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Bitcoin's Generational Run: Four Visionaries Converge

· 22 min read
Dora Noda
Software Engineer

Bitcoin is entering an unprecedented phase where institutional capital flows, technical innovation, and regulatory tailwinds converge to create what thought leaders call a "generational run"—a transformation so fundamental it may render traditional four-year cycles obsolete. This isn't mere price speculation: four prominent Bitcoin voices—Udi Wertheimer of Taproot Wizards, Larry Cermak of The Block, investor Dan Held, and Stacks founder Muneeb Ali—have independently identified 2024-2025 as Bitcoin's inflection point, though their reasons and predictions vary dramatically. What makes this cycle different is the replacement of price-sensitive retail holders with price-insensitive institutions, the activation of Bitcoin's programmability through Layer 2 solutions, and political support that shifts Bitcoin from fringe asset to strategic reserve. The convergence of these forces could propel Bitcoin from today's levels toward 150,000150,000-400,000+ by late 2025, while fundamentally altering crypto's competitive landscape.

The implications extend beyond price. Bitcoin is simultaneously solidifying its position as digital gold while evolving technical capabilities that could capture market share from Ethereum and Solana. With **1.4trillioninrelativelyidleBitcoincapital,spotETFinflowsexceeding1.4 trillion in relatively idle Bitcoin capital**, spot ETF inflows exceeding 60 billion, and corporate treasuries accumulating at unprecedented rates, the infrastructure now exists for Bitcoin to serve both as pristine collateral and programmable money. This dual identity—conservative base layer plus innovative second layers—represents a philosophical reconciliation that eluded Bitcoin for over a decade.

The generational rotation thesis redefines who owns Bitcoin and why

Udi Wertheimer's viral July 2025 thesis "This Bitcoin Thesis Will Retire Your Bloodline" articulates the core transformation most clearly: Bitcoin has completed a rare generational rotation where price-sensitive early holders sold to price-insensitive institutional buyers, creating conditions for "multiples previously considered unimaginable." His $400,000 target by December 2025 assumes this rotation enables a rally structure he compares to Dogecoin's 200x run from 2019-2021.

The Dogecoin analogy, while provocative, provides a concrete historical template. When Elon Musk first tweeted about Dogecoin in April 2019, veteran holders distributed their bags thinking they were smart, missing the subsequent 10x move in January 2021 and the even larger rally to nearly $1 by May 2021. The pattern: old holders exit, new buyers don't care about previous prices, supply shock triggers explosive upside. Wertheimer argues Bitcoin now sits at the equivalent moment—after ETF approval and MicroStrategy's acceleration, but before the market believes "this time is different."

Three categories of old Bitcoin holders have largely exited according to Wertheimer: maximalists who "bought a house and a boat and fucked right off," crypto investors who rotated into Ethereum chasing staking yields, and younger traders who never held Bitcoin, preferring memecoins. Their replacements are BlackRock's IBIT (holding 770,000 BTC worth 90.7billion),corporatetreasuriesledbyMicroStrategys640,000+BTC,andpotentiallynationstatesbuildingstrategicreserves.Thesebuyersmeasureperformanceindollarnotionaltermsfromtheirentrypoints,notBitcoinsunitprice,makingthemstructurallyindifferenttowhethertheybuyat90.7 billion), corporate treasuries led by MicroStrategy's 640,000+ BTC, and potentially nation-states building strategic reserves. These buyers measure performance in dollar-notional terms from their entry points, not Bitcoin's unit price, making them structurally indifferent to whether they buy at 100,000 or $120,000.

Larry Cermak's data-driven analysis supports this thesis while adding nuance about cycle compression. His "Shorter Cycle Theory" argues Bitcoin has transcended traditional 3-4 year boom-bust cycles due to infrastructure maturation, long-term institutional capital, and persistent talent and funding even during downturns. Bear markets now last 6-7 months maximum versus 2-3 years historically, with less extreme volatility as institutional capital provides stability. The Block's real-time ETF tracking shows over $46.9 billion in cumulative net inflows by mid-2025, with Bitcoin ETFs controlling 90%+ of daily trading volume versus futures products—a complete market structure transformation in under two years.

Dan Held's original "Bitcoin Supercycle" thesis from December 2020 (when Bitcoin was 20,000)predictedthismomentwithremarkableprescience.Hearguedtheconvergenceofmacrotailwinds,institutionaladoption,andsingularnarrativefocuswouldenableBitcointopotentially"movefrom20,000) predicted this moment with remarkable prescience. He argued the convergence of macro tailwinds, institutional adoption, and singular narrative focus would enable Bitcoin to potentially "move from 20k to $1M and then only have smaller cycles after." While his million-dollar target remains long-term (10+ years for full hyperbitcoinization), his framework centered on institutional buyers acting as "forced buyers"—entities that must allocate to Bitcoin regardless of price due to portfolio construction mandates, inflation hedging needs, or competitive positioning.

Institutional infrastructure creates structural demand dynamics never seen before

The concept of "forced buyers" represents the most significant structural change in Bitcoin's market dynamics. Michael Saylor's MicroStrategy (now renamed Strategy) epitomizes this phenomenon. As Wertheimer explained to Cointelegraph: "If Saylor stops buying Bitcoin for a sustained period of time, his company loses all of its value… he has to keep coming up with more new, original ways to raise capital to buy Bitcoin." This creates the first structural, forced buyer in Bitcoin's history—an entity compelled to accumulate regardless of price.

The numbers are staggering. Strategy holds over 640,000 BTC acquired at an average price around 66,000,financedthroughequityofferings,convertiblenotes,andpreferredstock.ButStrategyisjustthebeginning.Bymid2025,78publicandprivatecompaniesworldwideheld848,100BTCrepresenting466,000, financed through equity offerings, convertible notes, and preferred stock. But Strategy is just the beginning. By mid-2025, 78 public and private companies worldwide held 848,100 BTC representing 4% of total supply, with corporate treasuries purchasing 131,000 BTC in Q2 2025 alone—outpacing even ETF inflows for three consecutive quarters. Standard Chartered projects Bitcoin reaching 200,000 by year-end 2025 with corporate adoption as the primary catalyst, while Bernstein forecasts 330billionincorporateallocationsoverfiveyearsversus330 billion in corporate allocations over five years versus 80 billion today.

Spot Bitcoin ETFs fundamentally altered access and legitimacy. BlackRock's IBIT grew from launch in January 2024 to 90.7billioninassetsbyOctober2025,enteringthetop20ETFsgloballyandcontrolling7590.7 billion in assets by October 2025, entering the top 20 ETFs globally and controlling 75% of Bitcoin ETF trading volume. Nearly one-sixth of all institutional investors filing 13F forms held spot Bitcoin ETFs by Q2 2024, with over 1,100 institutions allocating 11 billion despite Bitcoin's price volatility. As Cermak noted, these institutions think in terms of basis trades, portfolio rebalancing, and macro allocation—not the hourly price fluctuations that obsess retail traders.

Political developments in 2025 cemented institutional legitimacy. President Trump's March 2025 executive order established a Strategic Bitcoin Reserve with approximately 207,000 BTC from government forfeitures, designating Bitcoin as a reserve asset alongside gold and petroleum. As Dan Held observed in May 2025: "We have the most open administration toward Bitcoin in the United States. It kind of feels weird... you've got the president encouraging Bitcoin." The appointment of crypto-friendly regulators (Paul Atkins at SEC, Brian Quintenz at CFTC) and David Sacks as crypto and AI czar signals sustained government support rather than adversarial regulation.

This institutional infrastructure creates what Held calls a "positive feedback loop" that Satoshi Nakamoto predicted before Bitcoin was worth even $0.01: "As the number of users grows, the value per coin increases. It has the potential for a positive feedback loop; as users increase, the value goes up, which could attract more users to take advantage of the increasing value." Institutional adoption legitimizes Bitcoin for retail, retail demand drives institutional FOMO, prices rise attracting more participants, and the cycle accelerates. The key difference in 2024-2025: institutions arrived first, not last.

Bitcoin's technical evolution unlocks programmability without compromising security

While price predictions and institutional narratives dominate headlines, the most consequential development for Bitcoin's long-term trajectory may be technical: the activation of Layer 2 solutions that make Bitcoin programmable while maintaining its security and decentralization. Muneeb Ali's Stacks platform represents the most mature effort, completing its Nakamoto Upgrade on October 29, 2024—the same year as Bitcoin's halving and ETF approval.

The Nakamoto Upgrade delivered three breakthrough capabilities: 100% Bitcoin finality (meaning Stacks transactions can only be reversed by reorganizing Bitcoin itself), five-second block confirmations (versus 10-40 minutes previously), and MEV resistance. More importantly, it enabled sBTC—a trust-minimized, 1:1 Bitcoin peg that solves what Ali calls Bitcoin's "write problem." Bitcoin's intentionally limited scripting language makes smart contracts and DeFi applications impossible at the base layer. sBTC provides a decentralized bridge allowing Bitcoin to be deployed in lending protocols, stablecoin systems, DAO treasuries, and yield-generating applications without selling the underlying asset.

The launch metrics validate market demand. sBTC's initial 1,000 BTC cap was hit immediately upon mainnet launch December 17, 2024, expanded to 3,000 BTC within 24 hours, and continues growing with withdrawals enabled April 30, 2025. Stacks now has $1.4 billion in STX capital locked in consensus, with 15 institutional signers (including Blockdaemon, Figment, and Copper) securing the bridge through economic incentives—signers must lock STX collateral worth more than the pegged BTC value.

Ali's vision centers on activating Bitcoin's idle capital. He argues: "There's more than a trillion dollars of Bitcoin capital sitting there. Developers are not programming it. They're not deploying it in big ways into DeFi." Even if Bitcoiners keep 80% in cold storage, hundreds of billions remain available for productive use. The goal isn't changing Bitcoin's base layer—which Ali acknowledges "is not going to change much"—but building expressive Layer 2s that compete head-to-head with Ethereum and Solana on speed, expressivity, and user experience while benefiting from Bitcoin's security and liquidity.

This technical evolution extends beyond Stacks. Wertheimer's Taproot Wizards raised $30 million to develop OP_CAT (BIP-347), a covenant proposal that would enable on-chain trading between BTC and stablecoins, borrowing with BTC collateral, and new types of Layer 2 solutions—all without requiring users to trust centralized custodians. The CATNIP protocol, announced September 2024, would create "true bitcoin-native tokens" enabling partially-filled orders, bids (not just asks), and on-chain AMMs. While controversial among Bitcoin conservatives, these proposals reflect growing consensus that Bitcoin's programmability can expand through Layer 2s and optional features rather than base-layer changes.

Dan Held's pivot to Bitcoin DeFi in 2024 signals mainstream acceptance of this evolution. After spending years evangelizing Bitcoin as digital gold, Held co-founded Asymmetric VC to invest in Bitcoin DeFi startups, calling it "by far the biggest opportunity ever to happen in crypto" with "$300 trillion potential." His reasoning: "Come for the speculation, stay for the sound money" has always driven Bitcoin adoption through speculative cycles, so enabling DeFi, NFTs, and programmability accelerates user acquisition while locking up supply. Held views Bitcoin DeFi as non-zero-sum—absorbing market share from Ethereum and Solana while increasing Bitcoin's dominance by locking BTC in protocols.

Altcoins face displacement as Bitcoin absorbs capital and mindshare

The bullish Bitcoin thesis carries bearish implications for alternative cryptocurrencies. Wertheimer's assessment is blunt: "Your altcoins are fucked." He predicts the ETH/BTC ratio will continue printing lower highs, calling Ethereum "the biggest loser of the cycle" as incoming treasury-style buyers need "years" to absorb legacy Ethereum supply before enabling a true breakout. His forecast that MicroStrategy's equity capitalization could surpass Ethereum's market value seemed absurd when published but looks increasingly plausible as Strategy's market cap reached $75-83 billion while Ethereum struggles with narrative uncertainty.

The capital flow dynamics explain altcoin underperformance. As Muneeb Ali explained at Consensus 2025: "Bitcoin is probably the only asset that has net new buyers" from outside crypto (ETFs, corporate treasuries, nation-states), while altcoins compete for the same capital circulating within crypto. When memecoins trend, capital rotates from infrastructure projects into memes—but it's recycled capital, not new money. Bitcoin's external capital inflows from traditional finance represent genuine market expansion rather than zero-sum reshuffling.

Bitcoin dominance has indeed risen. From lows around 40% in previous cycles, Bitcoin's market share approached 65% by 2025, with projections suggesting dominance remains above 50% throughout the current cycle. The Block's 2025 predictions—authored under Larry Cermak's analytical framework—explicitly forecast continued Bitcoin outperformance with drawdowns moderating to 40-50% versus historical 70%+ crashes. Institutional capital provides price stability that didn't exist when retail speculation dominated, creating more sustained appreciation at elevated levels rather than parabolic spikes and crashes.

Wertheimer acknowledges "pockets of outperformance" in altcoins for traders who can time short-term rotations—"in and out, wham bam thank you scam"—but argues most altcoins cannot keep pace with Bitcoin's capital inflows. The same institutional gatekeepers approving Bitcoin ETFs have explicitly rejected or delayed Ethereum ETF applications with staking features, creating regulatory moats that favor Bitcoin. Corporate treasuries face similar dynamics: explaining a Bitcoin allocation as inflation hedge and digital gold to boards and shareholders is straightforward; justifying Ethereum, Solana, or smaller altcoins is exponentially harder.

