Alts can still pump despite bearish market and lack of new inflows. But this comes at the expense of outflows from BTC and ETH. As more crypto natives get disillusioned with ETH and sell it, like Bankless's David Hoffman, they rotate to alts with revenue or PMF narratives behind them. The beauty is that selling $1m of $ETH and buying $1m of $ZEC or $NEAR has disproportionate price impact. Small cap, big move. I think this is what has been happening in crypto recently. And if select alts create new rags to riches stories, that brings attention back to crypto. Which could attract new capital and eventually flow back to ETH and BTC. This rotation is a healthy self-correcting mechanism. An alt season could actually lead to a bull run for majors. Those who were during DeFi summer will remember that at first only alts were pumping while ETH was stagnant. Only when the DeFi summer created FOMO beyond crypto circles is when the full blown out bull run started. So there's not enough inflows to pump the whole market now. We just need a few alts to continue outperforming to keep degen spirits alive.

DeFi needs new high-yield, high-risk products onchain. Everyone knows DeFi yields are too low for the risks we take, so while we reduce exploit risks on one side, we need new financial primitives for high yield. The demand for these products already exists. Despite the risks the demand for high yield products is high: • High yield corporate: ~7-9% • Private credit: ~8-12%, some strategies up to 15% • Private equity: ~12-18% (7-10 year lockups) In contrast, stablecoins yield between 3% to 5% and that's because rsETH hack temporarily increased yield. Seriously, DeFi risk profile looks good when you compare to private credit: illiquidity, years of lockups, unclear valuations and now withdrawal limits. But private credit still attracted $1.5T anyway because 8-12% on USD is hard to find elsewhere. That could be our target group currently underserved onchain. ---- We had amazing yields but the old yield model was reflexive. Bull markets push leverage demand up, which pushes yield up. Bear markets run the loop in reverse: TVL leaves, leverage demand collapses, yields compress. Emissions and points were really fun but temporary. The yield is gone when emissions stop, and mercenary capital leaves after TGE. We need to leave this circular economy. One innovation is undercollateralized lending but it's hard without identity. Maple tried this in 2021 and got rekt with ~$36M in bad debt from 3AC, Alameda etc. They stopped it now. Centrifuge loans also get rekt often but that's a risk lenders should be willing to take. Anyway, seems that the current innovation is still at importing TradFi yield instead of building crypto yield. Ethena's USDe with perps funding rates is truly unique. But even they are relying more on TradFi yields recently. Another recent 'innovation' is RWAs wrapping emerging market stables paying 10% local rates (with USD delta-neutral strategies). E.g. Brix on MegaETH. Tokenized stocks potential is also underdeveloped but will help: Borrow against tokenized SPX500 without selling which brings crypto native borrower demand but with real world collateral. Still early. What's actually missing is crypto native yield primitives. Something like: • Uniswap LP pools were the OG (and ETHlend). Yield from swap fees, paid by people actually trading. Still relies on crypto cycles but should reduce if payments increase (due to multiple stablecoin swaps required) • Fluid turns debt into LP positions. The borrowed liquidity also earns trading fees. • Liquity's BOLD pays yield from stability pool deposits and liquidation discounts. • Pendle splits yield-bearing assets into principal and yield tokens. Created a yield-trading market that didn't exist before. • Perp DEX LP vaults like Hyperliquid HLP. LPs earn from trader losses and funding rates. • Jito style MEV captured at the staking layer. The risk profile of these products is higher than wrapped T-bills. But they should give much higher yields. Private credit teaches that institutions are good at selling degen yield to their customers. DeFi could do the same. Hope we can find 10%+ yields from onchain mechanics soon. This will attract a new group of people, pump TVL and our bags as a result.

