• RWAs have been adopted by institutions at breakneck speed, especially over the past 2 years

• However, the growth in the RWA vertical is generally contained within institutions

• Retail-friendly RWAs are not a new concept. DApps that tokenised alternative assets such as luxury goods (high-end watches, handbags and wines) date back to 2021 but failed to find PMF

• However, a new iteration of the above, TCG Gacha dApps have found PMF due to optimal asset selection in the form of TCGs, as well as by leveraging the speculative flywheel in the form of Gacha packs

A primer on Real World Assets (RWAs) and institutional adoption

Gone were the days when CT was saying that “institutions are coming”, for they have already arrived and sunk their roots into the crypto industry. 2024 was a watershed moment for institutional adoption of RWAs, fueled by US T-Bills (one of the most popular tokenised products) offering multi-decade highs in interest rates. In the same year, BlackRock launched their BUIDL fund on Ethereum, creating a halo effect that triggered other institutions such as Franklin Templeton and Fidelity to follow suit. Since then, RWA adoption has been increasing rapidly, currently commanding US$21.24B in TVL (Source: RWA.xyz) and accounting for 16.47% of the total DeFi TVL (US$128.927B, Source: DeFiLlama).

The RWA landscape of today is mature and outpaces its TradFi incumbents across liquidity, settlement, redemption and other key factors. Today, RWA is highly integrated into DeFi, with Ethena’s USDtb currently holding more than US$850 million worth of BlackRock’s $BUIDL. Beyond DeFi, CEXs such as Binance have also integrated $BUIDL as an off-exchange collateral for its institutional clients. 

It is without a doubt that the RWA vertical has grown massively. However, who are these RWAs for and how many of these products can retail participants access or interact with?

Permissioned profits: How institutions keep us from playing the RWA(L) game

I analysed the top 10 RWA Assets (Source: RWA.xyz) to answer one question: Can retail actually participate?

On paper, several of these products are “available” to non-institutional users. In practice, 70% of these assets have high minimums (often US$100k+) which push participation toward institutions and sophisticated capital. Additionally, half of the assets above have a holder count of around 100 or less, which shows how exclusive the RWA vertical has become.

You might be wondering, why the obsession with retail participation? Evidently, we can see that the growth in the RWA vertical is generally contained within institutions. This begets the question: Is the endgame of RWA just a digital mirror of the existing gated financial system? If we sacrifice accessibility and composability in the name of institutional adoption, we are not innovating but just re-skinning TradFi. 

The real question is whether RWAs can actually deliver on the DeFi promise, or if they’re destined to remain a playground for the suits.

RWAs for the rest of us: Tokenised alternative assets

Retail-friendly RWAs are not a new concept. DeFi Summer 2021 was a watershed moment for the crypto industry and a fever dream for many. As the name suggests, DeFi was the talk of the town which inspired various innovative ideas and solutions. A type of decentralised application (dApp) that emerged revolved around the tokenisation of luxury goods such as high-end watches, handbags and wines. 

These dApps had very similar designs. The luxury goods would be authenticated and stored in vaults, while their digital twins would be represented on-chain via NFTs for transparency and assurance. Fractional ownership of these luxury goods was also a common feature, enabling users to buy fractional shares of said “item”. Another common integration is the ability to post these “items” as collateral on lending markets - an idea that did not take off due to pricing volatility which resulted in low Loan-to-Value (LTV) ratios, creating inefficient lending markets. 

Where these dApps shined is their inclusiveness of retail participants, which were undoubtedly their main target audience. It was a good idea to ride on the hype generated by DeFi, NFTs and the concept of tokenisation. 

While these dApps aimed for retail inclusivity, they faced a key problem: collision of hyper-niche demand for high-tier luxury goods with a still-nascent crypto user base. Even today, crypto’s monthly active users comes to around 40-70 million (Source: a16zcrypto). This accounts for 0.66%-1.16% of the 6.05 billion internet users (Source: Statista). Attempting to find product market fit (PMF) in such a narrow subset of the population was highly challenging.

How TCG Gacha dApps found the retail holy grail

To the average participant, RWAs that matter are retail-accessible, liquid and culturally native. The newest iteration of tokenised alternative assets, TCG Gacha dApps, tick every one of these boxes. Their success can be attributed to 2 main factors:

1. Optimal Asset Selection: These dApps tokenised high-demand real world goods in the form of Trading Card Games (TCGs) such as Pokemon & One Piece which have massive, culturally-aligned audiences

2. The Speculative Flywheel: The inclusion of a gacha mechanics which feeds the inherent crypto-native desire for asymmetric wins

Let’s break these factors down one by one.

1. Optimal Asset Selection: TCGs

TCGs are no longer a fad but a rapidly growing asset class, estimated to have a global market size of US$7.8b in 2025 with an estimated Compound Annual Growth Rate (CAGR) of 7.9%. Some of the top TCGs in the market include Pokemon, Magic The Gathering (MTG), Yu-Gi-Oh, and most recently, One Piece. More than 50% of TCG economic activity is driven by the secondary market. Platforms like eBay and Whatnot facilitate US$3+ billion in secondary market resales annually. These solutions sustain the ecosystem but come with friction in the form of high platform fees as well as rampant counterfeit items and scams. 

Going hand in hand with the secondary market is the rise of grading companies such as PSA, Beckett, CGC and more. Collectors would often send their high-tier cards for grading services to authenticate and assess the quality and condition. 

This is done in hopes of earning a Gem Mint 10, which highly elevates the price of the card. For instance, a PSA 10 copy of the Monkey.D.Luffy Manga Rare from the set OP05-119 commands a price premium of 117.3% (~US$6,045) compared with a “raw” copy of the same card.

Furthermore, due to the wide range in prices of TCG products (from as cheap as a few dollars to multiple millions), this makes it very accessible for all walks of life to participate, whether they’re here to speculate, collect or simply play the TCG. 

It is without a doubt that TCGs have penetrated the social fabric, with top content creators such as Logan Paul and IShowSpeed spearheading this movement. Seemingly everybody has at least heard of TCGs, with some venturing into the trenches themselves to speculate and flip these collectibles for a tidy profit. TCGs have transformed from a simple hobby to a profit generator which ties in very well to the next portion on Gacha.

2. The Speculative Flywheel: Gacha

These gacha dApps build on the concept of representing real world items (raw cards, graded slabs, sealed products) as NFTs on-chain. 

I will be using PlayKami as a case study to explain the TCG Gacha product mechanics. 

Each gacha pack has:

• A fixed purchase price 

• A verifiable prize pool

• Transparent odds and value tiers for its contents

On top of that, the protocol offers:

• Instant buybacks at 90% market value

• Physical redemption (and shipping) option

• As well as a marketplace to list and offer the cards that you pulled 

As compared to physical gacha products, often dubbed “oripa”, TCG Gacha dApps provide users with fair, immutable odds & Expected Values (EV) that can be verified on-chain. Additionally, with instant buybacks, users can seamlessly rip packs and profit immediately, enhancing capital efficiency and improving User Experience (UX). 

To date, TCG Gacha dApp volumes have grown exponentially, from a monthly volume of US$10.4m in Jan 2025 to US$82.5m in Dec 2025; that’s a 7.92x increase in a year! Sector leaders such as Courtyard & Collector Crypt are doing more than US$5m in revenue per week each, with Collector Crypt hitting a weekly activity peak of US$19m in the second week of 2026. Coupled with the boom in the TCG secondary market, steady growth in the TCG Gacha segment is also expected to continue.

The combination of culturally-aligned audiences, accessible prices (lower tier products/cards) and a speculative engine have seemingly allowed tokenised TCG Gacha dApps to find PMF. 

The Cyberpunk future is tangible

As the crypto industry matures and onboards an increasing number of traditional firms, it is paramount to consider if we should completely let go of the ethos of decentralisation – the same concepts of transparency, accessibility and immutability that we once lauded as the bedrock of DeFi. 

Institutionalisation of a vertical and even the industry is inevitable. We will likely continue to see a rising number of protocols that are tailored for institutions. Due to the nascency of the newly institutionalised RWA products, it is understandable that retail exclusion might be a structural choice rather than oversight, done to ease the transition of these institutions. Once this transition period is complete, the optimistic outcome is for these products to find a middle ground between being fully institutionalised and degen.

Nonetheless, one thing’s for sure: the future of RWAs is bright. 

References

https://app.rwa.xyz/

https://defillama.com/

https://a16zcrypto.com/posts/article/state-of-crypto-report-2025/

https://www.statista.com/statistics/617136/digital-population-worldwide/

https://www.cardladder.com/indexes/onepiece

https://finance.yahoo.com/news/trading-card-games-analysis-report-114800642.html

https://www.gemrate.com/

https://www.pricecharting.com/game/one-piece-awakening-of-the-new-era/monkeydluffy-alternate-art-manga-op05-119

https://playkami.io/packs/6

https://dune.com/zkayape/pokemontcgsol

*Disclosure: The information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

Thanks for reading! If you enjoyed the article, drop me a follow @samoyedscribes on X!

On-chain yield comes in many shapes and forms, some more lucrative than others. However, as always, high risk comes high reward. Yield sources such as LP farms provide higher APR but are of higher risk and require more active management. In contrast, LSTs and traditional staking are more friendly for beginners or long-term holders with lower risk appetite.

Let's take a closer look at the pros and cons of LP farming and LSTs below:

It is clear that LP farming, especially for Uni v3 style/CLMM LPs are catered towards DeFi power users due to its complexity. Fortunately, LSTs also provide decent yield for users who are simply looking to optimise capital efficency.

Crypto, often dubbed "The Wild West", is full of opportunities and various yield sources. However, keep in mind that there is no free lunch in this world. Remember to do your due diligence and check where the underlying yield is coming from to avoid getting farmed.

Thanks for reading!

The information provided is this article is for general informational purposes only and does not constitute professional nor investment advice.

Here's a rundown of each crypto vertical and a non-exhaustive list of examples for each one as well.

Infrastructure

DeFi

Consumer dApps

Institutional

DePIN

DeAI

Emerging Frontiers

Thanks for reading!

The information provided is this article is for general informational purposes only and does not constitute professional nor investment advice.

The Breakout Decentralised Application (dApp) Of The Cycle: Pump.fun
It is without a doubt that Pump.fun holds the title of the breakout dApp of the cycle. A dApp so innovative that it flipped the token launchpad vertical on its head, revolutionising token fair launches and taking the market by storm. In my first instalment, I gave readers and overview of the token launchpad landscape (on Solana), going over the key features of Pump.fun and its competitors.

Pump.fun has recently completed its Initial Coin Offering (ICO) and Token Generation Event (TGE). The demand for $PUMP clearly shows that the market values Pump.fun as an emerging blue-chip product, one that is innovative and generates loads of revenue to boot. The Breakout Decentralised Application (dApp) of The Cycle: Pump.fun.

The Rise Of Letsbonk.fun, Pump.fun’s First “Serious” Competitor
Not to say that the other competing launchpads are not real competitors, but rather, Letsbonk.fun has been showing some very impressive results recently, and is the most competitive alternative launchpad we have seen to date.

The token launchpad vertical is especially cutthroat due to the nature of the launchpads having very similar features and competitive fee structures. This causes token launchpads to have a “lack of moat” in some sense, which also leads to a cold start problem for many of them, and thus being unable to establish a user base.

That being said, the Bonk team has done an excellent job in building up interest and a sticky user base for Letsbonk.fun over the past few months.  A few months post launch, Letsbonk.fun seems to have picked up traction and built a strong community. A part of their success can be attributed to the Bonk team and community who have been continuously shilling the platform since inception.

Some proponents have been speculating that Letsbonk.fun’s run up in the recent weeks has been engineered and bound to be short-lived. Though we cannot predict the future, let’s dive into the numbers and figure out if this is a likely outcome.

The number of daily token deployments is one of the primary metrics for a token launchpad. It can be observed that Letsbonk.fun’s market share of token deployments has seen a sharp increase over the past two weeks, sitting at over more than 50% on several days with no signs of a meaningful decline at the moment. This is an important metric to continue monitoring to gauge the demand for the different launchpads.

Similar to the number of token deployments, the number of tokens that graduated also similarly gauge demand for the launchpads. Letsbonk.fun’s market share of daily tokens graduated has also seen a sharp spike in the recent two weeks.

Another metric that provides confluence for a launchpad’s demand is the trading volume. Since the start of April, the total trading volume across all launchpads remain generally similar, with slight deviations.

However, the market share of these volumes contributed by each launchpad varied greatly especially in the last two weeks. Letsbonk.fun has even exceeded Pump.fun’s trading volume in the previous week at the time of writing.

One metric where Pump.fun still commands a majority share at the moment is the amount of daily active addresses. This might raise suspicions regarding the source of Letsbonk.fun’s higher trading volume and activity despite having lesser active users; A possible presence of wash trading on Letsbonk.fun.

Concluding Thoughts
One might then ask, are all these numbers just a complete fugazi? We might never know. However, one thing’s for certain. The numbers don’t lie. Letsbonk.fun has been aggressively taking market share from Pump.fun. If they continue to do so, this will increase their legitimacy over time and cement them as a “serious” competitor to Pumpfun, something we have yet to see.

Thanks for reading!

The information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

Hyperliquid, launched in June 2023, started off as a perpetuals decentralised exchange (Perp DEX). Since then, it has amassed a total trading volume of over US$1.8 trillion. Currently, the trading activity on Hyperliquid represents around 4.8% of the aggregated trading volume from centralised exchanges (CEXs).

Hyperliquid’s PerpDEX success spurred the team to launch their own EVM compatible L1, HyperEVM. HyperEVM will host various dApps to provide services that complement Hyperliquid’s PerpDEX, as well as to build out the Hyperliquid ecosystem. Although the chain is still in its infancy, let us take a look at some interesting protocols there.

Money Markets
There are quite a number of money markets on HyperEVM, suggesting high demand for lending/ borrowing services. 

Leading the pack is Hyperlend, who has the highest TVL (US$340M at the time of writing) in the vertical as well as across HyperEVM. Hyperlend provides users with clean and simple lending and borrowing services, and other additional yield strategies to boot.

Some interesting money markets to pay attention to include Felix and Hyperdrive. Felix is a Collateralised Dept Position stablecoin protocol, featuring $feUSD. Users can deposit collateral to borrow $feUSD. On the other hand, Hyperdrive is a money market that is looking to tokenise Hyperliquidity Provider (HLP), Hyperliquid’s shared liquidity vault which is used to execute market-making and liquidation strategies. This would allow users to take a leveraged HLP position via looping, or borrow against HLP by using it as collateral, unlocking more interesting strategies as a whole.

