Mint Ventures

By Alex Xu, Mint Ventures' research partner
Report Data as of: August 24, 2025
1. Research Summary
As a leading global crypto asset exchange and service provider, Coinbase leverages its brand trust, extensive user base, diversified product offerings, and early compliance initiatives to position itself as a core player capturing the long-term growth potential of the crypto industry.
Specifically:
It has a long-standing track record and brand recognition in compliant operations and secure, reliable services, with numerous institutional partners, which helps attract both institutional and retail clients.Revenue from subscriptions, interest, and other sources is growing well, making the business model more diversified and less reliant on transaction fees, thereby enhancing its resilience to market cycles.The balance sheet is strong, with low leverage and ample cash on hand, providing the company with both a buffer and firepower for technological innovation, international expansion, and navigating challenging market conditions.In sovereign countries like the U.S., overall crypto regulations tend to be relatively permissive and innovation-friendly. The long-term industry trend still points to growth, with blockchain and digital assets expected to become increasingly integrated into mainstream finance. Coinbase has established strategic positions across key sectors of the industry.
However, while Coinbase’s revenue and profits have shown somewhat reduced volatility compared with the previous cycle, they still experience significant swings (see Section 6: Operations & Financial Performance). This has become particularly evident in the latest two quarters.
In addition, Coinbase operates in a highly competitive landscape. In the U.S., it faces direct competition from Robinhood and Kraken, while internationally, it contends with numerous offshore crypto exchanges such as Binance, rapidly growing decentralized exchanges like Uniswap, and on-chain platforms like Hyperliquid, all of which are challenging the market share of traditional centralized exchanges.
Notably, during this bull market cycle, Coinbase’s price rose over 11x from its 2022 low, far exceeding Bitcoin’s gains over the same period and outperforming the majority of crypto assets.
It is fair to say that Coinbase simultaneously faces significant competitive challenges and historical opportunities. This is Mint Ventures’ first report on Coinbase, and we will maintain long-term observation of the company.
Disclaimer: This report reflects the author’s thoughts as of the date of publication. Opinions may change over time and are highly subjective. Errors in facts, data, or reasoning may exist. Nothing in this report should be considered investment advice. Feedback and further discussion from peers and readers are welcome.
2. Company Overview
2.1 Development History and Milestones
Coinbase was founded in 2012 by Brian Armstrong and Fred Ehrsam, with its headquarters in San Francisco. In its early days, the company focused on Bitcoin brokerage services and, in 2014, obtained one of the first BitLicenses issued by the state of New York.
Since then, Coinbase has continuously expanded its product offerings: in 2015, it launched the trading platform “Coinbase Exchange” (later rebranded as Coinbase Pro); in 2016, it began supporting trading of multiple crypto assets, including Ethereum. In 2018, the company entered the blockchain application space through acquisitions such as Earn.com and brought on Emilie Choi, a former LinkedIn executive, to lead its M&A strategy. In 2019, Coinbase acquired Xapo’s institutional business, cementing its leading position in custody services. That same year, its valuation surpassed $8 billion. On April 14, 2021, Coinbase successfully went public on Nasdaq, becoming the first major crypto exchange to list (and remains the only one to date), with its market capitalization exceeding $85 billion at one point. After going public, the company continued to expand globally and diversify its product line: in 2022, it acquired futures exchange FairX and entered the crypto derivatives market, and also launched an NFT marketplace (although trading volume later remained subdued). In 2023, Coinbase launched Base, an Ethereum Layer 2 network, to strengthen its on-chain ecosystem. The company also actively pursued regulatory approvals, obtaining licenses in multiple jurisdictions, including Singapore, the EU (Ireland), and Brazil, and in 2025, it completed the acquisition of leading options trading platform Deribit.
After more than a decade of development, Coinbase has grown from a single Bitcoin brokerage into a comprehensive crypto financial platform offering trading, custody, payments, and more.
2.2 Positioning and Target Customers
Coinbase’s mission is to “increase economic freedom in the world,” with a vision to modernize the century-old financial system and enable anyone to participate in the crypto economy in a fair and accessible way. The company positions itself as a secure and trusted one-stop platform for crypto assets, attracting retail users through simple and intuitive products while providing institutional-grade services to meet the needs of professional investors.
Coinbase’s customer base can be broadly categorized into three groups:
Retail Users: Individual investors interested in crypto assets. Beyond trading mainstream cryptocurrencies, Coinbase also offers features such as staking for yield generation, payments, and other utilities. Its Monthly Transacting Users (MTUs) peaked at 11.2 million in Q4 2021. Even during the market downturn in 2022–2023, it maintained a solid base of over 7 million quarterly active users. In Q1 2025, MTUs reached around 9.2 million, before slightly declining to approximately 9.0 million in Q2 2025.Institutional Clients: Since 2017, Coinbase has expanded aggressively into the institutional market by offering brokerage services via Coinbase Prime and custody solutions through Coinbase Custody. Clients include hedge funds, asset managers, and corporate treasury departments. By the end of 2021, Coinbase had over 9,000 institutional clients, including 10% of the world’s top 100 hedge funds. Institutions now account for the majority of trading volume on the platform (about 81% in 2024). Although fee rates are lower than for retail users, this segment contributes stable revenue streams through custody fees and trading income.Developers and Ecosystem Partners: Coinbase also treats developers and blockchain projects as ecosystem clients. Through “Coinbase Cloud,” the company provides infrastructure services such as node hosting and API access to support blockchain network development. In addition, Coinbase partners with new projects via listings and investments. Notably, the USDC stablecoin was co-launched by Coinbase and Circle. Coinbase plays dual roles as both an issuance partner and a major distribution platform, capturing significant revenue from interest income and channel fees shared with Circle.
Overall, Coinbase combines mass-market accessibility with institutional trust, bridging retail and institutional markets. Within the crypto ecosystem, it serves as a critical “gateway between the fiat and crypto worlds.”
2.3 Equity and Voting Rights Structure
The company adopts a dual-class share structure (Class A and Class B). Class A common shares are listed on Nasdaq, carrying one vote per share, while Class B common shares—held by the founders and executives—carry 20 votes per share. Founder and CEO Brian Armstrong holds approximately 23.48 million Class B shares, controlling over 64% of total voting power, which makes Coinbase a tightly controlled company. A small portion of Class B shares is also held by early investors such as Andreessen Horowitz. In mid-2025, Armstrong converted and sold a small number of his Class B shares but still retained roughly 469.6 million votes, equivalent to the voting power of Class A shares. Since Class B shares can be converted into Class A shares at a 20:1 ratio at any time, the company’s total share count may fluctuate slightly with conversions.This dual-class structure secures the founding team’s control over Coinbase’s strategic direction but also limits the influence of ordinary shareholders in corporate governance. Overall, Coinbase’s ownership is highly concentrated, with significant decision-making power in the hands of the founder, ensuring alignment in long-term vision and strategy.
3. Industry Analysis
3.1 Market Definition and Segmentation
Coinbase operates in the broader cryptocurrency trading and related financial services market. The core segments include:
Spot Trading Market: The buying and selling of crypto assets via order matching, which remains Coinbase’s core business. By trading pair, the market can be segmented into fiat-to-crypto (on-ramp) and crypto-to-crypto transactions. By customer type, it can be divided into retail and institutional trading.Derivatives Trading Market: Includes leveraged products such as cryptocurrency futures and options. This market has expanded rapidly in recent years, with crypto derivatives accounting for about 75% of total trading volume in H1 2025 (source: Kaiko). Coinbase entered the derivatives business relatively late and currently operates through a regulated futures exchange as well as international platforms.Custody and Wallet Services: Provide secure storage solutions for institutions and individuals holding significant amounts of crypto assets. The custody business is closely tied to trading, as clients engaging in large transactions on exchanges often require compliant custody arrangements.BlockchainInfrastructure and Other Services: Covers stablecoin issuance and circulation, blockchain operations (e.g., Base), payments and settlements, and staking. These “crypto-financial” services expand revenue sources beyond trading. For instance, Coinbase generates interest and fee income from the USDC stablecoin and staking operations.
3.2 Historical Scale and Growth (Past Five Years)
The overall cryptocurrency market has exhibited pronounced cyclical volatility. Measured by trading volume, the global crypto trading market expanded from approximately USD 22.9 trillion in 2017 to USD 131.4 trillion in 2021, representing an exceptionally high compound growth rate. Subsequently, volumes contracted to USD 82 trillion in 2022 amid a market downturn (–37% YoY) and further slipped to USD 75.6 trillion in 2023. In 2024, fueled by a new wave of market enthusiasm, the total annual trading volume rebounded to a record high of about USD 150 trillion—nearly doubling from 2023.
Industry scale is highly correlated with crypto asset prices and volatility. For example, in the 2021 bull market, token prices surged and speculative trading flourished, driving a YoY trading volume increase of nearly +196%. Conversely, in the 2022 bear market, depressed prices triggered a sharp decline of almost 40% in trading activity.From a user perspective, the global crypto ownership base has also fluctuated with market cycles but shows a long-term upward trend. According to research by Crypto.com, the number of global crypto users rose from roughly 50 million in 2018 to over 300 million in 2021, contracted somewhat in 2022, and then recovered to around 400 million by the end of 2023.
Coinbase’s own performance has closely tracked industry dynamics. Platform trading volume grew from USD 32 billion in 2019 to USD 1.67 trillion in 2021, before falling to USD 830 billion in 2022 and further to USD 468 billion in 2023. On the user side, Coinbase’s Monthly Transacting Users (MTUs) increased from under 1 million in 2019 to an annual average of 9 million in 2021, then moderated to the 7–9 million range per quarter during 2022–2023.
In summary, over the past five years, the industry has demonstrated substantial medium- to long-term growth, albeit with sharp cyclical fluctuations.
3.3 Competitive Landscape & Coinbase Market Share (Past Five Years)
The cryptocurrency exchange industry is highly competitive, with market dynamics shifting alongside broader industry cycles.
Globally, Binance has rapidly risen since 2018 to become the largest exchange by trading volume. At its bull-market peak, Binance’s spot market share exceeded 50%; as of early 2025, it still maintained around 38%, ranking first. Other major players include OKX, Coinbase, Kraken, Bitfinex, and regional leaders such as Upbit in Korea. In recent years, emerging platforms such as Bybit and Bitget have also gained meaningful market share. Coinbase’s global market share has generally fluctuated in the 5–10% range. For instance, in H1 2025, Coinbase accounted for roughly 7% of the combined spot trading volume among the global top 10 exchanges, on par with OKX and Bybit. By comparison, Binance’s share was several times higher. It is important to note that Coinbase’s focus on the regulated U.S. market—and its decision not to engage in aggressive listing of speculative tokens—has limited its global ranking relative to more aggressive or wash-trading–prone competitors. However, in fiat-to-crypto on-ramp services and the U.S.-regulated market, Coinbase holds a clear advantage. Since 2019, Coinbase has consistently ranked as the largest exchange by trading volume in the U.S., and further strengthened its U.S. spot and derivatives market share in 2024. Following the collapse of FTX in 2022, Coinbase’s position in the U.S. has become even more dominant.
Market Dynamics over the Past Five Years
Several notable shifts have occurred:
Market share concentration followed by fragmentation: After FTX’s collapse in 2022, Binance’s global market share surged from 48.7% in Q1 to 66.7% in Q4. Since then, its dominance has eroded, with Bybit, OKX, Bitget and others steadily gaining share, intensifying competition.Rising regulatory pressure driving regional divergence: In the U.S., heightened compliance requirements have reduced the number of viable exchanges (leaving primarily Coinbase and Kraken). In contrast, Asian platforms have grown rapidly, with Upbit becoming dominant in South Korea and Gate.io expanding across Southeast Asia.
3.4 Industry Scale and Growth Outlook (Next 5–7 Years)
Looking ahead over the next 5–7 years, the cryptocurrency trading industry is expected to continue expanding, though the pace of growth will depend on multiple factors and scenario assumptions. Industry research reports (from SkyQuest, ResearchAndMarkets, Fidelity, Grand View Research, etc.) generally project the crypto market to sustain a double-digit CAGR.Under the base-case scenario—assuming macroeconomic stability and no severe deterioration in regulatory conditions—the total global crypto market capitalization could rise from the current level of just over USD 3 trillion to the USD 10 trillion range by 2030. Trading volumes are likewise expected to increase significantly; however, as the market matures, volatility may decline, leading to trading volume growth slightly lagging behind market cap growth. We forecast an average annual growth rate of around 15% in trading activity.
Key growth drivers for the industry include:
Asset Price Trends: Continued new highs in leading assets such as Bitcoin would lift the broader market. Rising prices and higher volatility tend to stimulate trading activity, amplifying transaction volumes.Derivatives Penetration: With derivatives already accounting for ~75% of total trading volumes, further expansion is expected. Institutional investors favor futures and other hedging tools, while retail adoption of leveraged products is also likely to increase. Assuming the derivatives share rises to 85% by 2030, overall trading volume could be boosted by an additional 1.2x or more.Institutional Adoption: Greater participation from traditional financial institutions (asset managers, banks, etc.) could introduce trillions of dollars in new capital. Examples include broader ETF approvals, institutional access channels (many are still restricted from holding direct crypto exposure, even via ETFs), and potential allocations from sovereign wealth funds. Such inflows would significantly deepen market liquidity and drive demand for both trading and custody. Fidelity, for instance, projects institutional capital inflows to add hundreds of billions of dollars annually to crypto market cap over the coming years.Regulatory Clarity: Clear and consistent regulatory frameworks will reduce participation risks and attract new entrants. In an optimistic scenario, major economies implement well-defined licensing regimes, expand ETF availability, and broadly legalize institutional participation—leading to higher user adoption and activity. In a pessimistic scenario, restrictive policies (e.g., banking access limits, strict capital requirements) could cap or stall growth. At present, regulatory clarity appears to be improving: the passage of the U.S. Genius Stablecoin Act and the Clarity Act in the House have created a positive precedent that may influence other developed economies. Overall, the global policy trajectory toward clearer rules is encouraging.
Scenario Analysis: Industry Outlook 2025–2030
Base Case: Assuming a stable macro environment and cautious but supportive regulation in major economies, crypto assets gradually gain wider investor acceptance. Under this scenario, market capitalization grows at an annual rate of around 15%, while trading volumes expand at 12% CAGR. By 2030, total annual global trading volume could reach approximately USD 300 trillion, with industry revenues (primarily trading fees) rising accordingly. Leading regulated platforms such as Coinbase are expected to see steady gains in market share. The industry experiences healthy, sustainable growth without excessive bubbles.Optimistic Case: Assuming a boom similar to the “fintech” wave, major economies (especially the U.S.) establish clear regulatory frameworks, large institutions and corporates enter aggressively, and crypto technologies achieve broad adoption (e.g., rapid growth and mass adoption of DeFi). Asset prices surge (with Bitcoin potentially reaching the USD 1 million level by 2030, in line with long-term projections from ARK Invest). Market capitalization grows at 20%+ CAGR, and trading volumes at 25% CAGR. Under this projection, annual trading volume could soar to USD 600–800 trillion by 2030. Regulated giants such as Coinbase capture outsized profits in this explosive growth phase, with industry ceilings raised substantially.Pessimistic Case: Assuming adverse macro conditions or heavy regulatory headwinds—for example, strict restrictions from major countries—crypto assets remain in prolonged stagnation. Industry scale may plateau, grow only marginally, or even contract in some years. In the worst case, trading volume growth slows to low single digits, stagnates, or turns negative, leaving annual volumes stuck at USD 100–150 trillion by 2030. While Coinbase and other regulated exchanges may gain market share (as unregulated competitors are squeezed out), their absolute business growth would remain limited.
Overall Outlook:We lean toward a base-to-slightly-optimistic scenario: the crypto trading industry is likely to continue its cyclical yet upward trajectory over the next 5–7 years, with total scale rising year by year. Crypto users and industry coalitions have already become a political force that cannot be ignored in many countries—most notably in the 2024 U.S. elections, where Republican momentum against the Democrats was strongly supported by the crypto community. Since then, Democrats have taken a noticeably softer stance on crypto legislation requiring bipartisan support. In fact, many Democratic lawmakers voted in favor of both the Genius Act (passed by both chambers) and the Clarity Act (passed in the House), underscoring a structural shift toward regulatory moderation.
4. Business and Product Lines
Coinbase currently operates a diversified business model, with revenue primarily derived from two major segments: Trading and Subscriptions & Services, each supported by multiple product lines. Below we outline the business model, key metrics, revenue contribution, profitability, and future roadmap of its major businesses.
Retail Trading (Brokerage Business)：Future roadmap: Coinbase is expanding its retail offerings to increase user stickiness. Initiatives include the Coinbase One subscription service (providing zero-fee trading allowances and premium features), continued expansion of tradable tokens (48 new assets listed in 2024, including popular meme coins to drive traffic), and enhanced user experience (simplified interfaces, educational content). The company is also exploring social trading and automated investment tools. With market recovery, retail trading will remain the cornerstone of Coinbase’s revenue base, with growth depending on broader market sentiment and Coinbase’s ability to capture market share.Professional & Institutional Brokerage: This segment encompasses trading services for high-net-worth individuals and institutional clients, primarily through Coinbase Prime and the now-integrated Coinbase Pro platform. These professional platforms offer deep liquidity, lower fees, and API access to attract large-volume traders and market makers. Institutional trading accounts for the majority of Coinbase’s volume—80–90% of total (e.g., in 2024 institutional trading volume reached $941 billion, or 81% of the total). However, with fee rates typically ranging from a few basis points to 0.1%, the direct revenue contribution is modest—about 10% of total trading revenue in 2024. That said, the indirect benefits of institutional business are substantial: institutions often leave significant assets under custody at Coinbase and participate in staking programs, generating custody fees, interest income, and financing revenues. Moreover, active institutional participation enhances platform liquidity and improves price discovery, ultimately benefiting retail users’ trading experience. Key metrics include institutional client count and Assets Under Custody (AUC). Coinbase’s AUC peaked at $278 billion in Q4 2021, fell to $80.3 billion by end-2022 amid the market downturn, then rebounded to ~$145 billion by end-2023. Entering 2025, institutional custody momentum remained strong: Q1 2025 average AUC reached $212 billion, up $25 billion QoQ，Q2 2025 set another record at $245.7 billion. Profitability: While institutional trading itself has limited direct margin contribution, custody, financing, and staking services meaningfully expand revenue streams.Future roadmap: Coinbase is scaling its derivatives offering to meet institutional demand. In 2023, it launched perpetual futures for overseas clients and, via its U.S. broker subsidiary, secured approval to offer Bitcoin and Ethereum futures to U.S. institutions. Coinbase also established Coinbase Asset Management (via the 2023 acquisition and restructuring of One River Asset Management), with plans to launch crypto investment products such as ETFs and index baskets to broaden institutional participation. A landmark step came in late 2024 when Coinbase announced the $2.9 billion acquisition of Deribit, the world’s leading crypto options exchange (deal structure: ~$700 million in cash plus 11 million shares of Coinbase Class A common stock). This transaction marked one of the largest M&A deals in crypto industry history, aimed at rapidly strengthening Coinbase’s global derivatives presence. Deribit processed $1.2 trillion in options trading volume in 2024, up 95% YoY, and dominates the market with over 87% share in Bitcoin options. Through this integration, Coinbase gained immediate leadership in Bitcoin and Ethereum options markets. Together with its futures and perpetual contracts, the acquisition significantly broadens Coinbase’s institutional derivatives portfolio, reinforcing its position as the go-to platform for institutions entering the crypto space.Custody and Wallet Services:Future roadmap: Coinbase plans to continue investing in custody technology and security to meet regulatory requirements (e.g., the New York Trust license under regulated Custody Trust). The company also aims to expand custody services across additional asset classes and geographies, including institutional staking and custody for ETFs. In 2024, Coinbase was selected as the custodian for multiple Bitcoin spot ETFs.Subscriptions & Services Revenue (Staking, USDC Interest, etc.)： In recent years, Coinbase has focused on developing a diversified revenue stream under the Subscriptions & Services segment. Key components include:Staking Services: Users delegate their crypto holdings via Coinbase to participate in blockchain staking and earn network rewards. Coinbase collects a commission (typically ~15%) from these rewards. Staking provides users with passive income while generating revenue for the platform. Since mainstream assets like Ethereum opened for staking in 2021, this revenue line has grown rapidly.Stablecoin Interest Income (USDC): Interest earned on USDC has become a significant revenue contributor for Coinbase in recent years. In 2023, with rising interest rates and expanded USDC reserves, Coinbase generated approximately $695 million in USDC interest income, representing about 22% of total revenue, significantly higher than in prior years. In 2024, as USDC market rates and circulation continued to increase, Coinbase’s annual USDC-related interest income rose to around $910 million, up 31% YoY. Although its share of total revenue declined to ~14%, the absolute amount reached a new high. By Q2 2025, Coinbase reported $333 million in stablecoin interest income, accounting for 22.2% of quarterly revenue. This stable income primarily comes from Coinbase’s revenue-sharing agreement with Circle: interest generated from USDC reserves is split 50/50, and interest from USDC held on Coinbase’s platform accrues 100% to Coinbase. As a result, USDC interest has become the fastest-growing and largest single line within Coinbase’s Subscriptions & Services segment, providing a recurring revenue source beyond transaction fees.In 2023, Coinbase strengthened its strategic collaboration with Circle, making significant adjustments to the joint operation model under Centre, the governance entity originally created by both parties. As part of this restructuring, Coinbase acquired equity in Circle, becoming one of its minority shareholders. Specifically, Circle purchased the remaining 50% stake in Centre Consortium held by Coinbase for approximately $210 million in Circle stock, in exchange granting Coinbase equivalent economic interest and certain governance influence. Following the transaction, the Centre Consortium was dissolved, and Circle assumed sole responsibility for USDC issuance and governance. Despite Circle taking over full management, Coinbase’s influence in the USDC ecosystem increased, as the new agreement grants Coinbase substantive participation and veto rights on major USDC strategies and partnerships, including a single-vote veto on any proposed USDC partnership agreements, ensuring that Coinbase’s interests remain aligned with USDC’s development. Furthermore, adjustments to the revenue-sharing mechanism, particularly the division of interest income, have strengthened the incentives for both parties to promote USDC adoption. These measures have encouraged Coinbase to actively support USDC by listing it on additional blockchains and offering incentives and rewards across its international exchanges and wallet products, such as higher yields for USDC holdings. Overall, the 2023 equity investment and agreement restructuring significantly strengthened Coinbase’s alliance with Circle, enabling Coinbase to participate more deeply in USDC governance while simultaneously promoting its adoption, jointly expanding the market influence and capitalization of this regulated stablecoin.Other subscription services include Coinbase Earn, which rewards users for engaging with educational content, Coinbase Card, which offers cashback on debit card transactions, and Coinbase Cloud, which provides blockchain infrastructure services. Although currently small in scale, these services offer business synergies and align with Coinbase’s strategy of building a comprehensive crypto platform. For example, Coinbase Cloud supplies nodes and exchange APIs to institutions and developers, supporting the launch of multiple blockchain networks in 2024, and has the potential to evolve into an “AWS-like” business within the crypto sector over the long term.The Subscriptions & Services segment has grown significantly, rising from less than 5% of total revenue in 2019 to approximately 40–50% today, serving as a stable revenue source during periods of weak trading activity. Gross margins are very high, approaching 90%, due to the low costs associated with interest and fee-based income. Looking ahead, Coinbase plans to continue expanding this segment by introducing more subscription packages for high-frequency users, supporting a broader range of stakable assets, and deepening the global adoption of USDC, including innovations such as using USDC as margin for U.S. futures trading. This segment is expected to become an important stabilizer against trading volatility.Decentralized Business: Base Layer-2 NetworkPositioning and Vision: Base is an Ethereum Layer-2 network launched by Coinbase in August 2023, built on the Optimism OP Stack, with the goal of smoothly onboarding over 100 million Coinbase users into the on-chain ecosystem. According to the official roadmap as of January 2025, Base plans to achieve sequencer decentralization by the end of 2025 and share network revenue through community governance.Key Operational Metrics: As of August 2025, Base’s on-chain assets totaled approximately $15.46 billion, with 30.7 million monthly active addresses, 9.24 million daily transactions, and $204,000 in daily on-chain fee revenue, ranking first among all Layer-2 networks.Revenue Contribution: Coinbase classifies Base sequencer fees as “other trading revenue.” In 2024, Base contributed roughly $84.8 million to Coinbase (Tokenterminal data; not specifically disclosed in official financial statements), with revenue reaching $49.7 million year-to-date in 2025. Base has become one of Coinbase’s most promising on-chain revenue engines beyond trading fees and interest income.Other Potential Business Lines: Coinbase is also exploring new opportunities, such as the NFT marketplace launched in 2022 (Coinbase NFT), which saw low user engagement and had investment scaled back in 2023, and payment and merchant tools like Coinbase Commerce, which allows merchants to accept crypto payments and primarily serves as a strategic initiative. While these businesses currently contribute minimally to financials, they are strategically important for completing the ecosystem and enhancing user reliance on the Coinbase platform.
The table below shows Coinbase’s 2024 revenue composition and segmental contributions.

