One thing I'd love on @l2beat A token tab. Right now, there's no easy way to tell the root chain of trust for a token - where was it minted? Like ZORA - is that native to Base or Ethereum L1? This matters - only L1 native tokens get L1 security. Maybe i want tokenbeat.

Name & Symbol: Zora ($ZORA)
Address: 0x1111111111166b7fe7bd91427724b487980afc69

From Circle's most recent quarterly report: “Circle is exploring the possibility of launching a native token on the Arc network which could foster network participation to drive adoption, further align the interests of Arc stakeholders and support the long-term growth and success of the Arc network.” Why L1 instead of L2? 9 times out of 10 the answer is L1 Premium.

Name & Symbol: AI Rig Complex ($arc)
Address: 61V8vBaqAGMpgDQi4JcAwo1dmBGHsyhzodcPqnEVpump

maybe halting the network or freezing hacked funds is a good solution for smaller alt-L1s as @hosseeb says but consider the second order effects if operators of a chain *can* freeze funds for theft, hack, or government order then doesn't this imply a legal responsibility for validators to always freeze funds? this opens the door for civil and criminal cases if you have the ability to pagerduty the validators and have them freeze and you don't take it - aren't you liable? i have to think this industry splits two types of chains: 1. cypherpunk chains - decentralized chains that don't have the ability to freeze/censor/steal 2. tradfi chains - centralized chains that have the ability to freeze/censor/steal and consider this a feature no shame in being a tradfi chain - but if that's your strategy be prepared to face off against Tempo/Arc and friends who will likely triple down on compliance/freezing to outcompete you hard to be half a gangster

Name & Symbol: AI Rig Complex ($arc)
Address: 61V8vBaqAGMpgDQi4JcAwo1dmBGHsyhzodcPqnEVpump

If you're curious why $1.5 billion in tokenized t-bills moved from Ethereum L1 to Apotos, Avalanche, Polygon last week look at incentives. BUIDL fees dropped from 50 bps to 20 bps for those chains (and Solana) vs Ethereum - that's $4.5m in annualized savings on $1.5 billion. I don't have insider baseball on this but it's likely BlackRock didn't cut fees because Larry's feeling generous. A simple theory: Aptos, Polygon, Solana, Avalanche are paying BlackRock incentives for this privilege - or else, why only those chains at 20 bps while Optimism and Arbitrum are 50 bps? If you're Avalanche with rich AVAX treasury would you pay a couple million to BlackRock in exchange for #2 on the RWA t-bill charts? Wouldn't be the worst marketing dollars you've spent. And once again we see goodhart's law in crypto - when a measure becomes a target it ceases to be a good measure. RWAs without deep liquidity and DeFi ties to the underlying network are vanity metrics - they don't really need the underlying chain, there's minimal moat. If the theory is right a few lessons: - Untethered RWAs are vanity metrics - Chains are spending for these metrics - "Spending" is token sell pressure There's good BD spend and there's bad BD spend. I'm not sure this is good spend.

Name & Symbol: Allo ($RWA)
Address: 0x9c8b5ca345247396bdfac0395638ca9045c6586e

Should @Plasma be an L2? AJ argues that Plasma should be an L2 in order to save on validator costs - $550m per year in savings. I think this is long-term correct however the market structure has to fundamentally change to make it long-term correct. The L1 Premium ROI Right now there's an L1 premium even for assets that aren't competing as a store of value. Should this be the case? I can't see why - not in the long-term. But the market currently disagrees. Let's look at FDV comps: Arbitrum (L2) - $4.3 billion Optimism (L2) - $2.9 billion ZKSync (L2) - $1.1 billion Compare these to EVM L1 chains that could be L2s: Tron (L1) - $32 billion Plasma (L1) - $9.6 billion There's clearly an L1 Premium. Say $5 billion of Plasma's current FDV is due to L1 premium. That's worth 10 years of $500m (5% of FDV) per year in validator costs. Add to this: Plasma can throttle issuance at any time - why not decrease validator rewards to 1-2% as the network grows? If you think you can be a deca-billion network it's market rational to launch an L1 instead of an L2 because of the L1 Premium. That's why Stripe's Tempo, Circle's Arc, Tether's Plasma are all launching as L1s instead of Ethereum L2s. The technical reasons they give are ex post facto rationalizations for the real reason: L1s are higher ROI because of the L1 Premium. Look at it from their perspective. Worst case - the L1 Premium evaporates in the years ahead. Fine, they just pivot to an L2 - they've lost nothing. Will the L1 Premium persist? Truthfully, i don't know. Maybe as the market matures we'll move from a Dumb L1 Premium to a Smart L1 Premium - only the assets truly competing as a nation-state grade censorship resistant store of value (SoV) will get the L1 premium and all other L1/L2 assets will be valued based on revenue and supply sinks. To me, BTC and ETH pass the SoV bar and it's very much TBD on everything else. But i'm not the market. The market says XRP is worth $300 billion and that the L1 Premium is real. So that's the takeaway for L2 lovers. Until the L1 Premium disappears expect to see more L1s.