Lido proposes 2,500 stETH to the rsETH relief fund. Total hole is 112,204 rsETH unbacked (~$258M at current ETH price). So we have: - Arbitrum froze 30,766 ETH from the exploiter (~$71M) - Lido 2,500 stETH (~$5.75M) - Aave has $181M treasury: $62M ETH correlated, $52M stablecoins, $54M in AAVE (probably won't use it as it dumps price). So ~$114M realistically deployable? No number committed yet. Even if Aave puts up the full $114M, you're at $191M covered. Gap still ~$67M. Not great not terrible. Kelp and LayerZero caused this (whatever has more fault) but Aave suffers the most. Lido, too. Kelp and L0 are yet to publicly committed $$$ but Kelp keeps posting some vague posts saying nothing at all. ugh. And Lido only deploys if the fund is fully raised! There's still a gap. If it isn't, their stETH isn't used and EarnETH ends up exposed to 9k ETH in losses. @justinsuntron got some $67M USD to spare?

Don’t be exit liquidity for Trump’s cartel: They deposited $484M of $WLFI tokens to borrow USDC. Those loans will likely never be repaid. Instead, when Trump leaves office, or even after the midterms if Republicans lose, $WLFI will dump, and Dolomite will be stuck with BAD DEBT. As a result, USDC lending rates are at 13.5%. But even that APY isn’t worth the risk of not being able to withdraw your deposit. Everyone knows this. No surprise Dolomite's $DOLO trades at just $15M market cap because it's a turkey getting ready for Thanksgiving.

Another DAO winding down its DAO operations: Velora (previously Paraswap) What's changing: - DAO governance stopped. Everything moves to Laita labs, the original operator and protocol dev team. - $415K DAO treasury transferred to Laita Labs for running protocol - 20% protocol fee routing to the DAO discontinued. Fees now go to Laita. - Staking program retired. seVLR loses governance rights. - Futarchy pilot from October 2025 closed. Usage was limited. Balancer recently restructured in a similar way: operations moved back to the core team, and the DAO’s scope narrowed. But one big difference. Balancer sends 100% of protocol fees to the DAO treasury. Velora ends DAO fee routing, sending fees to Laita Labs. Shifting value from the DAO to a corporate entity to sustain operations. As a delegate I get why teams do this. Velora was hit hard after Aave Labs replaced Velora with CowSwap (and fees dropped sharply). Money is tight so need funds to survive the bear. Many DAOs failed to function the way people hoped. Number 1 priority is survival now.

Tokens are trading at massive discounts on secondary markets right now. Good reporting by The Block. - Average discount is 40-50%. - Long vesting schedules (3+ years) trade at 60-70%+ discounts.. - Gaming tokens are the worst at ~80% discounts. Main reason is $500M-$1B in tokens unlocking every week but demand is weak and capital rotating to AI. Plus, equity is replacing tokens. On SecondLane (a marketplace for crypto secondaries), 40% of interest is now equity and it dominates deals above $2M. More investors want real exit paths like M&A and IPOs, not locked tokens that dump on unlock. The only tokens holding value are those with: - clear revenue - short lockups - liquid hedging markets. Basically, $HYPE.

6 years after DeFi Summer, we’re still seeing these massive hacks. Resolv, Venus Core, and now Drift. For a moment, I thought the Solana VM might be superior on security, with fewer hacks. Alas. I wonder if low-risk DeFi is a thing. Aave pls hold ground. All of crypto seems high risk.

Swap fees per wallet: - MetaMask - 0.875% - OpenSea - 0.85% - Phantom - 0.85% (1.5% for gasless mobile swaps on Solana) - Zerion - 0.67% (0% with Premium DNA) - Exodus - 0.5% minimum, actual spread often 2-5% depending on pair - Rabby - 0.25% - Backpack - 0% on Solana swaps and bridges - Ledger Live - 0.5-1%, varies by partner provider - Atomic Wallet - ~0.5-1% - Zengo - ~0.5-1% - Bybit Wallet - 0-0.5% - Binance Web3 Wallet - 0-0.5% - OKX Web3 Wallet - 0-0.5%