Summary of Business and Product Lines
Coinbase’s business has expanded from a single trading platform to a multi-engine model encompassing trading, custody, staking, and stablecoins. This diversification has reduced reliance on trading fees—with non-trading revenue accounting for 40% of total revenue in 2024—while also enhancing customer stickiness, as users keep assets on the platform to earn staking rewards or utilize stablecoins, reducing the likelihood of migration elsewhere. The various business lines create synergies: trading drives asset retention, retained assets generate staking and interest income, which in turn incentivizes further trading. This “flywheel effect” is a key component of the moat Coinbase is building. However, the company must carefully balance regulatory compliance and resource allocation to ensure sustainable operations; for instance, staking and lending must comply with securities laws, and stablecoins require transparent reserves. Overall, Coinbase’s product line is comprehensive, positioning it as one of the first firms in the industry to build an integrated crypto financial services platform, providing a relatively stable revenue structure and growth path in a highly competitive market.
5. Management and Governance
In evaluating Coinbase’s management, we focus on several dimensions: the background and stability of the executive team, and the quality of past strategic decisions.
5.1 Core Management Team Background
Brian Armstrong – Co-founder, Chief Executive Officer (CEO), and Chairman of the Board, holding the majority of voting power in the company. Born in 1983, Armstrong previously worked as a software engineer at Airbnb. He founded Coinbase in 2012 and is one of the earliest entrepreneurs in the crypto space. Armstrong emphasizes the company’s long-term mission and product simplicity, and is known internally for adhering to principles, such as the “no politics” cultural statement issued in 2020.Fred Ehrsam – Co-founder and Board Member. Formerly a foreign exchange trader at Goldman Sachs, Ehrsam co-founded Coinbase with Armstrong in 2012 and served as its first president. He stepped down from day-to-day management in 2017 to establish the prominent crypto investment fund Paradigm, but remains on the board, providing guidance on industry trends and company strategy.Alesia Haas – Chief Financial Officer (CFO). Haas joined Coinbase in 2018, previously serving as CFO at hedge fund Och-Ziff (now Sculptor Capital) and as an executive at OneWest Bank, bringing extensive experience in traditional finance and capital markets. She led the company through IPO preparation, emphasized financial discipline, and implemented two rounds of layoffs in 2022 to control costs. Haas also oversees Coinbase subsidiary Coinbase Credit, exploring crypto lending initiatives.Emilie Choi – President and Chief Operating Officer (COO). Choi joined Coinbase in 2018 as VP of Business Development and was promoted to President and COO in 2020. Prior to Coinbase, she led M&A and investment at LinkedIn, including the acquisition of SlideShare, and is known for strategic expansion expertise. At Coinbase, Choi has driven multiple acquisitions (Earn.com, Xapo Custody, Bison Trails) and international expansion, making her one of the most influential executives after Armstrong. She also oversees daily operations, talent management, and strategic project execution.Paul Grewal – Chief Legal Officer (CLO). Joining in 2020, Grewal was previously Deputy General Counsel at Facebook and a former federal judge. He is responsible for managing Coinbase’s legal and regulatory matters, including litigation with the SEC in 2023. His team plays a key role in compliance and policy advocacy.Other Key Executives: The Chief Product Officer role was held by Surojit Chatterjee (former Google executive) from 2020 to 2022; after his departure in early 2023, product leadership has been managed by multiple department heads. The Chief Technology Officer (CTO) position has been held by Greg Tusar and others, with engineering executives collectively managing technology. Chief People Officer (CPO, HR) LJ Brock leads recruitment and cultural initiatives, while Chief Marketing Officer Kate Rouch (former Facebook marketing director) contributes cross-industry expertise.
Overall, the leadership team combines young, entrepreneurial founders with seasoned professionals from traditional finance and tech giants, enabling Coinbase to balance technological innovation with regulatory execution. All executives hold significant equity or stock options, and Armstrong benefits from a special CEO performance equity plan designed to incentivize achieving long-term market capitalization targets over ten years.
5.2 Personnel and Strategic Stability
Coinbase has experienced fluctuations in both personnel and strategy, but overall maintains consistency.
Executive Turnover: Most of the core founding team remains in place (Armstrong and Ehrsam on the board). However, in recent years, some executives have departed: for example, former Chief Product Officer Surojit Chatterjee left in early 2023, and the CTO and Chief Compliance Officer roles have seen several changes. Some turnover was market-driven—during the 2022 bear market and performance downturn, management was streamlined. Additionally, after Armstrong announced the “no politics” policy in 2020, about 60 employees were laid off, including the former Chief People Officer. Despite this, the top leadership has remained largely stable: the CEO, CFO, and COO have served for many years and led the company through its IPO, while the legal head has maintained continuity. This indicates a relatively mature management team with key positions experiencing minimal disruption.Strategic Direction Consistency: Since its founding, Coinbase’s core mission—to build a trusted crypto financial ecosystem—has remained unchanged. Strategic priorities have evolved with the industry but maintain a clear trajectory: early focus on Bitcoin brokerage and user growth, followed by expansion of supported assets and international markets. Since 2020, Coinbase has pursued a dual-track strategy: serving both retail and institutional clients while growing subscription-based revenue to diversify its business model. Even during market downturns (e.g., 2018 and 2022), the management continued investing in new products, such as launching USDC in 2018 and entering the NFT platform and derivatives space in 2022, demonstrating confidence in the long-term crypto trend. Corrections have been made where needed—for instance, scaling back the NFT initiative in 2023 after weak adoption, and implementing two rounds of layoffs totaling ~2,100 employees (~35% of staff) in FY2022 after over-hiring, which improved operational efficiency. Overall, Coinbase demonstrates strong strategic execution, without major missteps or disruptive pivots, aligning decisions with industry development.Strategic Alignment: Quantifying strategic consistency, such as tracking early positioning in key technologies and markets, shows that Coinbase has generally anticipated major industry trends: supporting Ethereum as early as 2015 (betting on smart contracts), launching the stablecoin USDC in 2018 (positioning for compliant stablecoins), applying for futures licenses in 2021 (forward-looking on derivatives), and later developing its own L2 network. These moves have largely aligned with industry evolution, reflecting strong management judgment. There have been missteps, such as missing the early DeFi and decentralized exchange (DEX) wave in 2019–2020, only later entering through Base; however, given Coinbase’s focus on compliance, this may have been a deliberate strategic choice.
5.3 Strategic Capability Review
Key examples of successes and missteps in Coinbase management’s decision-making include:
Strategic Successes: Coinbase has long prioritized compliance. Since its founding, the company proactively applied for FinCEN registration and state licenses in 2013. This early emphasis on regulatory adherence proved prescient: while competitors were forced to exit the U.S. market due to compliance issues, Coinbase had already established a regulatory moat and earned strong trust from domestic users (the company has never experienced major client fund theft), expanding its U.S. market share. Another success was the timing of the IPO—management capitalized on the 2021 bull market peak to go public, providing ample capital and brand credibility, while rewarding early investors and employees, thereby stabilizing morale. The acquisition strategy has also been effective, such as the 2019 purchase of Xapo’s institutional custody business, which quickly positioned Coinbase as one of the largest crypto custodians globally, securing a first-mover advantage in the institutional market. These examples demonstrate the management team’s strategic vision and execution capability.Strategic Missteps: Rapid expansion led to layoffs. During the 2021 bull market, Coinbase’s headcount surged from roughly 1,700 to nearly 6,000 by early 2022 (currently around 3,700), resulting in overstaffed departments. Armstrong publicly acknowledged that the aggressive hiring led to efficiency decline. When the market cooled in 2022, the company had to implement two rounds of large-scale layoffs, impacting morale. Another setback was the NFT Marketplace launch—Coinbase invested in the NFT platform in April 2022, aiming to replicate OpenSea’s success. However, late entry, lack of differentiation, and a cooling NFT market led to persistently low monthly transaction volume, and the company eventually largely abandoned operations. While management’s experimental initiatives did not always meet expectations and some market judgments were off, overall losses were limited and corrective actions were timely.
Overall, Coinbase demonstrates solid management capability. Core team members remain stable, strategic judgment generally aligns with industry trends, and the company has not missed major opportunities. While there have been occasional cost-control issues and product exploration failures, these do not overshadow the team’s overall effectiveness.
6. Operations and Financial Performance
This section focuses on Coinbase’s revenue, profitability, costs, and balance sheet to assess the company’s earnings quality and financial stability.
6.1 Income Statement Overview (5 Years)
Coinbase’s revenue and profit performance is highly dependent on crypto market conditions, exhibiting “rollercoaster” volatility.
Revenue： In 2019, total revenue was only $534 million. It rose to $1.28 billion in 2020, driven by a Bitcoin mini-bull market (+140%). The 2021 bull market saw revenue surge to $7.84 billion (+513% YoY). During the 2022 bear market, revenue sharply dropped to $3.15 billion (-60%) and further declined to $2.92 billion in 2023. With market recovery in 2024, revenue rebounded strongly to $6.564 billion, roughly doubling compared with 2023. In Q1 2025, Coinbase continued the strong momentum from late 2024, achieving total revenue of about $2.03 billion, a 24% YoY increase. In Q2 2025, revenue declined sequentially to approximately $1.5 billion, down 26% from Q1 2025, primarily due to a 16% drop in crypto market volatility, which weakened investor trading activity. This demonstrates that Coinbase’s revenue remains highly sensitive to market fluctuations, with noticeable short-term swings. However, compared to the same period last year, total revenue for the first half of 2025 still grew by around 14%. Overall, over the past five years, the company’s revenue has shown “rollercoaster” behavior with extreme cyclicality: from 2019 to 2024, the compound annual growth rate (CAGR) was about 40%, but annual fluctuations exceeded ±50%, reflecting bull-market spikes and bear-market halving, trends that continue to be evident in the first half of 2025.