Name & Symbol: Plasma ($XPL)
Address: 0x405fbc9004d857903bfd6b3357792d71a50726b0

Stablecoin issuers are combining with blockchains to become Open Finance banks. Crypto is unbundling banks. In this case: Issuer = Tether Bank ledger = Plasma chain Stablecoins replace checking accounts. An open blockchain replaces the bank. All the functions of a bank - lending, borrowing, payments - these are replaced by DeFi protocols from the Ethereum ecosystem. The user interface - these are Ethereum wallets. Plasma becomes an open bank run on stablecoins. Not a world ledger, the world ledger is Ethereum. But a commercial ledger. Not maximally decentralized, but open enough, certainly more open than the banks. There will be many - Arc from Circle, Tempo from Stripe, Plasma from Tether - all competing, all EVM. EVM = increases Ethereum network effect Ethereum DeFi apps used = Aave, Fluid, Euler Strengthens Ethereum's DeFi ecosystem. Bullish Ethereum. Bearish banks. Crypto is unbundling banks.

Name & Symbol: Fluid ($FLUID)
Address: 0x6f40d4a6237c257fff2db00fa0510deeecd303eb

Well done @0xngmi and @DefiLlama team. tldr; many RWA TVL metrics are inflated and gamed.

Name & Symbol: Allo ($RWA)
Address: 0x9c8b5ca345247396bdfac0395638ca9045c6586e

I can't believe I still have to say this in the year 2025, but let me explain once again why permissioned chains like Tempo (or Canton or ARC or any other corporate chain) are likely to fail. Most people think Satoshi wanted to invent a new kind of money, but I think he was more interested in creating a new kind of payment system. The most astute TradFi-focused observation in the Bitcoin white paper is this one about intermediaries: "Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services. With the possibility of reversal, the need for trust spreads" TLDR: When everyone knows who is in charge, and that entity could plausibly be held liable in a civil court or by the government for facilitating crime, they have no choice but to censor, rollback some activity after the fact, and so on. In modern crypto terms it means no true liveness, safety, or CR. Before Bitcoin, this is how every single settlement or payment system--save physical cash--worked. What made Bitcoin unique was the way miners voluntarily opted into a protocol that was the final boss. They didn't have to identify themselves or be permissioned, and faced financial penalties if they didn't follow the rules. Thus: when any Bitcoin transaction happens, we don't necessarily know who the miner is. Even if we did (much of the hash rate is known) it wouldn't change anything because they can't be held liable. If any aggrieved party sued a specific miner for a particular transaction, that miner could say "I'm just following the rules of the protocol here. If I didn't follow them, someone else would, and the same transaction would still get processed" Thus: an open, permissionless and decentralized protocol is in charge of everything, and since you can't sue or jail or kill a protocol, we end up with liveness, safety, and censorship resistance. Same goes for a permissionless PoS chain. Or even a properly designed L2 with rock solid proofs and L1 defection/CR mechanisms. The sequencer can plausibly claim "I'm just following the rules here, if I try to force an irregular state change the proof won't be accepted by the permissionless L1 validator set. If I censor a particular user they'll force include via the L1" Fifteen years ago one could wonder whether this would actually work. What if the government decided to throw some miners in jail anyway just to deter others from joining the protocol? Well, they haven't. Probably because the US realized that going after American Bitcoin miners would achieve nothing other than making non-American miners (and the governments that tax them) richer. People like me have been telling them that for a decade. In fact the entire arc of regulatory interaction with crypto now is to respect decentralization, and even encourage it. Now, back to Tempo, et al: A permissioned network does not have this form of plausible deniability. The permissioning entity has to KYC every validator - not only are they known, but their participation is not voluntary. Given this practical reality, the protocol is not in charge, the gatekeeper is. The gatekeeper can change the protocol whenever it feels like it - and coerce all validators to go along, lest they be de-permissioned and kicked out. In a permissioned chain, the protocol is more of a "best practice set of recommendations" than it is something inviolable. This is a problem because it returns us back to the ass-covering hell Satoshi identified. Both the participating validators and the gatekeepers can be held liable because they have the power to violate liveness, safety and CR whenever they feel it. And because they are all run by smart professionals, and employ conservative lawyers and GCs, they will definitely cover their ass. They will censor. They will roll back the chain if something bad enough happens. They'll even halt it if the government forces them to. That's not a bad thing. But it's a TradFi thing. It means a permissioned blockchain is a lot closer to a database than it is a chain. A bad database, overloaded with cryptography and consensus it doesn't really need. So why am I saying all of this? Because a really smart researcher who I respect responded to my critiques of Tempo yesterday by saying "Coinbase is a major Ethereum validator. So the same liability problem exists." But he/she is missing a key detail: Coinbase doesn't control Ethereum transactions, the protocol does. And because the protocol is robust, and the validator set is both diverse, global, and in some cases anonymous, Coinbase can plausibly claim being a neutral participant. Coinbase can't do that if it get's permissioned by Stripe or whoever to be a part of Tempo. In a legal preceding or government action, it could credibly be argued that "The CEO of Coinbase could have gotten @matthuang on the phone and convinced him to get the other validators to pair back the chain, at the risk of being kicked out." That can't be argued for @VitalikButerin on Ethereum, or anyone on Bitcoin. And of course the folks involved with Tempo/Arc/Canton etc etc know all of this, which is why they'll be buried with legal and contractual negotiations for the foreseeable future. All of that wrangling is why every other attempt at building a permissioned chain, despite the honest attempts of really smart people and the investment of countless millions, has ended in total disaster. Lastly, the claim that Tempo/ARC/Canton are "permissionless but public" is a fantasy. All permissionless chains will become private eventually. It's the natural order of things when a corporation, and not the protocol, is in charge.

