

III. Future Outlook: Has Ethereum’s Potential Surpassed Bitcoin’s?
J.P. Morgan’s report indicates that while Bitcoin remains the dominant "store of value" in the crypto market, Ethereum has broader growth prospects:

• ETF Adoption: ETH ETF assets under management are still lower than BTC’s, but with the potential opening of staking, more long-term capital is expected to flow in.

• Corporate Adoption: Bitcoin is already widely held by enterprises and institutions, whereas Ethereum is still in its early stages, offering substantial incremental growth opportunities.

• DeFi and Application Ecosystem: Ethereum is not only a digital asset but also supports decentralized finance (DeFi), NFTs, stablecoins, AI+on-chain computations, and other applications, giving it richer use cases.

In other words, Bitcoin resembles "digital gold," while Ethereum is evolving into the "infrastructure of the digital economy."

IV. Conclusion
J.P. Morgan’s analysis reveals a key insight: Ethereum’s strength is not driven by short-term speculation but by the combined effects of favorable policies, structural optimizations, institutional adoption, and potential yields.

With further refinements in ETF mechanisms, continued corporate treasury accumulation, and potential SEC policy confirmations, Ethereum is poised to gradually narrow or even surpass Bitcoin’s advantages in the future market landscape.

For investors, this trend is not only a signal of capital flows but also potentially marks a tipping point for the crypto market’s shift from "single-dimensional value storage" to "multi-dimensional application ecosystems."

In the new chapter of crypto history, Bitcoin may remain "digital gold," but Ethereum is rapidly becoming the "heart of the digital economy."

This rally isn’t just hype; it reflects a fundamental revaluation of BNB’s role. Below, we dissect its institutional adoption path and outline actionable strategies for retail investors.

01. BNB’s Institutionalization: A Retrospective

Three pivotal developments over the past two months underscore this shift:

1. Corporate Treasury Adoption:

   • CEA Industries plans to raise $500M (up to $1.2B) to build the largest BNB reserve.

   • Liminatus Pharma committed $500M to long-term BNB holdings.

   • Windtree Therapeutics approved $700M for BNB acquisitions.

   • Nano Labs aims to own 5–10% of circulating supply ($1B allocated), already purchasing 128K BNB OTC.

2. ETF Momentum:
   VanEck’s BNB ETF application (with staking rewards) filed in May could position BNB as the next crypto ETF battleground after BTC and ETH.

3. Price Breakout:
   BNB’s rally to $865.68 was backed by sustained positive funding rates (0.015–0.03%/8h), signaling healthy spot and leverage demand.

Source: Coinglass

These events mark BNB’s transition from ecosystem-dependent utility to institutional-grade asset. For retail investors, this demands a reassessment of BNB’s long-term potential.

02. Retail Opportunity #1: BNB Chain Ecosystem

BNB Chain’s thriving DeFi, RWA, and Meme sectors offer multiple avenues for participation:

• DeFi:

  • PancakeSwap (V3): $2B TVL with liquidity pool rewards.

  • Venus Protocol: Lending/borrowing for BNB and major assets.

  • Lista DAO: $1B TVL in yield strategies.

• RWA:

  • Ondo Finance tokenized 100+ U.S. stocks/ETFs on BNB Chain.

  • Kraken/Backed’s xStocks enables 60+ stock/ETF trading.

  • Trump-linked USD1 stablecoin integrates with BNB DeFi.

• Meme Coins:
  Platforms like Four.meme offer high-risk/high-reward plays, though caution is advised during low-activity periods.

Key Takeaway: BNB Chain’s growth directly benefits BNB holders—whether through yield farming or asset diversification.

03. Retail Opportunity #2: Stock-Crypto Correlations ("BNB Stocks")

Public companies holding BNB (e.g., CEA, Windtree) often see their stock prices mirror BNB’s movements—sometimes outperforming. Strategies:

• Track Announcements: Buy stocks pre-news (SEC filings, treasury updates).

• Follow BNB’s Lead: Use BNB price action as a leading indicator.

• Assess Binance Ties: Stocks with direct Binance/CZ backing may have higher conviction.

Risk Warning: These stocks face dual volatility (crypto + equities) and dilution risks. Allocate cautiously.

04. Retail Opportunity #3: Exchange-Based Plays

Binance’s Launchpad, Launchpool, and Megadrop reward BNB holders:

• Passive Approach: Hold BNB for staking rewards and airdrops.

• Active Approach: Chase alpha via tasks (e.g., Booster quests), but factor in transaction costs.

Additional perks include trading fee discounts, VIP tiers, and exclusive Binance Earn products.

05. Retail Opportunity #4: BNB’s Deflationary Model

BNB’s scarcity is engineered:

• Total Burned: 60M+ BNB (31% of initial supply).

• Circulating Supply: Down from 200M to ~139M (target: 100M).

Mechanisms:

• Quarterly Burns: Algorithm adjusts based on BNB price and chain activity (e.g., Q2 2025 burned 1.6M BNB worth $1.02B).

• Real-Time Burns (BEP-95): Gas fees perpetually reduce supply.

Implication: Scarcity + demand = long-term value accretion.

06. BNB’s Revaluation & Future Outlook

• Price Targets: Standard Chartered forecasts $1,275 by EOY 2025 and $2,775 by 2028.

• Adoption Drivers:

  • Institutional reserves (digital gold narrative).

  • BNB Chain activity (ecosystem growth).

  • Binance Pay: 230M transactions ($230B volume), with BNB used at 80+ French merchants via Lyzi.

07. Conclusion

BNB’s evolution—from exchange token to institutional asset—mirrors crypto’s maturation. Retail investors can capitalize through:

1. Deep engagement with BNB Chain.

2. Strategic bets on "BNB stocks."

3. Leveraging Binance’s ecosystem.

4. Holding for deflationary upside.

As the "Build and Build" ethos suggests, BNB’s future hinges on collective participation. Whether it enters a new golden age depends on sustained innovation amid institutional adoption.

Data Sources: bnbburn.info, Binance Research, Standard Chartered.
Disclaimer: Crypto investments carry risks; DYOR and manage exposure accordingly.

Baihua Blockchain • August 11, 2025

Author: Thejaswini MA | Translated & edited by Baihua

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A Quiet War in Your Pocket

A silent battle is unfolding on your phone screen, and most people still haven’t noticed.

America’s two flagship finance apps—Robinhood and Coinbase—are running diametrically opposed experiments on millions of users. Robinhood sits at No. 14 in the App Store’s Finance category; Coinbase is at No. 20. Both are worth roughly $80 billion. Both chase the same young investors, yet each believes the other’s approach is fundamentally flawed.