HyperSwap
Every chain needs a quality DEX, and HyperSwap might just be what HyperEVM needs. It is currently the leading DEX on the chain, adopting Uniswap V2’s AMM as well as Uniswap V3’s concentrated liquidity pools.

Unit
Unit is a key piece of infrastructure for HyperEVM, allowing users to send major spot assets such as $BTC, $ETH, $SOL and $FARTCOIN from their native chains to Hyperliquid, improving liquidity and connectivity across chains.

Consumer dApps
Every chain needs a few good consumer dApps to appeal to the average user.

LiquidLaunch, a pumpfun-esque token launchpad is a good example.

Another interesting dApp is Fan App, who is building a social trading platform where users can copytrade, and get real-time data of other users’ trades.

Structured Products
Hyperbeat, Upshift and Liminal are products that aim to generate yield off user’s deposits by leveraging automated DeFi strategies, hedging strategies etc. For a chain that is built around a PerpDEX, structured products may have a good product market fit, as PerpDEX users may be drawn to these products that help to generate yield off users’ idle assets, maximising returns. 

Concluding thoughts
It is early days for HyperEVM. Many dApps are still in their beta launches and a work-in-progress. Many of them also have ongoing points programmes, which makes this a great opportunity to explore the ecosystem and support these dApps as well.

Hyperliquid.

*Disclosure: The information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

First Steps: Bitcoin ETF Approval
The approval of spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC) in January 2024 marked a watershed moment for the industry. These ETFs provided a familiar investment vehicle for institutional investors, driving significant capital inflows. Bitcoin ETFs are the fastest-growing ETF launch in history, with cumulative net inflows of more than US$45 bn to date. BlackRock’s iShares Bitcoin Trust (IBIT) is also the quickest ETF to US$20 bn AUM, an astounding figure.

Following the Bitcoin ETF success, the SEC approved spot Ethereum ETFs in July 2024. These ETFs have seen more modest inflows, totaling $4.1 billion in net assets at the moment, representing about 1.4% of Ethereum’s Fully Diluted Value (FDV). Despite a lack of investor appetite for the Ethereum ETF, a slew of altcoin ETFs were proposed, such as those for Solana, XRP, and Litecoin. However, none have been approved as of yet, reflecting a cautious regulatory stance for riskier assets. Market sentiment clearly favours Bitcoin, with its ETFs commanding the lion’s share of institutional interest.

Bitcoin’s Corporate Playbook: Revamping Treasuries
A growing number of companies are integrating Bitcoin into their corporate treasuries, viewing it  as a hedge against inflation and a strategic reserve asset. Till date, there are 250 companies that have added Bitcoin to their balance sheet, of which 140 of them are public. In total, these companies have acquired ~3.46 million BTC, accounting for around 16.5% of the total btc supply

Strategy, formerly MicroStrategy, leads this trend with 592,345 $BTC, valued at approximately US$63.5 billion. Their strategy involves issuing zero-coupon convertible bonds, which can be converted into shares at a set price, leveraging Bitcoin’s volatility to attract arbitrageurs. The capital raised is used to acquire more Bitcoin, amplifying exposure to its price movements. Strategy has also employed innovative fundraising instruments, such as $STRK and $STRD, to further fuel its Bitcoin acquisitions. 

Many companies have attempted to mimic Strategy, following their success. A standout company is Japan’s Metaplanet, have adopted similar strategies, accumulating 11,111 $BTC as of present, making it the eighth largest public corporate holder globally. Metaplanet’s strategy largely mirrors Strategy’s but is tailored to Asia-Pacific capital markets. 

On the other hand, other companies are venturing into altcoins, with SharpLink Gaming (SBET:NASDAQ) leading the charge by acquiring $463 million worth of $ETH in June 2025, becoming the largest publicly traded Ethereum holder. Spearheaded by Ethereum co-founder Joseph Lubin, SharpLink’s strategy involves staking over 95% of its ETH to generate yield. However, investor response has been volatile, with SharpLink’s stock surging upon announcement but later plummeting soon after. Many stocks of other companies looking to add altcoins to their treasury also experienced similar price action to Sharplink’s post announcement. This suggests that there might be a lack of investor appetite for altcoins at the moment, or at least through the institutional financial rails.

The IPO Race: Riding the Wave of Institutional Interest
The success of institutional adoption has spurred crypto companies to seek public listings, further bridging the gap between crypto and traditional finance. Circle, the issuer of the $USDC stablecoin, led the charge with a blockbuster Initial Public Offering (IPO) in June 2025, raising around US$1.1 billion. The IPO was a huge success for Circle, with the fundraising round being heavily oversubscribed. Recently, the stock hit an all time high share price of US$299, or US$75.57 Market Cap.

Other than Circle, many crypto companies are also looking to jump on the bandwagon and go public. One example is Gemini, a Centralised Exchange (CEX) founded by the Winklevoss twins, which confidentially filed for an IPO in June 2025. Similarly, Tron, led by Justin Sun, is pursuing a public listing through a reverse merger with SRM Entertainment, a Nasdaq-listed toy manufacturer. 

Concluding Thoughts: Opportunities and Risks
Institutional capital is no longer “coming”, it’s already here.

The crypto industry is experiencing a golden era of institutional adoption, with Bitcoin solidifying its status as a reserve asset. The US government’s establishment of a SBR signals potential for broader international adoption. Companies like Strategy and Metaplanet have demonstrated the viability of Bitcoin treasury strategies, attracting significant investor interest. The success of Circle’s IPO and the planned listings of Gemini and Tron further underscore the industry’s integration with traditional finance.

However, challenges remain. The rush to emulate Strategy’s model, particularly with altcoins, raises concerns. Simply cloning the Strategy model with altcoins offers asymmetric downside. Companies like SharpLink have faced volatile investor reactions, highlighting the risks of such strategies. Regulatory uncertainties, despite recent progress, continue to pose hurdles, and the lack of approved altcoin ETFs suggests limited institutional appetite for riskier assets.

The industry’s trajectory is upward, driven by institutional capital and regulatory support, but careful navigation is essential to balance the promise of innovation with the risks of volatility and speculation.

*Disclosure: The information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

UBI is a government program that provides every adult citizen with a fixed, regular payment. Unlike traditional welfare, which often involves complex eligibility criteria and bureaucratic oversight, UBI is universal, unconditional, and periodic. Its core aims are to eradicate poverty, simplify social safety nets, and provide financial security, especially in an era where automation threatens jobs.

Research suggests UBI can improve physical and mental health, boost financial stability, and stimulate economies through increased consumer spending. Yet, UBI also raises valid concerns when it comes to the cost, at around US$12,000 per person annually. Very possibly, UBI will also reduce the incentive to work, driving up unemployment; though others argue modest sums such as US$1,000 a month still necessitate employment for most.

Is UBI happening anytime soon?
The idea of UBI has gained momentum, particularly post-COVID, when governments worldwide issued direct cash payments to citizens. Pilot programs, like the Stockton Economic Empowerment Demonstration (SEED) program, gives $500 monthly grants to 125 residents. This programme demonstrated tangible benefits such as better job prospects, reduced financial volatility, and improved mental health. Though not directly referencing UBI, Singapore’s Community Development Council (CDC) has also rolled out a scheme which distributes vouchers to every Singaporean household to help with daily expenses.

However, scaling UBI faces significant hurdles, with the biggest being the cost. For instance, Andrew Yang’s US$1,000/month plan was estimated at US$2.8 trillion annually, only partially offset by proposed taxes and program cuts. Political opposition is fierce, with a 2020 Pew survey showing a narrow majority of Americans oppose UBI, though support is higher among younger, lower-income, and minority groups. Critics also argue it could exacerbate poverty if it replaces targeted welfare. Despite these challenges, societal trends such as rising income inequality, automation’s impact, and successful pilots suggest that UBI is gaining ground. It may not arrive tomorrow, but it’s looking more and more inevitable.

The opportunity for Worldcoin
Worldcoin is a project co-founded by Sam Altman which aims to create a global identity and financial network. Worldcoin uses iris-scanning orbs to verify unique human identities, ensuring that each person has a unique decentralised identity (DID). Verified users receive $WLD tokens every two weeks as emissions, with over 11 million users claiming more than 112 million $WLD tokens since its inception in July 2023. 

Worldcoin’s aims to be a universal identity system to distinguish humans from AI bots, coupled with regular token grants which is similar to UBI in some sense. With over 11 million users and integrations by platforms like Reddit and Discord, its rate of adoption is not to be scoffed at. $WLD is also a governance token for World Chain, their native a layer-2 blockchain. As society progresses towards UBI, it is possible that World Coin will play a pivotal role by providing DIDs as well as the financial infrastructural rails for UBI distribution as well as other financial services via World Chain.

UBI & Possible Unemployment - Where Does This Leave Us?
If UBI becomes a reality, people may have more disposable income and time. The line between unemployment and retirement may start to blur. Assuming that UBI will cause unemployment to increase, we can draw a parallel between the actions of the unemployed in the UBI future to the retirees of today. A recent survey showed that 57% of Americans aged 59-77 gambled in the last 12 months. Their participation remains high, with up to 85.6% of older adults gambling annually in some regions. In the age of UBI, we might see similar behaviours, except that the gambling would be brought on-chain in conjunction with Worldcoin’s DID.

Concluding Thoughts
The intersection of UBI and crypto is but a glimpse into the future as we navigate the age of artificial intelligence (AI) and robotics . Worldcoin shows how crypto can bypass traditional barriers, offering a scalable, transparent UBI framework. As automation reshapes economies, such innovations could bridge gaps in wealth distribution, empowering individuals globally.

Yet, with great power comes great responsibility. Increased disposable income from UBI could drive ean uptick in irresponsible behaviour, raising concerns about gambling addictions and unproductivity, necessitating robust regulations and support systems. As we stand at this crossroads, one thing is clear, crypto might just be the harbinger of a new economic era. What role will you play in shaping it?

*Disclosure: The information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

What is REV?
Simply put, If TVL tells you what sits in the vault, REV tells you how often the vault door is opened and why. In this article, we will be giving you an overview of what REV is and its utility as a metric for blockchain activity.

REV is the sum of all in-protocol transaction fees and out-of-protocol tips users pay to have their transactions included on a blockchain. It’s a direct measure of the economic demand for interactions with a network, effectively measuring economic activity on a blockchain.

Other metrics such as Total Value Locked (TVL) or Monthly Active Users (MAU) provide useful snapshots but don’t tell the full story. TVL measures the value of assets locked in a blockchain’s protocols. However, it doesn’t show how actively those assets are being used or represent demand for blockchain activity. Similarly, MAU counts how many users a blockchain has but doesn’t reveal the economic weight of their actions. Some users might hold several millions worth of assets in dApps without ever transacting, inflating TVL but contributing little to actual activity. REV, by contrast, focuses on the real costs users incur, making it a more direct indicator of a blockchain’s economic health.

What goes into calculating REV?
REV consists of two main components.

Firstly, in-protocol transaction fees. These are the base fees and priority fees users pay to have their transactions processed by validators or miners. 

Secondly, out-of-protocol tips refer to additional payments users make to prioritise their transactions, often in the form of bribes to miners/validators e.g. Miner Extractable Value (MEV). These tips are common in competitive environments where users want their transactions processed faster, such as during a memecoin presale or during Token Generation Events (TGE) and airdrop claims. 

Drivers of REV

One primary driver of REV is the volatility of assets hosted on the chain. High-volatility assets, like Solana’s memecoins, ignite speculative trading, which ramps up transaction volumes and creates lucrative Miner Extractable Value (MEV) opportunities. During periods of intense market speculation, users compete fiercely to prioritise their transactions, often paying substantial tips to fill their orders. This competitive bidding spikes REV, as seen in Solana’s 2024 memecoin craze.

Another critical factor is the maturity of a blockchain’s MEV infrastructure. In chains with nascent MEV systems, such as Solana in 2024, users often resort to aggressive bidding to influence transaction ordering, resulting in elevated tips. Solana’s remarkable 40x gap between median and average fees during this period underscores the impact of immature MEV systems on REV. As MEV infrastructure evolves, these spikes may stabilise, but in their early stages, they act as a powerful catalyst for inflating economic value.

Finally, each blockchain’s unique use cases shape its REV profile. Solana’s REV in 2024 was driven by memecoin launchpads like pump.fun, which attracted retail speculators and fuelled transaction volumes. Ethereum, by contrast, owes its steady REV to its dominance in Decentralised Finance (DeFi), with protocols facilitating lending, borrowing, and trading. These chain-specific adoption drivers explain why REV varies so widely across ecosystems.

Limitations of REV as a Metric
One significant limitation lies in the fee structures across blockchains, which complicates direct comparisons. This structural diversity means REV cannot serve as a linear benchmark across chains, as the underlying economic mechanics differ profoundly.

Another challenge is the skew introduced by MEV activity. High MEV environments, such as Solana during its 2024 memecoin frenzy, drive significant fee spikes as users pay hefty tips to prioritise transactions. While this boosts REV, it often reflects speculative gambling on volatile assets rather than sustainable economic value. Such disproportionate fees can distort perceptions of a chain’s health, masking whether its activity stems from genuine utility or fleeting hype.

REV also functions as a lagging indicator, offering a snapshot of current activity but little insight into future potential. A chain’s REV can plummet rapidly, as seen with Solana’s 85% drop from its 2024 peak, driven by a cooling of memecoin speculation. 

Moreover, REV captures only a fraction of a blockchain’s value. REV misses off-chain value, such as revenue generated by application-layer dApps or ecosystem partnerships, which are vital to a chain’s economic ecosystem,

Finally, Bitcoin serves as a stark reminder that low REV does not equate to worthlessness. With a Fully Diluted Valuation (FDV)  of approximately US$2.1 trillion as of May 2025, Bitcoin generates roughly US$206 million in annualised REV, more than a 10000x FDV/REV multiple. Its role as a store-of-value transcends transactional activity, illustrating that a chain’s value can far exceed its REV. 