Cermak adds important nuance to this bearishness. His analytical work emphasizes Bitcoin's value proposition as financial sovereignty and inflation hedge, particularly relevant "in regions plagued by corruption or experiencing rapid inflation." While maintaining his historical skepticism about cryptocurrency replacing central banks, his 2024-2025 commentary acknowledges Bitcoin's maturation into a legitimate portfolio asset. His "Shorter Cycle Theory" suggests the era of easy 100x returns is over for most crypto assets as markets professionalize and institutional capital dominates. The "wild west" gave way to presidential candidates discussing Bitcoin on campaign trails—good for legitimacy, but reducing opportunity for altcoin speculation.

Timeframes converge on late 2025 as critical inflection point

Across different frameworks and price targets, all four thought leaders identify Q4 2025 as a critical window for Bitcoin's next major move. Wertheimer's $400,000 target by December 2025 represents the most aggressive near-term prediction, premised on his generational rotation thesis and Dogecoin analogy's two-phase rally structure. He describes current price action as "after ETFs, after Saylor acceleration, after Trump. But before anyone believes that this time actually is different. Before anyone realizes that sellers ran out of tokens."

Dan Held maintains his four-year cycle framework with 2025 marking the peak: "I'm still a believer in the four year cycle, with the current cycle I see as ending in Q4 2025." While his long-term million-dollar target remains a decade-plus away, he sees Bitcoin reaching 150,000150,000-200,000 in the current cycle based on halving dynamics, institutional adoption, and macro conditions. Held's Supercycle thesis allows for "smaller cycles after" the current run—meaning less extreme booms and busts going forward as market structure matures.

Muneeb Ali shares the Q4 2025 cycle peak view: "I see as ending in Q4 2025. And even though there are some reasons to believe that maybe the cycles won't be that intense, I'm personally still a believer." His prediction that Bitcoin will never go below $50,000 again reflects confidence in institutional support providing a higher price floor. Ali emphasizes the halving as "almost like a self-fulfilling prophecy" where market anticipation creates the expected supply shock even if the mechanism is well-understood.

Standard Chartered's 200,000yearend2025targetandBernsteinsinstitutionalflowprojectionsalignwiththistimeframe.Theconvergenceisntcoincidentalitreflectsthefouryearhalvingcyclecombinedwithinstitutionalinfrastructurenowinplacetocapitalizeonreducedsupply.TheApril2024halvingcutminerrewardsfrom6.25BTCto3.125BTCperblock,reducingnewsupplyby450BTCdaily(worth200,000 year-end 2025 target and Bernstein's institutional flow projections align with this timeframe. The convergence isn't coincidental—it reflects the four-year halving cycle combined with institutional infrastructure now in place to capitalize on reduced supply. The April 2024 halving cut miner rewards from 6.25 BTC to 3.125 BTC per block, reducing new supply by 450 BTC daily (worth 54+ million at current prices). With ETFs and corporate treasuries purchasing far more than daily mined supply, the supply deficit creates natural upward price pressure.

Larry Cermak's Shorter Cycle Theory suggests this may be "one of the final big cycles" before Bitcoin enters a new regime of moderated volatility and more consistent appreciation. His data-driven approach identifies fundamental differences from previous cycles: infrastructure persistence (talent, capital, and projects surviving downturns), institutional long-term capital (not speculative retail), and proven utility (stablecoins, payments, DeFi) beyond pure speculation. These factors compress cycle timelines while raising price floors—exactly what Bitcoin's maturation into a trillion-dollar asset class would predict.

Regulatory and macro factors amplify technical and fundamental drivers

The macro environment in 2024-2025 eerily mirrors Dan Held's original Supercycle thesis from December 2020. Held emphasized that COVID-19's $25+ trillion global money printing brought Bitcoin's value proposition into focus as governments actively devalued currencies. The 2024-2025 context features similar dynamics: elevated government debt, persistent inflation concerns, Federal Reserve policy uncertainty, and geopolitical tensions from the Russia-Ukraine conflict to U.S.-China competition.

Bitcoin's positioning as "insurance against government malfeasance" resonates more broadly now than during Bitcoin's early years in a macro bull run. As Held explained: "Most people don't think about getting earthquake insurance until an earthquake hits... Bitcoin was special purpose built to be a store of value in a world where you can't trust your government or bank." The earthquake arrived with COVID-19, and aftershocks continue reshaping the global financial system. Bitcoin survived its "first real test" during March 2020's liquidity crisis and emerged stronger, validating its resilience for institutional allocators.

Trump's 2025 administration represents a complete regulatory reversal from the Biden years. Cermak noted the previous administration "literally just fighting us" while Trump is "going to actively support and encourage things, which is a huge 180." This shift extends beyond rhetoric to concrete policy: the Strategic Bitcoin Reserve executive order, crypto-friendly SEC and CFTC leadership, hosting the first White House Crypto Summit, and Trump Media's own $2 billion Bitcoin investment. While some view this as political opportunism, the practical effect is regulatory clarity and reduced legal risk for businesses building on Bitcoin.

International dynamics accelerate this trend. Switzerland planning crypto reserves after public referendum, El Salvador's continued Bitcoin adoption despite IMF pressure, and potential BRICS exploration of Bitcoin as sanctions-resistant reserve asset all signal global competition. As Ali noted: "If any of the Bitcoin Reserve [plans] happen, that's going to be a huge, huge signal throughout the world. Even if they happen [just] at the state level, like in Texas or Wyoming, it will send a huge signal around the world." The risk of being left behind in a potential Bitcoin "arms race" may prove more compelling to policymakers than ideological objections.

Central bank digital currencies (CBDCs) paradoxically boost Bitcoin's value proposition. As Cermak observed, China's digital yuan pilots and other CBDC initiatives highlight the difference between surveillance-ready government money and permissionless, censorship-resistant Bitcoin. The more governments develop programmable digital currencies with transaction controls and monitoring, the more attractive Bitcoin becomes as the neutral, decentralized alternative. This dynamic plays out most dramatically in authoritarian regimes and high-inflation economies where Bitcoin provides financial sovereignty that CBDCs explicitly eliminate.

Critical risks and counterarguments deserve serious consideration

The bullish consensus among these thought leaders shouldn't obscure genuine risks and uncertainties. The most obvious: all four have significant financial interests in Bitcoin's success. Wertheimer's Taproot Wizards, Held's Asymmetric VC portfolio, Ali's Stacks holdings, and even Cermak's The Block (covering crypto) benefit from sustained Bitcoin interest. While this doesn't invalidate their analysis, it demands scrutiny of assumptions and alternative scenarios.

Market scale represents a fundamental challenge to the Dogecoin analogy. Dogecoin's 200x rally occurred from a market cap measured in hundreds of millions to tens of billions—a small-cap asset moving on social media sentiment and retail FOMO. Bitcoin's current 1.4+trillionmarketcapwouldneedtoreach1.4+ trillion market cap would need to reach 140+ trillion for equivalent percentage gains, exceeding the entire global stock market. Wertheimer's 400,000targetimpliesroughly400,000 target implies roughly 8 trillion market cap—ambitious but not impossible given gold's $15 trillion market cap. Yet the mechanics of moving a trillion-dollar asset versus a billion-dollar meme coin differ fundamentally.

Institutional capital can exit as easily as it enters. The Q1 2024 ETF inflows that excited markets gave way to periods of significant outflows, including a record $1 billion single-day withdrawal in January 2025 attributed to institutional rebalancing. While Wertheimer argues old holders have rotated out completely, nothing prevents institutions from profit-taking or risk-off reallocation if macro conditions deteriorate. The "price-insensitive" characterization may prove overstated when institutions face redemption pressures or risk management requirements.

Technical risks around Layer 2 solutions deserve attention. sBTC's initial design relies on 15 institutional signers—more decentralized than single-custodian wrapped Bitcoin, but still introducing trust assumptions absent from Bitcoin L1 transactions. While economic incentives (signers locking more value in STX than BTC pegged) theoretically secure the system, implementation risks, coordination failures, or unforeseen exploits remain possible. Ali candidly acknowledged technical debt and complex coordination challenges in launching Nakamoto, noting the "trickled release" that "took away some of the excitement."

Bitcoin dominance may prove temporary rather than permanent. Ethereum's transition to proof-of-stake, development of Layer 2 scaling solutions (Arbitrum, Optimism, Base), and superior developer mindshare position it differently than Wertheimer's bearish assessment suggests. Solana's success in attracting users through memecoins and DeFi, despite multiple network outages, demonstrates that technical imperfection doesn't preclude market share gains. The narrative that Bitcoin "won" may be premature—crypto often defies linear extrapolation of current trends.

Cermak's environmental concerns remain underappreciated. He warned in 2021: "I think the environmental concerns are more serious than people think... because it's just very simple to understand. It's a super simple thing to sell to people." While Bitcoin mining increasingly uses renewable energy and provides grid stability services, the narrative simplicity of "Bitcoin wastes energy" gives politicians and activists powerful ammunition. Elon Musk's Tesla reversal on Bitcoin payments due to environmental concerns demonstrated how quickly institutional support can evaporate over this issue.

Regulatory capture risks cut both directions. While Trump's pro-Bitcoin administration appears supportive now, political winds shift. A future administration could reverse course, particularly if Bitcoin's success threatens dollar hegemony or enables sanctions evasion. The Strategic Bitcoin Reserve could become a Strategic Bitcoin Sale under different leadership. Relying on government support contradicts Bitcoin's original cypherpunk ethos of resisting state control—as Held himself noted, "Bitcoin undermines their entire power and authority by removing money from their ownership."

Synthesis and strategic implications

The convergence of institutional adoption, technical evolution, and political support in 2024-2025 represents Bitcoin's most significant inflection point since creation. What differentiates this moment from previous cycles is simultaneity: Bitcoin is simultaneously being adopted as digital gold by conservative institutions AND becoming programmable money through Layer 2s, while receiving government endorsement rather than hostility. These forces reinforce rather than conflict.

The generational rotation thesis provides the most compelling framework for understanding current price action and future trajectory. Whether Bitcoin reaches 400,000or400,000 or 200,000 or consolidates longer at current levels, the fundamental shift from price-sensitive retail to price-insensitive institutions has occurred. This changes market dynamics in ways that make traditional technical analysis and cycle timing less relevant. When buyers don't care about unit price and measure success in multi-year timeframes, short-term volatility becomes noise rather than signal.

Layer 2 innovation resolves Bitcoin's long-standing philosophical tension between conservatives who wanted a simple, unchanging settlement layer and progressives who wanted programmability and scaling. The answer: do both. Keep Bitcoin L1 conservative and secure while building expressive Layer 2s that compete with Ethereum and Solana. Ali's vision of "taking Bitcoin to a billion people" through self-custodial applications requires this technical evolution—no amount of institutional ETF buying gets normies using Bitcoin for daily transactions and DeFi.

The altcoin displacement thesis reflects capital efficiency finally arriving in crypto. In 2017, literally anything with a website and whitepaper could raise millions. Today, institutions allocate to Bitcoin while retail chases memecoins, leaving infrastructure altcoins in no-man's land. This doesn't mean every altcoin fails—Ethereum's network effects, Solana's user experience advantages, and application-specific chains serve real purposes. But the default assumption that "crypto goes up together" no longer holds. Bitcoin increasingly moves independently on macro drivers while altcoins compete for shrinking speculative capital.

The macro backdrop cannot be overstated. Ray Dalio's long-term debt cycle framework that Held invoked suggests the 2020s represent a decade-defining moment where fiscal dominance, currency debasement, and geopolitical competition favor hard assets over fiat claims. Bitcoin's fixed supply and decentralized nature position it as the premier beneficiary of this shift. The question isn't whether Bitcoin reaches six figures—it likely already has or will—but whether it reaches high six figures or seven figures this cycle or requires another full cycle.

Conclusion: A new Bitcoin paradigm emerges

Bitcoin's "generational run" isn't merely a price prediction—it's a paradigm shift in who owns Bitcoin, how Bitcoin is used, and what Bitcoin means in the global financial system. The transition from cypherpunk experiment to trillion-dollar reserve asset required 15 years of survival, resilience, and gradual institutional acceptance. That acceptance accelerated dramatically in 2024-2025, creating the conditions Satoshi predicted: positive feedback loops where adoption drives value drives adoption.

The convergence of these four voices—Wertheimer's market psychology and supply dynamics, Cermak's data-driven institutional analysis, Held's macro framework and long-term vision, Ali's technical roadmap for programmability—paints a comprehensive picture of Bitcoin at an inflection point. Their disagreements matter less than their consensus: Bitcoin is entering a fundamentally different phase characterized by institutional ownership, technical capability expansion, and political legitimacy.

Whether this manifests as a final parabolic cycle reaching 400,000+oramoremoderategrindto400,000+ or a more moderate grind to 150,000-$200,000 with compressed volatility, the structural changes are irreversible. ETFs exist. Corporate treasuries have adopted Bitcoin. Layer 2s enable DeFi. Governments hold strategic reserves. These aren't speculative developments that vanish in bear markets—they're infrastructure that persists and compounds.

The most profound insight across these perspectives is that Bitcoin doesn't need to choose between being digital gold and programmable money, between institutional asset and cypherpunk tool, between conservative base layer and innovative platform. Through Layer 2s, institutional vehicles, and continued development, Bitcoin becomes all of these simultaneously. That synthesis—rather than any single price target—represents the true generational opportunity as Bitcoin matures from financial experiment to global monetary architecture.