And, oddly enough, both experiments are working.

---

Same Lab, Different Hypotheses

These companies aren’t rivals in the classic sense; they’re running separate experiments on the same test subject—us.

Robinhood asks: “What if we simply remove every annoying part of finance?”

• 15 cryptocurrencies

• Zero-commission trades

• A UI that lets you buy Tesla stock without a finance degree

Their philosophy: you don’t need to know how the sausage is made to enjoy a hot dog.

Coinbase asks the opposite: “What if we rebuild the entire financial system on-chain?”

• 260+ cryptocurrencies

• Higher fees than Robinhood

• A platform for users who want total exposure to crypto

Coinbase’s bet: traditional finance will eventually migrate on-chain, and it wants to be the rails.

Brian Armstrong, CEO of Coinbase:

“Over the next 5–10 years our goal is to become the world’s leading financial-services app, because we believe crypto is eating finance and we are the №1 crypto company. Every asset class—money-market funds, real estate, securities, debt—will be on-chain.”

---

The Race to Expand Crypto Products

Both are accelerating, but in opposite directions.

Robinhood’s flanking maneuver:

• June launch of Robinhood Chain—its own Layer-2 for tokenized stocks and crypto, eventually adding SpaceX, OpenAI, etc.

• 24/7 tokenized U.S. equities already live in Europe.

• ETH & SOL staking, $200 million acquisition of Bitstamp, and incoming perpetual futures for Europeans.

• Fee war: Robinhood ~40 bps; Coinbase can top 140 bps.

• Revenue model: payment for order flow, identical to its equities business.

The catch: on Robinhood you don’t own the crypto—you hold an IOU. No DeFi, no self-custody, no transfers.

For most users that’s fine; for power users, Coinbase remains the only viable U.S. option.

---

Q2 Scorecard: Two Different Stories

Robinhood—fireworks

• Net revenue $989 M, up 45 % YoY.

• Crypto revenue $160 M, up 98 %, jumping from 10 % to 16 % of total.

• 26.5 M active accounts; $279 B in AUM, up 99 %.

• Post-Bitstamp: +520 k crypto users and $7 B in volume.

Coinbase—“tough” quarter

• Revenue $1.5 B, down 26 % QoQ, missing estimates.

• Trading revenue off 39 %; stock dropped 16 % on the day.

• But: $1.4 B net income, boosted by $1.5 B unrealized gains on its own crypto stack.

• USDC interest: $332 M.

• Custody: $2.457 T in assets—record high.

The headline miss ignores the fortress underneath.

---

Coinbase’s Infrastructure Empire

• Custodian for >80 % of U.S. Bitcoin & Ethereum ETFs (~$113 B of the $140 B total).

• 240+ institutional clients, 420+ liquidity providers, NYDFS-chartered custody.

• U.S. retail now gets 10× perpetual futures—previously offshore only.

• Base L2: >54 k tokens launched in a single day, beating Solana.

– ETFs can settle instantly.

– Corporations can tokenize assets natively.

– Retail taps institutional-grade rails.

---

Robinhood’s Generational Ambush

While Coinbase builds for institutions, Robinhood executes the oldest play in finance: catch users before they’re rich.

Disney playbook, 21-century edition:

• 50 % of users are Millennials, 25 % Gen-Z.

• Average first trade at 19–22 years old (vs. 30+ for boomers).

• First $50 realized gain creates a loyalty hook.

Robinhood Gold ($5/mo) now bundles:

• 3 % cash-back credit card

• High-yield savings

• Retirement matching

• Discounted margin

Gold subs: 2 M, up 60 % YoY.

Robinhood’s $279 B in AUM is a beachhead for the $84–124 T wealth transfer from boomers over the next two decades. Capture the habit early; inherit the money later.

---

Who’s Winning?

| Metric | Robinhood | Coinbase |

|-----------------|-----------|----------|

| Market cap | $81 B | $85 B |

| YTD share move | +135 % | +30 % |

| US Bank PT | $119 | $369 (cut from $383) |

| Global spot share | n/a | 4.56 % (down from 5.65 %) |

Bank of America’s Craig Siegenthaler:

“Robinhood’s crypto revenue is exploding, while Coinbase is over-exposed to alt-coin volatility that retail is abandoning.”

Mizuho (post-Vlad Tenev meeting):

“Europe tokenized stocks, teen onboarding, 15 % net deposits from competitors, low-fee moat—reiterate $120 PT.”

---

Not a Winner-Take-All War—A Market Segmentation

• Robinhood thesis: Finance becomes invisible—simple, abstract, embedded.

• Coinbase thesis: Trust is earned through architecture and compliance.

Both can thrive. One is optimizing for lifestyle; the other for plumbing.

The $160-billion duel is less about crushing the rival and more about proving whose theory of money the next generation will prefer.

The P&L algorithm of perpetual contracts is never as simple as what you see on the exchange interface.

It hides a game of multiple variables:

• Funding rates

• Mark price vs. last traded price

• Liquidation mechanisms

• Unrealized P&L display logic

You might think you're "holding profits," but in reality, you could already be in a high-risk zone. Or you believe you're experiencing "minor floating losses," but the liquidation model has already kicked in—it just hasn't executed yet.

This article examines the psychological impact of unrealized P&L calculations and reveals:

• What truly determines your profit or loss?

• Where do the algorithmic traps lie?

Reading Guide

Start with Chapter 1 if you:

• Aren’t sure about the difference between linear (USDT-margined) and inverse (coin-margined) perpetual contracts.

Jump to Chapter 2 if you:

• Have seen your position show a profit, but after closing, the realized P&L was smaller than displayed (or even negative after fees).

• Opened a position with enough margin to withstand a 10% move, but got liquidated after just a 5% swing days later.

If neither applies to you: Like, share, and exit gracefully. 🤣

Chapter 1: P&L Calculation Mechanisms

Perpetual contracts, the most popular crypto derivatives, allow traders to speculate on asset prices without expiry dates. Understanding their Profit & Loss (PnL) calculations is critical.

1.1 USDT-Margined (Linear) Contracts

These use stablecoins (e.g., USDT) as margin and settlement. PnL is straightforward and linear—the dominant choice on exchanges like Binance and Bybit.

Unrealized P&L

• Calculated using mark price (not last traded price).

• Mark price = Index price (weighted average across major spot exchanges) + funding rate basis.

Formulas:

• Long PnL = (Mark Price − Avg Entry Price) × Position Size

• Short PnL = (Avg Entry Price − Mark Price) × Position Size

Psychological Trap: The PnL displayed often differs from actual closing value due to execution price vs. mark price divergence.