Name & Symbol: AI Rig Complex ($arc)
Address: 61V8vBaqAGMpgDQi4JcAwo1dmBGHsyhzodcPqnEVpump

Stripe's Tempo and the newly announced corporate chains are more positive than negative for Ethereum. Why positive? On the surface, these reinforce EVM network effects (almost all use EVM) and brings more assets onchain, which will increase flows from tradfi to Ethereum. Assets that were in banks will be one step closer to Ethereum - this is good for ETH. Perhaps more impactfully, it differentiates the credibly neutrality of Ethereum - in a world of Circle's Arc, Stripe's Tempo, Tether's Plasma, and the dozens of corporate consortium L1 copycats sure to follow, in this war of all against all none will want to advantage the other, so all will ultimately use the neutral L1 of Ethereum as the only thing they can all agree on. I do think high TPS alt L1s face a more serious threat from these corpo chains. Speed, throughput, distribution - hard to compete against a Stripe L1 on these, the only moat is decentralization and openness, yet these alt L1s are pressured into the innovator's dilemma of chasing TPS and losing moat. But it's not all rosey for Ethereum. There was a naive belief that all corporate chains would become L2s as the obvious choice, but the results so far remain mixed. Ethereum is winning maybe 50% of new chains that matter - Coinbase, Robinhood yes - Circle and Stripe no. Why aren't all these becoming L2s? Probably because the benefits of shared liquidity (L2s fragmented, where's L2 interoperability?) and security (how much is really needed for RWAs?) haven't overcome the profit incentives (L1s get fat tokens) and technical limitations (L2s still not cheap/fast/private enough) sufficiently for L2s to win over these new corpo chains. Still 50% is a solid win rate, and there's the promise that as L2 interoperability is solved and L2 tech improves some of these L1s may later convert. This is not a given, Ethereum will have to execute it's roadmap and fight for this outcome. There's also the question - will any of these corpo L1s matter? None have in the past, but then again we've never had the stablecoin regulation and TradFi buy-in that we've have today. It is different this time. If i was a bank i'd be worried. Tldr; - Net bullish Ethereum - Bearish some alt L1s - Very Bearish banks

Name & Symbol: Allo ($RWA)
Address: 0x9c8b5ca345247396bdfac0395638ca9045c6586e

📊 UPDATE: Tokenized RWAs on Ethereum have surged ~20x since January 2024. https://t.co/03pA3JUHd0

Name & Symbol: Allo ($RWA)
Address: 0x9c8b5ca345247396bdfac0395638ca9045c6586e

Zora is cooking

Name & Symbol: Zora ($ZORA)
Address: 0x1111111111166b7fe7bd91427724b487980afc69

Came on Bankless today and broke my silence on the Roman Storm case. A lot to say—important discussion. We also talk Project Crypto, Ethereum's position in the market, and Zora vs Pump 👇

Name & Symbol: Zora ($ZORA)
Address: 0x1111111111166b7fe7bd91427724b487980afc69