Memecoins Are Information Markets for Attention

· 6 min read
Dora Noda
Software Engineer

Why does a token featuring a Shiba Inu, a frog, or a political caricature command a multi-billion dollar market cap? To an outsider, the world of memecoins looks like pure, unadulterated chaos. But beneath the surface of the hype, there’s a powerful economic engine at work.

The short answer is this: because most memecoins have no cash flow or use value, their prices are almost entirely a real-time aggregate of beliefs about future attention, reach, and coordination. In other words, the token becomes a tradable scoreboard for a meme’s cultural trajectory.

Let's break down how this works.

The First Principle: Prices as Information

Economists have long noted that prices are miraculous mechanisms for summarizing dispersed private knowledge. Countless tiny signals, observations, and hunches held by millions of individuals get compressed into a single number by people willing to put money behind their views. This is the classic “prices as information” idea, famously explored by Friedrich Hayek.

Memecoins take this concept to its logical extreme. With essentially no fundamentals like revenue or profits to anchor value, the primary thing being priced is the collective expectation about future attention and adoption. The market isn't asking "What is this asset worth?" but rather, "What will everyone else think this asset is worth next week?"

What Information Are Memecoin Prices Actually Aggregating?

Think of a memecoin’s price as a live, fluctuating index of the following signals. None of these represent “intrinsic value”; all are forward-looking expectations.

  • Attention Velocity: Is the meme spreading? Traders watch on-chain and off-chain proxies like Google search trends, social media mentions, follower growth, the velocity of new wallet creation, and engagement in Telegram and Twitter communities.
  • Access & Convenience: How easy will it be for new money to flow in? This is a bet on future liquidity. Key signals include listings on major centralized or decentralized exchanges, the availability of fiat on-ramps, gas fees, and the efficiency of the underlying blockchain (e.g., Solana vs. Ethereum).
  • Credibility & Rug-Pull Risk: Will early insiders dump their holdings or drain the liquidity pool? The market prices this risk by scrutinizing developer wallet behavior, liquidity lock-up mechanisms, token ownership concentration, and the transparency of the founding team.
  • Staying Power: Will the meme survive next week’s news cycle? The market looks for signs of cultural resonance, such as spin-off memes, derivative content, and crossovers into mainstream culture, as indicators of a meme's longevity.
  • Catalysts: Is there a specific event on the horizon that could dramatically shift sentiment? This includes potential influencer endorsements, exchange listing announcements, or new cross-chain bridges that open up the token to a new ecosystem.

Because issuance and trading are nearly frictionless—especially on chains like Solana, where one-click launch tools have made "attention IPOs" cheap—these signals get reflected in the price almost immediately.

A simple way to picture it is with a basic function:

Price ≈ *f*(current attention, growth of attention, ease of buying, perceived fairness, upcoming catalysts)

There are no dividends or discounted cash flows in this equation. It’s just the crowd’s evolving best guess about future demand for belonging to—and speculating on—the meme.

Evidence in Action: When Information Shocks the Price

We can see clear evidence that prices are reacting to information about attention, not fundamentals.

  • Listing Shocks: When a memecoin jumps from a niche decentralized exchange to a mainstream platform like Coinbase or Binance, its price often gaps upward dramatically. A prime example is BONK's surge around its Coinbase listing. The token’s underlying "utility" didn't change, but its access to a massive new pool of potential buyers did. This “access information” shock was immediately capitalized into its price.
  • Research Framing: As noted by crypto research firms like Galaxy and Kaiko, analysts increasingly describe memecoins as a core part of the attention economy. They are treated as assets whose value is directly tied to cultural mindshare and distribution rather than technical utility. This framing aligns perfectly with the "information market" view.

How This Rhymes with Prediction Markets (and How It Doesn’t)

The function of memecoins bears a striking resemblance to formal prediction markets like Polymarket or Kalshi.

Similarities:

  • Both create a financial incentive for discovering and acting on information early.
  • Both collapse diffuse, complex opinions into a single, tradable number that updates in real time.
  • Both react instantly to news flow and the "who knows what" dynamics of social networks.

Key Differences:

  • No Objective Resolution: A prediction market has a clear, binary outcome. It pays out when a well-defined event happens (“Will X be elected?”). A memecoin has no terminal state; the “event” being wagered on is the meme’s continuing cultural adoption. This makes its price a belief index, not a probability with a resolution oracle.
  • Higher Reflexivity: Because future demand is heavily influenced by past price action (people love to chase winners), the feedback loops are stronger and noisier. In many cases, a rising price creates its own positive news cycle, attracting more attention and further driving up the price.
  • Manipulation Risk: Thin liquidity, concentrated holdings, and insider knowledge can heavily distort the price signal, especially early in a token’s life.

Why People Keep Trading Them

If they are so detached from fundamentals, why does this market persist?

  1. Expressive Trading: Buying a memecoin is a low-friction way to express a belief ("this joke is hilarious and it will spread") and be financially exposed to its correctness.
  2. Coordination Shelling Point: The ticker symbol becomes a focal point for a community's energy. The price both measures and amplifies that collective energy.
  3. The 24/7 Scoreboard: The tight feedback loop between social media chatter and on-chain data allows traders to watch the meme’s “mindshare momentum” in real time and act on it instantly.

Important Caveats

Calling memecoins “information markets” does not mean they are efficient at truth discovery or safe to trade. The signal can easily be swamped by whale movements, bot farms, or orchestrated hype campaigns. Without a resolving event, prices need never converge to anything “correct.” The vast majority of new memecoins behave like high-volatility lotteries, and both academic and industry analyses constantly warn about prevalent scams and extreme tail-risk.

This is not investment advice.

The One-Line Takeaway

Memecoins are information markets because the only thing they consistently price is information about attention—who has it now, who will have it next, and how easily that collective belief can be turned into coordinated buying and selling.

Sources

Stablecoins and the Trillion‑Dollar Payment Shift

· 10 min read
Dora Noda
Software Engineer

perspectives from Paolo Ardoino, Charles Cascarilla and Rob Hadick

Background: Stablecoins are maturing into a payments rail

  • Rapid growth: Stablecoins began as collateral for trading on crypto exchanges, but by mid‑2025 they had become an important part of global payments. The market cap of dollar‑denominated stablecoins exceeded US210billionbytheendof2024andtransactionvolumereachedUS210 billion** by the end of 2024 and transaction volume reached **US26.1 trillion, growing 57 % year‑on‑year. McKinsey estimated that stablecoins settle roughly US30billionoftransactionseachdayandtheiryearlytransactionvolumereachedUS30 billion** of transactions each day and their yearly transaction volume reached **US27 trillion – still less than 1 % of all money flows but rising quickly.
  • Real payments, not just trading: The Boston Consulting Group estimates that 5–10 % (≈US1.3trillion)ofstablecoinvolumesattheendof2024weregenuinepaymentssuchascrossborderremittancesandcorporatetreasuryoperations.Crossborderremittancesaccountforroughly101.3 trillion)** of stablecoin volumes at the end of 2024 were genuine payments such as cross‑border remittances and corporate treasury operations. Cross‑border remittances account for roughly **10 % of the transaction count**. By early 2025 stablecoins were used for **≈3 % of the US200 trillion cross‑border payments market, with capital‑markets use still less than 1 %.
  • Drivers of adoption: Emerging markets: In countries where local currencies depreciate by 50–60 % per year, stablecoins provide a digital dollar for savers and businesses. Adoption is particularly strong in Turkey, Argentina, Vietnam, Nigeria and parts of Africa. Technology and infrastructure: New orchestration layers and payment service providers (e.g., Bridge, Conduit, MoneyGram/USDC via MoneyGram) link blockchains with bank rails, reducing friction and improving compliance. Regulation: The GENIUS Act (2025) established a U.S. federal framework for payment stablecoins. The law sets strict reserve, transparency and AML requirements and creates a Stablecoin Certification Review Committee to decide whether state regimes are "substantially similar". It allows state‑qualified issuers with less than US$10 billion in circulation to operate under state oversight when standards meet federal levels. This clarity encouraged legacy institutions such as Visa to test stablecoin‑funded international transfers, with Visa's Mark Nelsen noting that the GENIUS Act "changed everything" by legitimising stablecoins

Paolo Ardoino (CEO, Tether)

Vision: a “digital dollar for the unbanked”

  • Scale and usage: Ardoino says USDT serves 500 million users across emerging markets; about 35 % use it as a savings account, and 60–70 % of transactions involve only stablecoins (not crypto trading). He emphasises that USDT is now “the most used digital dollar in the world” and acts as “the dollar for the last mile, for the unbanked”. Tether estimates that 60 % of its market‑cap growth comes from grassroots use in Asia, Africa and Latin America.
  • Emerging‑market focus: Ardoino notes that in the U.S. the payment system already works well, so stablecoins offer only incremental benefits. In emerging economies, however, stablecoins improve payment efficiency by 30–40 % and protect savings from high inflation. He describes USDT as a financial lifeline in Turkey, Argentina and Vietnam where local currencies are volatile.
  • Compliance and regulation: Ardoino publicly supports the GENIUS Act. In a 2025 Bankless interview he said the Act sets “a strong framework for domestic and foreign stablecoins” and that Tether, as a foreign issuer, intends to comply. He highlighted Tether’s monitoring systems and cooperation with over 250 law‑enforcement agencies, emphasising that high compliance standards help the industry mature. Ardoino expects the U.S. framework to become a template for other countries and predicted that reciprocal recognition would allow Tether’s offshore USDT to circulate widely.
  • Reserves and profitability: Ardoino underscores that Tether’s tokens are fully backed by cash and equivalents. He said the company holds about US125billioninU.S.TreasuriesandhasUS125 billion in U.S. Treasuries** and has **US176 billion of total equity, making Tether one of the largest holders of U.S. government debt. In 2024 Tether generated US$13.7 billion profit and he expects this to grow. He positions Tether as a decentralised buyer of U.S. debt, diversifying global holders.
  • Infrastructure initiatives: Ardoino announced an ambitious African energy project: Tether plans to build 100 000–150 000 solar‑powered micro‑stations, each serving villages with rechargeable batteries. The subscription model (~US$3 per month) allows villagers to swap batteries and use USDT for payments, supporting a decentralised economy. Tether also invests in peer‑to‑peer AI, telecoms and social media platforms to expand its ecosystem.
  • Perspective on the payment shift: Ardoino views stablecoins as transformational for financial inclusion, enabling billions without bank accounts to access a digital dollar. He argues that stablecoins complement rather than replace banks; they provide an on‑ramp into the U.S. financial system for people in high‑inflation economies. He also claims the growth of USDT diversifies demand for U.S. Treasuries, benefiting the U.S. government.

Charles Cascarilla (Co‑Founder & CEO, Paxos)

Vision: modernising the U.S. dollar and preserving its leadership

  • National imperative: In testimony before the U.S. House Financial Services Committee (March 2025), Cascarilla argued that “stablecoins are a national imperative” for the United States. He warned that failure to modernise could erode dollar dominance as other countries deploy digital currencies. He compared the shift to moving from physical mail to email; programmable money will enable instantaneous, near‑zero‑cost transfers accessible via smartphones.
  • Regulatory blueprint: Cascarilla praised the GENIUS Act as a good baseline but urged Congress to add cross‑jurisdictional reciprocity. He recommended that the Treasury set deadlines to recognise foreign regulatory regimes so that U.S.‑issued stablecoins (and Singapore‑issued USDG) can be used abroad. Without reciprocity, he warned that U.S. firms might be locked out of global markets. He also advocated an equivalence regime where issuers choose either state or federal oversight, provided state standards meet or exceed federal rules.
  • Private sector vs. CBDCs: Cascarilla believes the private sector should lead innovation in digital dollars, arguing that a central bank digital currency (CBDC) would compete with regulated stablecoins and stifle innovation. During congressional testimony he said there is no immediate need for a U.S. CBDC, because stablecoins already deliver programmable digital money. He emphasised that stablecoin issuers must hold 1:1 cash reserves, offer daily attestations, restrict asset rehypothecation, and comply with AML/KYC/BSA standards.
  • Cross‑border focus: Cascarilla stressed that the U.S. must set global standards to enable interoperable cross‑border payments. He noted that high inflation in 2023–24 pushed stablecoins into mainstream remittances and the U.S. government’s attitude shifted from resistance to acceptance. He told lawmakers that only New York currently issues regulated stablecoins but a federal floor would raise standards across states.
  • Business model and partnerships: Paxos positions itself as a regulated infrastructure provider. It issues the white‑label stablecoins used by PayPal (PYUSD) and Mercado Libre and provides tokenisation services for Mastercard, Robinhood and others. Cascarilla notes that eight years ago people asked how stablecoins could make money; today every institution that moves dollars across borders is exploring them.
  • Perspective on the payment shift: For Cascarilla, stablecoins are the next evolution of money movement. They will not replace traditional banks but will provide a programmable layer on top of the existing banking system. He believes the U.S. must lead by creating robust regulations that encourage innovation while protecting consumers and ensuring the dollar remains the world’s reserve currency. Failure to do so could allow other jurisdictions to set the standards and threaten U.S. monetary primacy.