Concluding thoughts
REV’s strength lies in its ability to highlight economic engagement, but as a standalone metric, it falls short of painting a complete picture. Its fluctuations, driven by transient factors like memecoin frenzies or MEV spikes, can obscure a chain’s underlying fundamentals. To derive meaningful insights, REV must be used in confluence with other indicators. Only then can we discern if a chain’s economic activity is robust or merely a fleeting bubble. Maximising REV is not a universal goal, as its relevance varies with a chain’s core use case. Each chain’s purpose, whether store-of-value, DeFi hub, or “on-chain casino”, dictates whether REV is a representative metric or not

The future of REV lies in cultivating healthy, sustainable economic activity, even if it means sacrificing absolute fee income. Chains must prioritise long-term stability over short-term revenue spikes. By aligning fee structures with their unique adoption drivers, chains can build resilient economies that endure market cycles. As the crypto landscape evolves, REV will remain a vital tool for measuring economic demand, but its true power lies in contextual application. The goal is not to crown a chain with the highest REV but to foster ecosystems where user value and economic health coexist.

*Disclosure: The information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

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A brief history of token launchpads
Token launchpads are an established vertical in the crypto ecosystem, providing a structured pathway for projects to raise funds and bootstrap liquidity. Before the meteoric rise of Pump.fun, the landscape was dominated by protocols more tailored to Initial DEX Offerings (IDOs). Protocols such as CoinList, PinkSale Finance, and Fjord Foundry were the go-to choices for projects looking to launch on various blockchains, such as Ethereum and Binance Smart Chain (BSC). These launchpads often catered to established protocols with dedicated builders and also featured a more selective environment where investors typically had to get whitelisted to participate in a particular raise. These barriers to entry made them less accessible for smaller protocols, as well as less formal projects such as meme coins or experimental tokens.

Why was Pump.fun so impactful?
Enter Pump.fun, which some might hail as Solana’s kingmaker for its role in driving the chain’s dominance. Launched on Solana, Pump.fun leveraged the blockchain’s low-cost and high-speed transactions to revolutionise token launches. Unlike its predecessors, Pump.fun introduced a standardised mechanism that burned liquidity pool (LP) tokens upon launch, ensuring that liquidity couldn’t be pulled - this feature provided added trust for retail participants, though the platform wasn’t immune to manipulation by certain insiders.

What made Pump.fun truly impactful was its decentralised approach. It allowed anyone, not just established protocols, to fundraise and bootstrap liquidity in a fair manner. To date, more than 10 million tokens have been launched on pump.fun. This accessibility turned Pump.fun into a breeding ground for Solana’s meme coin frenzy, which caused Solana to be dubbed as the go-to “on-chain casino”. Other chains have tried to take this title away from Solana, but none have prevailed. Pump.fun’s model was the first of its kind, enabling the proliferation of new token launches at an unprecedented scale.

However, was this a net positive or negative for the crypto space? On one hand, Pump.fun lowered the barriers to entry, fostering creativity and experimentation. On the other hand, it opened the floodgates to low-quality projects and mass liquidity extraction events. Some argue this is detrimental to the ecosystem’s long-term health. Time will tell, as the market corrects itself in due course.

Makenow.meme - the earliest iteration

Following Pump.fun’s success, Makenow.meme emerged as an early competitor, aiming to take the concept further by integrating directly with platforms like X. The idea was to allow users to create tokens directly from X by tagging Makenow.meme’s X handle, making token launches a seamless, consumer-friendly experience. On paper, this sounded like a promising decentralised application for the masses, blending social media with crypto innovation. However, despite its supposed potential, Makenow.meme struggled to find product-market fit (PMF). The platform had lacklustre adoption, causing user activity to quickly taper off post-launch. While the concept was novel, it lacked the execution and incentives needed to drive mainstream adoption.

The resurgence of Pump.fun competitors
Pump.fun’s dominance didn’t go unchallenged for long. A pivotal moment came when Pump.fun decided to migrate its “graduated” tokens, those that reached a certain market cap threshold, from Raydium to its own Pumpswap DEX. This move sparked a wave of competition, as Raydium responded by launching its own token launchpad, LaunchLab. Additionally, Believe launched a similar product to Makenow.meme which allows users to launch tokens on X, while Bonk introduced its own launchpad as well, built on Raydium’s LaunchLab technology stack. Most recently, Boop entered the scene, spearheaded by Dingaling, founder of Pancakeswap, LooksRare, and more.

Boop, the most promising newcomer
Boop stands out as the most intriguing of the new entrants, thanks to its innovative approach and “fun” ponzinomics. Boop introduces fee-sharing mechanisms, a feature that addresses one of Pump.fun’s key criticisms: the lack of incentives for token creators and early adopters. Boop also employs aggressive onboarding strategies to attract users. To highlight this, some DeFi power users were given $BOOP airdrops, but with a catch. They must launch a token, market it, and rally others to buy it in order to claim their airdropped tokens. Additionally, Boop offers fee sharing, airdrops and other incentives for token deployers, $BOOP stakers and hodlers of recently “graduated” tokens. While it’s early days, Boop’s dynamic incentive structure and willingness to rethink what a launchpad can be could foster the growth of a loyal and committed user base over time.

Concluding thoughts

There is no doubt that the token launchpad vertical on Solana is becoming increasingly saturated. The ability to fork protocols is a fundamental feature of blockchains and not inherently negative. However, the proliferation of near-identical products risks stifling innovation as they offer little differentiation, thus contributing to a crowded market where user attention and liquidity are spread thin.

Instead, the crypto space should encourage projects like Boop, under Dingaling’s leadership, to iterate on the design of existing products. By introducing novel incentive structures and rethinking user onboarding, Boop demonstrates that there’s still room for innovation in this space. As the market evolves, the key to success will lie in balancing accessibility with sustainability, ensuring that token launchpads not only empower creators but also foster a healthier, more resilient crypto ecosystem.

*Disclosure: The information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

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The early days
In the present day, there is a lot of emphasis on design and user experience (UX), especially the necessity of a mobile-first user interface (UI). Although modern consumer dApps are still not completely polished, earlier dApps definitely had many more rough edges.

One of the first protocols that can be considered as a consumer dApp is CryptoKitties. First launched in 2017, CryptoKitties was a pioneer, offering digital cat (Non-Fungible Tokens) NFTs on Ethereum. It attracted so much traffic that it congested the Ethereum network, proving demand for fun consumer use cases. Unfortunately, interest waned quickly once the novelty faded. 

Similar early projects set the stage for the “X-to-earn” model in modern consumer dApps, where some real-world or digital action is incentivised with tokens. Some well-known examples of X-to-earn dApps include STEPN and Sweatcoin, which led the move-to-earn narrative. During that time, tons of other X-to-earn ideas started emerging: play-to-earn, learn-to-earn, even sleep-to-earn. However, these dApps faced a similar growth trajectory. While many of these dApps saw explosive growth in the early stages, they often struggled to retain users.

Today, the X-to-earn trend has cooled off a bit, but new experiments are still popping up, with some going in pretty unconventional directions. Before we dive into those protocols, it’s important to understand why so many of these consumer dApps lose steam after the initial hype. The success of these dApps hinges on the presence of strong incentives and sustainable token sinks to keep the ecosystem running long-term

Tokenomics and the X-to-Earn Model: Why Sinks Matter
Tokenomics refers to the economic design of a crypto token, including how it’s distributed, issued and used within the protocol’s ecosystem. For consumer X-to-Earn dApps, tokenomics are especially important. While the token incentives must be substantial to attract users, tokenomics design must also be sustainable in the long-term. 

The core challenge is balancing token supply and demand. X-to-earn apps typically create a constant stream of token emissions as user rewards. If nothing curtails this growing supply, the token’s value will trend downward. To counteract inflation, the app needs token sinks which refer to a token use case that results in a portion of token supply being burnt. In essence, users must have reasons to use the token beyond selling it for profit. If dApps fail to establish strong sinks, it becomes a ponzi-like scenario where existing holders can profit only as long as new users arrive to buy the tokens. Early on, hype and growth can sustain high eventually causing a death spiral.

In theory, a well-designed consumer dApp tokenomics model will include token sinks and mechanisms to direct dApp revenue to token holders. A popular implementation of this concept is to use dApp revenue to buy and burn protocol tokens. Another strategy is to burn protocol tokens whenever they are spent on in-dApp purchases.

Case Study: STEPN
STEPN is a move-to-earn mobile app launched in Dec 2021 that gamifies physical exercise. It lets users earn crypto by walking or running. By moving physically, users earn in-game tokens. STEPN’s mission was to incentivise healthier lifestyles by combining fitness tracking with play-to-earn mechanics. STEPN’s simplicity and novelty allowed it to attract millions of users, crowning it as one of the most successful consumer dApps of all time. 

STEPN’s Mobile App Interface

To partake in the STEPN ecosystem, users are required to download the STEPN app, create a wallet, and buy an NFT sneaker with crypto. Each sneaker NFT has different traits and attributes that affect how much users earn from moving. The app then uses GPS to track distance and speed, ensuring users are moving physically. Moving spends in-game energy that recharges over time, as well as earns Green Satoshi Token (GST), the primary reward token. GST earnings depend on the sneaker NFT’s levels, upgrades and traits. Additionally, users could level up their sneakers or mint new ones by spending GST. STEPN also had a second token, Green Metaverse Token (GMT) which served as their governance token.

In short, STEPN combined fitness tracking, game mechanics and crypto rewards. The onboarding experience was smooth, with a built-in wallet and marketplace, resulting in a fun experience for many. People formed habits of taking daily runs to farm tokens and sharing progress on social media. This created a positive flywheel effect which onboarded new participants once they found out that it was an easy way to “get paid” for something they do everyday.

STEPN operated a two-token economy. One one hand, GST was STEPN’s reward token which was earned through movement. STEPN incorporated many token sinks for GST. For example, users paid GST to level up, upgrade, repair, and mint new NFT sneakers. All these actions burn GST, creating a sink. On the other hand, STEPN also featured GMT, the governance token, which was envisioned as the token which aligned with longer-term interests of the ecosystem. Only 30% of GMT was allocated to move-to-earn rewards, with the rest to ecosystem treasury, team, investors, etc.

Price Chart of STEPN’s GST (SOL)

With these token sinks in place, STEPN’s tokenomics appeared to be sound and healthy. However, in May 2022, the crypto markets crashed hard, Bitcoin and altcoins altogether. Fundamentally, STEPN’s ecosystem still heavily relied on continuous demand for GST. By June 2022, GST suffered a >99% drop from its highs, while GMT also fell by 85% later that October. With the incentive structure no longer being as lucrative, STEPN’s user count consequently collapsed. From over half a million daily users at its apex, active users dropped to under 6,000 by the fall of 2022.

Emerging Consumer dApps: New Frontiers
Even as many X-to-earn models struggle, innovators in crypto continue to propose ever-more creative ways to tie tokens to human behaviour. A unique consumer dApp that stands out is Sleepagotchi, a protocol that packages a “sleep-to-earn” mechanic in an interactive mobile game.

Firstly, the convenient mobile interface is one of the most important features for a good consumer dApp. Secondly, by building the dApp around sleep, a required activity for all, Sleepagotchi casts a wide net, targeting a larger addressable market. Thirdly, the adoption of a “sleep-to-earn” mechanic gives the project a sense of novelty. 

Crypto consumer apps hold a distinct advantage with the "X-to-earn" model, which serves as a powerful incentive for onboarding users. However, competing head-to-head with established Web2 consumer apps, especially in dominant sectors like social media or e-commerce, presents significant challenges. Instead of trying to replicate these models, Sleepagotchi takes a different route by targeting a niche market, sleep. This targeted approach enables the app to tap into a specific, underserved need and build a dedicated user base. By carving out a space in an area like sleep, Sleepagotchi can create an engaged, loyal community before scaling and potentially branching out into other areas of health and wellness.

What the future holds for consumer dApps
Many protocols have tried, and failed, to create a sustainable consumer dApp. While token sinks are important, tokenomic design alone is insufficient to guarantee the sustainability of a protocol’s ecosystem. These hurdles speak for why there has been a drop in X-to-earn projects lately. Thus, it is encouraging to see consumer dApps continue to emerge in this challenging vertical.

That said, the key issue still remains. The longevity of an X-to-earn dApp ultimately depends on whether it can retain its user base, especially when user incentives start to drop, either due to unforeseen circumstances or an influx of users that dilutes the token earnings. As we've seen, there’s clear demand for X-to-earn dApps, and incentives play a big role in attracting new users. When users realise they can earn rewards by engaging with the app, they’re motivated to join. With referral programs as a common go-to-market (GTM) strategy, these users often spread the word on social media, bringing in a second wave of users, so on and so forth.

The challenge, however, is keeping this loop running. Incentive-driven flywheels are a double-edged sword. Once the incentives decrease, user engagement drops, leading to the eventual collapse of the ecosystem. What future X-to-earn protocols need to focus on is creating a more sustainable flywheel, one that doesn't rely solely on token incentives. A product-led flywheel, where the app's unique features themselves drive user engagement and retention, is a promising solution. This approach better establishes product-market fit and fosters a more loyal user base, with token incentives playing a secondary role in retention. This serves as a more sustainable and scalable strategy.

Concluding Thoughts
The evolution of consumer dApps reflects both the promise and the challenges of bringing blockchain to the masses. While novelty and rewards can drive short-term adoption, sustainable value requires more than just incentives. Tokenomics play a central role, especially the presence of strong token sinks that balance emissions and keep ecosystems healthy.

It is also important to point out that crypto is a fundamentally different industry when it comes to marketing and GTM strategies. Instead of relying on traditional methods like SEO or paid ads, successful crypto protocols build bottom-up: earning trust, engaging users directly, and forming tight-knit communities. As the space continues to mature, it will be exciting to see how these dApps balance innovation with sustainability. The next wave of consumer dApps will likely be defined by their ability to not just attract users, but to keep them.

*Disclosure: The information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

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Then came Kaito Pro, a powerful alternative that pushed the boundaries further. Kaito carved out its own edge by tracking token and narrative mindshare, giving users a sense of what people were actually paying attention to. Beyond token flows, Kaito tapped into social sentiment, adding a new dimension to token analysis.

Alongside these analytics platforms, Polymarket captured attention as a prediction market, especially the recent U.S. Presidential elections. Polymarket let people bet on outcomes, and let market pricing reflect collective belief, demonstrating how financial incentives could sharpen informational efficiency.

But the real inflection point for InfoFi came with the launch of Kaito Yaps. Kaito Yaps didn’t just measure attention, it tokenised it. For the first time, users could attach value to digital mindshare, quantifying what had previously been intangible. This marked a paradigm shift.

Kaito Yaps
Kaito Pro is the premier crypto data source. It is an AI-powered vertical search engine built specifically for crypto, helping users cut through the noise of a fragmented and fast-moving ecosystem. Built on thousands of data sources, its proprietary algorithms, semantic search, and real-time analytics surface only the most relevant, high-signal information. Thus, it is widely used by crypto teams, researchers, and investors. However, there remains a large group of crypto participants who are priced out of Kaito Pro’s services, limiting the platform’s broader reach and adoption.