Realized P&L

• Final locked-in P&L after closing, including all costs.

Formula:
Realized P&L = (Exit Price − Entry Price) × Position Size − Trading Fees − Funding Fees

Key Trap: Fees are calculated on notional value (position size × price), not margin.

• Example: 100x leverage on $100 margin → $10,000 notional value.

• A 0.06% taker fee = $6 (not $0.06).

• A 0.01% funding fee (every 8hrs) = $1 per interval.

Result: High leverage + sideways markets = slow bleed of margin.

1.2 Coin-Margined (Inverse) Contracts

These use the traded crypto (e.g., BTC) as margin, creating nonlinear P&L dynamics.

Key Feature:

• Long positions suffer accelerated losses in downtrends (double whammy: BTC price drop + collateral value decline).

• Short positions see slower USD losses in rallies (convex payoff).

Why? Your collateral’s value fluctuates with the asset price.

Chapter 2: Visible Profits, Invisible Bleeding—Hidden Risks

2.1 Mark Price vs. Last Price: The Silent Killer

• Liquidation uses mark price; your orders execute at last price.

• Scenario 1: A "wick" in last price triggers your stop-loss, but mark price stays stable → unnecessary exit.

• Scenario 2: Your exchange’s price looks stable, but mark price (based on other exchanges) drops → sudden liquidation.

Lesson: Always monitor mark price—it’s your real liquidation line.

2.2 Funding Fees: The Leverage Tax

• Charged every 8 hours based on notional value.

• Example: 50x leverage, 0.01% fee → Daily cost = 0.03% of position size.

  • Over 10 days: 0.3% of notional value → 15% of margin eroded (0.3% × 50x).

Result: High leverage + low volatility = slow-margin bleed.

2.3 Liquidation Cascades & Slippage

• Liquidations trigger market orders, eating order book depth.

• Domino effect: One liquidation → slippage → more liquidations → death spiral.

• May 19, 20xx Crash: Stop-loss at $38,000? Too bad—executed at $34,500 due to slippage.

Defense: Use limit stops and trade on high-liquidity platforms.

2.4 Auto-Deleveraging (ADL): The Winner’s Curse

• When insurance funds dry up, the exchange force-closes profitable positions to cover bankrupt traders.

• Example: You short LUNA from $20 to $1 (95% profit), but ADL closes you at $2.50.

• Outcome: Profits slashed, no chance to re-enter.

Lesson: Even winning trades can be hijacked by the system.

Key Takeaways

1. Mark price > Last price for liquidation risk.

2. Funding fees compound silently—avoid high leverage in choppy markets.

3. Liquidation cascades amplify losses—trade on deep-order-book exchanges.

4. ADL can steal your profits—diversify across platforms.

Final Warning: Perpetual contracts are algorithmic minefields. What you see isn’t always what you get. Trade wisely.

July 2024: Skepticism Reigned
When the SEC green-lit U.S.-listed spot Ethereum ETFs on 23 July 2024, the fanfare was muted. Bitcoin ETFs had already siphoned the spotlight, and ETH’s first 39 weeks saw only 15 weeks of net inflows. Early capital actually walked out the door.

June 2025: The Inflection
Fast-forward to June 2025—$3.5 billion in net inflows, a 70 % leap over the prior record of $2.08 billion set in December 2024.
July is on track to beat June, with inflows already above $3 billion.
For the first time in its 52-week life, the ETH ETF complex has now recorded ten consecutive weeks without a single outflow .

AUM has followed the same parabolic arc: $19 billion as of 21 July 2025, double the $9.6 billion mark of just two months earlier .

Beyond ETFs: Corporate “ETH Treasuries”
While ETFs were grabbing headlines, companies began stacking ETH on their balance sheets—a narrative previously reserved for Bitcoin.

• SharpLink Gaming (June 2 2025) – First U.S. public company to adopt ETH as a strategic reserve.

  • 360,807 ETH (~$1.3 billion) now sits on its books.

  • Additional $413 million raised; 567 ETH earned via staking rewards .

  • SEC filing seeks to lift share-sale shelf from $1 billion → $5 billion.

• BitMine Immersion – Bitcoin miner now holding 300 k+ ETH (~$1 billion).

  • Chairman Tom Lee targets 5 % of total ETH supply for staking .

Combined, SharpLink + BitMine already control more ETH than the Ethereum Foundation.

• Ether Machine – Newco merging several entities, targeting a NASDAQ listing with >400 k ETH (~$1.5 billion) .

  • Founded by ex-ConsenSys execs Andrew Keys & David Merin.

Even ARK Invest rotated: trimmed COIN & RBLX, bought $182 million of BitMine across its ETFs; Peter Thiel now owns 9.1 % of BitMine .

Behind the Surge: Foundation & Fundamentals
In April 2025, the Ethereum Foundation split its board from management and set three priorities:

1. Scale the base layer.

2. Optimize L2 Rollups.

3. Improve UX.

Meanwhile, 28 % of all ETH (~33.7 million coins) is already staked—yielding ~3-5 % native returns .

Next Catalyst: Staking-Enabled ETFs
Today, no U.S. ETF can stake its ETH—a regulatory gap BlackRock calls “the missing piece.”

• A 19b-4 amendment from BlackRock lists staking as a “future feature pending SEC approval” .

• Q4 2025 is the consensus estimate for the green light .

With $19.6 billion in ETF AUM, a 4 % staking yield would translate into $750 million annual passive income for issuers—a “digital bond” pitch tailor-made for pension funds, endowments and sovereign wealth funds .

Price & Supply Mechanics

• ETH up >50 % in two weeks, +150 % in three months—a direct echo of institutional buying .

• Each new ETF share locks real ETH, shrinking free float.

• Deflationary issuance + programmable collateral narrative = scarcity + yield, a combo Bitcoin cannot replicate.

Bitcoin = Digital Gold | Ethereum = Programmable Yield
The takeaway for allocators:

• Bitcoin ETFs = macro hedge, hold and forget.

• Ethereum ETFs = productive infrastructure, stake and compound.

Traditional investors are learning the distinction—just in time for the next wave of capital.

The biggest Beta plays remain the "one superstar and three giants": BTC + ETH, SOL, and BNB. As for altcoin Beta, I’m currently bullish on the following four and plan to hold them with diamond hands.

1. AAVE
AAVE is one of the few assets outside the "big four" that you can hold long-term and still sleep soundly. Its TVL has smashed previous highs, surpassing $30 billion, and—remarkably—it has never suffered a major security breach in all these years. Even traditional financial institutions like JPMorgan, when dabbling in blockchain, prioritize testing on AAVE.