Rob Hadick (General Partner, Dragonfly)

Vision: stablecoins as a disruptive payment infrastructure

  • Stablecoins as a disruptor: In a June 2025 article (translated by Foresight News), Hadick wrote that stablecoins are not meant to improve existing payment networks but to completely disrupt them. Stablecoins allow businesses to bypass traditional payment rails; when payment networks are built on stablecoins, all transactions are simply ledger updates rather than messages between banks. He warned that merely connecting legacy payment channels underestimates stablecoins’ potential; instead, the industry should reimagine payment channels from the ground up.
  • Cross‑border remittances and market size: At the TOKEN2049 panel, Hadick disclosed that ≈10 % of remittances from the U.S. to India and Mexico already use stablecoins, illustrating the shift from traditional remittance rails. He estimated that the cross‑border payments market is about US$200 trillion, roughly eight times the entire crypto market. He emphasised that small and medium‑sized enterprises (SMEs) are underserved by banks and need frictionless capital flows. Dragonfly invests in “last‑mile” companies that handle compliance and consumer interaction rather than mere API aggregators.
  • Stablecoin market segmentation: In a Blockworks interview, Hadick referenced data showing that business‑to‑business (B2B) stablecoin payments were annualising US36billion,surpassingpersontopersonvolumesofUS36 billion**, surpassing person‑to‑person volumes of **US18 billion. He noted that USDT dominates 80–90 % of B2B payments, while USDC captures roughly 30 % of monthly volume. He was surprised that Circle (USDC) had not gained more share, though he observed signs of growth on the B2B side. Hadick interprets this data as evidence that stablecoins are shifting from retail speculation to institutional usage.
  • Orchestration layers and compliance: Hadick emphasises the importance of orchestration layers—platforms that bridge public blockchains with traditional bank rails. He notes that the biggest value will accrue to settlement rails and issuers with deep liquidity and compliance capabilities. API aggregators and consumer apps face increasing competition from fintech players and commoditisation. Dragonfly invests in startups that offer direct bank partnerships, global coverage and high‑level compliance, rather than simple API wrappers.
  • Perspective on the payment shift: Hadick views the shift to stablecoin payments as a “gold rush”. He believes we are only at the beginning: cross‑border volumes are growing 20–30 % month‑over‑month and new regulations in the U.S. and abroad have legitimised stablecoins. He argues that stablecoins will eventually replace legacy payment rails, enabling instant, low‑cost, programmable transfers for SMEs, contractors and global trade. He cautions that winners will be those who navigate regulation, build deep integrations with banks and abstract away blockchain complexity.

Conclusion: Alignments and differences

  • Shared belief in stablecoins’ potential: Ardoino, Cascarilla and Hadick agree that stablecoins will drive a trillion‑dollar shift in payments. All three highlight growing adoption in cross‑border remittances and B2B transactions and see emerging markets as early adopters.
  • Different emphases: Ardoino focuses on financial inclusion and grassroots adoption, portraying USDT as a dollar substitute for the unbanked and emphasising Tether’s reserves and infrastructure projects. Cascarilla frames stablecoins as a national strategic imperative and stresses the need for robust regulation, reciprocity and private‑sector leadership to preserve the dollar’s dominance. Hadick takes the venture investor’s view, emphasising disruption of legacy payment rails, the growth of B2B transactions, and the importance of orchestration layers and last‑mile compliance.
  • Regulation as catalyst: All three consider clear regulation—especially the GENIUS Act—essential for scaling stablecoins. Ardoino and Cascarilla advocate reciprocal recognition to allow offshore stablecoins to circulate internationally, while Hadick sees regulation enabling a wave of startups.
  • Outlook: The stablecoin market is still in its early phases. With transaction volumes already in the trillions and use cases expanding beyond trading into remittances, treasury management and retail payments, the “book is just beginning to be written.” The perspectives of Ardoino, Cascarilla and Hadick illustrate how stablecoins could transform payments—from providing a digital dollar for billions of unbanked people to enabling businesses to bypass legacy rails—if regulators, issuers and innovators can build trust, scalability and interoperability.

OKX Pay’s Vision: From Stablecoin Liquidity to Everyday Payments

· 5 min read
Dora Noda
Software Engineer

Here’s a concise, sourced brief on OKX Pay’s vision as it’s being signaled by Scotty James (ambassador), Sam Liu (Product Lead, OKX Pay), and Haider Rafique (Managing Partner & CMO).

TL;DR

  • Make on‑chain payments everyday‑useful. OKX Pay launched in Singapore, letting users scan GrabPay SGQR codes and pay with USDC/USDT while merchants still settle in SGD—a practical bridge between crypto and real‑world spending.
  • Unify stablecoin liquidity. OKX is building a Unified USD Order Book so compliant stablecoins share one market and deeper liquidity—framing OKX Pay as part of a broader “stablecoin liquidity center” strategy.
  • Scale acceptance via cards/rails. With Mastercard, OKX is introducing the OKX Card to extend stablecoin spending to mainstream merchant networks, positioned as “making digital finance more accessible, practical, and relevant to everyday life.”

What each person is emphasizing

1) Scotty James — Mainstream accessibility & culture

  • Role: OKX ambassador who co‑hosts conversations on the future of payments with OKX product leaders at TOKEN2049 (e.g., sessions with Sam Liu), helping translate the product story for a broader audience.
  • Context: He frequently fronts OKX stage moments and brand storytelling (e.g., TOKEN2049 fireside chats), underscoring the push to make crypto feel simple and everyday, not just technical.

Note: Scotty James is an ambassador rather than a product owner; his contribution is narrative and adoption‑focused, not the technical roadmap.

2) Sam Liu — Product architecture & fairness

  • Vision points he’s put forward publicly:
    • Fix stablecoin fragmentation with a Unified USD Order Book so “every compliant issuer can equally access liquidity”—principles of fairness and openness that directly support reliable, low‑spread payments.
    • Payments form factors: QR code payments now; Tap‑to‑Pay and the OKX Card coming in stages to extend acceptance.
  • Supporting infrastructure: the Unified USD Order Book is live (USD, USDC, USDG in one book), designed to simplify the user experience and deepen liquidity for spend‑use cases.

3) Haider Rafique — Go‑to‑market & everyday utility

  • Positioning: OKX Pay (and the Mastercard partnership) is framed as taking crypto from trading to everyday life:

    “Our strategic partnership with Mastercard to launch the OKX Card reflects our commitment to making digital finance more accessible, practical, and relevant to everyday life.” — Haider Rafique, CMO, in Mastercard’s press release.

  • Event leadership: At OKX’s Alphas Summit (on the eve of TOKEN2049), Haider joined CEO Star Xu and the SG CEO to discuss on‑chain payments and the OKX Pay rollout, highlighting the near‑term focus on Singapore and stablecoin payments that feel like normal checkout flows.

What’s already live (concrete facts)

  • Singapore launch (Sep 30, 2025):
    • Users in Singapore can scan GrabPay SGQR codes with the OKX app and pay using USDT or USDC (on X Layer); merchants still receive SGD. Collaboration with Grab and StraitsX handles the conversion.
    • Reuters corroborates the launch and flow: USDT/USDC → XSGD conversion → merchant receives SGD.
    • Scope details: Support is for GrabPay/SGQR codes presented by GrabPay merchants; PayNow QR is not supported yet (useful nuance when discussing QR coverage).

The near‑term arc of the vision

  1. Everyday, on‑chain spend
    • Start where payments are already ubiquitous (Singapore’s SGQR/GrabPay network), then expand acceptance via payment cards and new form factors (e.g., Tap‑to‑Pay).
  2. Stablecoin liquidity as a platform advantage
    • Collapse splintered stablecoin pairs into one Unified USD Order Book to deliver deeper liquidity and tighter spreads, improving both trading and payments.
  3. Global merchant acceptance via card rails
    • The OKX Card with Mastercard is the scale lever—extend stablecoin spending to everyday merchants through mainstream acceptance networks.
  4. Low fees and speed on L2
    • Use X Layer so consumer payments feel fast/cheap while staying on‑chain. (Singapore’s “scan‑to‑pay” specifically uses USDT/USDC on X Layer held in your Pay account.)
  5. Regulatory alignment where you launch
    • Singapore focus is underpinned by licensing progress and local rails (e.g., MAS licences; prior SGD connectivity via PayNow/FAST for exchange services), which helps position OKX Pay as compliant infrastructure rather than a workaround.

Related but separate: some coverage describes “self‑custody OKX Pay” with passkeys/MPC and “silent rewards” on deposits; treat that as the global product direction (wallet‑led), distinct from OKX SG’s regulated scan‑to‑pay implementation.

Why this is different

  • Consumer‑grade UX first: Scan a familiar QR, merchant still sees fiat settlement; no “crypto gymnastics” at checkout.
  • Liquidity + acceptance together: Payments work best when liquidity (stablecoins) and acceptance (QR + card rails) land together—hence Unified USD Order Book plus Mastercard/Grab partnerships.
  • Clear sequencing: Prove utility in a QR‑heavy market (Singapore), then scale out with cards/Tap‑to‑Pay.

Open questions to watch

  • Custody model by region: How much of OKX Pay’s rollout uses non‑custodial wallet flows vs. regulated account flows will likely vary by country. (Singapore docs clearly describe a Pay account using X Layer and Grab/StraitsX conversion.)
  • Issuer and network breadth: Which stablecoins and which QR/card networks come next, and on what timetable? (BlockBeats notes Tap‑to‑Pay and regional card rollouts “in some regions.”)
  • Economics at scale: Merchant economics and user incentives (fees, FX, rewards) as this moves beyond Singapore.

Quick source highlights

  • Singapore “scan‑to‑pay” launch (official + independent): OKX Learn explainer and Reuters piece.
  • What Sam Liu is saying (fairness via unified order book; QR/Tap‑to‑Pay; OKX Card): Alphas Summit recap.
  • Haider Rafique’s positioning (everyday relevance via Mastercard): Mastercard press release with direct quote.
  • Unified USD Order Book details (what it is and why it matters): OKX docs/FAQ.
  • Scotty James role (co‑hosting OKX Pay/future of payments sessions at TOKEN2049): OKX announcements/socials and prior TOKEN2049 appearances.

Vlad Tenev: Tokenization Will Eat the Financial System

· 21 min read
Dora Noda
Software Engineer

Vlad Tenev has emerged as one of traditional finance's most bullish voices on cryptocurrency, declaring that tokenization is an unstoppable "freight train" that will eventually consume the entire financial system. Throughout 2024-2025, the Robinhood CEO delivered increasingly bold predictions about crypto's inevitable convergence with traditional finance, backed by aggressive product launches including a $200 million acquisition of Bitstamp, tokenized stock trading in Europe, and a proprietary Layer 2 blockchain. His vision centers on blockchain technology offering an "order of magnitude" cost advantage that will eliminate the distinction between crypto and traditional finance within 5-10 years, though he candidly admits the U.S. will lag behind Europe due to "sticking power" of existing infrastructure. This transformation accelerated dramatically after the 2024 election, with Robinhood's crypto business quintupling post-election as regulatory hostility shifted to enthusiasm under the Trump administration.

The freight train thesis: Tokenization will consume everything

At Singapore's Token2049 conference in October 2025, Tenev delivered his most memorable statement on crypto's future: "Tokenization is like a freight train. It can't be stopped, and eventually it's going to eat the entire financial system." This wasn't hyperbole but a detailed thesis he's been building throughout 2024-2025. He predicts most major markets will establish tokenization frameworks within five years, with full global adoption taking a decade or more. The transformation will expand addressable financial markets from single-digit trillions to tens of trillions of dollars.

His conviction rests on structural advantages of blockchain technology. "The cost of running a crypto business is an order of magnitude lower. There's just an obvious technology advantage," he told Fortune's Brainstorm Tech conference in July 2024. By leveraging open-source blockchain infrastructure, companies can eliminate expensive intermediaries for trade settlement, custody, and clearing. Robinhood is already using stablecoins internally to power weekend settlements, experiencing firsthand the efficiency gains from 24/7 instant settlement versus traditional rails.

The convergence between crypto and traditional finance forms the core of his vision. "I actually think cryptocurrency and traditional finance have been living in two separate worlds for a while, but they're going to fully merge," he stated at Token2049. "Crypto technology has so many advantages over the traditional way we're doing things that in the future there's going to be no distinction." He frames this not as crypto replacing finance, but as blockchain becoming the invisible infrastructure layer—like moving from filing cabinets to mainframes—that makes the financial system dramatically more efficient.

Stablecoins represent the first wave of this transformation. Tenev describes dollar-pegged stablecoins as the most basic form of tokenized assets, with billions already in circulation reinforcing U.S. dollar dominance abroad. "In the same way that stablecoins have become the default way to get digital access to dollars, tokenized stocks will become the default way for people outside the U.S. to get exposure to American equities," he predicted. The pattern will extend to private companies, real estate, and eventually all asset classes.

Building the tokenized future with stock tokens and blockchain infrastructure

Robinhood backed Tenev's rhetoric with concrete product launches throughout 2024-2025. In June 2025, the company hosted a dramatic event in Cannes, France titled "To Catch a Token," where Tenev presented a metal cylinder containing "keys to the first-ever stock tokens for OpenAI" while standing by a reflecting pool overlooking the Mediterranean. The company launched over 200 tokenized U.S. stocks and ETFs in the European Union, offering 24/5 trading with zero commissions or spreads, initially on the Arbitrum blockchain.