Kaito Yaps completely flips the script, targeting the entire crypto user base on X, a community formerly known as “Crypto Twitter (CT)”. Currently, there are more than 200,000 monthly active Yappers. As part of Kaito’s airdrop campaign, crypto users could earn Yaps by posting high-quality content on X. Additionally, other projects have begun leveraging Yaps as a distribution mechanism, rewarding top Yappers with allocations of their future tokens. Yaps represent verified, reputation-weighted attention. Rather than rewarding vanity metrics like impressions or likes, Kaito evaluates how valuable a tweet is based on the insight it provides, its originality, and relevance. This ensures that only posts generating real, meaningful engagement and adding genuine insight are rewarded with Yaps, effectively cutting through the noise.

What makes Kaito Yaps truly powerful, though, is the self-reinforcing growth loop it enables. As users earn Yaps, they gain visibility and influence within the community. This increases their mindshare, which in turn encourages more participation, more content creation, and more meaningful discourse. As this content spreads and gets recognised, it attracts more projects to engage through the ecosystem via Kaito Connect (elaborated on in a later section), drawing in more protocol incentives to the Kaito ecosystem. The result is a virtuous flywheel: more quality content → more Yaps → more community mindshare → more project integrations → more incentives → and back to more content.

In doing so, Kaito has created more than just a leaderboard or a rewards system. It has laid the foundation for an attention economy with built-in network effects. Kaito Yaps is here to stay, as an integral part of the Kaito ecosystem. 

Kaito Connect

Following the success of Kaito Yaps, Kaito launched Kaito Connect, which features a Yapper Launchpad. This launchpad is predominantly for pre-TGE projects to launch their own Yapper Leaderboard, featuring the top yappers in their respective ecosystem. The Yapper Launchpad allows the Kaito community to decide which project’s Yapper Leaderboard launches next. Each week, the top three projects from the launchpad are selected for a Yapper Leaderboard launch. 

The amount of votes per user, comes from 2 main sources, Yapper votes (25%) and Holder votes (75%). The number of Yapper votes one receives is based on the amount of Yaps and Smart Followers one has. On the other hand, Holder Votes are based on the amount of staked $KAITO, $sKAITO and Genesis NFTs that are held in their wallet linked to Kaito’s platform. This strikes a balance between active participants and longer-term stakeholders.

Yaps were designed to do more than just quantify attention, they were meant to redistribute value more fairly across the attention economy. By introducing Kaito Connect’s Rewards Station, Kaito closes the loop between creators, users, and brands. This new layer makes it easy for protocols to directly incentivise content creation by allocating token rewards to yappers who create high-quality, on-brand content. In the Rewards Station, crypto participants can browse a curated list of projects and choose which one they want to support. By crafting insightful tweets, threads, or commentary about that project, participants earn tokens based on the quality and reach of their contributions.

What’s next?
One potential area for growth lies in further aligning incentives for Kaito users, particularly voters on the Yapper Launchpad. While the Rewards Station provides a clear incentive structure for creators who generate content, the current voting mechanism on the Yapper Launchpad offers limited extrinsic motivation for users to actively participate beyond personal interest in a project. Introducing a built-in reward mechanism for voters could help deepen engagement, improve signal quality, and strengthen the governance layer of the ecosystem.

Notably, the emergence of third-party protocols like Yapper Collective, which have begun streaming incentives to voters, signals clear and growing demand for vote-based rewards. However, this also highlights a point of value leakage from the Kaito ecosystem, where engagement that originates within Kaito is being monetised externally. Addressing this gap presents an opportunity for Kaito to capture more of its own value flow, tighten its feedback loops, and reinforce long-term platform loyalty by embedding these incentive mechanisms natively.

Beyond native integrations, Kaito has also introduced the Yaps Open Protocol, enabling builders to access, track, and utilise the Yaps date through a public API. Since its launch in December 2024, it has already gained traction among teams like Berachain, Story, and Fantasy Top, who are leveraging Yaps data for use cases ranging from SocialFi applications to custom reward distribution mechanisms. Apart from Yaps, there are also teams building on top of Kaito Pro’s data stream. One such example is Noise, a DEX for tokenised mindshare, made possible by utilising Kaito as an oracle. 

By making attention programmable, Kaito has laid the foundation for a new wave of composable, attention-driven applications.

Tokenomics

Successful protocols are always accompanied by strong tokenomics — Kaito is no different. Currently, users can stake $KAITO to receive $sKAITO and receive yield in exchange. Note that there is a 7 days unstaking period before withdrawal is possible. The source of the staking yield originates from the 5% of token supply allocated as liquid incentives.

Kaito also conducts strategic token buybacks by utilising its revenue generated from its core products, such as Kaito Pro subscriptions used by institutional investors, analysts, and trading teams, as well as ecosystem partnerships through Kaito Connect. With an annualised revenue of US$32.95 million, the protocol is well-positioned to sustain these buybacks. Given that the next $KAITO token unlock is scheduled for 20th August 2025, and factoring in the current pace of buybacks, $KAITO is effectively deflationary at this stage.

This revenue-backed model gives $KAITO a good level of economic sustainability. However, there is room to deepen token utility and better align long-term value accrual with active governance and participation. At present, token holders primarily benefit through staking emissions and buybacks. However, the protocol could evolve further to incentivise broader ecosystem behaviors.

One potential path forward is to integrate a Curve-style veTokenomics model, pairing locked $KAITO with native governance rights and directional control over emissions. Under such a design, protocols could be encouraged to purchase and lock $KAITO in order to gain voting power, allowing them to redirect a portion of emissions (either in $KAITO or their native tokens) toward voters on the Yapper Launchpad.

Implementing such a design would unlock two key benefits. First, it would significantly strengthen voter incentives, giving users a more compelling reason to actively participate in project selection and community curation. Second, the model would introduce a substantial token sink, as protocols would need to lock up $KAITO to gain influence over emissions and governance. This reduction in circulating supply would not only support the token’s value but also enhance long-term alignment between protocol stakeholders and the token economy. 

Conclusion

To tie it all together, the trifecta of Kaito Pro, Kaito Yaps, and Kaito Connect forms a cohesive ecosystem that bridges creators and protocols using data. Kaito Pro delivers AI-powered market intelligence, surfacing high-signal insights from across the crypto landscape. Kaito Yaps builds on that foundation by turning attention into a tokenised asset, enabling creators to earn based on the quality and impact of their content. And Kaito Connect brings everything full circle, allowing projects to engage directly with top Yappers through tools like the Yapper Launchpad and Rewards Station.

This tightly integrated system not only empowers creators and users but also offers protocols a transparent and effective way to build community and distribute value. In doing so, Kaito redefines the relationship between data, discourse, and distribution, positioning itself as a core infrastructure layer for the emerging InfoFi paradigm.

However, the long-term sustainability of this ecosystem depends on more than just strong architecture — it requires consistent demand and incentives to maintain engagement. The past few months saw a surge of euphoria in the market, which drove heightened interest in Kaito’s services and increased activity across Yaps. But as that excitement cools, so too may the flow of incentives from protocols. If these rewards begin to dry up, engagement across the ecosystem, particularly within Yaps and the Launchpad, could taper off as well. To mitigate this, Kaito will need to ensure that its incentive structures are resilient beyond cyclical market trends. The key challenge moving forward will be turning Yaps from a temporary engagement tool into a sustainable, self-sufficient attention economy.

While Kaito shares surface-level similarities with platforms like Nansen and Polymarket, it is ultimately in a league of its own. By achieving product-market fit and pioneering the tokenisation of attention, Kaito has brought the vision of InfoFi to life. Despite recent market downturns, the team at Kaito has continued to execute with unwavering focus, consistently shipping meaningful updates and pushing the protocol’s boundaries. The team is doubling down on innovation, with a wave of new products in the pipeline, including a mobile app that will make Kaito’s core offerings more accessible to a wider audience. Most notably, Kaito is preparing to launch its own Capital Launchpad, a next-generation AI-powered matchmaking system designed to optimise capital formation by aligning communities through shared interests and values. 

Lastly, Kaito stands out as a revenue-generating project with real utility and high-quality products. As attention shifts back toward fundamentals, Kaito is well-positioned to reclaim its spotlight and establish itself as a cornerstone of the future attention economy.

*Disclosure: The information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

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NetMind AI
NetMind AI offers 2 primary services: a decentralized GPU rental platform and a suite of inference-related services. The decentralized GPU network is NetMind's original product and value proposition. Instead of relying on centralized data centers, NetMind enables users to contribute their idle GPUs to the network by creating a distributed compute layer where anyone can rent or supply compute resources. It serves as an open marketplace for AI compute, aligning incentives for both providers and consumers. Currently, the network boasts 1,833 GPUs with a high utilization rate of 95%, and over 6,600 GPUs are currently queued, indicating strong demand. Additionally, more than 1,000 of these GPUs are in use by NetMind's institutional partners, which include well-known universities and research institutions such as Carnegie Mellon, The University of Edinburgh, King's College London, etc. These partnerships further cement NetMind's credibility and underscore its relevance to academic and research workloads.

Beyond compute, NetMind AI also provides a comprehensive stack for inference services. The platform supports online inference across a wide range of popular open-source models from the likes of DeepSeek, Google, Meta, and more. Developers can easily integrate these models via API endpoints or deploy their own models in a serverless fashion—without worrying about infrastructure management. The serverless architecture also allows users to be billed strictly based on runtime, making it especially cost-efficient for teams running low-frequency workloads.

NetMind XYZ
In late 2024, AI Agents took the world by storm, crypto included. The AI Crypto space was booming, with new agents and supporting infrastructure being deployed at the speed of light. NetMind saw an opportunity in this space and launched Netmind XYZ, a low-code no-code AI Agent launchpad that leverages their decentralized GPU stack. Users just have to fill in a few parameters and choose the LLM of choice in order to deploy their very own AI Agent on the platform.

NetMind XYZ's Version 1 provides the core infrastructure for AI agents with basic cognitive functions: memory, reasoning, skill execution, and token issuance. These agents can recall information, perform tasks, interact with external tools or platforms, and create their own tokens for on-chain use. Version 2, launching soon, expands this with more advanced capabilities. Agents will support self-evolution based on environmental feedback, multimodal input (voice, video, image), and group-based coordination through agent organizations. Additional features include agent cloning, autonomous crypto trading, and support for emotional reasoning and social interactions.

For the Speculators
NetMind has done well to build out a robust product suite across several crypto narratives. The team has been continuously adding features that align with both user needs and broader market trends. On the tokenomics front, $NMT has seen several enhancements designed to strengthen its utility and long-term value. These include a token burning mechanism to reduce supply, controlled buyback initiatives to support demand, and a shift toward payment-based rewards for miners, which boosts value for active participants.

From a more speculative point of view, NetMind is also well-positioned as a Binance-aligned project, with the $NMT token and their AI Agent launchpad being deployed on BNB Chain. For more context, there has been a recent shift in go-to-market strategies, where some protocols choose to align themselves with Binance and BNB Chain to maximize their exposure to the booming Binance ecosystem and to front-run a possible "BNB Chain season." Some of the things that these protocols do include deploying their protocol on BNB Chain and participating in the Binance Web3 Wallet IDO. This seemingly allows these tokens to get an expedited listing on Binance Alpha, a platform within the Binance Wallet that spotlights early-stage crypto projects with growth potential. By adopting this strategy, protocols can make it as seamless as possible for users within the Binance ecosystem to discover and interact with their product. With strong product-market fit and the right momentum, this alignment may also increase the likelihood of a future spot listing on Binance. Some recent examples include Bubblemap ($BMT) and MyShell ($SHELL).

Concluding Thoughts
Crypto narratives are cyclical. However, protocols that can repurpose and evolve their products tend to maintain relevance, especially when backed by a proactive and adaptive team. It's increasingly important for founders to stay plugged in, understand shifting consumer demands, and iterate quickly to meet them.

In NetMind's case, the team has not only expanded its product suite but done so in a way that builds on top of its existing GPU infrastructure, demonstrating strong internal synergy. Their alignment with the Binance ecosystem further positions them well for upside, especially if Binance continues to strengthen its platform and we see a "BNB Chain season." Paired with a recovering macro environment, this positioning could play out favorably in the near future.

Thank you for reading!

*Disclosure: The information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

On August 5, 2024, global financial markets experienced a significant downturn, marking a local bottom for risk-on assets, including both stocks and cryptocurrencies. This sharp decline was primarily triggered by the Bank of Japan's (BoJ) unexpected decision to raise its benchmark interest rate from 0.1% to 0.25%, a move that caught investors off guard and led to widespread market volatility. The main implication of this was the unwinding of the yen carry trade, which exerted significant selling pressure on global equities and other risk assets.

The market quickly shifted as bullish catalysts emerged, most notably Donald Trump’s election victory, which signaled regulatory reform and a pro-crypto stance from the new SEC leadership. This ushered in a period of euphoric outperformance, often dubbed the "Trump Trade," as investors anticipated a more favorable environment for digital assets. Over the next few months, the market experienced a wave of risk-on sentiment, with capital rotating aggressively into altcoins. Now, with the initial euphoria cooling, we take a closer look at how leading tokens have performed since then, evaluating their resilience, volatility, and broader market trends.

Layer 1s

Despite macro uncertainty, $BTC and $BNB have demonstrated the highest relative strength, holding up better than other L1s. $BTC remains propped up by ETF flows, increasing institutional adoption and Trump's executive orders for a strategic Bitcoin reserve - reinforcing its position as the market’s reserve asset. Meanwhile, $BNB has maintained dominance as the top centralised exchange (CEX) token, consistently staying ahead of trends with constant airdrops for $BNB holders during new listings, swift token listings, innovative initiatives like Binance Alpha 2.0, and deeper integration with on-chain ecosystems—increasing accessibility for users.

$ETH and $AVAX have significantly underperformed this cycle, primarily due to a lack of new, impactful initiatives—a crucial factor in crypto’s attention-driven market. Without strong narratives or upgrades that capture interest, they have struggled to keep pace with competitors. $SOL, on the other hand, dominated the L1 narrative, largely due to pump.fun, a meme token launchpad that drew massive user engagement. The blockchain proved its resilience under high transaction loads while maintaining low fees, successfully onboarding retail users and even securing high-profile token launches, including Trump’s token. However, this retail speculation also made Solana a prime venue for value extraction, leading to recent underperformance as the hype cycle cooled.