Coinbase Revenue (TTM) Trend, Sep 2020 – Jun 2025, Source: Seeking Alpha

Coinbase Annual Revenue (Including Forecast), 2020–2026, Source: Seeking Alpha
Revenue Composition: Trading fees have long been Coinbase’s primary revenue source, but their share has gradually declined. In 2021, trading revenue was $6.9 billion, accounting for about 87% of total revenue; in 2022, it fell to $2.4 billion (77%); in 2023, trading revenue dropped further to $1.5 billion (52%); and in 2024, it rebounded to approximately $4.0 billion (about 61%). Correspondingly, subscription and services revenue—which includes staking, interest, custody, etc.—rose from less than 5% in 2019 to 48% in 2023, before slightly declining to about 35% in 2024 (absolute value $2.3 billion).In Q1 2025, trading fee revenue was approximately $1.26 billion (+17.3% YoY), accounting for over 60% of quarterly revenue, while subscription and services revenue reached $698 million (+37% YoY), contributing more than 30% of revenue, mainly driven by rising USDC stablecoin interest income and growth in Coinbase One subscribers. In Q2 2025, trading and subscription revenue shifted in opposite directions: trading fees totaled about $764.3 million (around 54% of total revenue), while subscription and services revenue increased to $655.8 million (+9.5% YoY), rising to roughly 46% of total revenue—nearly matching trading revenue. Growth in the subscription segment was primarily fueled by USDC interest and custody services; Q2 average USDC reserves increased 13% from the previous quarter to $13.8 billion, generating substantial and stable interest income. Meanwhile, staking services and institutional custody fees continued steady growth, helping Coinbase’s subscription revenue reach record levels. For the first half of 2025, subscription and services revenue accounted for about 44% of total revenue, up significantly from 35% for the full year of 2024, further consolidating Coinbase’s business diversification. This shift in revenue composition reduces reliance on trading fees, helping mitigate the impact of sharp market fluctuations on overall revenue.Profitability: Benefiting from its high-margin business model, Coinbase’s profitability is extremely sensitive to trading volume. In 2019, the company still recorded a small loss of $30 million. In 2020, net profit reached $322 million (net margin 25%), and in 2021, net profit soared to $3.624 billion (net margin ~46%), exceeding the total profits of all prior years combined. However, in 2022, Coinbase suffered a massive net loss of $2.625 billion (net margin -83%), marking its worst year ever. In 2023, the company returned to modest profitability with a net income of $95 million (net margin 3%), and in 2024, net profit climbed to $2.579 billion (net margin ~39%), second only to the 2021 peak. This demonstrates that Coinbase’s profits fluctuate sharply in line with revenue. In Q1 2025, net profit was $66 million, appearing significantly lower than the previous quarter. However, this was mainly due to declines in the fair value of crypto assets, stock-based compensation, and litigation expenses. Adjusting for after-tax fair value changes in crypto investments and other one-time items, core operating net profit for the quarter was $527 million, more accurately reflecting operating performance. In contrast, Q2 2025 showed a dramatic spike: GAAP net profit reached $1.429 billion, a year-over-year surge (Q2 2024 net profit was only $36 million), with a net margin of about 95%. Yet, this unusually high profit primarily stemmed from non-recurring gains: $1.5 billion from the strategic revaluation of Coinbase’s equity stake in Circle and $362 million from crypto investment portfolio gains. After excluding these one-time items—and accounting for nearly $438 million of related tax adjustments—the adjusted Q2 net profit was only around $33 million, significantly lower than Q1’s $527 million, reflecting weakened core business profitability due to declining trading volume. Overall, Coinbase’s profitability remains highly cyclical: during bull markets, net margin can exceed 30–40% of revenue, whereas in downturns, losses can occur if cost control is insufficient. Nevertheless, the company’s ability to quickly return to break-even in 2023 following the massive 2022 loss—through layoffs and expense reductions—demonstrates operational flexibility and resilience.Expense Structure: On the cost side, Coinbase’s expenses are primarily composed of operating costs, including R&D, sales, and general administrative expenses, while direct trading costs are relatively small. Sales and marketing expenses typically account for less than 10% of revenue, and after 2022, they were further reduced to below 5%, reflecting disciplined marketing spending. Combined R&D and general administrative expenses make up roughly 20–30% of revenue, including substantial stock-based compensation (SBC) for employees. For example, during the 2021 IPO, a one-time equity-related expense was recognized, and from 2022 to 2023, annual SBC expenses remained around $300–500 million. The expense ratio (operating expenses as a percentage of revenue) is highly cyclical: it was significantly diluted during the bull market (around 22% in 2021) but spiked in the bear market (over 100% in 2022). Following layoffs and cost control, the ratio fell back to 70% in 2023. Since 2024, Coinbase has continued strict expense management, aligning staffing and project investment with business needs. Notably, in Q2 2025, a major data breach led to litigation and compensation expenses of approximately $307 million, causing total operating expenses to surge 15% quarter-over-quarter to $1.52 billion. Excluding this one-time event, core operating costs actually continued their downward trend. Stock-based compensation remains a significant portion of expenses and warrants ongoing attention: Q2 2025 SBC costs reached $196 million, up 3% from Q1, suggesting that annual SBC expenses could exceed $700 million. Overall, Coinbase’s expense structure is relatively flexible, with personnel and project spending adjustable according to market conditions, though the dilutive effect of stock-based compensation needs to be monitored.
6.2 Profitability and Efficiency (5-Year Overview)
Combining multiple ratio metrics to evaluate Coinbase’s profitability quality and operational efficiency:
Gross Margin: Coinbase has maintained a high gross margin of 80–90% over the long term, reflecting the high-profit nature of its transaction fee business. For example, gross margin was approximately 88% in 2021, 81% in 2022, and rose to 84% in 2023 despite lower revenue (due to a higher proportion of interest income, which has minimal associated costs), reaching 85% in 2024. Even in Q2 2025, with declining trading volumes, gross margin remained around 83%. This indicates that regardless of market conditions, most of every dollar of revenue converts into gross profit, placing Coinbase ahead of peers (traditional securities brokers typically have gross margins of 50–60%).Net Margin: Net margin has been highly volatile. In 2021, net margin reached 46%, comparable to the most profitable tech companies; it fell to -83% in 2022 due to severe losses, recovered to 3% in 2023, and rose to 39% in 2024. In Q2 2025, adjusted net margin (excluding non-recurring items) was only about 2%. On average, during normal or bull market conditions, Coinbase’s net margin is around 30–40%, demonstrating strong profit leverage, but it can incur losses in downturns without timely cost reductions.ROE / ROA: Due to profit volatility, Return on Equity (ROE) and Return on Assets (ROA) fluctuate significantly. ROE exceeded 60% in 2021 (high profits combined with limited net asset expansion from the IPO), dropped to -40% in 2022, was below 2% in 2023, and rebounded to around 25% in 2024. ROA was about 20% in 2021 and approximately 15% in 2024, reflecting slightly lower efficiency after balance sheet expansion. Overall, Coinbase’s ROE during profitable years is far above that of traditional financial firms, though stability is weaker.Per-Employee Efficiency: Given the large fluctuations in headcount, revenue per employee is used to gauge efficiency. In the 2021 bull market, per-employee annual revenue reached approximately $1.9 million; it dropped below $500,000 in 2022, and after layoffs rebounded to $0.8–1 million per employee in 2023. This remains higher than most traditional financial institutions, indicating the scale economy of Coinbase’s digital platform model. With a reasonable workforce (currently around 3,700 employees), per-employee revenue is expected to stabilize around $1 million, potentially exceeding this in another super bull market.

