Who is actually accruing the value created in crypto? This started as a conversation on the @Blockworks TG group with @santiagoroel and a few others. Venture in crypto has shrunk a lot! and imo the main reason is that on-chain revenue pools have been far smaller than anticipated. From Blockworks data, total on-chain revenue was roughly $8B in 2025, so I wanted to see how much off-chain/Centralized companies are capturing from this industry by comparison. So consider the off-chain pool: public companies like coinbase, Gemini, BitGo, Bullish, plus crypto revenue from Robinhood, Galaxy etc and private players like Binance, Tether, FalconX, Anchorage, etc. The result surprised me: off-chain companies generate ~$70B roughly, consider roughly a range between 60B to 100B, 8.5x more than on-chain protocols and L1s. To put that $8B in perspective: even if you give on-chain protocols generous 70% EBITDA margins and a 30x multiple, the entire addressable market cap today is ~$168B ($8B × 70% = $5.6B EBITDA × 30x). That's the whole on-chain pie, less than a single mega-cap tech company. Do the same for centralized companies at a more realistic 40% EBITDA margin: $70B × 40% = $28B EBITDA × 30x = ~$840B of justified market cap. Even with lower margins, that's 5x the entire on-chain ecosystem. And to put even that in perspective: the entire centralized crypto industry, all of it combined, is basically worth one OpenAI or Anthropic. The breakdowns are telling too. On-chain, L1/L2 chains take almost half the pool (~49%), with launchpads/trading apps and DEXs/perps splitting most of the rest. Off-chain, it's exchanges and brokers dominating at ~66%, with stablecoin issuers second at ~19%, everything else (market making, payments, infra, asset mgmt) is single digits. Both worlds are extremely concentrated at the top of the same funnel: trading and the rails to do it. From a venture perspective, you were often better off investing early in L1s and traditional exchanges than in most tokens. It was a bit simpler than we thought. To me the common denominator: off-chain companies sit much closer to the end user than protocols and L1s. They own that relationship and monetize it well. They abstract away crypto's complexity: trade, stake, store, manage without ever touching a coldcard or metamask app and people pay up BIG for that. On-chain is clearly in a bear market, but the lesson for protocols, L1s, and on-chain primitives is to build and verticalize more. Get closer to the end user. One caveat: this is an approximation, done with Claude's help. Many of these companies don't have public earnings, so the private side (Binance, Tether, and especially "other private") is mostly an educated guess. Directionally though, the gap is hard to argue with.

Had a blast joining @artemis podcast with @jonbma and Mike. I think @circle’s story is widely misunderstood. We dug into stablecoins, competition, where value ultimately accrues, and how we see the market playing out from here. Disclosure: We own @circle stock (a lot)

CT missed the most important earnings call of the week. It wasn't a crypto company. It was @Cloudflare Everyone caught the wallet announcement. The real alpha was in the call itself. Today Cloudflare monetizes the internet through subscriptions: security services, AI platform spend, pools of funds. A mix of SaaS and IaaS economics. The CEO was explicit that AI agents are about to break that model. Cloudflare sits in front of roughly 20% of internet traffic. Here's what that traffic looks like from the call: - AI agent requests up 1,700% YoY - Agents crossed 50% of total network traffic this quarter. First time in history non-human traffic is the majority. Management admitted it happened faster than their own models - Their projection: if trends hold, non-human traffic outnumbers human traffic 1000x within 5 years The monetization shift is the key part. The ad-supported internet doesn't work when the visitor is an agent. Cloudflare's CEO answer: block malicious bots for free, charge good agents a tiny fee per request. Fractions of a penny. They want to be the ones defining that layer. Now the throughput math here: - Cloudflare handles ~500M requests per second - They estimate 1 to 10% is monetizable via micro/nanotransactions - That means 10M TPS on day one, scaling to 100M TPS Visa peaks at ~20k TPS The CEO's framing: "we're building this while others compete with Visa." Three to four orders of magnitude beyond card rails. No existing payment network can settle this. It has to be something new. Two conclusions I keep coming back to: - Being short L1 throughput is being short agentic workflows. If agent traffic gets monetized per request, the settlement layer needs to scale orders of magnitude beyond anything live today. - The fee math for L1s flips. Base fees have collapsed across ETH, SOL, everywhere. MEV is getting internalized by apps. Hard to build a base fee revenue case at human scale. But at 10M TPS and $0.001 per transaction, you're looking at ~$315B a year in base fees alone. At 100M TPS the number gets silly. Stablecoins and crypto are the end-game here for Agentic finance @jerallaire @circle

I believe Crypto is going through the biggest consolidation phase in its history, far more profound than in previous bear markets. The market structure has changed. Capital is much more selective, and teams and exchanges without real PMF are shutting down. Revenue concentration is now at all-time highs across almost every layer apps, middleware, L1s etc: @HyperliquidX and @Pumpfun account for 67% of total app revenue. Add @ethena , and the top three generate almost 80%. I expect this to intensify over the coming months: much more M&A, Chapter 11 filings, shutdowns, and acqui-hires. This is extremely bullish for the space.