The launch wasn't without controversy. OpenAI immediately distanced itself, posting "We did not partner with Robinhood, were not involved in this, and do not endorse it." Tenev defended the product, acknowledging the tokens aren't "technically" equity but maintain they give retail investors exposure to private assets that would otherwise be inaccessible. He dismissed the controversy as part of broader U.S. regulatory delays, noting "the obstacles are legal rather than technical."

More significantly, Robinhood announced development of a proprietary Layer 2 blockchain optimized for tokenized real-world assets. Built on Arbitrum's technology stack, this blockchain infrastructure aims to support 24/7 trading, seamless bridging between chains, and self-custody capabilities. Tokenized stocks will eventually migrate to this platform. Johann Kerbrat, Robinhood's crypto general manager, explained the strategy: "Crypto was built by engineers for engineers, and has not been accessible to most people. We're onboarding the world to crypto by making it as easy to use as possible."

Tenev's timeline projections reveal measured optimism despite his bold vision. He expects the U.S. to be "among the last economies to actually fully tokenize" due to infrastructure inertia. Drawing an analogy to transportation, he noted: "The biggest challenge in the U.S. is that the financial system basically works. It's why we don't have bullet trains—medium-speed trains get you there well enough." This candid assessment acknowledges that working systems have greater sticking power than in regions where blockchain offers more dramatic improvement over dysfunctional alternatives.

Bitstamp acquisition unlocks institutional crypto and global expansion

Robinhood completed its 200millionacquisitionofBitstampinJune2025,markingastrategicinflectionpointfrompureretailcryptotradingtoinstitutionalcapabilitiesandinternationalscale.Bitstampbrought50+activecryptolicensesacrossEurope,theUK,U.S.,andAsia,plus5,000institutionalclientsand200 million acquisition of Bitstamp** in June 2025, marking a strategic inflection point from pure retail crypto trading to institutional capabilities and international scale. Bitstamp brought **50+ active crypto licenses** across Europe, the UK, U.S., and Asia, plus **5,000 institutional clients** and **8 billion in cryptocurrency assets under custody. This acquisition addresses two priorities Tenev repeatedly emphasized: international expansion and institutional business development.

"There's two interesting things about the Bitstamp acquisition you should know. One is international. The second is institutional," Tenev explained on the Q2 2024 earnings call. The global licenses dramatically accelerate Robinhood's ability to enter new markets without building regulatory infrastructure from scratch. Bitstamp operates in over 50 countries, providing instant global footprint that would take years to replicate organically. "The goal is for Robinhood to be everywhere, anywhere where customers have smartphones, you should be able to open up a Robinhood account," he stated.

The institutional dimension proves equally strategic. Bitstamp's established relationships with institutional clients, lending infrastructure, staking services, and white-label crypto-as-a-service offerings transform Robinhood from retail-only to a full-stack crypto platform. "Institutions also want low-cost market access to crypto," Tenev noted. "We're really excited about bringing the same sort of Robinhood effect that we've brought to retail to the institutional space with crypto."

Integration proceeded rapidly through 2025. By Q2 2025 earnings, Robinhood reported Bitstamp exchange crypto notional trading volumes of 7billion,complementingtheRobinhoodapps7 billion, complementing the Robinhood app's 28 billion in crypto volumes. The company also announced plans to hold its first crypto-focused customer event in France around midyear, signaling international expansion priorities. Tenev emphasized that unlike the U.S. where they started with stocks then added crypto, international markets might lead with crypto depending on regulatory environments and market demand.

Crypto revenue explodes from 135milliontoover135 million to over 600 million annually

Financial metrics underscore the dramatic shift in crypto's importance to Robinhood's business model. Annual crypto revenue surged from 135millionin2023to135 million in 2023 to 626 million in 2024—a 363% increase. This acceleration continued into 2025, with Q1 alone generating 252millionincryptorevenue,representingoveronethirdoftotaltransactionbasedrevenues.Q42024provedparticularlyexplosive,with252 million in crypto revenue, representing over one-third of total transaction-based revenues. Q4 2024 proved particularly explosive, with **358 million in crypto revenue, up over 700% year-over-year**, driven by the post-election "Trump pump" and expanding product capabilities.

These numbers reflect both volume growth and strategic pricing changes. Robinhood's crypto take rate expanded from 35 basis points at the start of 2024 to 48 basis points by October 2024, as CFO Jason Warnick explained: "We always want to have great prices for customers, but also balance the return that we generate for shareholders on that activity." Crypto notional trading volumes reached approximately 28billionmonthlybylate2024,withassetsundercustodytotaling28 billion monthly by late 2024, with assets under custody totaling **38 billion** as of November 2024.

Tenev described the post-election environment on CNBC as producing "basically what people are calling the 'Trump Pump,'" noting "widespread optimism that the Trump administration, which has stated that they wish to embrace cryptocurrencies and make America the center of cryptocurrency innovation worldwide, is going to have a much more forward-looking policy." On the Unchained podcast in December 2024, he revealed Robinhood's crypto business "quintupled post-election."

The Bitstamp acquisition adds significant scale. Beyond the $8 billion in crypto assets and institutional client base, Bitstamp's 85+ tradable crypto assets and staking infrastructure expand Robinhood's product capabilities. Cantor Fitzgerald analysis noted Robinhood's crypto volume spiked 36% in May 2025 while Coinbase's fell, suggesting market share gains. With crypto representing 38% of projected 2025 revenues, the business has evolved from speculative experiment to core revenue driver.

From regulatory "carpet bombing" to playing offense under Trump

Tenev's commentary on crypto regulation represents one of the starkest before-and-after narratives in his 2024-2025 statements. Speaking at the Bitcoin 2025 conference in Las Vegas, he characterized the previous regulatory environment bluntly: "Under the previous administration, we have been subject to…it was basically a carpet bombing of the entire industry." He expanded on a podcast: "In the previous administration with Gary Gensler at the SEC, we were very much in a defensive posture. There was crypto, which was, as you guys know, basically they were trying to delete crypto from the U.S."

This wasn't abstract criticism. Robinhood Crypto received an SEC Wells Notice in May 2024 signaling potential enforcement action. Tenev responded forcefully: "This is a disappointing development. We firmly believe U.S. consumers should have access to this asset class. They deserve to be on equal footing with people all over the world." The investigation eventually closed in February 2025 with no action, prompting Chief Legal Officer Dan Gallagher to state: "This investigation never should have been opened. Robinhood Crypto always has and will always respect federal securities laws and never allowed transactions in securities."

The Trump administration's arrival transformed the landscape. "Now suddenly, you're allowed to play some offense," Tenev told CBS News at the Bitcoin 2025 conference. "And we have an administration that's open to the technology." His optimism extended to specific personnel, particularly Paul Atkins' nomination to lead the SEC: "This administration has been hostile to crypto. Having people that understand and embrace it is very important for the industry."

Perhaps most significantly, Tenev revealed direct engagement with regulators on tokenization: "We've actually been engaging with the SEC crypto task force as well as the administration. And it's our belief, actually, that we don't even need congressional action to make tokenization real. The SEC can just do it." This represents a dramatic shift from regulation-by-enforcement to collaborative framework development. He told Bloomberg Businessweek: "Their intent appears to be to ensure that the US is the best place to do business and the leader in both of the emergent technology industries coming to the fore: crypto and AI."

Tenev also published a Washington Post op-ed in January 2025 advocating for specific policy reforms, including creating security token registration regimes, updating accredited investor rules from wealth-based to knowledge-based certification, and establishing clear guidelines for exchanges listing security tokens. "The world is tokenizing, and the United States should not get left behind," he wrote, noting the EU, Singapore, Hong Kong, and Abu Dhabi have advanced comprehensive frameworks while the U.S. lags.

Bitcoin, Dogecoin, and stablecoins: Selective crypto asset views

Tenev's statements reveal differentiated views across crypto assets rather than blanket enthusiasm. On Bitcoin, he acknowledged the asset's evolution: "Bitcoin's gone from largely being ridiculed to being taken very seriously," citing Federal Reserve Chair Powell's comparison of Bitcoin to gold as institutional validation. However, when asked about following MicroStrategy's strategy of holding Bitcoin as a treasury asset, Tenev declined. In an interview with Anthony Pompliano, he explained: "We have to do the work of accounting for it, and it's essentially on the balance sheet anyway. So there's a real reason for it [but] it could complicate things for public market investors"—potentially casting Robinhood as a "quasi Bitcoin-holding play" rather than a trading platform.

Notably, he observed that "Robinhood stock is already highly correlated to Bitcoin" even without holding it—HOOD stock rose 202% in 2024 versus Bitcoin's 110% gain. "So I would say we wouldn't rule it out. We haven't done it thus far but those are the kind of considerations we have." This reveals pragmatic rather than ideological thinking about crypto assets.

Dogecoin holds special significance in Robinhood's history. On the Unchained podcast, Tenev discussed "how Dogecoin became one of Robinhood's biggest assets for user onboarding," acknowledging that millions of users came to the platform through meme coin interest. Johann Kerbrat stated: "We don't see Dogecoin as a negative asset for us." Despite efforts to distance from 2021's meme stock frenzy, Robinhood continues offering Dogecoin, viewing it as a legitimate entry point for crypto-curious retail investors. Tenev even tweeted in 2022 asking whether "Doge can truly be the future currency of the Internet," showing genuine curiosity about the asset's properties as an "inflationary coin."

Stablecoins receive Tenev's most consistent enthusiasm as practical infrastructure. Robinhood invested in the Global Dollar Network's USDG stablecoin, which he described on the Q4 2024 earnings call: "We have USDG that we partner with a few other great companies on...a stablecoin that passes back yield to holders, which we think is the future. I think many of the leading stablecoins don't have a great way to pass yield to holders." More significantly, Robinhood uses stablecoins internally: "We see the power of that ourselves as a company...there's benefits to the technology and the 24-hour instant settlements for us as a business. In particular, we're using stablecoin to power a lot of our weekend settlements now." He predicted this internal adoption will drive broader institutional stablecoin adoption industrywide.

For Ethereum and Solana, Robinhood launched staking services in both Europe (enabled by MiCA regulations) and the U.S. Tenev noted "increasing interest in crypto staking" without it cannibalizing traditional cash-yield products. The company expanded its European crypto offerings to include SOL, MATIC, and ADA after these faced SEC scrutiny in the U.S., illustrating geographic arbitrage in regulatory approaches.

Prediction markets emerge as hybrid disruption opportunity

Prediction markets represent Tenev's most surprising crypto-adjacent bet, launching event contracts in late 2024 and rapidly scaling to over 4 billion contracts traded by October 2025, with 2 billion contracts in Q3 2025 alone. The 2024 presidential election proved the concept, with Tenev revealing "over 500 million contracts traded in right around a week leading up to the election." But he emphasized this isn't cyclical: "A lot of people had skepticism about whether this would only be an election thing...It's really much bigger than that."

At Token2049, Tenev articulated prediction markets' unique positioning: "Prediction markets has some similarities with traditional sports betting and gambling, there's also similarities with active trading in that there are exchange-traded products. It also has some similarities to traditional media news products because there's a lot of people that use prediction markets not to trade or speculate, but because they want to know." This hybrid nature creates disruption potential across multiple industries. "Robinhood will be front and center in terms of giving access to retail," he declared.

The product expanded beyond politics to sports (college football proving particularly popular), culture, and AI topics. "Prediction markets communicate information more quickly than newspapers or broadcast media," Tenev argued, positioning them as both trading instruments and information discovery mechanisms. On the Q4 2024 earnings call, he promised: "What you should expect from us is a comprehensive events platform that will give access to prediction markets across a wide variety of contracts later this year."

International expansion presents challenges due to varying regulatory classifications—futures contracts in some jurisdictions, gambling in others. Robinhood initiated talks with the UK's Financial Conduct Authority and other regulators about prediction market frameworks. Tenev acknowledged: "As with any new innovative asset class, we're pushing the boundaries here. And there's not regulatory clarity across all of it yet in particular sports which you mentioned. But we believe in it and we're going to be a leader."

AI-powered tokenized one-person companies represent convergence vision

At the Bitcoin 2025 conference, Tenev unveiled his most futuristic thesis connecting AI, blockchain, and entrepreneurship: "We're going to see more one-person companies. They're going to be tokenized and traded on the blockchain, just like any other asset. So it's going to be possible to invest economically in a person or a project that that person is running." He explicitly cited Satoshi Nakamoto as the prototype: "This is essentially like Bitcoin itself. Satoshi Nakamoto's personal brand is powered by technology."

The logic chains together several trends. "One of the things that AI makes possible is that it produces more and more value with fewer and fewer resources," Tenev explained. If AI dramatically reduces the resources required to build valuable companies, and blockchain provides instant global investment infrastructure through tokenization, entrepreneurs can create and monetize ventures without traditional corporate structures, employees, or venture capital. Personal brands become tradable assets.

This vision connects to Tenev's role as executive chairman of Harmonic, an AI startup focused on reducing hallucinations through Lean code generation. His mathematical background (Stanford BS, UCLA MS in Mathematics) informs optimism about AI solving complex problems. In an interview, he described the aspiration of "solving the Riemann hypothesis on a mobile app"—referencing one of mathematics' greatest unsolved problems.