Revenue per Employee Comparison of Trading-Focused Financial Institutions (2024)
6.3 Cash Flow and Capital Expenditures (5-Year Overview)
Coinbase’s operating cash flow is also cyclical, but overall remains positive.
Operating Cash Flow (OCF): In 2021, OCF was very strong, with net cash inflow from operations of approximately $10 billion, mainly due to a surge in customer trading volume and resulting fund deposits. Free cash flow was substantially positive that year. In 2022, operating cash flow turned negative, with an outflow of about $2 billion, reflecting losses and changes in working capital. In 2023, through cost reductions and interest income, operating cash flow returned to positive, reaching approximately $520 million. In 2024, OCF surged, with net cash inflow from operations totaling $2.5 billion for the year, more than doubling year-over-year, driven by restored profitability and increased customer funds.Investing Cash Flow: As a light-asset company, Coinbase’s capital expenditures (CapEx) are relatively low, mainly allocated to acquisitions and platform R&D. From 2019 to 2021, annual CapEx averaged only tens of millions of dollars (for servers, office facilities, etc.). In 2022, CapEx increased to about $150 million (including office building purchases and data center expansion), and contracted again to roughly $50 million in 2023. Regarding acquisitions, the company spent significant cash around 2021 (e.g., acquiring Bison Trails and Skew for a total of about $100 million). Acquisitions slowed in 2022–2023. In 2024, Coinbase made smaller acquisitions, such as One River Asset Management. Overall, investing cash flow was a net outflow but not large enough to impact the company’s main operations. Additionally, from late 2024 to early 2025, Coinbase announced a major acquisition of the derivatives exchange Deribit, with a total deal value of approximately $2.9 billion, including $700 million in cash and the issuance of roughly 11 million shares of Coinbase stock.Free Cash Flow: Considering operating cash minus capital expenditures, Coinbase generates substantial free cash flow in profitable years: $9.7 billion in 2021, negative in 2022, recovered to about $400 million in 2023, and approximately $2.56 billion in 2024, demonstrating strong cash-generating capacity. Excess cash is primarily allocated to safe assets (e.g., short-term U.S. Treasury securities) or held in certain crypto assets.Financing Cash Flow: In 2021, Coinbase raised about $3.25 billion through convertible and corporate bonds, while its direct listing did not raise new equity. There were no major financing activities in 2022. In 2023, Coinbase proactively repurchased or retired part of its debt, buying back approximately $413 million at a discount to reduce interest expenses. The company has no dividend plans and only conducted small-scale stock repurchases at the end of 2022 and in 2023 to hedge equity incentives. Overall, the company’s financial policy is conservative and prudent.Cash Reserves: As of Q1 2025, Coinbase held approximately $9.9 billion in cash and cash equivalents. By Q2 2025, cash and equivalents had decreased to $7.539 billion, representing a notable drop but still maintaining a relatively healthy liquidity position.
6.4 Balance Sheet Stability (5 Years)
Coinbase’s balance sheet is relatively robust, characterized by high liquidity and low leverage.
Debt Levels: During the 2021 bull market, the company issued debt twice: a $1.25 billion convertible bond maturing in 2026, and senior notes totaling $2.0 billion maturing in 2028 and 2031. This brought long-term debt to a peak of approximately $3.25 billion. Coinbase did not raise additional debt in 2022–2023, and by the end of 2023, debt had decreased to about $2.8 billion through repayments and buybacks. With adjusted EBITDA of approximately $3.35 billion in 2024, net debt/EBITDA was effectively zero (net cash position), and gross debt/EBITDA was less than 0.9x, reflecting very low leverage. Overall, the company’s liabilities have remained low post-IPO. Notably, as of 2024, Coinbase had not used any bank loans; all debt is in the form of publicly issued bonds with long maturities, minimizing short-term repayment pressure and eliminating refinancing risk.Liquidity: Coinbase holds substantial cash and cash equivalents, resulting in a very high quick ratio. Excluding customer deposits (which are backed by corresponding customer assets), the company’s core operating current assets significantly exceed its current liabilities. In the H1 2025 report, the quick ratio (excluding customer-related balances) exceeded 3.19x, meaning cash alone could cover over three times all short-term liabilities. Particularly, its USDC reserves are highly liquid and redeemable 1:1 for USD daily. In 2023, during a brief USDC de-pegging incident, Coinbase quickly honored customer redemptions without any liquidity squeeze.Asset Quality: Assets primarily consist of cash, cash equivalents, and short-term investments (high-grade bonds, etc.), accounting for over 60% of total assets. Proprietary crypto holdings are relatively modest; as of Q2 2025, the fair value of crypto assets held was $1.839 billion, composed of 11,776 BTC worth $1.261 billion (68.6%), 136,782 ETH worth $340 million (18.5%), and other crypto assets worth $238 million (12.9%). Relative to the company’s net asset base, this exposure is manageable, and price fluctuations are unlikely to significantly impair solvency.
Overall, Coinbase’s financial safety is high: low leverage, ample liquidity, and a balance sheet that has withstood multiple stress tests. Moreover, this strong balance sheet enables counter-cyclical investments during market downturns—for instance, during the 2022–2023 industry slump, the company maintained R&D and international expansion, supporting its long-term competitive position.
6.5 Peer Comparison
We compare Coinbase with other publicly listed or comparable trading platforms for 2024 and Q2 2025 financial metrics. The selected peers include Robinhood, Kraken, and Binance:
Robinhood (U.S. stock brokerage & crypto trading platform): In 2024, Robinhood achieved net revenue of approximately $2.951 billion, up 58% year-over-year, recording its first full-year profit in history with net income of $1.411 billion (compared to a $541 million loss in 2023). The strong performance was driven by interest income boosted by high interest rates and a rebound in trading activity. Robinhood’s gross margin reached 94% in 2024, with a net margin of about 48%. In Q1 2025, revenue was $927 million (up 50% YoY), with net income of $336 million. With improving results, Robinhood’s stock price surged significantly from the end of 2024 to the present, giving it a market capitalization exceeding $95 billion.Kraken (U.S.-based established crypto exchange, privately held): In 2024, Kraken benefited from surging trading volumes, generating revenue of approximately $1.5 billion, up 128% YoY, close to a historical high. Adjusted EBITDA for the year was about $400 million, with an EBITDA margin of 25%-30%. As of the end of 2024, Kraken’s platform held assets worth $42.8 billion, with 2.5 million monthly active paying users, and average annual revenue per user exceeding $700. In Q1 2025, Kraken achieved revenue of $472 million (+19% YoY, slightly down 7% QoQ), while Q2 revenue was about $411.6 million, down 13% QoQ. As a private company, Kraken’s latest valuation is undisclosed; however, media reports indicate it sought over $10 billion in financing in 2021. Based on a $42.8 per share private equity price on the Hiive platform, its implied valuation is roughly $9.1 billion. Revenue growth in 2024 indicates significant expansion of its business scale, though its valuation multiples relative to revenue may be lower than those of publicly listed Coinbase and Robinhood.Binance (largest global crypto exchange, privately held): Binance, as the industry leader, far exceeds peers in trading volume and user base. Its financials are not regularly disclosed, but industry estimates suggest 2023 revenue reached approximately $16.8 billion, up 40% YoY, about 2.7 times Coinbase’s revenue for the same period. Binance reportedly generated over $12 billion in revenue and nearly $10 billion in profit in 2022, reflecting extraordinary profitability and scale (profit margin ~80%). As a private company, Binance does not have a publicly disclosed market cap or valuation multiple; however, based on its revenue and earnings, its implied market value could be in the hundreds of billions of dollars even under conservative multiples. Regulatory pressures in the U.S., Europe, and other regions add uncertainty to its future growth and potential pre-IPO valuation. Overall, Binance leads the industry in absolute scale, while regulated and listed platforms like Coinbase enjoy higher market confidence as reflected in valuation metrics such as price-to-sales and EV/EBITDA multiples, reflecting differences in regulatory transparency and business model.