Traditional markets are converging on crypto-native market structure: 24/7 access, perpetual exposure, better APIs, and open participation without sacrificing regulation or institutional-grade risk controls. @Architect_Fi with $3B in notional in under 3-4 months with no U.S. market, no retail access, and no marketing at all. The floodgates open over the next few weeks. Also, if you want to understand HFT trading, market making, and trading infra in general, @BrettHarrison tweets should literally not be free imo.

It’s 2026, and we’re still talking about Cardano. We’re still inviting Charles to conferences, treating Cardano as newsworthy, accepting its sponsorship money, and giving it airtime on podcasts. Then we wonder why this industry struggles for credibility. We deserve the reputation we have. No serious industry keeps rewarding irrelevance like this.

We are entering a new era for DeFi. For the first time ever, @HyperliquidX generated more volume from RWAs than crypto in a single week. RWAs accounted for 54% of total trading volume. An even more interesting trend: since June, single stocks have overtaken indices and commodities on HIP-3. Today, 61% of all RWA trading volume is in individual equities. I’m no longer convinced RWA trading will naturally aggregate on the same venue as crypto. There will likely be category leaders within RWA, and owning BTC/ETH/SOL flow may become far less important than many people assume. To put this into perspective: Total DEX perpetual volume last week: $79B Hyperliquid: $50B Of that, $26B was HIP-3 RWA trading In other words, Hyperliquid’s RWA market alone was larger than the combined crypto perpetual volume of every other DEX. If you’re still only focused on crypto token trading, I think you’re focusing on the wrong market. data from @Blockworks

I think this is the first time we’ve seen such a massive divide within DeFi teams from an investor’s perspective. There are now clearly two different breeds of DeFi founders. The first are the pre-DeFi summer protocols: Many carry years of baggage: messy equity + token structures, tokens down 80-95%, frustrated communities, investors still looking for liquidity, and organizations built around a playbook that optimized for liquidity mining, crypto-native users, and early-adopter UX. The second are teams that raised over the last few years: They looked at all of that and decided they wanted none of it. They’re building for a completely different customer. They know crypto degens are simply too small a market to matter if the goal is to build a massive financial business. Many are even delaying token launches altogether while they figure out whether a token is needed at all, or whether the right long-term structure is equity, a token, or some combination of the two. That changes almost everything: who the ideal CEO is, how you hire technical talent, your go-to-market, your fundraising, your cap table, and even how you think about tokens and equity. I’m not saying the pre-DeFi summer teams are bad investments, we’re bullish on many of them. But I do think the skills required to win in this next phase are fundamentally different. Some teams will successfully reinvent themselves. Others won’t. And I think that’s one of the biggest differentiators investors need to underwrite today.

AI had to take a page out of crypto’s playbook. If you ask the average person on the street, they have a pretty negative view of AI. They’re worried it will take their jobs and disrupt society. At the same time, they own literally zero of the upside. Crypto survived multiple boom-and-bust cycles because millions of people had financial exposure to the technology. There is something uniquely powerful about watching a technology succeed when you own a piece of it. We clearly failed here. These AI labs will eventually go public, but retail has had virtually no opportunity to participate in the value creation. Then we act surprised when people see AI as something happening to them rather than for them. Imagine trying to bootstrap crypto if retail’s first chance to buy Bitcoin was at $100k and Ethereum at 5k.

Stay-private-for-longer built a secondary market that's frankly berserk on liquidity. Forget public companies. Some of these private names trade more daily volume than plenty of listed ones. You can exit a position in a day. And they now run tender offers every 6-12 months. Semi-priced rounds on a schedule. I don't see why price discovery here shouldn't be more transparent and efficient. And frankly, futures and derivatives on some of these names make a lot of sense. Why shouldn't you be able to buy calls or puts on Anthropic or Databricks? Tokenization and crypto rails are built for exactly this. More efficient, more liquid, more accessible.