The tokenized one-person company thesis also addresses wealth concentration concerns. Tenev's Washington Post op-ed criticized current accredited investor laws restricting private market access to high-net-worth individuals, arguing this concentrates wealth among the top 20%. If early-stage ventures can tokenize equity and distribute it globally via blockchain with appropriate regulatory frameworks, wealth creation from high-growth companies becomes more democratically accessible. "It's time to update our conversation about crypto from bitcoin and meme coins to what blockchain is really making possible: A new era of ultra-inclusive and customizable investing fit for this century," he wrote.

Robinhood positions at the intersection of crypto and traditional finance

Tenev consistently describes Robinhood's unique competitive positioning: "I think Robinhood is uniquely positioned at the intersection of traditional finance and DeFi. We're one of the few players that has scale, both in traditional financial assets and cryptocurrencies." This dual capability creates network effects competitors struggle to replicate. "What customers really love about trading crypto on Robinhood is that they not only have access to crypto, but they can trade equities, options, now futures, soon a comprehensive suite of event contracts all in one place," he told analysts.

The strategy involves building comprehensive infrastructure across the crypto stack. Robinhood now offers: crypto trading with 85+ assets via Bitstamp, staking for ETH and SOL, non-custodial Robinhood Wallet for accessing thousands of additional tokens and DeFi protocols, tokenized stocks and private companies, crypto perpetual futures in Europe with 3x leverage, proprietary Layer 2 blockchain under development, USDG stablecoin investment, and smart exchange routing allowing active traders to route directly to exchange order books.

This vertical integration contrasts with specialized crypto exchanges lacking traditional finance integration or traditional brokerages dabbling in crypto. "Tokenization once permissible in the U.S., I think, is going to be a huge opportunity that Robinhood is going to be front and center in," Tenev stated on the Q4 2024 earnings call. The company launched 10+ product lines each on track for $100 million+ annual revenue, with crypto representing a substantial pillar alongside options, stocks, futures, credit cards, and retirement accounts.

Asset listing strategy reflects balancing innovation with risk management. Robinhood lists fewer cryptocurrencies than competitors—20 in the U.S., 40 in Europe—maintaining what Tenev calls a "conservative approach." After receiving the SEC Wells Notice, he emphasized: "We've operated our crypto business in good faith. We've been very conservative in our approach in terms of coins listed and services offered." However, regulatory clarity is changing this calculus: "In fact, we've added seven new assets since the election. And as we continue to get more and more regulatory clarity, you should expect to see that continue and accelerate."

The competitive landscape includes Coinbase as the dominant U.S. crypto exchange, plus traditional brokerages like Schwab and Fidelity adding crypto. CFO Jason Warnick addressed competition on earnings calls: "While there may be more competition over time, I do expect that there will be greater demand for crypto as well. I think we're beginning to see that crypto is becoming more mainstream." Robinhood's crypto volume spike of 36% in May 2025 while Coinbase's declined suggests the integrated platform approach is winning share.

Timeline and predictions: Five years to frameworks, decades to completion

Tenev provides specific timeline predictions rare among crypto optimists. At Token2049, he stated: "I think most major markets will have some framework in the next five years," targeting roughly 2030 for regulatory clarity across major financial centers. However, reaching "100% adoption could take more than a decade," acknowledging the difference between frameworks existing and complete migration to tokenized systems.

His predictions break down by geography and asset class. Europe leads on regulatory frameworks through MiCA regulations and will likely see tokenized stock trading go mainstream first. The U.S. will be "among the last economies to actually fully tokenize" due to infrastructure sticking power, but the Trump administration's crypto-friendly posture accelerates timelines versus previous expectations. Asia, particularly Singapore, Hong Kong, and Abu Dhabi, advances rapidly due to both regulatory clarity and less legacy infrastructure to overcome.

Asset class predictions show staggered adoption. Stablecoins already achieved product-market fit as the "most basic form of tokenized assets." Stocks and ETFs enter tokenization phase now in Europe, with U.S. timelines depending on regulatory developments. Private company equity represents near-term opportunity, with Robinhood already offering tokenized OpenAI and SpaceX shares despite controversy. Real estate comes next—Tenev noted tokenizing real estate is "mechanically no different from tokenizing a private company"—assets placed into corporate structures, then tokens issued against them.

His boldest claim suggests crypto entirely absorbs traditional finance architecture: "In the future, everything will be on-chain in some form" and "the distinction between crypto and TradFi will disappear." The transformation occurs not through crypto replacing finance but blockchain becoming the invisible settlement and custody layer. "You don't have to squint too hard to imagine a world where stocks are on blockchains," he told Fortune. Just as users don't think about TCP/IP when browsing the web, future investors won't distinguish between "crypto" and "regular" assets—blockchain infrastructure simply powers all trading, custody, and settlement invisibly.

Conclusion: Technology determinism meets regulatory pragmatism

Vlad Tenev's cryptocurrency vision reveals a technology determinist who believes blockchain's cost and efficiency advantages make adoption inevitable, combined with a regulatory pragmatist who acknowledges legacy infrastructure creates decade-long timelines. His "freight train" metaphor captures this duality—tokenization moves with unstoppable momentum but at measured speed requiring regulatory tracks to be built ahead of it.

Several insights distinguish his perspective from typical crypto boosterism. First, he candidly admits the U.S. financial system "basically works," acknowledging working systems resist replacement regardless of theoretical advantages. Second, he doesn't evangelize blockchain ideologically but frames it pragmatically as infrastructure evolution comparable to filing cabinets giving way to computers. Third, his revenue metrics and product launches back rhetoric with execution—crypto grew from 135milliontoover135 million to over 600 million annually, with concrete products like tokenized stocks and a proprietary blockchain under development.

The dramatic regulatory shift from "carpet bombing" under the Biden administration to "playing offense" under Trump provides the catalyst Tenev believes enables U.S. competitiveness. His direct SEC engagement on tokenization frameworks and public advocacy through op-eds position Robinhood as a partner in writing rules rather than evading them. Whether his prediction of convergence between crypto and traditional finance within 5-10 years proves accurate depends heavily on regulators following through with clarity.

Most intriguingly, Tenev's vision extends beyond speculation and trading to structural transformation of capital formation itself. His AI-powered tokenized one-person companies and advocacy for reformed accredited investor laws suggest belief that blockchain plus AI democratizes wealth creation and entrepreneurship fundamentally. This connects his mathematical background, immigrant experience, and stated mission of "democratizing finance for all" into a coherent worldview where technology breaks down barriers between ordinary people and wealth-building opportunities.

Whether this vision materializes or falls victim to regulatory capture, entrenched interests, or technical limitations remains uncertain. But Tenev has committed Robinhood's resources and reputation to the bet that tokenization represents not just a product line but the future architecture of the global financial system. The freight train is moving—the question is whether it reaches the destination on his timeline.

IBIT, Explained Simply: How BlackRock’s Spot Bitcoin ETF Works in 2025

· 7 min read
Dora Noda
Software Engineer

BlackRock’s iShares Bitcoin Trust, ticker IBIT, has become one of the most popular ways for investors to gain exposure to Bitcoin directly from a standard brokerage account. But what is it, how does it work, and what are the trade-offs?

In short, IBIT is an exchange-traded product (ETP) that holds actual Bitcoin and trades like a stock on the NASDAQ exchange. Investors use it for its convenience, deep liquidity, and access within a regulated market. As of early September 2025, the fund holds approximately $82.6 billion in assets, charges a 0.25% expense ratio, and uses Coinbase Custody Trust as its custodian. This guide breaks down exactly what you need to know.

What You Actually Own with IBIT

When you buy a share of IBIT, you are buying a share of a commodity trust that holds Bitcoin. This structure is more like a gold trust than a traditional mutual fund or ETF governed by the 1940 Act.

The fund’s value is benchmarked against the CME CF Bitcoin Reference Rate – New York Variant (BRRNY), a once-a-day reference price used to calculate its Net Asset Value (NAV).

The actual Bitcoin is stored with Coinbase Custody Trust Company, LLC, with operational trading handled through Coinbase Prime. The vast majority of the Bitcoin sits in segregated cold storage, referred to as the “Vault Balance.” A smaller portion is kept in a “Trading Balance” to manage the creation and redemption of shares and to pay the fund’s fees.

The Headline Numbers That Matter

  • Expense Ratio: The sponsor fee for IBIT is 0.25%. Any introductory fee waivers have since expired, so this is the current annual cost.
  • Size & Liquidity: With net assets of $82.6 billion as of September 2, 2025, IBIT is a giant in the space. It sees tens of millions of shares traded daily, and its 30-day median bid/ask spread is a tight 0.02%, which helps minimize slippage for traders.
  • Where It Trades: You can find the fund on the NASDAQ exchange under the ticker symbol IBIT.

How IBIT Keeps Up with Bitcoin’s Price

The fund’s share price stays close to the value of its underlying Bitcoin through a creation and redemption mechanism involving Authorized Participants (APs), which are large financial institutions.

Unlike many gold ETPs that allow for “in-kind” transfers (where APs can swap a block of shares for actual gold), IBIT was launched with a “cash” creation/redemption model. This means APs deliver cash to the trust, which then buys Bitcoin, or they receive cash after the trust sells Bitcoin.

In practice, this process has been very effective. Thanks to the heavy trading volume and active APs, the premium or discount to the fund’s NAV has generally been minimal. However, these can widen during periods of high volatility or if the creation/redemption process is constrained, so it’s always wise to check the fund’s premium/discount stats before trading.

What IBIT Costs You (Beyond the Headline Fee)

Beyond the 0.25% expense ratio, there are other costs to consider.

First, the sponsor fee is paid by the trust selling small amounts of its Bitcoin holdings. This means that over time, each share of IBIT will represent a slightly smaller amount of Bitcoin. If Bitcoin’s price rises, this effect can be masked; if not, your share’s value will gradually drift downward compared to holding raw BTC.

Second, you’ll encounter real-world trading costs, including the bid/ask spread, any brokerage commissions, and the potential for trading at a premium or discount to NAV. Using limit orders is a good way to maintain control over your execution price.

Finally, trading shares of IBIT involves securities, not the direct holding of cryptocurrency. This simplifies tax reporting with standard brokerage forms but comes with different tax nuances than holding coins directly. It’s important to read the prospectus and consult a tax professional if needed.

IBIT vs. Holding Bitcoin Yourself

Choosing between IBIT and self-custody comes down to your goals.

  • Convenience & Compliance: IBIT offers easy access through a brokerage account, with no need to manage private keys, sign up for crypto exchanges, or handle unfamiliar wallet software. You get standard tax statements and a familiar trading interface.
  • Counterparty Trade-offs: With IBIT, you don't control the coins on-chain. You are relying on the trust and its service providers, including the custodian (Coinbase) and prime broker. It’s crucial to understand these operational and custody risks by reviewing the fund’s filings.
  • Utility: If you want to use Bitcoin for on-chain activities like payments, Lightning Network transactions, or multi-signature security setups, self-custody is the only option. If your goal is simply price exposure in a retirement or taxable brokerage account, IBIT is purpose-built for that.

IBIT vs. Bitcoin Futures ETFs

It’s also important to distinguish spot ETFs from futures-based ones. A futures ETF holds CME futures contracts, not actual Bitcoin. IBIT, as a spot ETF, holds the underlying BTC directly.

This structural difference matters. Futures funds can experience price drift from their underlying asset due to contract roll costs and the futures term structure. Spot funds, on the other hand, tend to track the spot price of Bitcoin more tightly, minus fees. For straightforward Bitcoin exposure in a brokerage account, a spot product like IBIT is generally the simpler instrument.

How to Buy—And What to Check First

You can buy IBIT in any standard taxable or retirement brokerage account under the ticker IBIT. For best execution, liquidity is typically highest near the U.S. stock market's open and close. Always check the bid/ask spread and use limit orders to control your price.

Given Bitcoin’s volatility, many investors treat it as a satellite position in their portfolio—an allocation small enough that they can tolerate a significant drawdown. Always read the risk section of the prospectus before investing.

Advanced Note: Options Exist

For more sophisticated investors, listed options on IBIT are available. Trading began on venues like the Nasdaq ISE in late 2024, enabling hedging or income-generating strategies. Check with your broker about eligibility and the associated risks.

Risks Worth Reading Twice

  • Market Risk: Bitcoin’s price is notoriously volatile and can swing sharply in either direction.
  • Operational Risk: A security breach, key-management failure, or other problem at the custodian or prime broker could negatively impact the trust. The prospectus details the risks associated with both the "Trading Balance" and the "Vault Balance."
  • Premium/Discount Risk: If the arbitrage mechanism becomes impaired for any reason, IBIT shares can deviate significantly from their NAV.
  • Regulatory Risk: The rules governing cryptocurrencies and related financial products are still evolving.

A Quick Checklist Before You Click “Buy”

Before investing, ask yourself these questions:

  • Do I understand that the sponsor fee is paid by selling Bitcoin, which slowly reduces the amount of BTC per share?
  • Have I checked today’s bid/ask spread, recent trading volumes, and any premium or discount to NAV?
  • Is my investment time horizon long enough to withstand crypto’s inherent volatility?
  • Have I made a conscious choice between spot exposure via IBIT and self-custody based on my specific goals?
  • Have I read the latest fund fact sheet or prospectus? It remains the single best source for how the trust truly operates.

This post is for educational purposes only and is not financial or tax advice. Always read official fund documents and consider professional guidance for your situation.