During the market’s euphoric phase, $HYPE, $SUI, and $S emerged as some of the most reflexive performers, each leveraging a compelling narrative to attract capital inflows. $HYPE, a perpetual DEX, gained traction through a fair launch that rewarded early adopters, fostering a strong whale community that reinforced its price momentum. $SUI, positioned as Solana’s direct competitor, capitalised on its low fees and high transaction speeds, drawing liquidity from those seeking an alternative high-performance blockchain. Meanwhile, $S focused on enhancing the existing Fantom network, introducing higher scalability and faster transactions to position itself as a next-generation infrastructure upgrade. 

AI x Robotics Tokens

Among AI and robotics tokens, $GEOD stands out with strong relative strength, positioning itself as a potential leader in the emerging robotics sector. As the AI sector matures, attention may shift toward robotics as the next evolution of the narrative, giving $GEOD a strategic edge in capturing capital rotation and long-term market positioning.

Initially marketed as the go-to platform for DePIN (Decentralized Physical Infrastructure) projects, $PEAQ struggled to maintain momentum as market attention pivoted elsewhere. Crypto thrives on narratives, and as AI Agents overtook DePIN as the dominant trend, $PEAQ was left behind, ultimately leading to underperformance. Without a clear role in the evolving AI landscape, its relevance has diminished in the current market cycle.

$Virtual and $ai16z emerged as the two frontrunners in the AI agent narrative, each securing dominance on their respective chains. $Virtual, built on Base, positioned itself as the premier AI agent launchpad, integrating a tokenomics-driven flywheel effect that reinforced its growth. Meanwhile, $ai16z, built on Solana, became the leading AI agent framework, setting the standard for open-source agentic development. By adopting a bazaar-style approach to AI development, $ai16z gained traction among projects seeking a decentralized, collaborative ecosystem. Both assets experienced high reflexivity, rallying as the AI narrative strengthened and capital flowed aggressively into the sector.

Dino Tokens

$XRP has emerged as one of the strongest-performing legacy tokens, bolstered by favourable regulatory trends following Trump’s election and Gary Gensler’s resignation. With the SEC taking a more industry-friendly stance, Ripple may see its ongoing legal battle ease, particularly if the agency withdraws its appeal against $XRP’s $125M penalty—a move that would remove a significant overhang on the token.

Many dino tokens rely heavily on strong community backing to maintain price momentum, and $DOT is no exception. Historically, its value has been tied to its dedicated supporter base rather than new innovations or major adoption breakthroughs. As attention shifts toward newer, narrative-driven sectors like AI and memecoins, $DOT may struggle to sustain its current rally. 

Despite underperforming relative to other legacy tokens, IOTA remains focused on long-term adoption rather than speculative hype. Once primarily an IoT-focused blockchain, it has successfully transitioned into a scalable smart contract platform, now supporting dual virtual machines and achieving 50,000 TPS with sub-second finality. Beyond technical improvements, IOTA has made significant strides in regulatory and enterprise adoption. It was a finalist in the European Blockchain Service Infrastructure (EBSI) program, became the first DLT foundation registered with Abu Dhabi Global Market, and is actively working on real-world applications like the Trade Logistics Information Pipeline (TLIP) in Kenya and digital product passports aligned with EU regulations. 

Concluding Thoughts
The idea of fixed four-year crypto cycles may no longer hold true. Instead, we are seeing shorter, more fragmented periods of outperformance, driven by macro shifts, regulatory changes, and fast-moving narratives. In this evolving landscape, staying engaged is more important than ever.

For crypto natives, the lesson is clear—staying informed and adaptable is key to capturing opportunities. Rather than fully logging off during downturns, those who continuously research, track emerging narratives, and recognise when to go risk-on will be best positioned to navigate this new, reflexive market environment.

*Note: This data reflects conditions as from August 5, 2024, following the Bank of Japan’s decision to raise its benchmark rates from 0.1% to 0.25%, increasing the risk of the yen carry trade unwinding.

***Disclosure: The information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

These architectural approaches are now playing a crucial role in shaping the rapidly evolving landscape of AI agents in the crypto. AI agents - autonomous software entities powered by large language models (LLMs) that can perform tasks on behalf of users - have transformed from simple conversational interfaces (text) to potentially powerful tools for navigating the complex world of DeFi and crypto dApps.

Evolution of AI Agents
When I first covered AI Agents, popular agents such as GOAT had limited functionality and developer flexibility to them. These agents were generally LLM-based reply guys (usually on Crypto Twitter) and had closed-sourced codebases which made it hard to ascertain the AI capabilities. Since then, we have seen an influx of AI frameworks that focus more on open-sourced development and thus, development flexibility.

Current Web 2 frameworks like Agentverse, Anthropic's Claude Functions, and LangChain have gained popularity by offering modular components that developers can assemble for various use cases. These platforms allow developers to integrate multiple LLMs, connect to various blockchain networks, and provide generalised tools for transactions, data analysis, and user interaction. While powerful in their breadth, they often lack the specialised depth needed for specific crypto verticals.

Within frameworks, there is also a distinction between horizontal and vertical architecture. So far, most of the crypto AI frameworks we have seen are designed horizontally. These frameworks are generally LLM-agnostic, offer a wide range of modular on-chain tooling and are broadly applicable across crypto. However, the AI framework market has gotten rather saturated and stale and token prices have also come down quite considerably. A new form of innovation is required to reignite the spark within the Crypto AI sector.

The Case for Vertical Frameworks
Right before the recent market downturn, the hottest vertical within Crypto AI revolved around DeFAI agents, or AI DeFi assistants. DeFAI agents were envisioned to be autonomous agents that could carry out DeFi activities for you on a whim. They were pitched as AI agents that could optimise money management, from parking funds in the best yield farms (across multiple chains), to finding the next 100x gems, etc.

However, the current state of these DeFAI agents and applications are far from that ideal. At present, many of such applications are limited in functionality and are only able to perform simple tasks such as swaps, user-to-user transfers, very basic analysis of tokens etc. When tested, "Perp AI" might struggle to execute profitable trades amidst complex liquidity positions and macro conditions, or "OmniAI" might fail to execute multi-step transactions across different protocols and chains. The UX of such applications leaves more to be desired, often requiring users to manually verify and approve actions that should be automated. Of course, this niche sector is still in its infancy and it is understandable that they have their limitations.

Flipping the perspective on this, I think that DeFAI agents is a sub sector that would benefit greatly from vertical frameworks or agentic development. DeFAI is a more specific use-case as compared to the AI Agents. However, it is still a rather large domain by itself. Ideally, DeFAI agents will be able to carry out tasks across the DeFi verticals, from swaps, to liquidity provision and yield farming, lending and borrowing etc. However, this is a difficult ask for an agent built on a horizontal framework.

By leveraging vertical frameworks and development, developers will be able to create specialised DeFAI agents in this case, perhaps even DeFi vertical specific ones or protocol specific ones. For instance, a DeFAI agent that is specialised in yield farming, expertly navigating from one 1000% APR yield farm to the next. Or perhaps, a DeFAI agent built on top of a protocol such as Pendle, that allows users to optimise their yield by buying or selling Principal Tokens (PTs) and/or Yield Tokens (YTs) at opportune moments.

Where Does Vertical Design Lead Us?
The future of vertical AI agent architecture in crypto points toward specialised, interconnected systems that excel at specific tasks while collaborating to solve complex problems. This approach is already beginning to take shape in the form of agent swarms.

Swarms are somewhat the foundation of vertical agentic architecture. An agentic swarm refers to a decentralised network of AI agents that autonomously interact with blockchain ecosystems to execute tasks, make decisions, and coordinate activities. These agents leverage smart contracts, on-chain data, and decentralised protocols to operate collectively with minimal human intervention. In a vertical agentic architecture, it is likely that it features different AI agents with specialised roles. Swarms enable the distribution of tasks among these agents based on their expertise, ensuring optimised execution.

For example, a DeFi swarm might include:
• A risk assessment agent that evaluates protocol security and market conditions
• A yield optimisation agent that identifies the best farming opportunities
• A gas optimisation agent that determines the ideal transaction timings
• A transaction execution agent that interfaces directly with blockchain contracts

Each agent is specialised for its task, but they work together seamlessly to achieve the user's financial goals. This division of labor allows for much deeper expertise in each domain than a single, general-purpose agent could achieve.

The concept of specialised agent swarms extends beyond just DeFi applications. Robotics, which has been a largely unexplored sector within crypto, might benefit from vertical agentic architecture as well. While seemingly disconnected from cryptocurrency, robotic swarms represent a physical manifestation of the same architectural principles and could eventually integrate with blockchain systems for autonomous coordination and economic incentives. Robotic swarms can enable coordinated, autonomous systems that operate efficiently at scale. For instance, in logistics, robotic swarms can streamline warehouse automation and last-mile delivery, while in agriculture, they can optimise crop monitoring, precision spraying, and harvesting. Their scalability, fault tolerance, and adaptability make them a powerful foundation for the future of autonomous infrastructure, smart cities and much more.

Concluding thoughts
The shift toward vertical development in crypto AI represents progress in the sector. We are moving from general-purpose frameworks to specialised systems that excel at specific functions.

Virtuals Protocol has recently unveiled their Agent Commerce Protocol (ACP) which exemplifies this vertical approach. ACP is designed to enable secure, autonomous transactions between AI agents and humans through a specialised four-phase process—Request, Negotiation, Transaction, and Evaluation. What makes it unique is its focus on a specific vertical: agent-to-agent and agent-to-human commerce. Unlike general frameworks, ACP isn't trying to be everything to everyone; it's optimsing specifically for commercial interactions. The protocol includes specialised evaluator agents that verify transaction quality and earn a fee, creating a decentralised quality assurance market. Successfully tested in a multi-agent simulation (a lemonade stand business), ACP demonstrates its potential for fully autonomous digital economies, where AI agents can negotiate, execute, and regulate transactions without human intervention.

This is a big leap forward and I think more frameworks will be specialising in specific domains going forward. By moving from horizontal to vertical design, there is a possibility that a framework might lose some developers and users. However, this allows a framework to create a niche and a moat in a particular sector. For developers in the space, this suggests that focusing on solving specific problems rather than building general-purpose solutions may yield more valuable and differentiated products. For users, it means we can look forward to AI agents that truly understand our needs in specific domains rather than being jack-of-all-trades but masters of none.

I am excited to see what innovations Crypto AI continues to build as vertical development enables AI agents to move from interesting experiments to truly useful tools for navigating the complex world of decentralised finance and blockchain applications.

*Disclosure: the information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

Thank you for reading!

yEt aNotHEr lAyEr 1?!
It’s finally time for Berachain’s mainnet launch. While it’s hard to say that “it’s 100% different this time”, Berachain does bring some unique characteristics that set it apart from other chains due to their innovation at the chain layer. Berachain introduces a more refreshing tech stack in that of a high-performance EVM-identical Layer 1 blockchain built on BeaconKit, its modular consensus framework. BeaconKit integrates the benefits of CometBFT—such as increased composability and single-slot finality (SSF)—with full EVM compatibility. The main advantage of this design is that it leverages CometBFT’s technology while seamlessly integrating with the EVM developer community, minimizing friction and ensuring developers don’t face inertia when adapting to a new development environment.

Berachain employs a unique consensus mechanism called Proof-of-Liquidity (PoL), which not only secures the network but also functions as a supply sink within Berachain’s tokenomics. Unlike traditional Proof-of-Stake (PoS) systems that primarily reward validators, PoL prioritizes users, decentralised applications (dApps), and validators in a more economically aligned structure. Instead of validators receiving the bulk of rewards, PoL directs most emissions into application reward vaults, allowing dApps to actively incentivize user participation and liquidity provision. This is achieved by featuring a dual-token model in that of $BERA and $BGT. $BERA serves as the gas and staking token, used for transaction fees and validator activation. $BGT is a non-transferable governance and incentive token, earned by staking PoL-eligible assets in reward vaults. $BGT can be swapped one-way for $BERA and delegated to validators to earn rewards. This reduces governance centralisation, and creates a healthier incentive model for long-term ecosystem stability.

Berachain is also focused on developing a consumer-centric ecosystem by onboarding user-friendly dApps and curating a better overall user experience (UX). Many of these consumer dApps follow an 'x-to-earn' model, where users earn tokens by engaging in everyday activities such as running, sleeping, or browsing the web.

Additionally, Berachain’s Bear-themed branding effectively increases mindshare and gives the chain a distinct niche in the crowded blockchain space. By integrating this branding across core contributors, community members, and dApp design, Berachain has created a recognisable identity that strengthens its presence and reinforces long-term ecosystem growth.

DeFi - the building blocks of every budding ecosystem
Decentralised Finance (DeFi) serves as the backbone of every emerging blockchain ecosystem, providing the essential financial infrastructure needed for sustained growth. At the core of DeFi are Decentralized Exchanges (DEXs), which play a crucial role by facilitating liquidity for token swaps, ensuring seamless trading activity within the network. Building on this foundation, Perpetual DEXs (Perp DEXs) extend traditional DEX functionality by enabling on-chain trading of perpetual futures. These platforms not only offer leverage and advanced trading strategies but also help retain users within the ecosystem by reducing the need for off-chain alternatives.

Beyond trading, money markets enhance capital efficiency by unlocking liquidity from idle assets, allowing them to be used as collateral for lending and borrowing. This efficiency is further amplified through Liquid Staking Tokens (LSTs) and Liquid Restaking Tokens (LRTs), which enable staked assets to remain productive, improving capital utilisation across the ecosystem. For a deeper dive into how Berachain integrates these financial primitives, refer to our previous piece on Infrared Finance.

Despite the industry's evolution, trading and DeFi remain integral to blockchain ecosystems. DeFi has always been, and will continue to be, one of crypto’s core use cases. Over time, new verticals have emerged to capitalise on this, such as yield farming protocols inspired by early pioneers like Yearn Finance. Today, DeFi has transformed into a system of “money legos”, where users can stack and loop yields across multiple protocols through composable design, attaining a new level of financial flexibility.

Berachain, the consumer ecosystem (coming thoon)
Now comes the more interesting portion. Pre-TGE, Berachain was marketed as a “consumer brypto ecosystem”. At present, Berachain’s DeFi protocols are establishing the financial rails for broader ecosystem growth. As these protocols mature, second-order effects will come into play, with liquidity eventually flowing into consumer-facing dApps once they go live. 