Circle is clearly becoming one of the most misunderstood companies in crypto. Most people still value it as “the USDC issuer.” That is increasingly the wrong mental model. Circle is very far from the company it was 2-3 years ago. Circle is building a four-layer financial operating system. 1. Arc Core (OS) The base infrastructure: sub-second settlement, USDC-denominated gas, an FX engine, privacy, and AI-native infrastructure. 2. Assets & Protocols USDC, EURC, USYC, cirBTC, wETH, and partner-issued stablecoins. These are the assets that power the network. 3. Protocol Services & App Kits The infrastructure and plug-and-play SDKs developers use to build: mint/redeem, wallets, payments, cross-chain transfers, trading, lending, remittances, credit, onboarding, and agentic financial applications. 4. Applications Circle’s own products: Mint, CPN, Arc Portal, StableFX, alongside third-party DeFi protocols and a broader builder ecosystem. The important point is not simply that Circle is launching more products. It is that each layer increases the value of every other layer. More assets create more protocol usage. Better infrastructure attracts more developers. More applications generate more demand for USDC and Arc. That is the flywheel. Circle is not just trying to monetize stablecoin reserves. It is positioning itself to own and monetize multiple layers of the financial internet. That is a very different company from the one most investors think they are valuing.

Crypto really is a flat circle. Right as @jessepollak announces @base (Ethereum) is shifting away from creator coins, and memes, the Solana community re-embraces the memecoin casino that burnt their entire user base with solana:9cRCn9rGT8V2imeM2BaKs13yhMEais3ruM3rPvTGpump. You can't make a lion graze. You can't make a gazelle hunt. In the depths of the bear market, everyone reverts to what they know best. Lions eat. Gazelles run.

I was reading about this famous photo of Messi bathing baby Lamine Yamal, and the story is actually pretty crazy. This was 19 years ago. The photo was taken in 2007 as part of a UNICEF and FC Barcelona charity calendar. Families entered a raffle for the chance to have their picture taken with a Barça player at Camp Nou. Lamine Yamal’s family won the raffle, with his mother also appearing in the photos. By pure chance, Messi was the player assigned to the shoot. On Sunday, they’ll face each other in the World Cup final. The football gods are writing the script...

I think @a16zcrypto is top notch out there but this is overly bearish and simplistic imo. Let me strawman the counterargument here. Let's start with the historical analogies. The article invokes enterprise firewalls, private intranets, private cloud, FedRAMP etc to argue institutions will wrap blockchain in walled versions. But look at how those actually played out over time. Private intranets don't really exist anymore. Private cloud lost badly to AWS, Azure, GCP. The pattern a16z describes is real but its mostly a transitional phenomenon, not a durable endgame equilibirum. Using these analogies actually undercuts the thesis that permissioned and permissionless versions coexist indefinitely. If anything they predict permissionless wins the long game. The private-chain graveyard is doing a lot of work the piece ignores. R3 Corda, Hyperledger Fabric, Quorum, the original JPM permissioned stack, most of the DTCC pilots. A decade of enterprise consortia produced almost no economically meaningful assets, and im being generous here. Meanwhile BUIDL, BENJI, USDC, USDT, and the entire tokenized treasury market live on public chains. The direction of travel isn't "TradFi builds its own private version." Its "TradFi tried that for ten years, it failed, and now theyre grudgingly deploying on Ethereum, Base, Solana etc." That's a much bigger DeFi win than the article credits imo. Citing Canton as a paradigmatic institutional network is cherrypicking too. Canton has meaningful pilots but nothing close to the volume flowing through public chains yet (we like Canton a lot btw). There's another big point that gets missed here: composability and liquidity depth aren't detachable primitives. The piece treats DeFi's value as a menu of features (atomic settlement, programmable money, AMM math) that can be picked apart and reassembled inside institutional walls. That's true for some primitives. Its false for the most valuable ones. Global 24/7 liquidity, cross-protocol collateral efficiency, permissionless integration, these are emergent from openness. You can't clone them into a walled garden. This is why private stablecoins keep losing to USDC and USDT even when the counterparties would probably prefer private ones. The market keeps voting for open access, from institutional counterparties, on economic grounds not philosophical ones. These are ongoing conversations we have at ARK all the time. Last thing is that this framing misses the third category entirely and undermines a lot of current companies. The article splits the world into TradFi and DeFi and then argues builders should pick one. But the most intersting and biggest outcomes in terms of companies of the last five years, BY FAR, fit neither. Circle, Coinbase, Anchorage, Securitize, Superstate, Aave, Morpho, Layerzero, Uniswap etc. These are crypto-native firms building institutional-grade infrastructure with permissionless DNA, and this is important. Theyre not TradFi selectively adopting DeFi. Theyre not DeFi. Theyre a new institutional layer being built from scratch on public rails, and theyre eating the market share the article assumes PYPL, JPM, SWIFT, and BNY will capture over time. The "programmable financial infrastructure" category the piece defines is real. Its just being built mostly by crypto-natives, not by incumbents. The article frames it as if the "clients" of today will be exactly the same as tomorrow, but clearly many of those incumbents will disappear, it's just a slow depth, they won't die from one day to another