What Are Memecoins? A Crisp, Builder-Friendly Primer (2025)

· 10 min read
Dora Noda
Software Engineer

TL;DR

Memecoins are crypto tokens born from internet culture, jokes, and viral moments. Their value is driven by attention, community coordination, and speed, not fundamentals. The category began with Dogecoin in 2013 and has since exploded with tokens like SHIB, PEPE, and a massive wave of assets on Solana and Base. This sector now represents tens of billions in market value and can significantly impact network fees and on-chain volumes. However, most memecoins lack intrinsic utility; they are extremely volatile, high-turnover assets. The risks of "rug pulls" and flawed presales are exceptionally high. If you engage, use a strict checklist to evaluate liquidity, supply, ownership controls, distribution, and contract security.

The 10-Second Definition

A memecoin is a cryptocurrency inspired by an internet meme, a cultural inside joke, or a viral social event. Unlike traditional crypto projects, it is typically community-driven and thrives on social media momentum rather than underlying cash flows or protocol utility. The concept began with Dogecoin, which was launched in 2013 as a lighthearted parody of Bitcoin. Since then, waves of similar tokens have emerged, riding new trends and narratives across different blockchains.

How Big Is This, Really?

Don't let the humorous origins fool you—the memecoin sector is a significant force in the crypto market. On any given day, the aggregate market capitalization of memecoins can reach tens of billions of dollars. During peak bull cycles, this category has accounted for a material share of the entire non-BTC/ETH crypto economy. This scale is easily visible on data aggregators like CoinGecko and in the dedicated "meme" categories featured on major crypto exchanges.

Where Do Memecoins Live?

While memecoins can exist on any smart contract platform, a few ecosystems have become dominant hubs.

  • Ethereum: As the original smart contract chain, Ethereum hosts many iconic memecoins, from $DOGE-adjacent ERC-20s to tokens like $PEPE. During periods of intense speculative frenzy, the trading activity from these tokens has been known to cause significant spikes in network gas fees, even boosting validator revenue.
  • Solana: In 2024 and 2025, Solana became the ground zero for memecoin creation and trading. A Cambrian explosion of new tokens pushed the network to record-breaking fee generation and on-chain volume, birthing viral hits like $BONK and $WIF.
  • Base: Coinbase's Layer 2 network has cultivated its own vibrant meme sub-culture, with a growing list of tokens and dedicated community tracking on platforms like CoinGecko.

How a Memecoin Is Born (2025 Edition)

The technical barrier to launching a memecoin has dropped to near zero. Today, two paths are most common:

1. Classic DEX Launch (EVM or Solana)

In this model, a creator mints a supply of tokens, creates a liquidity pool (LP) on a decentralized exchange (like Uniswap or Raydium) by pairing the tokens with a base asset (like $ETH, $SOL, or $USDC), and then markets the token with a story or meme. The primary risks here hinge on who controls the token contract (e.g., can they mint more?) and the LP tokens (e.g., can they pull the liquidity?).

2. Bonding-Curve “Factory” (e.g., pump.fun on Solana)

This model, which surged in popularity on Solana, standardizes and automates the launch process. Anyone can instantly launch a token with a fixed supply (often one billion) onto a linear bonding curve. The price is automatically quoted based on how much has been bought. Once the token reaches a certain market cap threshold, it "graduates" to a major DEX like Raydium, where the liquidity is automatically created and locked. This innovation dramatically lowered the technical barrier, shaping the culture and accelerating the pace of launches.

Why builders care: These new launchpads compress what used to be days of work into minutes. The result is massive, unpredictable traffic spikes that hammer RPC nodes, clog mempools, and challenge indexers. At their peak, these memecoin launches on Solana generated transaction volumes that matched or exceeded all previous network records.

Where "Value" Comes From

Memecoin value is a function of social dynamics, not financial modeling. It typically derives from three sources:

  • Attention Gravity: Memes, celebrity endorsements, or viral news stories act as powerful magnets for attention and, therefore, liquidity. In 2024–2025, tokens themed around celebrities and political figures saw massive, albeit often short-lived, trading flows, particularly on Solana DEXs.
  • Coordination Games: A strong community can rally around a narrative, a piece of art, or a collective stunt. This shared belief can create powerful reflexive price movements, where buying begets more attention, which begets more buying.
  • Occasional Utility Add-Ons: Some successful memecoin projects attempt to "bolt on" utility after gaining traction, introducing swaps, Layer 2 chains, NFT collections, or games. However, the vast majority remain purely speculative, trade-only assets.

The Risks You Can’t Ignore

The memecoin space is rife with dangers. Understanding them is non-negotiable.

Contract and Control Risk

  • Mint/Freeze Authority: Can the original creator mint an infinite supply of new tokens, diluting holders to zero? Can they freeze transfers, trapping your funds?
  • Ownership/Upgrade Rights: A contract with "renounced" ownership, where the admin keys are burned, reduces this risk but doesn't eliminate it entirely. Proxies or other hidden functions can still pose a threat.

Liquidity Risk

  • Locked Liquidity: Is the initial liquidity pool locked in a smart contract for a period of time? If not, the creator can perform a "rug pull" by removing all the valuable assets from the pool, leaving the token worthless. Thin liquidity also means high slippage on trades.

Presales and Soft Rugs

  • Even without a malicious contract, many projects fail. Teams can abandon a project after raising funds in a presale, or insiders can slowly dump their large allocations on the market. The infamous $SLERF launch on Solana showed how even an accidental mistake (like burning the LP tokens) can vaporize millions while paradoxically creating a volatile trading environment.

Market and Operational Risk

  • Extreme Volatility: Prices can swing 90%+ in either direction within minutes. Furthermore, the network effects of a frenzy can be costly. During $PEPE's initial surge, Ethereum gas fees skyrocketed, making transactions prohibitively expensive for late buyers.
  • Rug pulls, pump-and-dumps, phishing links disguised as airdrops, and fake celebrity endorsements are everywhere. Study how common scams work to protect yourself. This content does not constitute legal or investment advice.

A 5-Minute Memecoin Checklist (DYOR in Practice)

Before interacting with any memecoin, run through this basic due diligence checklist:

  1. Supply Math: What is the total supply vs. the circulating supply? How much is allocated to the LP, the team, or a treasury? Are there any vesting schedules?
  2. LP Health: Is the liquidity pool locked? For how long? What percentage of the total supply is in the LP? Use a blockchain explorer to verify these details on-chain.
  3. Admin Powers: Can the contract owner mint new tokens, pause trading, blacklist wallets, or change transaction taxes? Has ownership been renounced?
  4. Distribution: Check the holder distribution. Is the supply concentrated in a few wallets? Look for signs of bot clusters or insider wallets that received large, early allocations.
  5. Contract Provenance: Is the source code verified on-chain? Does it use a standard, well-understood template, or is it full of custom, unaudited code? Beware of honeypot patterns designed to trap funds.
  6. Liquidity Venues: Where does it trade? Is it still on a bonding curve, or has it graduated to a major DEX or CEX? Check the slippage for the trade size you are considering.
  7. Narrative Durability: Does the meme have genuine cultural resonance, or is it a fleeting joke destined to be forgotten by next week?

What Memecoins Do to Blockchains (and Infra)

Memecoin frenzies are a powerful stress test for blockchain infrastructure.

  • Fee and Throughput Spikes: Sudden, intense demand for blockspace stresses RPC gateways, indexers, and validator nodes. In March 2024, Solana recorded its highest-ever daily fees and billions in on-chain volume, driven almost entirely by a memecoin surge. Infrastructure teams must plan capacity for these events.
  • Liquidity Migration: Capital rapidly concentrates around a few hot DEXs and launchpads, reshaping Miner Extractable Value (MEV) and order-flow patterns on the network.
  • User Onboarding: For better or worse, memecoin waves often serve as the first point of contact for new crypto users, who may later explore other dApps in the ecosystem.

Canonical Examples (For Context, Not Endorsement)

  • $DOGE: The original (2013). A proof-of-work currency that still trades primarily on its brand recognition and cultural significance.
  • $SHIB: An Ethereum ERC-20 token that evolved from a simple meme into a large, community-driven ecosystem with its own swap and L2.
  • $PEPE: A 2023 phenomenon on Ethereum whose explosive popularity significantly impacted on-chain economics for validators and users.
  • BONK & WIF (Solana): Emblematic of the 2024-2025 Solana wave. Their rapid rise and subsequent listings on major exchanges catalyzed massive activity on the network.

For Builders and Teams

If you must launch, default to fairness and safety:

  • Provide clear and honest disclosures. No hidden mints or team allocations.
  • Lock a meaningful portion of the liquidity pool and publish proof of the lock.
  • Avoid presales unless you have the operational security to administer them safely.
  • Plan your infrastructure. Prepare for bot activity, rate-limit abuse, and have a clear communication plan for volatile periods.

If you integrate memecoins into your dApp, sandbox flows and protect users:

  • Display prominent warnings about contract risks and thin liquidity.
  • Clearly show slippage and price impact estimates before a user confirms a trade.
  • Expose key metadata—like supply figures and admin rights—directly in your UI.

For Traders

  • Treat position sizing like leverage: use only a small amount of capital you are fully prepared to lose.
  • Plan your entry and exit points before you trade. Do not let emotion drive your decisions.
  • Automate your security hygiene. Use hardware wallets, regularly review token approvals, use allow-listed RPCs, and practice identifying phishing attempts.
  • Be extremely cautious of spikes caused by celebrity or political news. These are often highly volatile and revert quickly.

Quick Glossary

  • Bonding Curve: An automated mathematical formula that sets a token's price as a function of its purchased supply. Common in pump.fun launches.
  • LP Lock: A smart contract that time-locks liquidity pool tokens, preventing the project creator from removing liquidity and "rugging" the project.
  • Renounced Ownership: The act of surrendering the admin keys to a smart contract, which reduces (but doesn't entirely eliminate) the risk of malicious changes.
  • Graduation: The process of a token moving from an initial bonding curve launchpad to a public DEX with a permanent, locked liquidity pool.

Sources & Further Reading

  • Binance Academy: "What Are Meme Coins?" and "Rug pull" definitions.
  • Wikipedia & Binance Academy: DOGE and SHIB origins.
  • CoinGecko: Live memecoin market statistics by sector.
  • CoinDesk: Reporting on Solana fee spikes, PEPE’s impact on Ethereum, and the SLERF case study.
  • Decrypt & Wikipedia: Explanations of pump.fun mechanics and its cultural impact.
  • Investopedia: Overview of common crypto scams and defenses.

Disclosure: This post is for educational purposes and is not investment advice. Crypto assets are extremely volatile. Always verify data on-chain and from multiple sources before making any decisions.

Introducing SUI Token Staking on BlockEden.xyz: Earn 2.08% APY with One-Click Simplicity

· 7 min read
Dora Noda
Software Engineer

We're happy to announce the launch of SUI token staking on BlockEden.xyz! Starting today, you can stake your SUI tokens directly through our platform and earn a $2.08% APY while supporting the security and decentralization of the SUI network.

What's New: A Seamless SUI Staking Experience

Our new staking feature brings institutional-grade staking to everyone with a simple, intuitive interface that makes earning rewards effortless.

Key Features

One-Click Staking Staking SUI has never been easier. Simply connect your Suisplash wallet, enter the amount of SUI you wish to stake, and approve the transaction. You'll start earning rewards almost immediately without any complex procedures.

Competitive Rewards Earn a competitive 2.082.08% APY** on your staked SUI. Our **8% commission fee is transparent, ensuring you know exactly what to expect. Rewards are distributed daily upon the completion of each epoch.

Trusted Validator Join a growing community that has already staked over 22 million SUI with the BlockEden.xyz validator. We have a proven track record of reliable validation services, supported by enterprise-grade infrastructure that ensures $99.9% uptime.

Flexible Management Your assets remain flexible. Staking is instant, meaning your rewards begin to accumulate right away. Should you need to access your funds, you can initiate the unstaking process at any time. Your SUI will be available after the standard SUI network unbonding period of 24-48 hours. You can track your stakes and rewards in real-time through our dashboard.

Why Stake SUI with BlockEden.xyz?

Choosing a validator is a critical decision. Here’s why BlockEden.xyz is a sound choice for your staking needs.

Reliability You Can Trust

BlockEden.xyz has been a cornerstone of blockchain infrastructure since our inception. Our validator infrastructure powers enterprise applications and has maintained exceptional uptime across multiple networks, ensuring consistent reward generation.

Transparent & Fair

We believe in complete transparency. There are no hidden fees—just a clear $8% commission on the rewards you earn. You can monitor your staking performance with real-time reporting and verify our validator's activity on-chain.

  • Open Validator Address: 0x3b5664bb0f8bb4a8be77f108180a9603e154711ab866de83c8344ae1f3ed4695

Seamless Integration

Our platform is designed for simplicity. There's no need to create an account; you can stake directly from your wallet. The experience is optimized for the Suisplash wallet, and our clean, intuitive interface is built for both beginners and experts.

How to Get Started

Getting started with SUI staking on BlockEden.xyz takes less than two minutes.

Step 1: Visit the Staking Page

Navigate to blockeden.xyz/dash/stake. You can begin the process immediately without any account registration.

Step 2: Connect Your Wallet

If you don't have it already, install the Suisplash wallet. Click the "Connect Wallet" button on our staking page and approve the connection in the wallet extension. Your SUI balance will be displayed automatically.

Step 3: Choose Your Stake Amount

Enter the amount of SUI you want to stake (minimum 1 SUI). You can use the "MAX" button to conveniently stake your entire available balance, leaving a small amount for gas fees. A summary will show your stake amount and estimated annual rewards.