Several consumer dApps are set to launch soon, with Puffpaw and Eden standing out as particularly interesting projects. Puffpaw incentivizes users to quit nicotine by integrating its proprietary nicotine-free vapes with crypto rewards, while Eden is a SexualFi protocol that enables users to earn by engaging with its sexual wellness products. Both dApps showcase novel use cases that push the boundaries of consumer applications in crypto. As Berachain’s ecosystem matures, we look forward to seeing more innovative consumer-focused projects emerge.

Up or down?
Currently, price action throughout the crypto industry has been suppressed due to macro uncertainties such as a possible international tariff war as well as new crypto regulations that have yet to be introduced. Only time will tell if Berachain lives up to the expectations of being a premiere crypto consumer ecosystem. In the meantime, we should BEAR it in mind or better yet, participate in this budding ecosystem. Ooga Booga

*Disclosure: The information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

Thank you for reading!

Outlook for AI Agents
During Q4 of 2024, Crypto AI, particularly AI Agents, took Crypto Twitter (CT) by storm. For an introduction to AI agents, refer to our previous piece here. The year kicks off with Trump’s inauguration amidst ongoing policy reforms in the United States. Notably, a $500 billion private-sector investment in AI infrastructure has been announced. As a byproduct, this will undoubtedly draw attention to the Crypto AI vertical, further accelerating its development. It seems the AI Agent Winter is here to stay and OpenAi's release of Operator solidifies this.

The emergence of Agentic Ecosystems
In recent months, agentic infrastructure has seen rapid growth, with leading projects evolving to become the robust ecosystems they are today. Take Virtuals, for example: initially launched as an agentic framework and launchpad, has now evolved into an AI Agent Hub on Base, featuring significant adoption of its framework and a growing community. We believe it's fitting to draw a parallel between these agentic ecosystems and Layer 1s, as agentic ecosystems function as agentic Layer 1s. The similarities between the two are striking—let’s explore them in detail.

Execution engines
Layer 1s feature decentralised execution environments that allow developers to run smart contracts in a trustless manner. Ethereum has its Ethereum Virtual Machine (EVM), while Solana has its Solana Virtual Machine (SVM). Both execution environments provide the foundational layer for deploying and executing applications on their respective blockchain networks. Similarly, agentic frameworks like Virtuals' game framework and Eliza define the rules, resources, and logic that govern how agents interact, operate, and execute tasks within a broader ecosystem.

More importantly, these execution environments provide decentralised applications (dApps) with a standard execution layer that developers can build upon. Similarly, frameworks like Virtuals’ G.A.M.E and Eliza provide developers with a standardised codebase that serves as the foundation of every AI Agent in their respective ecosystems. This is key because it improves the developer experience, making the onboarding process and adoption of the agentic frameworks as easy as possible. If agentic frameworks were the backbone of every agentic ecosystem, then maximising the adoption of said frameworks is the most important mission for the team and the community.

Tokenomics
Layer 1's typically use their native governance token as the gas token, creating a direct link between network usage and token demand. Each operation is assigned a gas cost based on complexity, with users specifying a gas price in the native token. The total fee, calculated as gas used multiplied by gas price, is paid to validators, with some blockchains burning a portion to reduce token supply and enhance value. More importantly, this accrues to the token by controlling supply, hence the term “tokenomics”.

The first agentic ecosystem that embraced tokenomics from the get-go was the Virtuals ecosystem. The Virtuals’ team set up their AI Agent Launchpad in an ingenious fashion, requiring each AI Agent’s token to be paired with $VIRTUAL, Virtuals’ native token. This creates a flywheel effect, where users have to purchase $VIRTUAL in order to acquire any of the AI Agent’s tokens launched from Virtuals Protocol. Essentially, this tokenomic model accrues value to the $VIRTUAL token, akin to Layer 1 governance tokens. The success of Virtuals’ tokenomic model inspired many launchpads to adopt similar designs. Conversely, this speaks to Virtuals’ first-mover’s advantage by having well-designed tokenomics.

Community
The most important asset to Layer 1s is their community. A community of dedicated developers who are willing to dedicate themselves to build out a suite of dApps which then attract users to their chain. It is also important that this group of core developers establish a presence and continuously attract new talented developers to continue innovating. Other than developers, users are equally important because they are the main source of demand for dApps and other services hosted on the chain. However, this relationship is often a chicken and egg problem. Without developers, it would be hard to attract users, vice versa.

On the other hand, a strong community is just as important for agentic ecosystems. One of the most successful examples of a strong agentic community is ai16z’s led by Shaw. Although Shaw is a bit of a controversial individual when it comes to his actions, he has rallied together one of the most robust open-source developer communities in crypto. ai16z adopted a bazaar development model, where open-sourced developers came together and contributed to the Eliza framework in a dynamic manner. Shaw has taken efforts to put together educational content to onboard new developers in the form of detailed livestreams and videos. Not to mention that he also has taken physical trips to multiple foreign countries to engage ai16z open-sourced developers all over the world. The strength of ai16z's community is nothing short of excellent.

Back to basics
Regardless of how sophisticated an AI framework may be or how meticulously designed an agentic protocol’s tokenomics are, the core purpose of the crypto AI vertical remains to foster innovation and create new use cases at this unique crossroads of industries.

What better way to push this vertical forward than to tap on existing web2 AI talents? Yohei Nakajima, general partner at Untapped Capital, stumbled upon AI-generated SVG images which led to the creation of Pippin the unicorn, a family-friendly agentic influencer, as well as a $pippin token. At present, Yohei and his team has built out an agentic framework for Pippin, based on his past work, BabyAGI—the first popular open-source autonomous agent with task-planning capability, boasting 20k GitHub stars and over 70 academic citations. 

While not a direct correlation, CT often views GitHub stars as a measure of a framework's popularity and adoption. Yohei's BabyAGI was a key codebase that ignited the AI Agent trend among web2 developers, drawing significant attention and adoption. Pippin’s framework, which is built on top of BabyAGI, is likely to value-add to the crypto AI vertical. By attracting non-crypto-native talent and leveraging their expertise, the crypto community can break out of its echo chamber, embracing and integrating AI technologies widely adopted by the broader community. The goal remains to push for mainstream adoption of crypto.

*Disclosure: The information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

Thank you for reading!

Throughout the last quarter of 2024, AI Agents were the talk of the town, dominating on-chain mindshare and market share. AI agents are intelligent, autonomous virtual assistants designed to relieve us of tasks that would otherwise require human effort. To read more about AI Agents, refer to my previous piece that serves as a primer to this intriguing new crypto vertical.

Since then, the agentic vertical has evolved leaps and bounds. Gone are “sentient yappers” and the automated reply guys. The flavour of the market has since rotated to agentic projects with utility or have a defining innovative feature that serves as a moat. 

The majority of AI Agents from the earlier part of Q4 ‘24 have now been forgotten. There are only a number of AI Agents from that time that have been able to establish a moat, such as Zerebro, who made music and art its niche, or aixbt, who brands itself as the KOL who gives alfa 24/7. An up and coming segment of the agentic market are AI-powered applications. An example is the DeFAI segment, which leverages the automation and sentience of AI Agents to smoothen users’ DeFi experience across various dApps (decentralised applications) and functionalities. Another example are the projects that are trying to integrate AI Agents into games, giving existing games a new flair. Lastly, AI Infrastructure such as launchpads (e.g. Virtuals, Top Hat) and development frameworks (e.g. ai16z, Zerebro) have taken the spotlight, seeing the most capital inflow as of late.

Where does TEE fit in all this?
An overlooked layer of the agentic tech stack is the integration of Trusted Execution Environments (TEEs). A TEE is a specialised hardware designed to create isolated environments for running sensitive computations securely. It ensures data confidentiality and protection even in untrusted or potentially compromised systems. TEEs act as a safeguard, isolating critical applications (such as private keys, AI models, or sensitive credentials) from less secure or unrelated applications. Communication between the secure and normal environments is tightly controlled and allowed only with specific privileges.

In the context of AI agents, the agent and its private key can operate entirely within the secure environment of a TEE. This setup prevents unauthorized access or abuse of the agent or its credentials. It ensures that even if someone tries to compromise the broader system, they would need special privileges to interact with or exploit the secure AI agent. This capability is particularly valuable in decentralized AI systems, where trust, privacy, and security are essential for handling proprietary or sensitive information.

Phala Network
Phala Network is an example of projects building in the TEE vertical. It is a protocol that revolves around verifiable compute, made possible by TEEs. Phala’s TEE technology combines software and hardware-based TEEs, enhancing security and privacy for decentralized AI (DeAI). Additionally, Phala's Key Management System (KMS) enhances security by continuously rotating management keys, reducing the risk of prolonged data exposure and providing an added layer of protection.

More relevant to AI Agents, a key development for the AI Agent vertical was Phala’s TEE integration into ai16z’s Eliza, the leading open-source AI Agent framework on Solana at present. Eliza allows for the deployment of AI agents across social media platforms such as Discord, Twitter, and Telegram. It offers a RAG memory system, media analysis, document processing, and more. By integrating Phala’s TEE, these capabilities benefit from cryptographic verification and improved privacy. Phala’s framework supports modularity and custom plugins, allowing developers to scale seamlessly and incorporate new integrations with ease.

On the roadmap is Phala 2.0, which introduces a powerful GPU TEE network, an upgrade from its existing CPU-based infrastructure. By integrating NVIDIA Confidential Computing (TDX), Phala ensures sensitive GPU computations remain isolated and secure, even on compromised hosts. Additionally, Phala is launching a Layer 2 rollup on Ethereum to provide fast, low-cost, and secure transactions while combining scalable ZK proofs with TEE infrastructure. Through Phala Cloud, developers gain seamless access to GPU and CPU TEEs, enabling private, AI-ready application deployment with real-time monitoring and trust verification.

Phala has seen a good amount of adoption across its product suite. Service providers such as Hyperbolic Labs, io.net, NEAR Protocol and more have adopted Phala’s TEE GPUs to secure LLM model training and data. On the other hand, 0G Labs, Ritual and Redpill have been using Phala’s TEE CPUs to safeguard LLM API calls.

The future of TEE agentic integrations
As the AI Crypto vertical continues to grow, it is likely that we see more use-cases and synergies between agentic developments and the current crypto tech stack. One such possible development in the near future is Eigenlayer’s potential involvement in furthering verifiable and secure computation. 

Most of us might know Eigenlayer as the premier infrastructural layer that allows for the restaking of Ethereum and its Liquid Staking equivalents for projects to tap on Ethereum’s security. However, recently, the Eigenlayer team seems to have taken an interest in AI Agents. We think that there is an opportunity for Eigenlayer to contribute to the agentic tech stack by providing AI Agents with a decentralised compute stack secured by Ethereum, via Eigenlayer’s Actively Validated Services (AVSs). 

This is just the tip of the iceberg. We believe that there will be a plethora of existing projects that will bring useful integrations to AI Agents, embracing the collaborative and open-sourced nature of the crypto community

Thank you for reading!

What are AI agents?

AI agents are intelligent autonomous virtual assistants designed to relieve us of tasks that would otherwise require human effort. Whether it’s finding relevant information, organising schedules, or automating repetitive tasks, AI agents are able to handle complex operations efficiently. Additionally, AI agents operate round the clock. This blend of efficiency and accessibility makes them indispensable in modern workflows.

At the core of every AI agent is its foundational AI model. These agents can be developed using either open-source models or proprietary algorithms, with the latter offering greater flexibility and potential technical advantages through customisation. While AI agents operate autonomously, they are not “sentient”; they can analyze data and execute algorithms but lack the ability to make judgments like humans. To function effectively, AI agents rely on a robust data feed and a well-structured data management system.

What got everyone excited about AI agents?

While crypto participants may view AI agents as cutting-edge, they are already well-established in Web2. A comprehensive ecosystem supports their development and deployment, including specialized frameworks, hosting platforms, memory systems, observability tools, and model-serving solutions from providers like OpenAI and Anthropic. These technologies enable AI agents to perform tasks, manage data, and integrate seamlessly across systems, showcasing that AI agentic tech is far from new—it’s a matured foundation in the Web2 space.

One of the main catalysts for this rapid adoption of AI agents in the crypto space was the creation of $GOAT. $GOAT was inspired by the "Goatse Gospel," a concept developed through unsupervised interactions between two instances of the AI model Claude Opus, facilitated by Andy Ayrey. Subsequently, Ayrey developed an AI agent named Truth Terminal, which began promoting the Goatse Gospel all over Crypto Twitter (CT). This caught the attention of venture capitalist Marc Andreessen, who provided a US$50,000 grant to support the AI's development. The culmination of these events led to the launch of the $GOAT token on Solana's pump.fun platform, with Truth Terminal actively endorsing it. The token's market capitalisation rapidly increased exponentially, hitting an all time high of US$1.36 billion and thus paving the way for a new wave of AI agents in the crypto space.

On-chain AI agent outlook 

Solana - home of on-chain AI agents

> Leader

$GOAT is the official token endorsed by the Terminal of Truths, the AI agent that kicked off this narrative.

> Meme

$FARTCOIN is the official memecoin endorsed by the Terminal of Truths

> Infrastructure/ Launchpads

$ACT created the infrastructure for AI agents and humans to interact, which was a big catalyst for the narrative as a whole.

Pump.fun-esque launchpads have emerged as well, with $vvaifu leading the pack currently.

> AI agents with a niche - e.g. Music, Trading

Some AI agents have found a niche in music production and trading. $Zerebro and $LOLA are some examples of the agents in these categories respectively.

> DeSci

AI agents such as $CHAOS and $WORM belong to protocols in the intersection of DeSci and AI.

> ai16z Ecosystem

$ai16z is an AI led hedge fund, made possible by daos.fun. More importantly, ai16z is behind Eliza, an open-sourced AI agent framework which has seen widespread adoption as of late.

> Other AI agents of note

As there is an abundance of AI agents on-chain, we are unable to feature them all. 

Some of the more popular AI agents are those that take on the role of AI Key Opinion Leaders (KOLs) who are perceived as “funny”. One example of such an AI agent is $BULLY. 

Other projects such as $Project89 and $UBC look into technological extensions such as the implementation of AI swarms.

Base - a booming AI scene

Base is home to several AI agent ecosystems, each featuring their own AI agentic infrastructure. Virtuals led the AI agentic adoption on Base, with its AI agent $LUNA taking the chain by storm. Since then, competitors such as $CLANKER on Farcaster, Spectral, Creator Bid and Agents.fun have emerged. 

With saturation in the sector expected to continue, it is important for projects to build a competitive moat. For instance, Spectral focuses on being a launchpad for AI agents who can be trained to trade perps on Hyperliquid, which is an interesting niche.