We now compare Coinbase and Robinhood’s Q2 2025 data：

Overall, the two companies have comparable revenue scales and other financial metrics. Coinbase’s current market capitalization is $79.8 billion, while Robinhood’s is $101.8 billion. However, their revenue structures differ significantly. Coinbase’s revenue comes from trading, subscriptions/custody/stablecoins/derivatives, whereas Robinhood’s revenue is derived from brokerage fees, interest income (spread from user funds deposited in banks and margin lending), and subscriptions/options/crypto trading. In recent years, Robinhood’s platform assets and user base have grown rapidly, and its acquisition of Bitstamp has accelerated international expansion, positioning it as a direct competitor to Coinbase both in the U.S. and globally.
In summary, Coinbase’s financial performance reflects the high-growth, high-volatility characteristics of the crypto industry. Yet, thanks to effective cost control and a strong balance sheet, the company has maintained resilience during market downturns and achieved outstanding profitability at market peaks. This performance elasticity is both an investment highlight and a risk factor: if the crypto market continues to perform well, Coinbase could potentially reach profit peaks similar to those in 2021. Conversely, in a market downturn, stricter expense management would be necessary to avoid repeating the losses of 2022. Currently, even if a new bull market emerges, the company maintains a lean workforce and controlled expenses. Going forward, close attention should be paid to whether the expansion of the subscription business can smooth out cyclical effects, making Coinbase’s financial performance more stable.
7. Competitive Advantages and Moat
Coinbase’s ability to maintain a leading position in the fiercely competitive crypto industry is closely tied to the multiple moats it has built：
Brand Trust and Regulatory Compliance Advantage
As one of the earliest exchanges to enter the regulated space, Coinbase has accumulated strong brand credibility. It is among the few exchanges in the U.S. to hold licenses in multiple states (since 2013, it has gradually obtained money transmission licenses in 46 states/territories, allowing legal operations across all 50 states), FinCEN registration, and the New York Trust License. Since its inception, Coinbase has never experienced a major loss of user assets. This has established a reputation for safety and reliability among users, an advantage that has become even more pronounced following incidents such as Mt. Gox, FTX, and other exchange collapses and hacks. For large institutions and mainstream users, Coinbase is often the preferred—or even sole—choice. For example, in the U.S., many traditional funds can only use licensed exchanges due to regulatory constraints, giving Coinbase a natural market share. Furthermore, Coinbase proactively cooperates with regulators (KYC/AML compliance, etc.), earning a strong reputation among policymakers and lobbying for favorable regulations. The barriers created by brand trust and compliance are difficult for new entrants to replicate quickly or at low cost. License applications typically take 12–18 months and require ongoing capital adequacy, anti-money laundering, cybersecurity audits, and other annual reviews; for a new platform to obtain licenses in all states could require hundreds of millions of dollars in compliance costs. Even if a new entrant is technologically competitive, without regulatory backing and years of incident-free operation, it is difficult to challenge Coinbase’s position among conservative funds and novice users in the short term. This trust advantage also allows Coinbase to command a premium: users are willing to pay relatively higher fees for a secure and reliable platform.
Network Effects and Liquidity
Exchange businesses exhibit clear network effects: more users and trading volume generate deeper liquidity and a better trading experience, which in turn attracts even more users. After years of operation, Coinbase has accumulated a large global user base and massive trading volume. Statistics show that 67% of cryptocurrency holders in the U.S. have used Coinbase. This high coverage makes Coinbase a “gateway” platform in the crypto space; new tokens and projects often aim to list on Coinbase to reach a broad audience. A large user base also ensures deep order books and tight bid-ask spreads, which are crucial for trading experience. Particularly during periods of high price volatility, platforms with deep liquidity can better handle large trades without significant slippage, further reinforcing professional traders’ reliance on Coinbase. Network effects are also amplified through word-of-mouth: the more users there are, the stronger the referral effect, and beginners tend to choose platforms that their friends use, creating a positive feedback loop. It is very difficult for competitors to break this cycle unless they offer extremely differentiated services in a niche market (e.g., zero fees or support for unique assets). Currently, Coinbase’s network effects in the U.S. and European markets are relatively solid.
Economies of Scale & Multi-Product Stickiness
Coinbase’s scale advantages are reflected not only in network liquidity effects but also in cost efficiency and business diversification. As a publicly listed company, Coinbase can raise sufficient capital to invest in system security, product development, and compliance teams, which lowers costs per unit of transaction. Smaller platforms often cannot afford such expensive compliance and security investments. Coinbase’s operational efficiency improves as its user base grows, creating an economies-of-scale moat. At the same time, Coinbase’s diversified business segments—trading, custody, staking, stablecoins, etc.—reinforce user stickiness. Users do more than just trade on Coinbase: they hold coins to earn interest, participate in staking to earn rewards, and use USDC for payments. Meeting multiple needs on a single platform increases switching costs, further strengthening user loyalty.
Technology & Security Moat
Although the technological barriers in trading are not as high as in some advanced tech industries, Coinbase has built a certain tech moat over years in areas such as high-concurrency matching engines, wallet security, and multi-chain support. Its trading engine has been tested during peak bull markets (e.g., daily trading volumes of hundreds of billions in 2021) and demonstrates stability under extreme trading surges. In terms of wallet security, Coinbase has never experienced a major hack, a record many competitors cannot claim—even Binance has suffered losses in the hundreds of millions. Additionally, Coinbase has developed many proprietary internal systems, including tools for monitoring suspicious transactions, preventing market manipulation, and providing professional APIs for institutional clients and partners. These systems are not easily replicable in the short term. Particularly in security and risk management, even a single major vulnerability could severely damage a new platform’s reputation, whereas Coinbase’s years of security investment have built strong user trust as a barrier to entry.
Sustainability of the Moat Can these moats be maintained long-term? Let’s evaluate each:
Brand & Compliance: With more mainstream institutions entering crypto and regulatory frameworks becoming clearer, Coinbase’s accumulated licenses will become increasingly valuable. Its first-mover advantage is likely to expand, as it has established a hard-to-challenge reputation and enjoys experience and scale benefits in licensing and compliance. However, regulatory uncertainty remains a potential risk—for example, changes in government or Congress could shift U.S. crypto regulations, potentially limiting Coinbase’s core market.
Network Effects: These are likely stable as long as Coinbase avoids trust crises or prolonged technical failures. Users are unlikely to migrate easily. Yet, the rise of decentralized finance (DeFi) may weaken network effects among some professional users (e.g., moving to Uniswap or on-chain platforms like Hyperliquid). Currently, DeFi’s user experience and liquidity are insufficient to significantly challenge Coinbase. Moreover, Coinbase’s development of Base and smart crypto wallets helps hedge against this trend.
Economies of Scale & Multi-Product Stickiness: These advantages become more pronounced as the company grows. Larger scale improves cost structure and raises user ARPU, creating a positive feedback loop. Risks exist, however: expanding business lines could dilute management focus, and regulatory requirements across products are complex, requiring careful oversight.
Technology Barrier: Maintaining this moat requires ongoing investment. Coinbase spends heavily on R&D (e.g., $1.2B in 2023, ~40% of revenue; $1.32B in 2024, absolute value up 11%, revenue proportion down to 22%). Sustaining this level of investment should preserve technological leadership.
Overall Assessment: Coinbase has established a significant moat, particularly in the U.S., with a unique advantage in trust and compliance branding. As the industry matures, the “strong get stronger” effect may concentrate capital and users toward leading compliant platforms, further deepening Coinbase’s moat. Unless a major disruptive shift occurs (e.g., DeFi fully replacing centralized exchanges, or Coinbase suffers a major failure), its competitive advantages are expected to persist in the foreseeable future.
8. Key Risks & Challenges
Coinbase still faces several critical risk factors:
Macro & Industry Cycle Risks The cryptocurrency market is highly cyclical, and Coinbase’s performance is heavily dependent on trading volume and coin prices. During bear markets like those in 2018 and 2022, trading activity can shrink sharply, putting pressure on the company’s revenue and profits, and potentially causing losses again. Macro tightening—such, such as reduced liquidity or high interest rates—can also dampen market speculation and asset prices. Additionally, the crypto market remains immature and sensitive to single events (exchange bankruptcies, hacks, large sell-offs, etc.), which can trigger widespread confidence declines. For example, the 2022 FTX collapse caused a sharp drop in industry-wide trading volumes; although Coinbase was not directly exposed, its overall business was still affected.
Regulatory Uncertainty Regulation remains one of the greatest uncertainties for Coinbase, especially in the U.S. The SEC and other agencies have yet to provide clear guidance on which tokens are classified as securities or whether exchanges violate regulations by offering certain services (though the situation has improved recently). Moreover, the U.S. has not yet enacted comprehensive digital asset trading laws; the passage of the Clarity Act this year is uncertain, and if delayed into next year, midterm elections could add further unpredictability. Internationally, regulatory changes in other countries may also affect Coinbase’s overseas expansion plans.
Technology, Security & System Stability Risks As a platform holding hundreds of billions in user assets, Coinbase faces significant cybersecurity and operational risks. Any hack resulting in customer asset theft would severely damage its reputation and financial position. The crypto industry frequently experiences hacks, and even with Coinbase’s strong track record, vigilance is essential. In addition, system crashes or outages during high-concurrency trading periods pose risks. Historically, Coinbase has experienced brief outages during volatile market periods, which drew user complaints; if the platform cannot facilitate trades at critical times, users may migrate elsewhere. New products (e.g., smart contracts) may contain code vulnerabilities, and staking or other services carry protocol risks, all of which require careful management.
Compliance Costs & Legal Risk As regulation strengthens and standards clarify, the path to compliant operations becomes clearer, but compliance costs may rise correspondingly. Maintaining licenses in multiple jurisdictions, AML monitoring, personnel verification, and other obligations represent significant annual expenses. Increased regulatory scrutiny can also distract management. If future laws impose additional obligations (e.g., trade reporting, user asset capital requirements), operational burdens and profitability could be affected. As an industry benchmark, Coinbase is also a likely target for litigation, including class actions and user disputes. Lawsuits not only entail compensation costs but can also damage the brand. For example, in 2022 some users sued Coinbase over allegedly misleading promotions; although the amounts were small, they consumed company resources. Legal disputes may continue to arise, requiring a strong legal team (currently led by a capable CLO), but legal and reputational risks cannot be entirely eliminated.
Intensifying Market Competition Although Coinbase currently holds a strong position, the competitive landscape evolves rapidly. Major competitors like Binance continue to exert pressure in certain markets (lower fees, more tokens). If Binance resolves regulatory challenges, its large user base could threaten Coinbase’s global market share.
Traditional financial giants may also enter: for instance, Intercontinental Exchange (ICE) acquired U.S. crypto exchange Bakkt, and Nasdaq has relevant initiatives. Large investment banks or tech companies could launch their own crypto trading platforms, leveraging resources and capital to capture customers.Innovative models: The rise of decentralized exchanges (DEX) and DeFi poses long-term challenges to centralized platforms. While DEX experiences are currently limited, technical progress is ongoing, and some sophisticated users have shifted to self-custody trading. If DEX platforms surpass centralized exchanges in performance and liquidity over the next few years, Coinbase could lose high-end users. Fintech brokers (e.g., Robinhood) expanding crypto support also capture some retail flow.
M&A & Integration Risks Coinbase has expanded through acquisitions and new business ventures, such as the NFT platform and various startups. Integration risks include cultural fit, technical alignment, and unmet expectations. The NFT business is an example where acquisition teams and internal resources failed to synergize effectively. Future acquisitions (e.g., payment companies, custodial firms) may carry similar risks, including underperformance or diluted focus on core operations. Large-scale M&A also involves regulatory approval risks; as a market leader, any industry acquisition may face antitrust scrutiny (e.g., acquiring another U.S. exchange could be blocked).
Global Geopolitical & Legal Environment Risks As a multinational, Coinbase faces risks from political and economic changes in different countries. Some jurisdictions could suddenly ban crypto trading, or international sanctions (e.g., restrictions on Russian users during the Russia-Ukraine conflict) could create complex compliance requirements. Exchange rate and tax policy changes could also impact international business profits. While not core risks, these require the company to maintain global contingency capabilities.
Summary: Among these risks, regulatory uncertainty and market cycles are the most significant and will continue to materially affect Coinbase’s future performance. The company has taken measures to address these challenges, but substantial uncertainty remains.
9. Valuation
We value Coinbase using a relative valuation approach and consider both bull and bear scenarios to estimate a target price range.
Valuation Method:
Price-to-Sales (P/S) Ratio: Given Coinbase’s highly volatile performance, using earnings-based metrics such as P/E is unstable, making the P/S ratio a more intuitive measure. Historically, Coinbase has traded near 20x P/S during peak periods, while in bear markets it fell below 3x P/S. Currently, the stock price corresponds to a trailing twelve-month revenue P/S of approximately 11.7x (this high multiple reflects investor expectations for continued rapid revenue growth). Compared with most other trading-platform fintech companies, this multiple is moderate, particularly well below that of peer Robinhood. Considering Coinbase’s high gross margin and strong growth leverage, a base-case P/S range of 10–15x is reasonable, implying a market capitalization of $67.1–100.7 billion and a share price of $232–348 (based on a fully diluted share count of 2.89 billion, for conservatism).

Coinbase vs. Comparable U.S.-Listed Trading Platform Companies: P/S Ratio
Enterprise Value / EBITDA (EV/EBITDA): Traditional exchanges are often valued based on EBITDA. Coinbase’s current EBITDA (TTM) is approximately $3.18 B, corresponding to an EV/EBITDA of about 24×. This is slightly higher than exchanges like CME and CBOE, which trade around 18–22×, but well below Robinhood at 63×. Compared with traditional trading platforms, Coinbase has higher growth potential but also greater earnings volatility, leading to a lower discounted value. Under baseline assumptions regarding regulatory environment and industry development, a reasonable EV/EBITDA range for Coinbase could be 20–30×, corresponding to an equity value (EV) of roughly $63.6–95.4 B and a share price of $220–330. To maintain a sufficient margin of safety, one could apply a 20–30% discount to this EV/EBITDA range as a potential buying range (similarly for P/S).

10. Conclusion
Summary: As a leading global platform for crypto asset trading and services, Coinbase possesses strong potential for sustained growth in the crypto finance wave, supported by its brand trust, broad user base, and diversified product offerings. The company has experienced both rapid growth and sharp pullbacks in recent years, but management has actively responded, maintaining financial stability and strategic discipline. Coinbase’s long-term value is underpinned by the following factors:
Strong reputation in compliance and security: This helps attract mainstream and institutional capital consistently.Diversified revenue streams: Growth in subscriptions, interest income, and other services provides a more resilient multi-legged business model, improving its anti-cyclical ability compared to past cycles.Robust balance sheet and ample cash reserves: These offer both a buffer and offensive capacity for technological innovation, international expansion, and navigating challenging market conditions.Positive long-term industry trends: Blockchain and digital assets are increasingly integrating into mainstream finance, positioning Coinbase favorably within the ecosystem.
However, revenue and profits remain highly cyclical, and large swings are still possible, as indicated in the most recent quarterly financials.
Moreover, Coinbase operates in a highly competitive landscape. In the U.S., it faces direct competition from Robinhood and Kraken; internationally, it contends with numerous offshore crypto exchanges, decentralized platforms such as Uniswap, and on-chain exchanges like Hyperliquid. In short, Coinbase’s challenges and opportunities coexist.
Catalysts & Watchlist: Over the coming quarters, investors should focus on factors and events that may influence Coinbase’s share price:
Regulatory developments: Progress on U.S. crypto regulatory legislation, such as the potential passage of the Clarity Act, would benefit both the crypto sector and Coinbase’s business.Macro & industry indicators: Bitcoin price trends, overall trading volume, and on-chain activity data. Surges in major coin prices could drive higher trading volume and new user acquisition. Monthly industry volume trends should be monitored to anticipate bull/bear cycle inflection points.Product and market expansion: Developments in Coinbase’s derivatives business (e.g., approval to offer comprehensive crypto futures in the U.S.), international market growth (user adoption after regulatory approvals), and new products (e.g., ecosystem activity on the Base chain). A significant quarterly increase in derivatives volume or overseas revenue would validate new growth engines.Competitor activity: Strategic shifts or regulatory hurdles faced by competitors such as Binance and Kraken could create market share opportunities for Coinbase. Additionally, collaborations with traditional financial giants (e.g., BlackRock using Coinbase for Bitcoin ETFs custody/market services) are worth noting.Operational metrics: Monthly trading users (MTU), assets under management (AUM), and fee trends. MTU growth indicates improved retail engagement; rising AUM shows net capital inflows. Stable or declining fees require analysis to determine if reductions are strategic to gain volume or driven by competitive pressure.
11. Appendix
Glossary of Terms:
MTU (Monthly Transacting User): Retail users who execute at least one transaction (buy, sell, or staking, etc.) within any 28-day period. Quarterly MTU is calculated as the average of the three months in the quarter. This metric reflects retail user activity.Adjusted EBITDA: Non-GAAP measure used by Coinbase management to evaluate operating performance, representing earnings before interest, taxes, depreciation, and amortization, adjusted for items such as stock-based compensation and one-time legal expenses. A negative value in 2022 indicates operating loss.Coinbase One: Subscription service for retail users that provides benefits such as zero-fee trading up to a certain limit and priority customer support. It aims to increase user stickiness and generate subscription revenue.MiCA: EU “Markets in Crypto-Assets” regulation, effective 2024–2025, establishing a unified regulatory framework for crypto issuance and services across the European Union.TTM (Trailing Twelve Months): Data covering the most recent consecutive 12-month period ending at the latest financial reporting date.