Step 4: Confirm & Start Earning

Click "Stake SUI" and approve the final transaction in your wallet. Your new stake will appear on the dashboard in real-time, and you will begin accumulating rewards immediately.

Staking Economics: What You Need to Know

Understanding the mechanics of staking is key to managing your assets effectively.

Reward Structure

  • Base APY: $2.08% annually
  • Reward Frequency: Distributed every epoch (approximately 24 hours)
  • Commission: $8% of earned rewards
  • Compounding: Rewards are added to your wallet and can be re-staked to achieve compound growth.

Example Earnings

Here is a straightforward breakdown of potential earnings based on a $2.08% APY, after the `$8% commission fee.

Stake AmountAnnual RewardsMonthly RewardsDaily Rewards
100 SUI~2.08 SUI~0.17 SUI~0.0057 SUI
1,000 SUI~20.8 SUI~1.73 SUI~0.057 SUI
10,000 SUI~208 SUI~17.3 SUI~0.57 SUI

Note: These are estimates. Actual rewards may vary based on network conditions.

Risk Considerations

Staking involves certain risks that you should be aware of:

  • Unbonding Period: When you unstake, your SUI is subject to a 24-48 hour unbonding period where it is inaccessible and does not earn rewards.
  • Validator Risk: While we maintain high standards, any validator carries operational risks. Choosing a reputable validator like BlockEden.xyz is important.
  • Network Risk: Staking is a form of network participation and is subject to the inherent risks of the underlying blockchain protocol.
  • Market Risk: The market value of the SUI token can fluctuate, which will affect the total value of your staked assets.

Technical Excellence

Enterprise Infrastructure

Our validator nodes are built on a foundation of technical excellence. We utilize redundant systems distributed across multiple geographic regions to ensure high availability. Our infrastructure is under 24/7 monitoring with automated failover capabilities, and a professional operations team manages the system around the clock. We also conduct regular security audits and compliance checks.

Open Source & Transparency

We are committed to the principles of open source. Our staking integration is built to be transparent, allowing users to inspect the underlying processes. Real-time metrics are publicly available on SUI network explorers, and our fee structure is completely open with no hidden costs. We also actively participate in community governance to support the SUI ecosystem.

Supporting the SUI Ecosystem

By staking with BlockEden.xyz, you're doing more than just earning rewards. You are actively contributing to the health and growth of the entire SUI network.

  • Network Security: Your stake adds to the total amount securing the SUI network, making it more robust against potential attacks.
  • Decentralization: Supporting independent validators like BlockEden.xyz enhances the network's resilience and prevents centralization.
  • Ecosystem Growth: The commission fees we earn are reinvested into maintaining and developing critical infrastructure.
  • Innovation: Revenue supports our research and development of new tools and services for the blockchain community.

Security & Best Practices

Please prioritize the security of your assets.

Wallet Security

  • Never share your private keys or seed phrase with anyone.
  • Use a hardware wallet for storing and staking large amounts.
  • Always verify transaction details in your wallet before signing.
  • Keep your wallet software updated to the latest version.

Staking Safety

  • If you are new to staking, start with a small amount to familiarize yourself with the process.
  • Consider diversifying your stake across multiple reputable validators to reduce risk.
  • Regularly monitor your staked assets and rewards.
  • Ensure you understand the unbonding period before you commit your funds.

Join the Future of SUI Staking

The launch of SUI staking on BlockEden.xyz is more than a new feature; it's a gateway to active participation in the decentralized economy. Whether you're an experienced DeFi user or just beginning your journey, our platform provides a simple and secure way to earn rewards while contributing to the future of the SUI network.

Ready to start earning?

Visit blockeden.xyz/dash/stake and stake your first SUI tokens today!


About BlockEden.xyz

BlockEden.xyz is a leading blockchain infrastructure provider offering reliable, scalable, and secure services to developers, enterprises, and the broader Web3 community. From API services to validator operations, we're committed to building the foundation for a decentralized future.

  • Founded: 2021
  • Networks Supported: 15+ blockchain networks
  • Enterprise Clients: 500+ companies worldwide
  • Total Value Secured: $100M+ across all networks

Follow us on Twitter, join our Discord, and explore our full suite of services at BlockEden.xyz.


Disclaimer: This blog post is for informational purposes only and does not constitute financial advice. Cryptocurrency staking involves risks, including the potential loss of principal. Please conduct your own research and consider your risk tolerance before staking.

Sui’s Reference Gas Price (RGP) Mechanism

· 8 min read
Dora Noda
Software Engineer

Introduction

Announced for public launch on May 3rd, 2023, after an extensive three-wave testnet, the Sui blockchain introduced an innovative gas pricing system designed to benefit both users and validators. At its heart is the Reference Gas Price (RGP), a network-wide baseline gas fee that validators agree upon at the start of each epoch (approximately 24 hours).

This system aims to create a mutually beneficial ecosystem for SUI token holders, validators, and end-users by providing low, predictable transaction costs while simultaneously rewarding validators for performant and reliable behavior. This report provides a deep dive into how the RGP is determined, the calculations validators perform, its impact on the network economy, its evolution through governance, and how it compares to other blockchain gas models.

The Reference Gas Price (RGP) Mechanism

Sui’s RGP is not a static value but is re-established each epoch through a dynamic, validator-driven process.

  • The Gas Price Survey: At the beginning of each epoch, every validator submits their "reservation price"—the minimum gas price they are willing to accept for processing transactions. The protocol then orders these submissions by stake and sets the RGP for that epoch at the stake-weighted 2/3 percentile. This design ensures that validators representing a supermajority (at least two-thirds) of the total stake are willing to process transactions at this price, guaranteeing a reliable level of service.

  • Update Cadence and Requirements: While the RGP is set each epoch, validators are required to actively manage their quotes. According to official guidance, validators must update their gas price quote at least once a week. Furthermore, if there is a significant change in the value of the SUI token, such as a fluctuation of 20% or more, validators must update their quote immediately to ensure the RGP accurately reflects current market conditions.

  • The Tallying Rule and Reward Distribution: To ensure validators honor the agreed-upon RGP, Sui employs a "tallying rule." Throughout an epoch, validators monitor each other’s performance, tracking whether their peers are promptly processing RGP-priced transactions. This monitoring results in a performance score for each validator. At the end of the epoch, these scores are used to calculate a reward multiplier that adjusts each validator's share of the stake rewards.

    • Validators who performed well receive a multiplier of ≥1, boosting their rewards.
    • Validators who stalled, delayed, or failed to process transactions at the RGP receive a multiplier of <1, effectively slashing a portion of their earnings.

This two-part system creates a powerful incentive structure. It discourages validators from quoting an unrealistically low price they can't support, as the financial penalty for underperformance would be severe. Instead, validators are motivated to submit the lowest price they can sustainably and efficiently handle.


Validator Operations: Calculating the Gas Price Quote

From a validator's perspective, setting the RGP quote is a critical operational task that directly impacts profitability. It requires building data pipelines and automation layers to process a number of inputs from both on-chain and off-chain sources. Key inputs include:

  • Gas units executed per epoch
  • Staking rewards and subsidies per epoch
  • Storage fund contributions
  • The market price of the SUI token
  • Operational expenses (hardware, cloud hosting, maintenance)

The goal is to calculate a quote that ensures net rewards are positive. The process involves several key formulas:

  1. Calculate Total Operational Cost: This determines the validator's expenses in fiat currency for a given epoch.

    Costepoch=(Total Gas Units Executedepoch)×(Cost in $ per Gas Unitepoch)\text{Cost}_{\text{epoch}} = (\text{Total Gas Units Executed}_{\text{epoch}}) \times (\text{Cost in \$ per Gas Unit}_{\text{epoch}})
  2. Calculate Total Rewards: This determines the validator's total revenue in fiat currency, sourced from both protocol subsidies and transaction fees.

    $Rewardsepoch=(Total Stake Rewards in SUIepoch)×(SUI Token Price)\text{\$Rewards}_{\text{epoch}} = (\text{Total Stake Rewards in SUI}_{\text{epoch}}) \times (\text{SUI Token Price})

    Where Total Stake Rewards is the sum of any protocol-provided Stake Subsidies and the Gas Fees collected from transactions.

  3. Calculate Net Rewards: This is the ultimate measure of profitability for a validator.

    $Net Rewardsepoch=$Rewardsepoch$Costepoch\text{\$Net Rewards}_{\text{epoch}} = \text{\$Rewards}_{\text{epoch}} - \text{\$Cost}_{\text{epoch}}

    By modeling their expected costs and rewards at different RGP levels, validators can determine an optimal quote to submit to the Gas Price Survey.

Upon mainnet launch, Sui set the initial RGP to a fixed 1,000 MIST (1 SUI = 10⁹ MIST) for the first one to two weeks. This provided a stable operating period for validators to gather sufficient network activity data and establish their calculation processes before the dynamic survey mechanism took full effect.


Impact on the Sui Ecosystem

The RGP mechanism profoundly shapes the economics and user experience of the entire network.

  • For Users: Predictable and Stable Fees: The RGP acts as a credible anchor for users. The gas fee for a transaction follows a simple formula: User Gas Price = RGP + Tip. In normal conditions, no tip is needed. During network congestion, users can add a tip to gain priority, creating a fee market without altering the stable base price within the epoch. This model provides significantly more fee stability than systems where the base fee changes with every block.

  • For Validators: A Race to Efficiency: The system fosters healthy competition. Validators are incentivized to lower their operating costs (through hardware and software optimization) to be able to quote a lower RGP profitably. This "race to efficiency" benefits the entire network by driving down transaction costs. The mechanism also pushes validators toward balanced profit margins; quoting too high risks being priced out of the RGP calculation, while quoting too low leads to operational losses and performance penalties.

  • For the Network: Decentralization and Sustainability: The RGP mechanism helps secure the network's long-term health. The "threat of entry" from new, more efficient validators prevents existing validators from colluding to keep prices high. Furthermore, by adjusting their quotes based on the SUI token's market price, validators collectively ensure their operations remain sustainable in real-world terms, insulating the network's fee economy from token price volatility.


Governance and System Evolution: SIP-45

Sui's gas mechanism is not static and evolves through governance. A prominent example is SIP-45 (Prioritized Transaction Submission), which was proposed to refine fee-based prioritization.

  • Issue Addressed: Analysis showed that simply paying a high gas price did not always guarantee faster transaction inclusion.
  • Proposed Changes: The proposal included increasing the maximum allowable gas price and introducing an "amplified broadcast" for transactions paying significantly above the RGP (e.g., ≥5x RGP), ensuring they are rapidly disseminated across the network for priority inclusion.

This demonstrates a commitment to iterating on the gas model based on empirical data to improve its effectiveness.


Comparison with Other Blockchain Gas Models

Sui's RGP model is unique, especially when contrasted with Ethereum's EIP-1559.

AspectSui (Reference Gas Price)Ethereum (EIP-1559)
Base Fee DeterminationValidator survey each epoch (market-driven).Algorithmic each block (protocol-driven).
Frequency of UpdateOnce per epoch (~24 hours).Every block (~12 seconds).
Fee DestinationAll fees (RGP + tip) go to validators.Base fee is burned; only the tip goes to validators.
Price StabilityHigh. Predictable day-over-day.Medium. Can spike rapidly with demand.
Validator IncentivesCompete on efficiency to set a low, profitable RGP.Maximize tips; no control over the base fee.

Potential Criticisms and Challenges

Despite its innovative design, the RGP mechanism faces potential challenges:

  • Complexity: The system of surveys, tallying rules, and off-chain calculations is intricate and may present a learning curve for new validators.
  • Slow Reaction to Spikes: The RGP is fixed for an epoch and cannot react to sudden, mid-epoch demand surges, which could lead to temporary congestion until users begin adding tips.
  • Potential for Collusion: In theory, validators could collude to set a high RGP. This risk is primarily mitigated by the competitive nature of the permissionless validator set.
  • No Fee Burn: Unlike Ethereum, Sui recycles all gas fees to validators and the storage fund. This rewards network operators but does not create deflationary pressure on the SUI token, a feature some token holders value.

Frequently Asked Questions (FAQ)

Why stake SUI? Staking SUI secures the network and earns rewards. Initially, these rewards are heavily subsidized by the Sui Foundation to compensate for low network activity. These subsidies decrease by 10% every 90 days, with the expectation that rewards from transaction fees will grow to become the primary source of yield. Staked SUI also grants voting rights in on-chain governance.

Can my staked SUI be slashed? Yes. While parameters are still being finalized, "Tally Rule Slashing" applies. A validator who receives a zero performance score from 2/3 of its peers (due to low performance, malicious behavior, etc.) will have its rewards slashed by a to-be-determined amount. Stakers can also miss out on rewards if their chosen validator has downtime or quotes a suboptimal RGP.

Are staking rewards automatically compounded? Yes, staking rewards on Sui are automatically distributed and re-staked (compounded) every epoch. To access rewards, you must explicitly unstake them.

What is the Sui unbonding period? Initially, stakers can unbond their tokens immediately. An unbonding period where tokens are locked for a set time after unstaking is expected to be implemented and will be subject to governance.

Do I maintain custody of my SUI tokens when staking? Yes. When you stake SUI, you delegate your stake but remain in full control of your tokens. You never transfer custody to the validator.