This wave of RWA + stablecoins—where blockchain meets traditional finance to boost efficiency—is undeniably the top trend in crypto’s future. Among the projects poised to ride this wave, AAVE stands out as a surefire leader, far more certain than Uniswap or Curve. The upcoming V4 launch in the coming months is another reason to stay bullish. A definite diamond hand pick.

2. Pendle
With a TVL of $6 billion (nearing its all-time high) and rock-solid stability, Pendle is gearing up for its third wave.

• First wave: Backed by Sushiswap and some DeFi protocols, it pioneered yield tokenization—but lacked hype because the yields were mostly fluff.

• Second wave: Took off with LST/LRT based on Lido and Eigenlayer, offering tangible returns.

• Third wave: Will be driven by RWA and stablecoins. In TradFi, yield tiering and risk-splitting is a massive ($10T+) market. As more RWAs and stablecoins move on-chain, Pendle—with no real competitors in sight—is poised to dominate.

The only gripe? Its price is too stable, with minimal volatility. Still, worth holding for a few months to see how it plays out.

3. Hyperliquid
The strongest token launch of this cycle—bar none.

Its Perp DEX boasts a user experience and trading depth so superior that it’s crushing competitors in volume and market cap. But Hyperliquid isn’t just a Perp platform; it’s a liquidity layer. Phantom’s recent integration is proof, and more frontends will tap into its backend liquidity soon.

Beyond its aggressive buybacks, Hyperliquid has HyperEVM, HIP-3’s RWA Perps, and more in the pipeline.

The catch? I haven’t built a position yet—having sold my airdrops (batches 4–10) too early. At a $50B market cap, I’m hesitant to FOMO in now. But I’ll find an entry point eventually, even if I have to wait for the next bear market.

4. Bittensor
I used to be a Bittensor skeptic—until recently, when I flipped bullish and decided to hold for 6–12 months.

My doubts stemmed from its PMF (or lack thereof). Much like Filecoin (which filled storage with junk data), Bittensor seemed to invent demand where none existed, with miners competing to produce useless inference results. Past dramas—like validators colluding with miners—didn’t help.

So why the change of heart?

This cycle, crypto has disproven many narratives but validated two: finance (DeFi, RWA, stablecoins) and gambling (memes, PolyMarket, on-chain casinos).

Crypto+AI remains the largest unproven—but also hard to disprove—narrative. And among all AI+Crypto projects, Bittensor is the toughest to dismiss because:

• It’s the market cap and mindshare leader in the space.

• Few truly understand what it does (try explaining it to a friend in 10 minutes—good luck).

• Its subnet count is nearing 100 (likely 200–300 next year), with some subnets actually generating revenue (albeit mostly from Web3 projects and negligible relative to its valuation).

• Its upcoming halving in Jan/Feb 2026—mirroring BTC’s 21M cap and 4-year halvings—will be a major catalyst.

Bittensor resembles BTC in emission/mindshare but ETH in subnet design. A breakout subnet (like Uniswap or AAVE on ETH) could emerge, given its coverage of decentralized training, data, compute, inference, and more.

The downside? Its high market cap and daily emissions (>$1M) make digestion tough at this stage. If it feels too pricey now, watch for a better entry early next year.

Closing Notes
This marks the end of the Diamond Hands series. Let’s revisit these picks in a year or two to see if they outperformed BTC. For the record, today’s prices:

• BTC: $118,275

• AAVE: $312.7

• Pendle: $4.43

• Hyper: $44

• TAO: $433

On July 10, the Ethereum Foundation unveiled “The Future of Ecosystem Development,” kicking off a sweeping overhaul of its own structure. The move is designed to tackle long-standing headaches: uneven project support, fragmented ecosystem operations, and an opaque treasury.

The Foundation’s new vision statement sets two overriding goals:

1. Maximize the number of people who use Ethereum—directly or indirectly—and who benefit from its underlying values.

2. Maximize the resilience of Ethereum’s technical and social infrastructure.

To get there, the Foundation is recasting its role inside the ecosystem. Four strategic pillars—Accelerate, Amplify, Support, and Long-Term Unblocking—are joined by a fresh governance framework and a re-engineered capital-management playbook, all aimed at boosting scalability, resilience, and decentralization.

Accelerating the Ecosystem

Critics have long accused the Foundation of “governing by inaction,” a stance that fueled schisms and diluted Ethereum’s narrative. With corporations now racing to build crypto treasuries, a clear reserve strategy has become mission-critical.
To accelerate adoption, the Foundation is spinning up four focused modules:

• Enterprise Relations: Helping corporations onboard to Ethereum, with a spotlight on finance and supply-chain verticals and the on-chain tokenization of real-world assets (RWA) like real estate and bonds.

• Developer Growth: Recruiting and mentoring the next wave of builders. Gitcoin research lead Austin Griffith will steer this unit.

• Application Support: Fast-tracking user-facing, high-impact apps.

• Founder Support: Non-financial guidance for early teams, led by ex-ConsenSys front-end tech lead Adrian Li.

The “Amplify” layer supercharges these efforts through:

• Digital Studio (the ethereum.org team): Ethereum’s narrative engine, producing rich content, videos, publications, and data visualizations that showcase the network’s potential.

• Strategic Events: Designing and executing targeted campaigns.

• Ethereum Everywhere: A squad devoted to scaling local communities and hubs for app developers.

• EcoDev Automation: AI-driven tools and internal automations that let teams hit targets faster.

Supporting the Ecosystem

Transparency has been another sore spot. The Ecosystem Support Program (ESP) used to reveal only project names—never grant sizes or follow-up progress. Early contributor @econoar’s exit only amplified complaints of “bureaucratic drag,” “time sinks,” and “leadership detached from the wider community.”

In 2025 the Foundation trimmed its operational-expense ratio from 15 % to 5 %—a figure closer to endowment-grade benchmarks—and began deploying assets on-chain to secure a 2.5-year cash runway.

The new ESP doubles down on targeted grants and non-financial help. Strategic co-funding will bankroll public-goods projects that serve the entire Ethereum stack. Launchpad, a new support layer, will help organizations tackle operational design, sustainable funding, governance, and other headaches. Funding for Launchpad may flow from the Foundation, grantees, or spin-ups like Protocol Guild.

Looking ahead, the Foundation will also:

• Coordinate global crypto policy, monitoring worldwide issues tied to Ethereum and partnering with policy shops, governments, and NGOs.

• Run an Academic Secretariat that links Ethereum with universities, professors, and students to push blockchain research forward.