By Lawrence Lee, Researcher at Mint Ventures

Recently, the tokenized US stocks sector has witnessed several new developments:
Centralized exchange Kraken announced the launch of its tokenized stock trading platform, xStocks.Centralized exchange Coinbase announced it is seeking regulatory approval for its tokenized stock trading services.Public blockchain Solana submitted a framework for blockchain-based tokenized US stock products.
Both US-based public blockchains and exchanges are accelerating their efforts in tokenized US stocks. Combined with the recent enthusiasm following Circle’s IPO, this momentum is fueling optimism about the future prospects of tokenized US equities.
In fact, the value proposition of tokenized U.S. stocks is very clear:
1. Expanded the scale of the trading market: It provides a 7×24-hour, borderless, and license-free trading venue for US stock trading, which is currently unavailable to Nasdaq and NYSE (although Nasdaq has applied for 24-hour trading, it is expected to be realized in the second half of 26)2. Superior composability: By combining with other existing DeFi infrastructure, U.S. stock assets can be used as collateral, margin, to build indexes and fund products, and derive many currently unimaginable gameplays.The needs of both supply and demand are also clear:Suppliers (US-listed companies): Through the borderless blockchain platform, they have reached potential investors from all over the world and obtained more potential buying orders.Demand side (investors): Many investors who were unable to trade U.S. Stocks directly in the past for various reasons can now directly allocate and speculate on U.S. stock assets hrough blockchain.Quoted from “U.S. Stocks on the Blockchain and STO: A Hidden Narrative“
In this round of tolerant crypto regulatory cycle, progress is a high probability event. According to RWA.xyz data, the current market value of tokenized stocks is only 321 million US dollars, and there are 2,444 addresses holding tokenized stocks. The huge market space is in sharp contrast to the current limited asset size.

In this article, we will introduce and analyze the product solutions of current players in the tokenized U.S. stock market and other players who are promoting the tokenization of U.S. stocks, and list potential investment targets under this concept.
This article is the author’s interim thinking as of the time of publication. It may change in the future, and the views are highly subjective. There may also be errors in facts, data, and logical reasoning. All views in this article are not investment advice, and we welcome criticism and further discussion from colleagues and readers.
According to data from rwa.xyz, the current tokenized stock market has the following projects by issuance size:

We will take a look at the business models of Exodus, Backed Finance, and Dinari (Montis Group targets European stocks, and SwarmX is similar to Backed Finance but on a smaller scale), as well as the progress of several other important players who are currently working on tokenized US stock business recommendations.
Exodus
Exodus (NYSE.EXOD) is an American company that develops non-custodial crypto wallets. Its stock is listed on the New York Stock Exchange (NYSE.EXOD). In addition to its own branded wallets, Exodus has also collaborated with NFT market MagicEden to launch a wallet.
As early as 2021, Exodus allowed users to migrate their common shares to the Algorand chain through Securitize, but the tokens migrated to the chain could not be traded or transferred on the chain, nor did they include governance rights or other economic rights (such as dividends). The Exodus token is more like a “digital clone” of real shares, and its symbolic significance on the chain is greater than its actual significance.
The current market value of EXOD is US$770 million, of which approximately US$240 million is on-chain.

Exodus is the first stock approved by the SEC to tokenize its common stock (or to be more precise, Exodus is the first tokenizable stock approved by the SEC to be listed on the NYSE). Of course, this process was not smooth sailing. The listing time of Exodus stock was delayed again and again since May 2024, and it was not officially listed on the NYSE until December.
However, Exodus’ stock tokenization is only for its own stocks, and the tokenized stocks cannot be traded, which is of little significance to us Web3 investors.
Dinari
Dinari is a company registered in the United States. They were founded in 2021. Since its establishment, they have been focusing on stock tokenization under the US compliance framework. They completed a $10 million seed round of financing in 2023 and a $12.7 million Series A financing in 2024. Investors include Hack VC and Blockchange Ventures, Coinbase CTO Balaji Srinivasan, F Prime Capital, VanEck Ventures, Blizzard (Avalanche Fund), etc. Among them, F Prime is a fund under the asset management giant Fidelity. The investment of Fidelity and VanEck also shows the recognition of the tokenized US stock market by traditional asset management institutions.
Dinari only supports non-US users. The process of trading US stocks is as follows:
User completes KYCThe user selects the US stocks they want to buy and pays with USD+ issued by Dinari (a short-term Treasury bond-backed stablecoin issued by Dinari that can be exchanged from USDC)Dinari submits the order to the cooperating broker (Alpaca Securities or Interactive Brokers). After the broker completes the order, the shares are kept in the custodian bank, and Dinari mints the corresponding dShares for the user.
Currently, Dinari operates on Arbitrum, Base, and the Ethereum mainnet. All dShares have a 1:1 correspondence with real-world equity. Users can view the equity corresponding to their dShares through the Dinari official website. Dinari can also distribute dividends or stock splits to users holding its dShares.
However, dShares cannot be traded on the chain. If you want to sell dShares, you can only trade through the Dinari official website. The actual transaction process is the reverse of the purchase process. dShares transactions must also follow US trading hours and cannot be bought or sold outside of trading hours. In terms of product form, in addition to direct stock trading, they also offer stock trading APIs that can work with other trading front ends.
In fact, Dinari’s business process, namely “KYC->payment exchange->clearing and settlement by compliant brokers”, is consistent with the current mainstream way for non-US users to participate in US stock transactions. The main difference is that the asset categories paid by users are Hong Kong dollars, euros, etc., while the asset categories accepted by Dinari are encrypted assets. The rest are completely implemented in accordance with the SEC’s regulatory framework.
As a company mainly engaged in the tokenization of US stocks, Dinari’s courage to register the company in the United States (the registration place of the corresponding entities of most other projects is in Europe) shows its confidence in its compliance capabilities. Their US stock tokenization products were officially launched in 2023. At that time, the former SEC Chairman Gary Gensler, who was known for his strict supervision of cryptocurrencies, could not find fault with its business model; and after the new SEC Chairman Paul Atkins took office, the SEC once held a special meeting with Dinari, asking Dinari to demonstrate its system and answer relevant questions (source), which showed that its products were impeccable in terms of compliance and the team’s strong resources in compliance.
However, since Dinari’s tokenized US stocks do not enable on-chain trading, cryptocurrency serves merely as an entry point and payment method for Dinari. Functionally, Dinari’s product offers little distinction from platforms like Futu or Robinhood. For its target users, Dinari’s product experience provides no advantage over its competitors. For a user in Hong Kong, trading US stocks on Dinari offers no improved experience compared to using Futu. Additionally, it lacks access to trading features like margin trading, and users may even face potentially higher fees.
Perhaps precisely for these reasons, Dinari’s tokenized stock market has remained small in scale. Currently, only the tokenized stock MSTR has a market capitalization exceeding $1 million, and just five tokenized stocks have market caps above $100,000. Presently, the vast majority of its TVL is participating in its floating-rate treasury products.

Dinari’s current market capitalization of tokenized stocks Source
Overall, Dinari’s tokenized stock business model has received regulatory certification. However, strict compliance requirements prevent its tokenized stocks from being traded/staked on-chain, eliminating composability. This results in an inferior user experience for dShare holders compared to traditional brokerages, diminishing the product’s appeal to mainstream Web3 users.
Among current market players, projects similar to Dinari include the meme coin Stonks community project mystonks.org. According to the project’s self-disclosed reserve report, their U.S. stock portfolio currently exceeds $50 million in market value, with significantly higher user trading activity than Dinari.
However, the regulatory framework of mystonks.org remains flawed. For instance, the qualifications of its securities custody account are not clearly specified, and users cannot verify its reserve reports.
Backed Finance
Backed Finance is a Swiss company, also founded in 2021. Its product launched in early 2023, and in 2024 it completed a $9.5 million funding round led by Gnosis, with participation from Cyber Fund, Blockchain Founders Fund, Blue Bay Capital, and others.
Like Dinari, Backed does not serve U.S. users. Its operational process is as follows:
Issuers (professional investors) complete KYC verification and review on Backed Finance.The issuer selects the U.S. stocks they wish to purchase and pays in stablecoins.Backed Finance submits the order to a partner brokerage to complete the stock purchase. After the purchase, Backed Finance mints the corresponding bSTOCK token and delivers it to the issuer.Both bSTOCK and its wrapped version wbSTOCK can be freely traded on-chain (the wrapping primarily facilitates handling dividend distributions, etc.). Retail investors can directly purchase bSTOCK or wbSTOCK on-chain.
As can be seen, unlike Dinari where retail investors directly purchase stocks, Backed Finance currently relies on professional investors buying the stocks and then transferring them to retail investors. This significantly improves overall operational efficiency and enables 24/7 trading. Another key difference is that the bSTOCK tokens issued by Backed are unrestricted ERC-20 tokens, allowing users to form LP on-chain for others to purchase.

Liquidity of Backed’s Tokenized Stocks Source
Backed Finance’s on-chain liquidity primarily derives from the SPX index, Coinbase, and Tesla. Users create liquidity by pairing bSTOCK tokens with stablecoins in AMM pools. The current TVL across all liquidity pools approaches $8 million, with an average APY of 32.91%. Liquidity is distributed across Balancer and Swapr on Gnosis Chain, Aerodrome on Base, and Pharaoh on Avalanche. Notably, the bCOIN-USDC liquidity pool currently offers an APY reaching 149%.
A critical operational distinction is that Backed Finance imposes no restrictions on on-chain trading of its bSTOCK tokens. This creates a secondary pathway for token holders, where on-chain users – without undergoing KYC verification – can directly purchase bSTOCK using stablecoins such as USDC or sDAI.
This approach effectively bypasses KYC restrictions while delivering a trading experience indistinguishable from trading standard on-chain tokens, making it more readily adoptable by Web3 users. Moreover, by issuing unrestricted ERC-20 tokens, Backed unlocks composability for tokenized stock holders – exemplified by stablecoin pairings generating LP yields averaging 33% APY. This likely explains why Backed Finance’s TVL is nearly 10 times larger than Dinari’s.
Regarding compliance, Backed Finance operates through a Swiss-registered entity. Its business model – where “ERC-20 tokens representing tokenized stocks are freely transferable” – has received approval from European regulatory authorities (source). Backed also publishes proof-of-reserve audits conducted by The Network Firm.
However, the U.S. SEC has not yet commented on Backed’s operations. Notably, all securities tokenized by Backed are U.S. stocks. While Swiss regulatory approval is certainly beneficial, the more critical factor is how U.S. regulators will ultimately assess this model.
Among comparable projects, SwarmX operates under an identical model but falls significantly short of Backed Finance in both operational scale and compliance rigor.
Despite Backed Finance’s tokenized stocks having a market cap ten times larger than Dinari’s, its $20 million-plus assets under management and $8 million TVL still represent relatively modest scale, while on-chain trading activity remains notably low. The core reasons for this include:
Limited Use Cases: Tokenized stocks currently only serve LP purposes on-chain. Their composability potential remains largely untapped, likely due to concerns from integrated protocols (e.g., lending/stablecoin) regarding regulatory uncertainty.Liquidity Constraints: As Backed itself is not an exchange, its tokenized stocks lack organic liquidity support. Existing liquidity relies entirely on issuers, specifically, their willingness to hold tokenized stocks and provide LP capital. Current data indicates that issuers lack the incentive to increase exposure in these areas.
Should the SEC establish clearer regulatory frameworks affirming Backed’s model, both issues could be alleviated.
xStocks
In May this year, the U.S. exchange Kraken announced plans to collaborate with Backed Finance and Solana to launch xStocks.
On June 30th, the xStocks product officially launched. Its partners include Backed, Kraken, and Solana, as well as centralized exchanges Kraken and Bybit, Solana-based decentralized exchanges Raydium and Jupiter, lending protocol Kamino, Bybit-incubated DEX Byreal, oracle Chainlink, payment protocol Alchemy Pay, and brokerage firm Alpaca.