Ethereum - some signs of life

While most of the AI agentic action seems to be happening on Solana and Base, there are still some interesting projects on Ethereum. Most notably, $EMP is an AI agent launchpad where users are able to create AI agents natively on X.

What’s next for AI agents?

For Web2 AI developers who have onboarded to the crypto scene, they most likely saw the potential of tokens as novel fundraising and ownership mechanisms. Tokens enable them to fundraise in a decentralised manner as well as foster shared ownership and alignment between creators and users. 

Grants like Marc Andreessen’s support for $GOAT and more recently, $ACT’s US$1,000,000 Innovation Hub have catalysed the development of AI agents on-chain. Additionally, initiatives such as ai16z’s AI Agent Dev School, spearheaded by Shaw, aim to equip developers with the tools and knowledge to build AI agents tailored for the Web3 environment.

From the viewpoint of traders and investors, the AI agent space is emerging as a promising sector for capital gains. While speculation remains a driving force, the market has started to identify leading projects which have demonstrated staying power and innovation.

As the ecosystem evolves, projects will need to prioritise clear, value-driven use cases and establish sustainable competitive advantages to secure long-term growth. The era of generic "reply guy" or "sentient KOL" style AI agents is likely coming to an end. Instead, the next wave of AI agentic innovations will focus on building impactful technical infrastructure, such as AI swarms and advanced development toolkits, that deliver tangible value to the ecosystem.

Concluding thoughts

Whether you’re an enthusiast or a skeptic, one thing is clear: AI agents are not a passing trend—they’re here to stay. As the sector continues to evolve, the spotlight will increasingly turn toward transparency and verifiability. Ensuring that the decision-making processes are genuinely AI-driven, rather than being run by larps, will become critical for maintaining trust and legitimacy. Moreover, with Web2 developers and firms recognising the potential of tokenisation, the on-chain AI agent ecosystem is poised for further expansion.  

*Disclosure: The information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

Thank you for reading!

5. Conclusion and Future Outlook

- - - - - - - - -

“When in doubt, zoom out.” - Reggie Watts.

Crypto is a diverse space that presents many opportunities. As a developer, perhaps you’re building a killer dApp in the latest, most trending narrative in hopes of attaining product-market-fit. As a trader, perhaps you’re drawing setups in hopes of catching every move, up or down. As an on-chain memelord, perhaps you’re scrolling through your hundredth discord channel in hopes of finding the next 100x low-cap gem. 

These are just a few of the many options available to you in the space. It’s easy to get lost in the mix and lose sight of the bigger picture. One of the reasons why crypto was conceived was to revolutionise the traditional financial systems. Although crypto has already been around for almost a decade, it is still a highly nascent sector. The industry has to continue innovating in order for crypto to see long-term success. While nobody can foresee the future and what’s to come, in 2022, Vitalik shared his vision for a multichain crypto ecosystem as the way forward.

A multichain ecosystem refers to deploying dApps across multiple blockchains, resulting in multiple instances or versions of the same application in various blockchain ecosystems. This however poses challenges such as inconsistent user experiences across chains due different tech stacks and capabilities. Another challenge is fragmented liquidity which results in discrepancies in liquidity across chains. More of such challenges, as well as their proposed solutions will be covered later on.

In this article, we will be diving into the various multichain technologies that are available today, covering several multichain case studies, as well as looking into the future and what it holds.

1. Composability - the key to opening up new possibilities
A primer on composability
On a high level, composability refers to the ability for dApps to build on top of each other, allowing for seamless integration and the formation of complex and innovative solutions. Composability is one of the most distinctive features of crypto and DeFi, given its open-sourced and permissionless nature. This begs the question, is composability for everyone? 

When thinking of composability, the first thing that comes to mind is the Curve-Convex integration. Curve is a DEX which incentivises Liquidity Providers (LPs) with $CRV rewards. They pioneered the vote escrowed governance model, which gives users the option to lock $CRV to receive $veCRV based on the lock duration and the amount locked. $veCRV then allows LPs to boost their $CRV rewards and collect a portion of the fees from swaps and loans that occur on Curve. 

Convex was developed with the goal of optimising yield for Curve users by aggregating $CRV. Instead of having to lock up $CRV tokens for extra rewards, Curve LPs can deposit their LP tokens into Convex and earn the same boosted yield. Convex also allows $CRV holders to convert their tokens to $cvxCRV which is then staked on Convex to earn token rewards. Users can also opt to lock $CVX to earn a share of platform fees and Curve emissions weight votes. $vlCVX holders can redirect these external incentives to specific liquidity pools via the Votium bribes platform.

Interoperability as the key for the evolution of composability
By leveraging composability, Curve and Convex shot to fame. Convex was dubbed as the “Kingmaker of DeFi”, and rightfully so. Today, Curve is deployed on more than 10 different chains, embracing interoperability and its benefits. However, Convex, its partner in crime, has chosen to reside solely on Ethereum mainnet, presumably due to the concentration of liquidity and demand there. The Curve-Convex integration is a great application of composability. However, due to the nascency of cross-chain liquidity solutions at present, this particular “DeFi Lego” has yet to take off on other chains. 

Interoperability creates a unified environment where dApps can interact across multiple chains. While composability is not fully dependent on interoperability, it is highly enhanced by interoperability. Interoperability allows dApps to scale horizontally across chains, while composability allows vertical expansion via the permission integration of other various protocols. Future multichain solutions could enable one to bring “dApp Legos” smoothly across chains, opening up doors for greater innovation and collaboration.

Doing away with interoperability and composability
Current limitations in blockchain technology, such as throughput constraints, network congestion, and high transaction fees, prevent certain applications from being fully supported on-chain. Some dApps require highly specialised blockchain solutions with custom technical requirements. Instead of leveraging interoperability and composability across networks, they opt to develop custom chains tailored to their needs, prioritising control and optimization over seamless integration with the broader ecosystem. Effectively, these applications remain within their own ecosystems, which raises questions about the importance of composability in crypto.

One such example is Hyperliquid’s L1 blockchain. Hyperliquid is a high-performance perp DEX. Unlike other projects that leverage existing Layer 2s or Layer 1s with broad interoperability, Hyperliquid chose to deploy its own L1 to cater to the specific needs of its platform. By developing a custom L1, Hyperliquid can optimise throughput, reduce latency, and avoid the scalability and network congestion issues commonly faced by more generalised blockchains. This way, Hyperliquid maintains full control over their infrastructure, ensuring that the technical specifications align with the demands of high-frequency trading and liquidity provisioning. Ultimately, this approach prioritises performance and security over composability with other networks, enabling Hyperliquid to create a specialised environment tailored for its user base. Since its inception in June 2023, Hyperliquid has seen great success. It currently has a TVL of US$671m, with a cumulative trading volume of more than US$290b.

Is composability oversold?
In view of Hyperliquid’s success, is it fair to say that interoperability and composability are not necessary to build a great product? Although the application-specific approach worked for Hyperliquid, not all types of protocols and products can fit in this same mould. 

Is composability oversold? Is interoperability really necessary? There are no easy answers to both of these questions. However, if application-specific chains and infrastructure continue to be popular, this further solidifies the bull case for interoperability solutions. As these solutions continue to improve, perhaps there will come a time when “dApp Legos” can be brought multichain seamlessly. 

Given the limitations of the current L1 architecture, which lacks a clear path for scaling at the base layer, the concept of moving execution to an offchain environment was introduced. Since then, we've seen the rise of nearly 100 rollups, all designed to massively scale developer and user experiences by reducing latency and fees. These rollups offer modular components that allow for the creation of either generalized execution environments or specialized ones, tailored to the needs of specific applications. The advent of rollups and Layer 2 solutions has scaled Ethereum but negatively impacted the developer and end-user experience. Developers are forced to choose specific L2 platforms for their projects, while users must navigate a complex landscape of interoperability tools just to interact with decentralized applications. This fragmentation is expected to worsen as more rollups and application-specific chains are introduced.

However, because these networks maintain sovereignty over how they operate, order, and sequence transactions, the largest Rollups have become siloed within their ecosystem and keep gain increasing profitability, particularly through the control of transaction sequencing. The Rollup's control over sequencing introduces a centralized and fragmented liquidity landscape, which does not reflect the original ideology of decentralization, censorship resistance and a unified composability layer as we see on several L1 environments.

Additionally, the notion that rollups inherit the censorship resistance and decentralization of the underlying L1 is misleading, as long as the sequencer remains under the control of the rollup entity itself. This is evident in the significant revenues generated by platforms like Base and Arbitrum through their sequencing operations. Hence, the interoperability among L2s is currently fragmented and almost non-existent, only through clunky 3rd party bridges and routing aggregators. Several teams are actively working on solutions to seamlessly unify liquidity and user experience across existing L2s, fostering collaboration and enabling them to opt into third-party solutions that could maximize Ethereum's network effects.

2. A closer look at the current building blocks aimed at addressing the challenges of interoperability and composability.
a) Shared sequencing
Shared sequencing and the decentralization of the sequencer that comes with it, was among the most promising approaches to achieve the notion of why Rollups have been brought to existence.

Shared sequencers are rollup-agnostic solutions that aim to enable synchronous composability by submitting transactions from multiple rollups to a shared, mempool-like environment. The sequencer then selects and batches these transactions to achieve synchronous atomic transactions across rollups. Current shared sequencer designs vary; some focus solely on aggregating and ordering transactions, while others execute them too.

Case study: Espresso’s shared sequencer
To address the limitations and challenges faced by current Layer 2 (L2) solutions, Espresso introduces a shared sequencing network designed to provide secure, high-throughput, and low-latency transaction ordering and availability for the existing optimistic - and zk Rollup landscape. Espresso focuses on preserving the inherent properties of L2 solutions while leveraging Ethereum's economic security through restaking. By breaking the current sequencing monopolies, their shared sequencing layer aims to enhance user experience and enable atomic cross-rollup transaction execution, while providing feature like preconfirmations.

At its core, Espresso's shared sequencer is built on HotShot, a modified consensus protocol derived from HotStuff BFT, along with its own data availability layer, Tiramisu. This combination allows Espresso to optimize for both high throughput and fast finality for cross Rollup transactions, with similar security guarantees as on the underlying L1.

Sequencer Marketplace
Espresso enables applications to sell their sequencing rights through an open marketplace governed by an auction, where participants acquire execution tickets for the sequencing rights of chains, and if successful, become the sequencer for a given slot on those chains. This coordination layer enables atomic cross-rollup transactions and fast pre-confirmations, boosting the utility of rollups and enhancing the UX. Chains can set a reserve price for their blockspace or designate their own sequencer if the price isn't met. Additionally, the Ethereum L1 proposer has a right of first refusal on sequencing rights sold in the marketplace, allowing participating chains to function as Ethereum rollups and enhancing composability with Ethereum, a derived idea from based sequencing.

b) Cross chain intent bridges
Intents are paving the way for a transformative shift in on-chain trading experience. At their core, intents represent a user’s desired action - such as swapping Asset A for Asset B. These intents allow for flexibility, as they can be fulfilled by any party (referred to fillers and solvers) in various ways, providing a more adaptable and user-centric approach to trading. As the current DeFI landscape is fragmented, liquidity in AMMs is limited causing a bad trading experience for ever participant - from HFT traders to the everyday meme trader. 

Intents introduce an elegant alternative, where a user can broadcast it’s intentional trade to a wide array of fillers/solvers. Those third parties have the flexibility to batch a set of transactions, tap into offchian liquidity or match two transactions in a CoW to fulfil the intent in the most optimal execution for the user, while earning a rewarding fee for facilitating this.

Just as money flows almost seamlessly within current monetary frameworks, certain applications and user groups rely on robust and secure cross chain solutions to unlock new levels of sophistication and innovation in product development and user experience.

c) Intents x Interoperability
Many existing cross-chain solutions use various approaches to enable communication between blockchains, with most relying on message passing—often off-chain—to facilitate end-to-end data exchange. These protocols require robust validation, transport, and security mechanisms to ensure reliable communication. Leading protocols such as Axelar, Across, and LayerZero enforce strict rules to relay only fully finalized transactions, ensuring security but introducing latency, especially on blockchains like Ethereum, where finalization can take several minutes. While messaging-based designs have been widely used, they often suffer from slow transfer finalization, high costs, and security trade-offs, highlighting the need for more efficient and secure cross-chain architectures.

Intent-based systems seek to optimize real-time, secure trading experiences by allowing users to define the desired end-state of a transaction. A network of fillers then competes to achieve the user’s outcome as quickly and cost-effectively as possible.

Case Study: Axelar Cross-Chain Intent Communication
Axelar has pioneered the connection of multiple blockchains and Rollups, enabling near-instant cross-chain transactions through an intent-based system. In Axelar's framework, users define their desired actions - such as swapping asset X for asset Y from Chain A to Chain B - by specifying these actions as "intents." Once the intent is submitted, it is broadcast to a decentralized network of "solvers," which are third-party entities or validators that compete to identify the most efficient route and execution path for fulfilling the intent. These solvers then execute the transaction across the appropriate chains, leveraging Axelar's secure and standardized protocol. This approach combines the security of on-chain execution with the flexibility of off-chain processing.

Axelar has also partnered with Uniswap to pioneer ERC-7683, an initiative aim to improve cross-chain interoperability with a new standard
While current intent-based systems fulfil user intents through dedicated networks or relayers, often operated by decentralized validators, they face significant challenges in attracting a broad range of solvers. These challenges stem from complex integration requirements, infrastructure inconsistencies, and other implementation hurdles, which often result in the centralization of execution among the most sophisticated and resourceful solvers.

ERC-7683 addresses these issues by proposing a standardized intent-based architecture. This framework establishes a unified network where any filler or solver can participate seamlessly, fostering global DeFi interoperability and supporting a diverse, decentralized network of solvers worldwide. While intents have proven to be an effective solution for cross-chain interoperability, current systems often operate within isolated networks, leading to potential latency issues, value extraction, and centralization risks due to reliance on a small group of solvers.

At the center of this proposed new standard are the "Cross-chain Order" and "Cross-chain Settler" functions. These functions define the constraints that settlement contracts must adhere to in order to resolve implementation-specific orders and initiate them on-chain. This new standard allows users to submit cross chain intents that remain consistent across platforms, whether directly on Uniswap, Across or any other system. This standardization enables cross-chain applications to share a common set of fillers/solver through a universal network, eliminating siloed systems and reducing the risk of centralized dependencies, improving the UX for dApps, fillers/solvers and end users - all at once.

d) Based rollups
Still in a very nascent stage, rollups are considered "based" or “L1 sequenced” when its sequencing is directly determined by the base layer - L1. Specifically, based rollups are a class of L2’s that leverage the inherent sequencing capabilities of an L1 proposer. In this setup, L1 proposers, along with searchers and builders, can permissionlessly include the next rollup block (n+1) within the subsequent L1 block (n). This design significantly enhances composability among rollups, fostering seamless interactions and interoperability between them.