Epilogue: Price Meets Promise

On July 11, ETH cracked $3,000. As the price climbs, the ecosystem reboot is gathering steam. The Foundation’s metamorphosis boils down to two imperatives: widen the user base and harden the infrastructure. Translation: the Foundation will now marshal resources, steer the narrative, heal community rifts, and—without compromising core values—drive scale in key verticals.

Rival L1s are closing the gap, but Ethereum’s architects are betting that systematic support and strategic direction can still uncover—and shape—the network’s next growth engine.

Global demand for the U.S. dollar isn’t declining—it’s exploding. Despite headlines about "de-dollarization," a more critical trend is emerging: over 4 billion people and millions of businesses are actively seeking dollar access through stablecoins, marking the largest expansion of the dollar’s network effect in decades.

This creates an unprecedented opportunity for Ethereum. Stablecoins provide global individuals with dollar access—a market that has grown 60x since 2020, surpassing $200 billion. But these new dollar holders need more than digital cash; they seek yield, investment opportunities, and financial services. Traditional finance, constrained by regulation and infrastructure, cannot serve this massive new market.

Ethereum is uniquely positioned to power this digital dollar economy, and ETH stands to benefit directly from its growth.

Millions of New Dollar Holders Enter via Stablecoins

There’s immense latent demand for dollars globally:

Individuals seek safety in dollars:

• Over 4 billion face currency risks due to political instability, poor monetary policies, and inflation.

• 21% of the global population lives in countries with inflation exceeding 6% annually, eroding savings.

• For them, holding dollars means financial security—a store of value, a medium for cross-border trade, and a hedge against local currency volatility.

Businesses need dollars for trade:

• The dollar dominates 88% of forex transactions.

• Emerging-market businesses rely on dollar liquidity for international payments, imports, and supply chains, where local banking systems are often unreliable.

Stablecoins democratize dollar access:

• Anyone with internet can now hold and transact dollars—no banks or government approvals needed.

• Stablecoin market cap has surged 60x since 2020, with adoption concentrated in emerging markets (e.g., Nigeria, China).

Stablecoins are creating a new class of dollar holders—businesses pricing in USDT, families saving in USDC—expanding the market for dollar-based financial services.

Stablecoin Holders Seek Yield, Creating Demand for New Infrastructure

Stablecoin holders want to put their money to work:

• Traditional finance fails this market: U.S. banks exclude most global users; cross-border services remain slow and expensive.

• Ethereum fills the gap: It’s the only platform meeting three critical requirements for serving stablecoin holders:

  1. Global accessibility: Available anywhere with internet.

  2. Institutional-grade security: Decentralized, reliable, and compliant (ETH is classified as a commodity in the U.S.).

  3. Resistance to government intervention: No single point of control.

Ethereum’s proven track record includes:

• $140B+ in stablecoins, $60B+ in DeFi, and $7B+ in tokenized real-world assets.

• 1M+ validators across 100+ countries.

• A culture prioritizing decentralization—unreplicable by competitors.

ETH: The Reserve Asset of the Digital Dollar Economy

As stablecoins flow through Ethereum, ETH naturally becomes its reserve asset:

• Scarce & trustworthy: Predictable supply, low inflation, no central control.

• Productive: Earns yield via staking (unlike static dollars or gold).

• Collateral utility: Backs $19B in DeFi loans—already the top on-chain collateral.

• Censorship-resistant: Cannot be frozen or seized.

• Liquid & programmable: Deeply integrated into on-chain finance.

Growth flywheel:
More stablecoins → More on-chain activity → Higher ETH demand as collateral → Increased institutional adoption.

Layer-2s amplify demand: By reducing costs and enabling new use cases, L2s expand ETH’s utility as collateral.

ETH as a Global Store of Value

ETH’s demand growth positions it to capture share from traditional stores of value (e.g., gold, bonds):

• Like Bitcoin, ETH offers superior SoV properties but with added yield generation.

• Investors prefer income-generating assets (e.g., $32T in U.S. dividend stocks vs. <$1T in gold).

Conclusion: ETH is the Simplest Stablecoin Play

Ethereum’s stablecoin economy creates a powerful flywheel:
More stablecoins → Higher ETH demand → Stronger network → More institutional adoption.

Alternatives face hurdles:

• Traditional finance excludes billions.

• Government systems are politically constrained.

• Bitcoin lacks programmability; other chains lack security/decentralization.

For most investors, ETH provides the easiest, most efficient exposure to the digital dollar revolution.

While investing in specific DeFi protocols is an option, it’s riskier. ETH is the straightforward choice.

Policy Easing in Progress: A Panoramic View of the Crypto Regulation World Map

On the map, we divide the countries into four categories: business concentration areas, fully compliant, partially compliant and non - compliant. The criteria for judgment include the legal status of crypto - assets (50%), the regulatory framework and the implementation of laws and regulations (30%) and the implementation of exchanges (20%).

Asia

Greater China Region

Hong Kong, China

In Hong Kong, China, crypto - assets are regarded as "virtual assets" rather than currency and are regulated by the Securities and Futures Commission (SFC). For stablecoins, Hong Kong implements a licensing system. The Stable Coin Ordinance restricts licensed institutions from issuing Hong Kong dollar - denominated stablecoins. As for other tokens, NFTs are regarded as virtual assets, while governance tokens are regulated in accordance with the rules of "collective investment schemes".

In terms of the regulatory framework, Hong Kong revised the Anti - Money Laundering Ordinance in 2023, requiring crypto exchanges to obtain licenses. In addition, the Securities and Futures Commission (SFC) has also issued rules for virtual asset ETFs. The SFC is responsible for license issuance. At present, HashKey and OSL have been the first to obtain licenses, and more than 20 institutions are in the application process. In terms of exchange implementation, licensed exchanges are allowed to serve retail investors. It is worth noting that Bitcoin and Ethereum ETFs were listed in Hong Kong in 2024.

By actively embracing Web3 and virtual assets, especially allowing retail trading and launching virtual asset ETFs, Hong Kong aims to consolidate its position as an international financial center and form a sharp contrast with the strict ban in mainland China. The SFC of Hong Kong enforces exchange licensing, allows licensed exchanges to serve retail investors and has launched Bitcoin / Ethereum ETFs. Against the backdrop of the mainland China's comprehensive ban on crypto - currencies, Hong Kong has chosen a completely different path, actively building a clear and regulated virtual asset market. Allowing retail participation and launching ETFs are the key measures to attract global crypto capital and talent, enhance market liquidity and international competitiveness.

Taiwan, China

The Taiwan region of China takes a cautious attitude towards crypto - currencies and does not recognize their status as currency. However, it regulates them as speculative digital commodities and gradually improves the framework for anti - money laundering and security - token offerings (STOs).