Source: Official Website of xStocks
The legal architecture of xStocks is identical to that of Backed Finance. It currently supports over 200 stock products, with Kraken offering 24/5 trading hours. Key partnerships include: Kraken, Bybit, Jupiter, Raydium, and Byreal as supporting exchanges; Kamino enables xStocks to be used as collateral, while Kamino Swap facilitates trading of xStocks; Solana as the underlying blockchain; Chainlink providing reserve attestations; and Alpaca serving as a brokerage partner.
Due to its relatively short time since launch, comprehensive data metrics remain limited, and trading volumes are currently modest. However, xStocks demonstrates significantly stronger partner integration compared to Backed Finance’s native offering:
CEX like Kraken and Bybit may leverage their existing market makers and user bases to enhance liquidity for xStocks. Within the on-chain ecosystem, multiple DEXs and Kamino support xStocks. Significantly, Kamino has pioneered new use cases for tokenized U.S. stocks beyond liquidity provision. Additional protocols are expected to integrate xStocks in the future, further expanding its composability potential.
Given these strategic advantages, the author maintains that despite its nascent launch status, xStocks will rapidly surpass existing providers to become the dominant tokenized U.S. stock issuer.
Robinhood
Robinhood, which has been actively expanding its cryptocurrency business, submitted a report to the SEC in April 2025 calling for the establishment of an RWA regulatory framework covering tokenized stocks. In May, Bloomberg reported that Robinhood would create a blockchain platform enabling European investors to trade U.S. stocks, with Arbitrum or Solana being candidate public chains.
Also on June 30, Robinhood officially announced the launch of its tokenized U.S. stock trading product for European investors. The product supports dividend distributions and offers 5*24 market access.
Robinhood’s tokenized stock product was initially issued on Arbitrum. In the future, its tokenized stock infrastructure will operate on Robinhood’s proprietary L2, which is also built on Arbitrum.
However, according to Robinhood’s official documentation, its current tokenized stock product does not constitute genuine tokenized equity, but rather derivative contracts tracking the prices of corresponding U.S. Stocks, with the underlying assets securely held by licensed U.S. institutions in Robinhood Europe accounts. Robinhood Europe issues these contracts and records them on the blockchain. Currently, these tokenized stocks can only be traded within Robinhood and are not transferable.
Other Players Venturing into the Space
Beyond the projects with operational deployments discussed above, numerous other players are venturing into tokenized U.S. equities, including:
Solana
Solana demonstrates a significant commitment to tokenized equities beyond its involvement with xStocks. It has established the Solana Policy Institute (SPI), which aims to “educate policymakers on why decentralized networks like Solana represent foundational infrastructure for the future digital economy.” Two projects are currently being advanced. One is named Project Open, “enable compliant blockchain-based issuance and tradingof securities. This initiative seeks to harness blockchain technology to create more efficient, transparent, and accessible capitalmarkets while maintaining robust investor protections.” Members of Project Open, besides SPI, include the Solana-based DEX Orca, RWA service provider Superstate, and the law firm Lowenstein Sandler LLP.
Since April this year, Project Open has repeatedly submitted public written comments to the SEC’s Crypto Task Force. On June 12, the SEC’s Crypto Task Force held a meeting with them, after which Project Open members separately submitted further explanations regarding their respective business operations.
The tokenized U.S. stock issuance and trading process advocated by Project Open is as follows:

Source: SEC official document
The process is summarized as follows:
Issuers must pre-apply for SEC approval. Upon approval, they may issue tokenized U.S. stocks.Users wishing to purchase tokenized U.S. stocks must complete KYC verification beforehand. After completion, they may use cryptocurrency to purchase these issuer-approved tokenized stocks.SEC-registered transfer agents will record share transfers on-chain.
Project Open specifically advocates for SEC permission enabling peer-to-peer trading of tokenized U.S. stocks via smart contracts. This would allow tokenized stock holders to trade through AMM, thereby unlocking on-chain composability. However, per the proposed framework, all holders of tokenized U.S. stock positions must complete KYC. To implement this process, Project Open has requested 18-month exemptive relief or confirmatory guidance for multiple operations (see references for details).
Overall, Project Open’s proposal builds upon Backed Finance’s existing framework by adding KYC requirements. From the author’s perspective, approval under the current SEC leadership, which has shown relative tolerance toward DeFi, appears almost certain. The only remaining question is the timing of approval.
Coinbase
As early as 2020, when Coinbase applied for a Nasdaq listing, its filing included plans for on-chain issuance of tokenized COIN. However, this initiative was abandoned due to non-compliance with SEC requirements at the time. Recently, Coinbase has been seeking a no-action letter or exemptive relief from the SEC for its tokenized stock trading business. While detailed documentation remains unavailable, a key confirmed detail from press releases states: Coinbase’s tokenized stock trading program will be accessible to U.S. users.
This represents the key distinction from other current tokenized stock market players and enables Coinbase to directly compete with online brokerages like Robinhood and traditional brokers such as Charles Schwab. For Web3 investors, however, this development holds far less significance than its implications for Nasdaq:COIN.
Ondo
Ondo, which has established a proven presence in the treasury bond RWA market (see Mint Ventures’ earlier coverage on Ondo), has long planned a tokenized U.S. stocks business. According to their documentation, their tokenized stock product features:
Accessibility to non-U.S. users24/7 trading availabilityReal-time token minting and redemptionPermission to use tokenized stock assets as collateral
Judging from these specifications, Ondo’s product closely aligns with the new framework proposed by Solana. Ondo has also announced at Solana’s Accelerate conference its intention to launch the tokenized stock product on the Solana network.
Ondo’s tokenized stock platform, Ondo Global Markets, is scheduled to launch later this year.
The above outlines the current landscape of the tokenized U.S. stock market and key players expanding into this space.
Fundamentally, users’ primary motivation for purchasing tokenized stocks is to profit from price fluctuations. Their focus centers on: exchange liquidity, settlement guarantees, and the ability to trade while bypassing KYC. Whether the tokenization is performed by compliant institutions is not a user priority. Consequently, the Web3 market has consistently offered derivative-based solutions for synthetic U.S. stock exposure.
U.S. equity trading via derivative-based instruments
Platforms providing U.S. stock derivatives services primarily include Gains Network (on Arbitrum and Polygon) and Helix (on Injective). Their users do not actually trade U.S. equities, thus eliminating the need for tokenization.
Their core product logic applies perpetual contract mechanisms to U.S. stocks, typically featuring:
No KYC requirements for traders, and stablecoins as collateral with leveraged tradingTrading hours synchronized with U.S. market sessionsAsset prices sourced directly from trusted oracles like ChainlinkFunding rates balancing on-platform prices against fair market values
However, neither current platforms (Gains/Helix) nor predecessors (Synthetix/Mirror) have achieved significant trading volumes with synthetic stock models. Helix processing under $10 million daily in synthetic U.S. stock derivatives, and Gains Network handling less than $2 million in comparable activity. This underperformance stems from two critical factors:
This model carries significant regulatory risks. Although they do not actually facilitate trading of U.S. stocks, they effectively function as exchanges, enabling users to trade U.S. equities. Regulators impose clear requirements on any exchange, with KYC being one of the most fundamental compliance obligations. While regulators may overlook such platforms when they remain under the radar, they will inevitably come under scrutiny if their profile grows substantially.Furthermore, none of these platforms currently possesses sufficient liquidity to meet genuine user trading demands. Their liquidity models rely entirely on internal, self-contained solutions without access to third-party liquidity sources. Consequently, none of them can provide users with viable trading depth.

Trading Volume of Helix’s U.S. Stocks & Forex Products

Order Book for COIN (Highest Volume)
On the centralized exchange front, Bybit recently launched a U.S. equities trading platform based on MT5. This product similarly adopts perpetual contract-like mechanics, executing no actual equity transactions but facilitating index trading with stablecoins as collateral.
Additionally, the upcoming Shift project introduces the concept of Asset-Referenced Tokens (ART), claiming to enable KYC-free U.S. stock trading through the following operational flow:
Shift purchases U.S. stocks and custodies them with regulated brokers (e.g., Interactive Brokers) and uses Chainlink Proof-of-Reserve for asset verificationIssues ART backed by reserved stocks, each ART corresponds to underlying equities, but does not constitute tokenized stocks.Retail investors can purchase ART without KYC
Shift’s model maintains 100% reserve backing between ARTs and underlying U.S. equities. However, ARTs do not constitute tokenized stocks and confer no share ownership rights, dividend entitlements, or voting privileges. Consequently, they fall outside existing regulatory frameworks, enabling KYC-free trading (Source).
From a regulatory logic perspective, ART is not permitted to be pegged to securities assets. It remains unclear how the Shift team intends to implement ‘pegging ART to U.S. stocks’ in practice, nor is it certain whether the final product design will truly operate according to the above-described mechanisms. However, by leveraging certain loopholes in regulatory provisions, this solution achieves KYC-free U.S. stock trading and warrants ongoing monitoring.
What Kind of Tokenized U.S. Stock Products Does the Market Need?
Regardless of the tokenization approach, all solutions share this core two-step process:
Tokenization: The process is typically managed by regulated entities that provide periodic proof-of-reserves. Fundamentally, it enables KYC-compliant users to access U.S. equities through blockchain representation after traditional acquisition. Minimal divergence exists across current implementation frameworks.Trading: End-users transact with tokenized equities. The critical divergence across solutions manifests here: certain platforms prohibit trading entirely (Exodus); others restrict transactions to licensed broker channels (Dinari and mystonks.org); while several enable native on-chain trading (Backed Finance, Solana, Ondo, Kraken). Notably exceptional is Backed Finance, which currently leverages Swiss regulatory frameworks to allow non-KYC users direct AMM purchases of its tokenized U.S. stock products.
For end-users, the tokenization process primarily concerns regulatory compliance and asset security, criteria currently met by most market players. The pivotal differentiator lies in trading mechanisms. Platforms like Dinari restrict transactions to licensed broker channels while offering no liquidity mining or lending, substantially diminishing the utility of tokenized equities. Regardless of compliance rigor or operational refinement, such limitations inherently deter user adoption.
Conversely, models like xStocks, Backed Finance, and Solana represent more consequential long-term solutions. By enabling native on-chain trading—bypassing traditional brokerage systems—they fully harness DeFi’s core advantages: 24/7 accessibility and programmable composability.
However, on-chain liquidity remains insufficient to rival traditional venues. Low-liquidity exchanges functionally equate to unusable platforms; tokenized equities cannot scale without deeper liquidity pools. This is also why the author is optimistic about xStock.
Ultimately, as regulatory clarity emerges and tokenized stocks proliferate across Web3, market share will likely consolidate toward exchanges with pre-existing advantages: superior liquidity and established trader networks.
In fact, we can see from the few examples in the previous cycle that Synthetix, Mirror, and Gains all launched products featuring U.S. stock trading in 2020. However, the most influential U.S. stock trading product was FTX. FTX’s approach was actually quite similar to the current solution offered by Backed Finance, but FTX’s trading volume and AUM for stocks were far higher than Backed Finance’s.
Potential Investment Targets
Although the market potential for tokenized U.S. stocks is significant, there are currently very few investable options available to investors.
Among existing players, neither Dinari nor Backed Finance has issued a token. Dinari has even explicitly stated that it will not issue one. The only potential investment target in this category is the meme token STONKS, associated with mystonks.org.
As for actively involved players, the tokens of Coinbase, Solana, and Ondo already have relatively high market capitalizations. Moreover, tokenized U.S. stocks are not their core business. While progress in tokenized equities may have some influence on their tokens, the extent of that impact is hard to predict.
xStock’s partners include leading Solana-based DEXs such as Raydium and Jupiter, as well as the lending protocol Kamino. However, these collaborations are unlikely to bring significant growth to the mentioned protocols.
Among the members of the SPI Project Open initiative, Phantom and Superstate have not issued tokens, while only Orca has.
In the derivatives space, Helix has yet to launch a token, leaving GNS as the only investable option.
Since these projects vary widely in their business models and approaches to tokenized U.S. stocks, it’s not possible to conduct a meaningful valuation comparison. Instead, we provide a summary of the basic information for the relevant tokens below:

References
https://x.com/xrxrisme69677/status/1925366818887409954
https://www.odaily.news/post/5204183
Project Open References:
Initial Framework Submitted in April: https://www.sec.gov/files/ctf-written-project-open-wireframe-04282025.pdfJune 12 Meeting Between SEC Crypto Working Group and Project Open Team: https://www.sec.gov/files/ctf-memo-solana-policy-institute-et-al-061225.pdfJune 17 Updates by SPIUpdated Proposal Framework by SPI: https://www.sec.gov/files/project-open-chain-equities-infrastructure-061725.pdfSupplemental Materials from SPI: https://www.sec.gov/files/project-open-061725.pdfPhantom Technologies Submission: https://www.sec.gov/files/phantom-technologies-061725.pdfSuperstate Submission: https://www.sec.gov/files/ctf-superstate-letter-061725.pdfOrca Creative Submission: https://www.sec.gov/files/orca-creative-061725.pdf
Project Open submitted an application for exemptive relief or confirmatory guidance, which includes:
Blockchain, as a technological tool, does not in itself require or mandate any SEC registration.Network fees on blockchain are considered technical costs and are not treated as securities transaction fees.Peer-to-peer transactions conducted via smart contract protocols are permissible and do not fall under the regulatory definition of exchange or ATS transactions, as they are bilateral transactions, similar to those envisioned under Section 4(a)(1) of the Securities Act of 1933.Relief for broker-dealers to participate in Section 4(a)(1) transactions (serving in a limited administrative role).Non-custodial/self-custodial wallets (and their providers) are not classified as broker-dealers.Holding tokenized equities in non-custodial/self-custodial wallets that have passed proper whitelisting and KYC is allowed.Broker-dealers may create sub-wallets for clients to hold tokenized equities. For custodial purposes, this satisfies the SEC’s requirement for “possession and control” of securities.Transfer agents may fulfill their responsibilities using blockchain if they have access to the KYC information of whitelisted wallet owners and modernized accredited investor educational materials, enabling the enforcement of: a) Transfer restrictions; b) Restrictive legends (e.g., for securities held by affiliates).Registration statements may be used to register tokenized equities, provided appropriate exemptive relief is granted. This includes: a) Proposals on content and format requirements; b) Proposals on methods of periodic reporting.Direct purchases of shares from the issuer, as envisioned above, would not cause purchasers to be considered underwriters or broker-dealers. These purchases are not made in the capacity of a broker or dealer.Requests for appropriate exemptions from Reg NMS, such as: Order Protection Rule, Best Execution, and Access Rule.