By relying on the L1 for sequencing, based rollups achieve greater interoperability, allowing cross rollup transactions to be natively finalized on the underlying L1 . Unlike other solutions, which use a third party message passing system or a shared sequencing marketplace, this approach leverages the decentralization, security, and liveness properties of the base layer, ultimately optimizing for scalability and fostering a more interconnected rollup ecosystem.

When multiple rollups are sequenced by the L1, they benefit from asynchronous composability within any L1 slot where the proposer is granted the right to act as the L2 sequencer across multiple rollups. Here, the L1 proposer functions as a shared sequencer among a set of based rollups, facilitating sophisticated cross-rollup transactions and interactions natively at the base layer.

This approach contrasts with most current rollup solutions that rely on third-party interoperability protocols, such as arbitrary messaging protocols, bridges, or bridging routers, which can introduce potential liveness issues and create single points of failure outside the core protocol. By contrast, L1-based sequencing provides an in-protocol solution that directly leverages the inherent liveness and security guarantees of the Ethereum validator set. This not only enhances reliability and reduces dependencies on external solutions but also fosters a more robust and secure cross-rollup ecosystem by building on Ethereum's decentralized foundation.

e) Chain abstraction
As the multichain ecosystem evolves, efforts to scale EVM infrastructure and embrace Ethereum’s rollup-centric future have resulted in over 100 rollups and numerous standalone appchains. While these advancements address scalability and sovereignty, one critical challenge remains unresolved: user experience (UX). Despite progress in scalability - largely empowered by the modular thesis - user frustration continues to stem from fragmentation. Assets are dispersed across multiple wallets, bridging pathways are complex, chain configurations are diverse, and gas tokens vary widely. This added complexity not only increases the learning curve for both developers and users but also raises user acquisition costs and slows broader blockchain adoption. To overcome these challenges and create a seamless, user-friendly environment, the industry must introduce additional layers of abstraction, simplifying interactions for both users and developers.

Introducing and implementing account abstraction was the first step towards enhancing UX, but it doesn't address the coordination of assets in a multichain environment.
The core idea behind Chain abstraction is to solve the coordination problem based on a pretty straightforward assumption; blockchain technology should be invisible to users.
In other words, users should not be aware that they are using a blockchain, nor should they know which blockchain they are using. Users should be able to execute logic from one point of execution, eliminating the need for them to switch networks, sign transactions on different chains, or manage independent balances across networks. For the first time, users can seamlessly interact with a dApp from any supported chain, using any token, all without ever leaving your UI.

3. Particle Network is leading the charge in chain abstraction innovation
We wanted to use Particle Network as a case study on chain abstraction. Particle is an emerging Layer 1 blockchain with a single goal: providing a superior user experience that many others in the space aspire to achieve. Particle Network brings a solution to the industry's challenges through its implementation of an L1 that unifies all chains through Universal Accounts, simplifying the blockchain experience with Chain Abstraction. This approach addresses issues such as fragmented liquidity, cumbersome and expensive cross-chain transactions, and suboptimal user experiences across different blockchains. By leveraging its modular core components, Particle Network creates a seamless interaction experience, making it almost indistinguishable from using a single chain. In essence, Particle Network provides users with one account and one balance usable across the entire ecosystem.

a) To achieve the notion of a fully blockchain abstracted future, Particle network is build upon 3 critical components: 
i. Universal liquidity
Particle Network’s Universal Liquidity architecture combines a modular node setup with a Decentralized Messaging Network to enable automatic, cross-chain operations. This system streamlines interactions by unifying balances across Universal Accounts and automating fund movement between chains, drawing liquidity directly from the user’s balances when necessary. By eliminating the need for manual bridging, it allows transactions with any token, all coordinated and settled through Particle Network. Users can interact across chains as though they were on a single network. When a user joins an app powered by Particle Network’s Universal SDK, their EOA (e.g., MetaMask, Keplr) signs into a Universal Account, enabling seamless funding and usage across multiple chains without the need for bridging, all backed by Universal Liquidity.

ii. Universal accounts
Universal Accounts are a core feature that enables Particle Network to achieve chain abstraction. These accounts provide users with a single address, balance, and point of interaction across the entire multi-chain ecosystem. With a Universal Account, users maintain one unified balance and address across all chains. Leveraging Universal Liquidity, users can execute cross-chain transactions automatically, delivering a seamless, cohesive experience without the complexity of managing multiple wallets or addresses.

iii. Universal Gas
This feature allows users to pay gas fees on any blockchain using any token, eliminating the need to hold multiple tokens like SOL or ETH. Regardless of the token used for payment, all gas fees are ultimately settled in $PARTI, the network’s native token, even if the user doesn't hold it.

b) Protocol Architecture
To create a universal coordination layer, Particle Network introduces a streamlined infrastructure that outsources data availability (DA) and employs an innovative consensus mechanism built around three core modules:
i. Master Keystore Hub (MKH)
The MKH serves as the central coordinator for smart contract deployments and state management across all networks. It automatically synchronizes configurations across all Universal Accounts (UAs), ensuring consistent state updates throughout the network. Acting as the authoritative source of truth, it securely stores account settings to maintain uniformity across all connected chains.

ii. Decentralized Messaging Network
Particle’s Decentralized Messaging Network leverages relayer nodes to create a communication hub, enabling seamless cross-chain coordination. These relayer nodes monitor and update the execution status of operations across external chains and efficiently manage state changes within Universal Accounts, ensuring consistent and reliable cross-chain interactions.

iii. Transaction Bundler
Unlike the centralized bundlers commonly seen with ERC-4337 (Account Abstraction), Particle implements a decentralized approach for its bundler. In this system, transactions from the public UserOps mempool are gathered and processed by node operators within the bundler network before being relayed and executed on external chains as needed.

iv. Aggregated Data Availability
Designed with modularity in mind, Particle adopts a unique approach to data availability (DA), integrating multiple DA solutions like Celestia and Avail rather than depending on a single provider. By leveraging a diverse array of DA layers, Particle enhances the robustness, redundancy, and security of its data availability infrastructure.

v. Dual Staking Model with Babylon
The Particle-Babylon mechanism introduces a dual staking model featuring two distinct groups of node operators:
• $PARTI Staking Nodes — Nodes that stake Particle's native token, $PARTI, to secure the network directly.
• $BTC Staking Nodes — Nodes that stake $BTC to provide cryptoeconomic security through Babylon.
Both groups of validators are incentivized to independently validate blocks, fostering balanced participation in the consensus process. This model broadens the network’s security framework and enhances incentives for node operators, promoting higher participation and greater network stability.

4. Building a unified liquidity Layer on Ethereum
Ethereum and its rollup ecosystem face considerable challenges in establishing a unified liquidity layer, a problem less pronounced in more integrated networks like Solana. Rollups such as Arbitrum, Optimism, and zkSync boost Ethereum’s scalability, yet each operates as a distinct entity with separate liquidity pools, resulting in fragmented markets and limited asset flow across networks. Unlike the seamless composability Ethereum originally offered, rollups increasingly behave as appchains, prioritizing their own liquidity and user retention. This shift reflects their evolving role as standalone entities with business models that may be impacted by liquidity sharing with competitors. For instance, Optimism's OpStack enables atomic composability across rollups built within its framework, effectively aiming to retain liquidity and users within its own network rather than Ethereum as a whole.

This fragmentation presents a unique hurdle for Ethereum as it seeks to create a cohesive financial layer amid a decentralized landscape of independently operating rollups. The incentives between Ethereum’s base layer and its rollups have become misaligned. While rollups initially leveraged Ethereum’s liquidity and user base to scale, they are increasingly seen as parasitic to the Layer 1, contributing only little value in return. Instead of enriching the broader Ethereum ecosystem, rollups are now focused on retaining their own liquidity and user base, often isolating themselves from Ethereum’s native network. This dynamic creates a tension where rollups benefit from Ethereum’s established network effects without providing reciprocal value, undermining the long-term symbiotic relationship that was once envisioned between Ethereum and its rollups.

While interoperability is often touted as the future of blockchain, the reality is that many networks are more focused on building 'walled gardens' than truly interconnected ecosystems.

Interoperability across domains VMs may, in some cases, be overstated, as many networks and applications are fundamentally incentivized to retain liquidity and users within their own ecosystems. This dynamic is particularly evident in the growing prevalence of rollups and appchains, which, despite promoting the idea of cross-chain functionality, are often more concerned with consolidating their own liquidity and fostering self-contained environments. These ecosystems are designed to ensure that assets and users remain within their "walled gardens," limiting the flow of value and interaction with external networks. As a result, the promise of seamless cross-chain communication may be hindered by the competitive interests of individual networks, which prefer to protect their liquidity pools and user bases, limiting the broader vision of a fully interconnected blockchain ecosystem.

5. Conclusion - How we see the end game to be
While the vision for a seamless multichain ecosystem is not fully realised yet, there has been substantial progress with the development of new technologies like shared sequencers, arbitrary messaging protocols and chain abstraction. Composability, although one of the hallmarks of DeFi, faces limitations without the full support of interoperability across chains. The Curve-Convex integration illustrates the potential of composability, though limited by the inability to bring this “DeFi Lego” across chains.

Ultimately, the future of the multichain endgame is still unfolding, and it remains to be seen whether interoperability and composability will be universally adopted. What is clear, however, is that these principles will continue to shape innovation in the space, allowing for more sophisticated, scalable, and user-friendly applications in the years to come. The path forward may be diverse, but with ongoing advancements in multichain solutions, the possibilities for a truly interconnected blockchain world seem closer than ever.

*Disclosure: The information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

This article was written in conjunction with @ahboyash and @0xniko0x

Running the show from the shadows
While crypto natives frequently discuss multi-sig technology, many don't realize that SAFE is the dominant infrastructure provider in this space. Trusted by major projects like 1inch, Aave, and Chainlink, and supporting a wide range of EVM networks, SAFE has established itself as a crucial cornerstone of the crypto ecosystem due to the massive value it safeguards.

SAFE{Wallet}
SAFE serves as critically important infrastructure for crypto users and developers, safeguarding digital assets for projects, DAOs, institutions, and individuals. As of October 2024, SAFE manages over US$70 billion worth of assets across more than 25 million safes, which have collectively executed more than 97 million transactions. These numbers clearly demonstrate SAFE's strong Product Market Fit (PMF) and highlight the widespread adoption of smart contract accounts.

Safe{Wallet} offers top-grade security and audited contracts, providing multi-sig self-custodial wallets that promote decentralized co-ownership of assets. Additionally, Safe{Wallet} can be accessed via mobile applications on both the App Store and Google Play Store, ensuring convenient access for all SAFE users.

SAFE{Core}
Safe{Core} provides a comprehensive set of open-source tools and infrastructure that developers can leverage to implement secure, battle-tested account management features in their applications. Its key features include various forms of account abstraction, such as chain abstraction and payment abstraction. Safe{Core} also enables seamless integration with the robust Safe Ecosystem, which currently supports more than 200 projects building tools for identity abstraction, DeFi operations, on-chain governance, and asset management.

The account abstraction stack comprises the Safe Core SDK, which offers developers a comprehensive account abstraction toolkit. Additionally, it includes the Safe Core APIs, designed to enhance existing project interfaces, and the Safe Smart Account, a modular and extensible smart contract account that accommodates diverse use cases.

Use cases

The impact of SAFE on the crypto ecosystem is undeniable. According to Areta, SAFE secures more assets than any Layer 1 or Layer 2 blockchain, including Ethereum. 

SAFE’s use cases span multiple sectors within crypto:
• Payments: Gnosis payment wallets are utilizing Safe for secure transactions. Read more.
• Social: Farcaster’s Frames are built on Safe, leveraging Safe accounts. Learn more.
• Digital Identity: Worldcoin has integrated Safe accounts through proof-of-humanity verification. Details here.
• Institutions: Safe provides institutional-grade security for organizations like 1kx and Wintermute. Explore more.
• Ecosystem Layers: Platforms like Celo and Polygon zkEVM have integrated Safe to enhance user experience. Celo integration, Polygon zkEVM integration.
• NFTs: Punk6529’s gallery is powered by Safe, showcasing its application in the NFT space. Find out more.

In the next section, we will discuss how SAFE’s traction can convert into revenue and potential upside for the SAFE community.

Crouching Tiger, Hidden Dragon

In May 2024, SAFE launched native swaps which allowed Safe{Wallet} users to trade tokens within their wallets. Later in July 2024, SAFE introduced TWAP Orders and tiered fees in Safe{Wallet} native swaps, adding more functionality to their native swaps.

In September 2024, the SAFE Ecosystem Foundation put out a proposal for the revenue generated from native swap to be pledged to SafeDAO. This marks the first revenue stream for the SAFE community.

Taking a look at data on-chain, native swaps on SAFE generated a total of US$1.6 million  in annualised revenue (based on the tiered fee model). However, at present, only slightly more than 0.01% of Safes utilised the native swap function.

We believe that this number is not representative of the demand for swaps in DeFi. According to Nansen, there were more than 1.2 million unique traders who used decentralised exchanges (DEX) throughout 2022. Cross-referencing a report by Grayscale that estimated there to be around 7 million DeFi users in 2022, it can be estimated that around 17.14% of DeFi users utilise swaps. However, given that Safes are generally used for treasury management, it is likely that swap usage amongst SAFE users might not be as high. Taking the most conservative projection as reference, with just 1.71% of Safe’s utilising native swaps, this is estimated to produce more than US$274 million in total annualised revenue. For reference, Uniswap generates an estimated $703 million in annualised fees, while Curve generates an estimated US$27 million in annualised revenue.

tl;dr

SAFE currently commands a whopping US$74.2 billion in Total Value Locked (TVL) across its safes. Moreover, much of this TVL has yet to get involved in revenue-generating native swaps. Additionally, on SAFE’s roadmap is the introduction of revenue generation from native staking as well as a possible fee-sharing mechanism in the future. Considering SAFE’s huge untapped market as well as its future revenue streams, this could very well be the making of the next revenue generating beast. 

This article was written by @ahboyash and @0xsamoyed.

*Disclosure: The information provided in this article is for general informational purposes only and does not constitute professional nor investment advice.

Thank you for reading!