Legal status of crypto - assets: The Taiwan region of China currently does not recognize crypto - currencies as currency. Since 2013, the stance of the Central Bank of Taiwan and the Financial Supervisory Commission (FSC) has been that Bitcoin should not be regarded as currency, but as a "highly speculative digital virtual commodity". For tokens such as NFTs and governance tokens, their legal status is not yet clear. However, in practice, NFT transactions require the declaration of capital gains tax. Security tokens are recognized by the FSC as securities and regulated under the Securities and Exchange Law.

Regulatory framework: Taiwan's Anti - Money Laundering Law regulates virtual assets. The FSC has ordered that since 2014, local banks are not allowed to accept Bitcoin and are not allowed to provide any services related to Bitcoin. For security - token offerings (STOs), Taiwan has specific regulations, which distinguish regulatory paths according to the amount of issuance (NT $ 30 million). The FSC also announced in March 2025 that it is drafting a law specifically targeting virtual asset service providers (VASPs), aiming to shift from a basic registration framework to a comprehensive licensing system.

License issuance: In 2024, the FSC introduced new rules under the Anti - Money Laundering Law, requiring VASPs to register with the FSC before providing any virtual - asset - related services (such as operating exchanges, trading platforms, transfer services, custody services or underwriting activities). Failure to register may result in criminal penalties. For STOs, the issuer must be a Taiwan - registered joint - stock company, and the STO platform operator must obtain a securities dealer license and have a paid - in capital of at least NT $ 100 million.

Mainland China

Mainland China has a comprehensive ban on the trading of crypto - assets and all related financial activities. The People's Bank of China believes that crypto - currencies disrupt the financial system and facilitate criminal activities such as money laundering, fraud, pyramid selling and gambling.

In judicial practice, however, virtual currencies have corresponding property attributes, and a consensus has basically been formed in judicial practice. In the field of civil law, precedents generally believe that virtual currencies have characteristics such as exclusivity, controllability and transferability in possession, similar to virtual goods, and recognize that virtual currencies have property attributes. Some precedents cite Article 127 of the Civil Code "If the law has provisions on the protection of data and network virtual property, it shall be followed" and refer to Article 83 of the "Minutes of the National Court Financial Trial Work Conference" "Virtual currencies have some attributes of network virtual property", determining that virtual currencies are a specific type of virtual property and should be protected by law. In the field of criminal law, recent cases included in the case library of the Supreme People's Court have also clearly stated that virtual currencies are considered property in the sense of criminal law and have property attributes in the sense of criminal law.

However, since 2013, banks in mainland China have been banned from engaging in crypto - currency business. In September 2017, China decided to close all domestic virtual currency exchanges within a specified time. In September 2021, the People's Bank of China issued a notice, comprehensively banning services related to virtual currency settlement and providing information about traders, and clarified that engaging in illegal financial activities will be subject to criminal liability. In addition, crypto - currency mines were closed and the opening of new mines was not allowed. It is also considered an illegal financial activity for overseas virtual currency exchanges to provide services to Chinese residents through the Internet.

Singapore

Legal status of crypto - assets: Singapore regards crypto - assets as "payment instruments / goods", mainly based on the provisions of its Payment Services Act. For stablecoins, Singapore implements a licensed issuance system. The Monetary Authority of Singapore (MAS) requires issuers to have a 1:1 reserve and conduct monthly audits. For other tokens, such as NFTs and governance tokens, Singapore adopts a case - by - case determination principle: NFTs are generally not regarded as securities, while governance tokens may be regarded as securities if they have dividend rights.

Crypto - currency regulatory framework: Singapore's Financial Services and Markets Act, promulgated in 2022, regulates exchanges and stablecoins. However, the newly effective DTSP regulations have greatly reduced the scope of license compliance, which may affect the offshore business of crypto projects and exchanges. The Monetary Authority of Singapore (MAS) usually issues three types of licenses to crypto companies: money exchange, standard payment and large - payment institutions. At present, more than 20 institutions have obtained licenses, including Coinbase. Many international exchanges choose to set up regional headquarters in Singapore, but these institutions will be affected by the new DTSP regulations.

South Korea

In South Korea, crypto - assets are regarded as "legal assets", but not legal tender, mainly based on the provisions of the "Special Financial Information Reporting and Utilization Act" (the "Special Financial Act"). At present, the draft "Digital Assets Basic Act" (DABA) is being actively promoted and is expected to provide a more comprehensive legal framework for crypto - assets. The current "Special Financial Act" mainly focuses on anti - money laundering regulation. For stablecoins, the DABA draft proposes to require their reserve transparency. As for other tokens, such as NFTs and governance tokens, their legal status is not yet clear: NFTs are currently regulated as virtual assets, while governance tokens may be included in the category of securities.

South Korea implements a real - name - based exchange licensing system. At present, five major exchanges, including Upbit and Bithumb, have obtained licenses. In terms of exchange implementation, the South Korean market is mainly dominated by local exchanges, and it is forbidden for foreign exchanges to directly serve South Korean residents. At the same time, the draft "Digital Assets Basic Act" (DABA) of South Korea is being promoted, which proposes to require stablecoin reserve transparency. This strategy not only protects domestic financial institutions and market share, but also facilitates regulatory authorities to effectively monitor domestic trading activities.

Indonesia

Indonesia is experiencing a shift in the regulatory authority of crypto - assets from the Commodity Futures Trading Regulatory Agency (Bappebti) to the Financial Services Authority (OJK), signaling more comprehensive financial regulation.

Legal status of crypto - assets: The legal status of crypto - assets in Indonesia is not yet clear. With the recent shift in regulatory authority, crypto - assets are classified as "digital financial assets".

Regulatory framework: Previously, Indonesia's Commodity Law regulated exchanges. However, the recently promulgated "OJK Regulation No. 27 of 2024" (POJK 27/2024) has transferred the regulatory authority of crypto - asset trading from Bappebti to the Financial Services Authority (OJK), and this regulation will come into effect on January 10, 2025. This new framework sets strict capital, ownership and governance requirements for digital asset exchanges, clearing houses, custodians and dealers. All licenses, approvals and product registrations previously issued by Bappebti remain valid as long as they do not conflict with current laws and regulations.

License issuance: The licensing authority has been transferred from Bappebti to OJK. The minimum paid - in capital for crypto - asset dealers is 1 trillion Indonesian rupiah, and at least 500 billion Indonesian rupiah of equity must be maintained. Funds for paid - in capital must not come from illegal activities such as money laundering, terrorism financing or financing of weapons of mass destruction. All digital financial asset trading providers must fully comply with the new obligations and requirements of POJK 27/2024 by July 2025.