Crypto hates VCs but for strong altcoin season we need VC money. VC money funds salaries, operations, and VERY importantly, market making. When tokens launch, teams and airdrop farmers sell into liquidity partly backed by VCs. Key point is that $1 of VC money creates more than $1 of market cap for the whole industry. And because most tokens are held and not sold, so small inflows move market caps disproportionately. I couldn’t find an exact multiplier for alts, but for BTC, Bank of America calculated a 118x multiplier in 2021. Back then, $93M of inflow moved BTC’s market cap by $11B. For alts the multiplier MUST be much higher due to thinner order books, more supply locked in vesting and staking etc. $5M into a $50M MC shitcoin with 90% supply locked pumps the price way more than $5M into Bitcoin. Of course, in a bearish market and when VC money dries up, altcoins dump the most. Problem is that this bull run we got ~50% less VC money ($26B) vs $66b in 2020-22. At the same time, projects raised at all time high valuations $37M USD. So: -> less money for similar number of projects at way higher valuations. -> Every project ended up getting a smaller cash injection but listed at a super high FDVs. -> More tokens competed for less liquidity and the multiplier had less impact this cycle. Low float high FDV launches were bad for retail but in the short term it created a wealth effect in crypto that made you feel rich on paper, so you ended up getting greedy, trade memecoins and maybe lost a lot :(( VC also served as exit liquidity for airdrop farmers ... who sold their airdrops. In any case, VC capital is what funds the industry... It's especially needed now when so many crypto projects are shutting down.

Balancer proposes a survival restructuring after the V2 exploit in Nov 2025. - Balancer Labs winds down. Operations consolidate under OpCo - Team cut from ~25 to 12.5. Budget down 34% to $1.9M per year - veBAL... dead. $500K compensation to locked holders over 6 months - All BAL emissions stopped. - 100% of protocol fees now go to DAO treasury (was ~17.5%) - V3 protocol fee cut from 50% to 25% so LPs keep more Annual deficit drops from $2.6M to $700K. Runway extends from 4 years to ~9. Very sad to see as I received the BAL airdrop and had great fun LPying on it. Good times. Though I haven't used Balancer in quite a while.

Sentiment on r/Gold right now reads like CT after BTC crashed in 2025. - Isn't gold a safe-haven asset? - Why is it behaving like crypto? Gold dumped as much as ~22% from its ATH and Reddit is in disbelief. As a crypto investor this is not surprising but for a macro asset it's new. I think that crypto actually leads the market in retail sentiment (making it a key asset class to follow). But while crypto is being sold by retail and bought by institutions, the opposite is happening for gold and equities. Since Q2 2025, retail bought +$70B in gold ETFs. That's 3x over the last 6 months. Institutions sold $1B over the same period. Gold ETFs used to be an institutional product but narratives of Ray Dalio's "Changing World Order" and 'debasement trade' pushed retail into gold. Same for stocks. Retail does 20-35% daily US equity volume and they own 38% of all US stocks. FT reports retail is still net buying stocks 'virtually every day since the war began.' The BIS chart shows retail still buying gold/silver while institutions are selling. We've seen this in crypto many times. Gold used to move slow but now it trades like a memecoin because the same retail degens trade it the same way they trade BTC. Emotionally and without conviction. If retail is buying the dip in gold and stocks while institutions exit, equities could be next. Everything is a trade for retail degens, which really helps BTC as ppl started to question its digital gold story.

Gold dumping 17% from ATH is saving Bitcoin's image. In a macro-uncertain and potentially inflationary environment where gold should perform well, it's selling off too. Narrows the gap between BTC and gold performance without BTC having to do anything. I wished BTC would save face by pumping to catch up with gold. But gold dumping achieves a similar effect. At the end of the day, liquidity flows drive the market. Everything is a trade in short-term periods.

ETH staking ETF launched with $46M USD of inflows in 2 days. Quite surprising how silent CT was about the news. ETHB holds spot $ETH and stakes 70-95% of it via Coinbase. Investors receive 82% of staking rewards as monthly cash dividends: ETH is sold and yield is paid in USD. So no compounding inside the fund. Perhaps attractive for whales who want to live off the yield. BlackRock and Coinbase keep the remaining 18%. Fee is 0.25%, waived to 0.12% for the first year or until the fund hits $2.5B AUM. ------ So why would you hold ETHA, which doesn't offer staking rewards? AFAIK, BlackRock created a separate product instead of adding staking to ETHA, likely because staking adds slashing risk and some investors want to avoid that.