A few thoughts on @santiagoroel country and taxes analogy. People love to say blockspace is commoditized and switching costs are basically zero. The numbers say otherwise. We're 10 years into this experiment and only 3-4 L1s actually matter. Same story as AI models: everyone calls them commoditized, yet everybody uses either Chatgpt or Claude. Coming back to countries and taxes, California is the best counterexample here to Santi's argument, and probably the model ETH is going for. A 30% tax is too much, but the current take rate is almost certainly too low. Why don't people leave California despite outrageous taxes? Weather, quality of life, the AI job market. No single factor, the bundle. ETH's real moat is the assets on platform plus ETH the asset. If Ethereum had $3-5T of AOP instead of $250B, this would be a very different conversation, and Hood probably never leaves. You need to coordinate 2-3 outstanding qualities at once. Good weather alone (Portugal), not enough. Low taxes alone (Dubai), not enough. Great quality of life alone (Japan), still not enough. @HyperliquidX aggregated so much demand precisely because it coordinated three things: great UX, deep liquidity, and strong execution tech. Any one of the three alone doesn't cut it. One more thing. There's the @ethereumJoseph theory: subsidize blockspace to attract applications, then raise prices once network effects are real. The problem is that Ethereum the blockchain needs a strong ETH asset in the meantime. Hard to do that with ETH at $1,500. And for everyone saying we need thousands of Robinhood L2s: there just aren't that many Hood-like companies to go around. Robinhood has 30M accounts and ~$300B in deposits. At that scale you're not closing a Robinhood L2 every week. The math matters here.

The Robinhood Chain is the cleanest case study of what happened to ETH's economics over time. Since inception, @RobinhoodApp Chain has grossed ~$816K in revenue. @Arbitrum, the middleware provider, takes 10%: ~$80K. Arbitrum then pays Ethereum for settlement: $1,538. The margin profile roughly: Robinhood: 89% Arbitrum: 10% Ethereum: 0.15% If your thesis is "ETH is money," Robinhood building here is ultra bullish. More activity, more ETH collateral, more lindyness. If your thesis is "ETH is a revenue generating asset," this is the ultra-bear case. And here's the uncomfortable truth: Robinhood was never going to build on Solana, Sui or any monolithic L1. They want the stack customization. They want to be landlords, not renters. Ethereum won this deal on merit. It's just not pricing it right. A healthy split to me looks more like: Robinhood: 75% Arbitrum: 10% Ethereum: 15% Ethereum sells the most valuable settlement layer in crypto at marginal cost. Things need to change. @ethlabs_org

My thesis on dishwashers: why you should have either 0 or 2 at home, because 1 is utterly useless I think the longest-standing fight between my wife and me is about the utility and usefulness of a dishwasher. I think dishwashers are the most useless appliances on Earth; obviously, she loves ours. My argument is super simple: if there are fewer than three people at home, adults, not kids, you are better off, by pretty much any metric, washing the dishes by hand. To me, the whole process of pre-washing them, putting them inside the dishwasher, and then taking them out, sometimes still drying them, and putting them back on the shelves is utterly ridiculous and defeats the whole purpose. I just hate having to take them out the next day and put them back on the shelves. I would rather wash everything by hand in 10 minutes and get it over with. Over time, though, I have slowly realized that what my wife really hates is having dirty dishes in sight. She just hates it: the smell, the way they look, everything. So I have come to this conclusion: you should either own 0 dishwashers or 2. Having 1 makes no sense. Why 2? You start loading one dishwasher until it is full. Once you turn it on, you start using the second one. When the first one is clean, you simply take the clean dishes directly from it, effectively using the dishwasher as their storage place. Once the second one is full, you run it and start using the first one again. This really solves both problems: you never have to leave dirty dishes in the sink, but at the same time, you never have to take all the clean dishes out of the dishwasher and put them away.

Didn’t expect this to happen so quickly, but over the past two days, RWAs have generated more volume on @HyperliquidX than every other market category combined and likely more fee revenue as well. If you’re building a trading app/temrinal or DEX, Crypto assets is probably not the market you should optimize for.