Exchange implementation: Local exchanges such as Indodax are actively operating locally. Indodax is a regulated centralized exchange that offers spot, derivatives and over - the - counter (OTC) trading services and requires users to comply with KYC.

Thailand

Thailand is actively shaping its crypto - currency market by encouraging compliant trading and consolidating its position as a global financial center through tax incentives and strict licensing systems.

Legal status of crypto - assets: In Thailand, it is completely legal to own, trade and mine crypto - currencies, and profits are subject to tax in accordance with Thai law.

Regulatory framework: Thailand has enacted the Digital Assets Act. It is worth noting that Thailand has approved the exemption of capital gains tax on crypto - currency sales conducted through licensed crypto - asset service providers for five years, from January 1, 2025 to December 31, 2029. This measure aims to position Thailand as a global financial center and encourage residents to trade on regulated exchanges. The Securities and Exchange Commission (SEC) of Thailand is responsible for regulating the crypto market.

License issuance: The SEC of Thailand is responsible for issuing licenses. Exchanges must obtain official permission and register as a Thai limited or public company. License requirements include minimum capital (50 million baht for centralized exchanges and 10 million baht for decentralized exchanges) and directors, executives and major shareholders must meet the "fit and proper" standards. KuCoin has obtained an SEC license through acquisition.

Exchange implementation: Local exchanges such as Bitkub are active locally and have the highest crypto - currency trading volume in Thailand. Other major licensed exchanges include Orbix, Upbit Thailand, Gulf Binance and KuCoin TH. The SEC of Thailand has taken action against five global crypto exchanges, including Bybit and OKX, to prevent them from operating in Thailand because they have not obtained local licenses. Tether has also launched its tokenized gold digital asset in Thailand.

Japan

Japan is one of the earliest countries in the world to clearly recognize the legal status of crypto - currencies, and its regulatory framework is mature and prudent.

Legal status of crypto - assets: In the Payment Services Act, crypto - assets are recognized as "legal means of payment". For stablecoins, Japan implements a strict bank / trust monopoly system, requiring them to be pegged to the yen and redeemable, while explicitly prohibiting algorithmic stablecoins. As for other tokens, such as NFTs, they are regarded as digital goods, while governance tokens may be considered as "collective investment scheme interests".

Regulatory framework: Japan formally recognized crypto - assets as legal means of payment by amending the Payment Services Act and the Financial Instruments and Exchange Act (2020). The Financial Services Agency (FSA) is in charge of regulating the crypto market. The revised Payment Services Act also added the "domestic retention order" clause, which allows the government to require platforms to retain part of users' assets in Japan when necessary to prevent the risk of capital outflow. In terms of license issuance, the FSA is responsible for issuing exchange licenses, and there are currently 45 licensed institutions. Key requirements for obtaining a Japanese crypto - currency license include: having a legal entity and office locally, meeting the minimum capital requirements (more than 10 million yen, with specific capital holding regulations), complying with AML and KYC rules, submitting a detailed business plan and conducting continuous reporting and auditing.

Exchange implementation: The Japanese market is mainly dominated by local exchanges such as Bitflyer. International platforms usually need to enter the Japanese market through joint ventures (such as Coincheck).

Europe

EU

As one of the most complete and extensive judicial regulatory jurisdictions in the global crypto field at present, Europe is becoming the first stop for compliance for many crypto projects. The EU has demonstrated its leadership as a globally important judicial jurisdiction in the field of crypto - currencies by building a unified regulatory framework through the Markets in Crypto - assets Regulation (MiCA).

Legal status of crypto - assets: Under the MiCA framework, crypto - assets are defined as "legal means of payment, but not legal tender". For stablecoins, MiCA has implemented strict regulation, requiring them to have a 1:1 fiat - currency - pegged and fully - reserved, and only allowing licensed institutions to issue them. MiCA classifies stablecoins into asset - referenced tokens (ARTs) and electronic money tokens (EMTs) for regulation. For other tokens, such as non - fungible tokens (NFTs) and governance tokens, the EU adopts a classified regulatory approach: NFTs are generally regarded as "unique digital assets" and are exempt from securities rules, while governance tokens are regarded as securities according to their functions and the rights they confer. MiCA currently does not cover security tokens, NFTs and central bank digital currencies (CBDCs).

Regulatory framework: The EU passed the MiCA bill in June 2023, with the stablecoin rules coming into effect in June 2024 ahead of schedule and the bill fully effective on December 30, 2024. The bill applies to 30 countries in Europe, including the 27 EU member states and Norway, Iceland and Liechtenstein in the European Economic Area. MiCA aims to address legal ambiguity, stablecoin risks and insider trading issues, and to protect investors, maintain market integrity and financial stability through unified rules. It makes detailed provisions for the issuance of crypto - assets, the authorization of service providers, operations, reserve and redemption management, and anti - money laundering (AML) regulation. In addition, MiCA also integrates the travel rule of the Funds Transfer Regulation (TFR), requiring crypto - asset service providers (CASPs) to include sender and recipient information in each transfer to enhance traceability.

License issuance: MiCA adopts the "one - stop - shop" model, which means that CASPs only need to be authorized in one member state to operate legally within the jurisdiction of all member states, greatly simplifying the compliance process. CASPs must be authorized by their national competent authorities. License requirements include good reputation, capability, transparency, data protection and compliance with the minimum capital requirements stipulated in Annex IV of MiCA, which range from EUR 15,000 to EUR 150,000 depending on the type of service. CASPs are also required to have a registered office in an EU member state and at least one director who is a resident of the EU.

Stablecoin implementation: USDC and EURC issued by Circle have obtained MiCA compliance approval and are regarded as stablecoins in line with EU standards. Tether (USDT) has faced delisting by major exchanges such as Coinbase and Binance for its users in the EU region due to its failure to meet the strict stablecoin regulations of MiCA.

UK

After Brexit, the UK did not simply copy MiCA, but chose an independent but equally comprehensive regulatory path to maintain its competitiveness as a global financial center.

Legal status of crypto - assets: In the UK, crypto - assets are explicitly regarded as "personal property", a legal status confirmed in the Parliamentary Act of 2024. This act aims to provide digital assets with the same legal protection as traditional property, thereby enhancing the certainty of owners and traders. For stablecoins, the UK takes a prudent regulatory approach, requiring them to obtain approval from the Financial Conduct Authority (FCA), and the reserve assets must be held in custody separately. As for other tokens, such as NFTs, they are also regarded as property according to court precedents. The legal status of governance tokens is determined according to their specific use, and may be classified as securities or utility tokens.