Five crypto things I want to figure out: - Is Nexo exposed to private credit, or are all their loans overcollateralized? Their rates feel too good for pure overcollateralized lending. - If I use privacy protocols, do my wallets get flagged by Chainalysis? This matters because Source of Funds and Proof of Wealth audits usually rely on Chainalysis data. If flagged, I won't use them. - Will Polymarket & Kalshi launch tokens, or go the IPO route? It's a critical test for token vs equity debate. - What happens to stablecoin regulation if the CLARITY Act passes vs. fails? Right now I can't find a good insight of either scenario. - Why isn’t futarchy more common in DAOs? Futarchy swaps opinion polls for prediction markets. It could make DAOs fun again by bringing speculation but why futarchy isn't picking up?

Sexy proposal by Aave Labs: - 100% of the revenue to the DAO - Aave branding IP given to a new Foundation I've been critical of Aave Labs exactly due to value leakage from the DAO. But this seems like a big compromise from Aave Labs that $AAVE holders should like. Instead of revenue, Aave Labs would ask for an annual budget from the DAO. I truly believe that whatever the amount, builders, BD, marketing etc. should be generously rewarded for their work. We've seen what happens when builders are not paid well. Ethereum Foundation devs leave and join other well financed projects. So Labs should not be in a position to beg the DAO for funding, especially as they cut their own revenue streams. Obviously with clear disclosures and transparency. Although some questions arise on who actually controls the Foundation that rules over Aave branding. A recent proposal that required disclosure of voting addresses was blocked by undisclosed wallets. On the other hand, that's how 1 token = 1 vote governance works. If Aave Labs wants to maintain control over the foundation, they are incentivized to hold those tokens, not sell. Or new buyers are incentivized to buy $AAVE if they want control over Aave IP. Let the market decide. Still, in light of this, I'd like to see clear disclosure that the granted 75k AAVE tokens would not be used for voting. Finally, the proposed migration from v3 to v4 within 8 to 12 months seems too quick: users usually want to see a new version pass stress-testing before moving the capital. But these smaller things can and will be adjusted. Feeling optimistic about this.

Crypto isn't cool because we optimized for Boomers. ETFs and regulation are necessary, but we sold out the original spirit to get them. In the process, we sidelined the actual majority. 2025 Gemini survey found 51% of Gen Z owns crypto. More than Millennials (49%) and Gen X (29%). Even worse, by focusing on dumping on boomers, we've completely sidelined Gen Z. They're cooked by tradfi, worried about AI taking jobs, unaffordable housing... And crypto fails to offer a solution. Now I bet that Gen Z is leaving crypto at the fastest rate. They got rekt on memecoins, NFTs, gamefi and every other retail oriented narrative. So after we're done with regulation, let's focus on bringing Gen Z back. Apps like PoolTogether is something we need more of. You could deposit some 10 USDC and win 100k. The only cost is the yield. More importantly, crypto culture will need to shift from 'tech-first' to 'culture-first'. The old motto of 'trustless' is confusing, and not sexy. Instead Gen Z trusts people, creators, more than cold code. The shift is already happening as all technical narratives are dead. I used to write how ZK, restaking, or soulbound tokens work. No one cares about it now. Even my beloved 'DeFi' focuses too much on 'low-risk' element that Vitalik mentioned instead of offering an escape from slave-waging. 3% or even 7% stablecoin yield on Aave doesn't make Gen Z exited. It's a product for rich millennials and boomers (who will use some vault wrapper on Aave). Damn it, even Ethereum itself as a 'Layer 1 blockchain' lost its cool. Reactions to Coinbase ad on Super Bowl are telling. ----- Hope Mr. Beast's acquisition of Step is a start of Gen Z-Fi. However, we need to address issues in crypto from all angles to bring them back: - Gen Z trusted influencers who exploited them the most. - Pump fun and similar apps that were supposed to bring 'creator revenue' ended up extracting value instead of creating it. - Perps that on paper bring fast money ended up literally liquidating most active crypto user base. Finally, I hope we succeed in making crypto cool again. Coz I am getting bored of crypto myself.