Regulatory framework: The Financial Services and Markets Bill (2023) has included crypto - assets within the scope of regulation and revised the definition of "designated investments" in the Financial Services and Markets Bill (2000) to include crypto - assets. The Bank of England has also regulated stablecoins in parallel, regarding them

CPMM CPMM (Constant Product Market Maker) is the most basic AMM implementation and is realized in many products. Here, we use Raydium's constant product-based AMM as an example. The constant product means that the supplies of the two tokens in the pool have a fixed product: X * Y = k.

For liquidity providers, when anyone adds liquidity (assets) to the pool, CPMM automatically creates an associated account for the wallet address and issues LP Tokens (each token pair has its own LP Token Mint). These LP Tokens are used to prove that the wallet address holds a share of a particular pool and will be destroyed when the liquidity provider withdraws funds.

The on-chain program of CPMM is developed using Anchor, and the program code can be found at raydium-io/raydium-cp-swap. Let's briefly examine how it implements the constant product.

Firstly, when users use Raydium's CPMM to swap tokens, the swap-related instruction will be triggered.

For example (only for illustrative purposes, this article is not responsible for any Token): when a user wants to swap USDC for TRUMP, they can do so through the TRUMP-USDC pool.

Pool

TRUMP

USDC

7XzVsjqTebULfkUofTDH5gDdZDmxacPmPuTfHa1n9kuh

6p6xgHyF7AeE6TZkSmFsko444wqoP15icUSqi2jfGiPN

EPjFWdd5AufqSSqeM2qN1xzybapC8G4wEGGkZwyTDt1v

For simplicity, let's ignore other instructions in the transaction and focus only on the Raydium part. We find Raydium CPMM: swapBaseInput.

In the Input Accounts, we can see that the input token is USDC and the output token is TRUMP. In the Solana ecosystem's AMM, LP pairs can be simply represented by Token Accounts, without the need to create and deploy a new contract program (such as the factory contract commonly used in Ethereum). When a transaction occurs, it directly interacts with Raydium's CPMM Program. The Solana program will modify the state of the corresponding Token Accounts through the pool address, token address, and other inputs to perform the swap operation.

For example, the code for the above swapBaseInput instruction can be found here. After a series of preliminary checks, the amount of the target token that can be obtained is calculated in ConstantProductCurve.swap_base_input_without_fees:

The formula used is:

That is, after the total amounts of TokenX and TokenY change, their product should remain constant. The left side of the equation is the product after the change, and the right side is the product before the change.

After mathematical transformation, we can obtain the conversion formula for Δy (the amount of y tokens we can obtain):

Which is the delta_y = (delta_x * y) / (x + delta_x) part in the code. Note that this calculation does not include fees, which have already been deducted in the preliminary logic of swap_base_input.

CLMM CLMM (Concentrated Liquidity Market Maker) is another AMM launched by Raydium. It is similar to Uniswap V3, where each token pair also has multiple fee tiers, and a corresponding pool can be created for each tier.

Since CLMM's implementation references Uniswap V3, many concepts and implementation methods can be referred to from Uniswap's implementation when learning it. It also inherits concepts from Uniswap, such as ticks, multiple fee tiers, and concentrated liquidity. More details can be found in the DEX development course launched by ZAN: DEX Development Practice - Uniswap Code Analysis - How Uniswap works - ZAN.

However, it is important to note that, similar to CPMM, due to the characteristics of the Solana blockchain, Raydium CLMM does not require a separate contract to be deployed for each pool, so there is no concept of a factory contract. This is different from Uniswap.

CLMM allows liquidity providers to select a price range when injecting funds, and the funds will only be distributed within the selected range:

For concentrated liquidity pools, tokens are distributed on both sides of the current price. The selected price range in the above figure includes the current price, so funds are allocated to both tokens in the pool.

We can also inject only one type of token to provide so-called one-sided liquidity (as shown in the figure below). This is somewhat similar to limit orders in traditional finance, where LP funds are only utilized when the token price reaches a certain range. However, this mode also involves more risk points to consider.

Generally, for pools with small price fluctuations, LPs tend to choose a smaller range; conversely, for pools with very volatile prices, they tend to choose a larger range. The goal is to prevent the current price from deviating too much from the selected range and causing too much impermanent loss.

It should be noted that while concentrated liquidity can improve the capital efficiency of LPs, it also demands a higher level of financial awareness from LPs. LPs need to actively manage their liquidity. If LPs are not responsive, frequent on-chain fluctuations can easily lead to significant impermanent losses for LPs.

DLMM DLMM (Dynamic Liquidity Market Maker) is an AMM product launched by Meteora. It also belongs to Uniswap V3 and is very similar to the CLMM mentioned above. DLMM also allows LPs to concentrate their funds within a certain range near the current price. However, there are some differences in the specific implementation of DLMM, and it provides some unique features.

DLMM introduces the concept of Bins. The pool starts from the base price, and every small segment, called a Bin step, represents a Bin. If a trade occurs within the same Bin, traders will enjoy zero slippage. This can greatly increase trading volume and success rate, and theoretically, LPs can earn more trading fees.

Similar to CLMM, tokens in the pool are also distributed on both sides of the current price. Only one type of token is needed to provide one-sided liquidity. However, according to the Bin concept, the currently activated Bin (indicating the current exchange price) contains both types of tokens. That is:

• The currently activated Bin: It contains both types of tokens. Swapping tokens within this Bin will be done at a fixed price with zero slippage.

• Other Bins: Distributed on both sides of the currently activated Bin, each containing only one type of token.

When the amount of tokens in the currently activated Bin changes, if one side of the token decreases to 0, DLMM will set the currently activated Bin to the next Bin on its left or right side based on the actual situation in the pool. This is how the price in the pool changes.

When LPs provide liquidity, DLMM offers three strategies: Spot, Curve, and Bid Ask.

• Spot is the most universal and suitable for almost all liquidity pools. It is the simplest liquidity strategy.

• Curve is more suitable for pools with very small price changes, such as stablecoin pairs. The price fluctuations in these pools are very small. As its shape suggests, concentrating LP funds within this range can maximize trading fees.

• Bid Ask is more suitable for pools with very large price fluctuations. People tend to conduct more arbitrage trades in such pools, and the price is unlikely to concentrate within a small range. This strategy usually requires LPs to frequently adjust their positions to avoid the price deviating from the set range. Since it involves market judgment, this is not easy.

Summary AMM, as an important part of Web3 finance, promotes the popularization and development of decentralized finance through its unique mechanisms and innovations. With continuous technological progress and the improvement of the ecosystem, AMM is expected to play a greater role in the future and further change the traditional financial landscape.