By Alex Xu, Mint Ventures' research partner
Introduction
Circle’s stock price has been soaring since its IPO (though showing a noticeable pullback recently), and stablecoin-related stocks in global markets are also exceptionally volatile. The U.S. stablecoin bill, the Genius Act, has passed the Senate vote and is now making its way through the House of Representatives. Recently, news emerged that tokens for the Trump family’s flagship project, World Liberty Financial (WLF), might be unlocked and enter circulation ahead of schedule. This counts as major news in the recently overall lackluster altcoin market, which has been starved of compelling narratives.
So, how is World Liberty Financial actually performing currently? How is its token mechanism designed? And what benchmarks should be used for its valuation?
Through this article, the author will attempt to provide a multi-dimensional analysis of World Liberty Financial’s current business status, project background details, tokenomics, and valuation expectations, offering readers several perspectives for evaluating the project.
PS: This article represents the author’s preliminary thoughts as of the time of publication and is subject to change. The views expressed are highly subjective and may contain factual, data-related, or logical errors. All opinions herein are in no way investment advice. Constructive feedback and further discussion from industry peers and readers are welcome.
Business: Product Status and Core Competitive Advantages
World Liberty Financial (WLF) is a decentralized finance DeFi platform co-founded with participation from the family of U.S. President Donald Trump. Its core product is the USD1 stablecoin. USD1 is a 1:1 dollar-pegged stablecoin fully backed by reserves of cash and U.S. Treasury bonds. World Liberty Financial also has plans for lending services (built on Aave) and a DeFi app, though these are not yet live.
USD1 Business Data
As of June 2025, the circulating supply of the USD1 stablecoin has reached approximately $2.2 billion. Among these, BNB Chain hosts 2.156 billion USD1 in circulation, Ethereum holds 48 million, and Tron maintains 26,000. BNB Chain accounts for 97.8% of the total supply, confirming that the vast majority of USD1 is issued on this network.
Regarding on-chain user metrics, BNB Chain leads with 248,000 wallet addresses holding USD1, followed by Ethereum at 66,000 addresses. Tron currently maintains merely one active address with USD1 holdings.
Analysis of token distribution reveals that on BNB Chain, 93.7% of USD1 (equivalent to 2.02 billion USD1) is held across two Binance-controlled addresses. Within this, 1.9 billion USD1 is concentrated in a single Binance address (0xF977814e90dA44bFA03b6295A0616a897441aceC).
Examining USD1’s historical market capitalization, we observe that prior to May 1, 2025, its market value remained around $130 million. However, on May 1 itself, the value surged to $2.13 billion, representing an overnight increase of nearly $2 billion.

Growth curve of USD1 scale | Source: CMC
The explosive growth primarily stems from Abu Dhabi investment firm MGX’s $2 billion equity investment in Binance in May 2025, where USD1 was selected as the payment currency. The current USD1 balance retained in Binance’s addresses aligns precisely with this $2 billion amount.
This implies:
After receiving MGX’s USD1 investment, Binance did not convert it to USD or other stablecoins, making it USD1’s largest holder with 92.8% of total supply.Excluding this transaction-derived volume, USD1 remains a small-scale stablecoin with a circulating market value barely exceeding $100 million.
This business expansion model is likely to recur in future project development.
Business Partnerships
WLFI has established collaborations with multiple institutions and protocols to expand its market presence.
In June 2025, WLFI announced a partnership with London-based crypto fund Re7 to launch USD1 stablecoin vaults on Ethereum lending protocol Euler Finance and BNB Chain staking platform Lista. This initiative aims to amplify USD1’s footprint across Ethereum and BNB Chain ecosystems. Notably, Lista is a leading BNB staking platform backed by Binance Labs.
Additionally, Aave – currently the largest decentralized lending platform – has proposed integrating USD1 into its markets on Ethereum and BNB Chain. The draft proposal has already passed community voting.
For trading accessibility, USD1 is now listed on centralized exchanges including Binance, Bitget, Gate, and Huobi, as well as decentralized exchanges such as Uniswap and PancakeSwap.
World Liberty’s Competitive Advantages
World Liberty’s competitive edge is straightforward: the Trump family’s formidable political influence grants the project inherent advantages in specific business expansions unavailable to competitors. This initiative also serves as a potential conduit for interests among individuals, organizations, or even nations with commercial or political ties to Donald Trump.
A prime example is Binance’s use of USD1 – issued by World Liberty – as the capital vehicle for Abu Dhabi investment firm MGX’s massive funding. Binance continues to hold these assets interest-free (effectively boosting USD1’s TVL) while rapidly listing USD1 across its platforms.
However, World Liberty token holders face three primary risks:
The Trump family maintains numerous channels for financial interests, and World Liberty may not be the ultimate choice for contributors. (For context on the Trump family’s diverse revenue streams, refer to Bloomberg’s late-May 2025 exposé: “THE TRUMP FAMILY’S MONEY-MAKING MACHINE“, detailing their multifaceted approaches.)WLFI tokens are fundamentally decoupled from World Liberty’s project value. (Analysed in the “Tokenomics” section below.)Potential operational abandonment by the Trump family post-token sell-off—or even during divestment—mirroring historical patterns observed in all Trump-affiliated crypto assets (from Trump Tokens to various NFTs).
Background: Backing and Financing Details
Core Team Background
World Liberty Financial’s core team hails from political and business circles, forming the foundation of the project’s competitive edge and influence.
Undoubtedly, the project’s central figures are Donald Trump—the 45th and 47th President of the United States—and his three sons: Donald Trump Jr., Eric Trump, and Barron Trump (aged 17).
However, their listed roles on World Liberty Financial’s official website have undergone subtle yet notable shifts over the past month. As of mid-June, Donald Trump held the symbolic title of “Chief Crypto Advocate,” while his three sons were given equally vacuous roles as “Web3 Ambassadors.”
These definitions for all four Trump family members are identically stated in the project’s “Golden Paper”.

Nonetheless, the four Trump members are listed above all project Co-Founders in official placements.

World Liberty Financial Team Profile Page (Mid-June 2025)
However, the project’s official team page has recently been updated with revised titles: Donald Trump is now listed as “Co-Founder Emeritus”, while his three sons have been designated as “Co-Founders.”

World Liberty Financial Team Profile Page (Late June 2025)
Another subtle detail: both Donald Trump and Steven Witkoff (another “Co-Founder Emeritus” whose title was downgraded from “Co-Founder” in the recent update) now have an almost imperceptible footnote marker “1” appended to their titles. At the bottom of the webpage, fine print clarifies: “Removed upon taking office”, indicating their honorary titles will be revoked if they assume public office.
This compliance mechanism aims to prevent conflicts of interest for government-affiliated figures by severing private commercial ties—a standard ethical requirement for U.S. public officials.
However, a critical contradiction exists: Donald Trump currently holds public office as the sitting U.S. President.
Beyond the Trump family, another pivotal figure is Steven Witkoff—a longtime business associate of Trump and prominent New York real estate magnate—serving as Co-Founder Emeritus. As founder and chairman of the Witkoff Group, he has maintained close ties with Donald Trump since the 1980s, frequently socializing on golf courses as widely recognized “longtime friends and business partners.”
Following Trump’s presidential inauguration, Witkoff was appointed “U.S. Special Envoy to the Middle East,” reporting directly to Trump. He played central roles in high-stakes negotiations involving Israel, Qatar, Russia, and Ukraine, additionally acting as Trump’s “private emissary” to Moscow for multiple meetings with Russian leadership.
The Witkoff family is deeply embedded in the project: Both sons, Zach Witkoff and Alex Witkoff, are WLFI Co-Founders.
Beyond political and business figures, WLFI’s technical and operational operations are primarily managed by crypto industry professionals. Zak Folkman and Chase Herro, both Co-Founders, are serial entrepreneurs in the cryptocurrency space. Their previous venture involved launching the DeFi platform “Dough Finance,” though the project failed following an early-stage hack, rendering their entrepreneurial track record unremarkable. Within WLFI, Folkman and Herro initially held primary control until January 2025, when they relinquished authority to a Trump-family-controlled entity.
Another key member is Richmond Teo, heading WLFI’s Stablecoin and Payments division. Teo previously co-founded the renowned compliant stablecoin firm Paxos and served as its Asia CEO. The team further includes blockchain practitioners such as Corey Caplan (Head of Technical Strategy) and Ryan Fang (Growth Lead), alongside traditional finance compliance experts, including Brandi Reynolds (Chief Compliance Officer).
The project has also enlisted several advisors, including Luke Pearson (Partner at Polychain Capital) and Sandy Peng (Co-Founder of Ethereum Layer-2 network Scroll). Notably, Peng provided operational support during WLFI’s token sale period.
Equity Evolution of the Trump Family in World Liberty Financial
The Trump family’s stake in World Liberty Financial has steadily declined, from an initial 75% to the current 40%.

The decline from the initial 75% to 40% stake may involve transfers to Justin Sun, DWF Labs, and the recently announced $100M investor Aqua 1 Foundation (this remains unverified).
Financing Journey & Backers
Since its September 2024 inception, World Liberty Financial has raised cumulatively over $700 million through multiple funding rounds, with its valuation surging rapidly post-Trump’s inauguration and token launch.
I delineate key funding rounds below:

Notably, according to the project’s Gold Paper and website disclosures, the Trump family is entitled to 75% of net proceeds from token sales (through subsequent equity divestments, which represent an indirect resale of token sale proceeds) and 60% of future net profits generated by stablecoin operations.
Tokenomics: Allocation, Utility & Protocol Revenue
Token Distribution & Vesting Details
The governance token $WLFI has a total supply of 100 billion tokens. Per the token economic model outlined in the official “Golden Paper”, the allocation and vesting schedule are structured as follows:

Here are the key points to note: The team allocated 35% of the tokens for the token sale (public sale), but only 25% of that allocation has been completed so far. There is currently no information on how the remaining 10% will be handled.
Additionally, while the public sale portion of the WLFI tokens has an additional clause specifying an expected 12-month lock-up period, the tokens in the other allocation categories have no clearly defined unlock conditions or timelines. However, like public sale tokens, they are currently non-transferable.
The ambiguity surrounding the specific unlock terms for the non-public sale WLFI tokens creates significant uncertainty for the project.
Token Functionality
WLFI is a pure governance token. It does not confer any profit-sharing or income rights, nor does it represent equity claims in the project company. Its value primarily derives from governance participation.
Protocol Revenue Distribution
The official WLFI Gold Paper states the following regarding the handling of protocol revenue:
$30 million of initial net protocol revenues will be held in a reserve controlled by a WLF (the project is abbreviated as WLF here but later renamed WLFI) Multisig to cover operating expenses, indemnities, and obligations. Net protocol revenues include revenues to WLF from any source, including without limitation platform use fees, token sale proceeds, advertising or other sources of revenue, after deduction of agreed expenses and reserves for WLF’s continued operations. The remainder of net protocol revenues will be paid to DT Marks DEFI LLC, Axiom Management Group, LLC WC Digital Fi LLC, which are entities affiliated with our founders and certain service providers (“Initial Supporters”). These entities have indicated to WLF their intent to deploy the majority of the fees received on the WLF Protocol once launched.
In essence, protocol revenue primarily flows to corporate entities behind WLFI (though they have committed to allocating most funds to support the protocol). Crucially, WLFI tokens themselves have no direct linkage to business revenue.
Valuation: What is WLFI Worth Long-Term?
Since WLFI’s core business revolves around stablecoins, we can reference the valuation metrics of its major listed competitor, Circle, using its “Market Cap / Stablecoin Market Cap” ratio to roughly estimate WLFI’s fair valuation range.
As of late June 2025, Circle’s USDC stablecoin maintained a circulating supply of approximately $61.7 billion. During the same period, Circle’s market capitalization stood at $41.1 billion, with a fully diluted valuation (including options and convertible instruments) reaching approximately $47.1 billion. This establishes Circle’s “Market Cap to Stablecoin Supply” ratio within the range of 0.66 to 0.76 ($41.1B/$61.7B = 0.66; $47.1B/$61.7B = 0.76).
“Applying this benchmark to WLFI, which currently supports $2.2 billion in stablecoin supply, yields a projected valuation range of $1.452 billion to $1.672 billion ($2.2B × 0.66 = $1.452B; $2.2B × 0.76 = $1.672B), implies a theoretical token price range of $0.0145 to $0.0167 ($1.452B ÷ 100B = $0.0145; $1.672B ÷ 100B = $0.0167).”
Clearly, this is a figure that WLFI investors find difficult to accept. For first-round public offering investors, it’s barely above the break-even point. Expectations for WLFI are high, and possible reasons include:
Early WLFI had incomplete unlocking: Its circulating market cap is significantly lower than its FDV, allowing WLFI to command a higher premium.WLFI is in its early stages: Its potential growth rate is far higher than Circle’s.WLFI possesses strong political resources: It should carry a “Trump premium,” attracting numerous projects eager to partner with WLFI.Sentiment and speculation in the crypto market are more aggressive than in the stock market: WLFI will enjoy a higher premium than Circle.WLFI may time its token issuance closely with the passage of the US GENIUS Act stablecoin bill: This would allow it to capitalize on high market sentiment and enthusiasm.
……
However, we can also present corresponding counter-arguments, such as:
The stablecoin business has extremely strong network effects: The leader should have a stronger competitive advantage and command a higher valuation premium than a new entrant (consider the profit-generating power of the sector leader Tether compared to the second-place Circle).WLFI project revenue is unrelated to the WLFI token: The WLFI token lacks value capture and should be heavily discounted in valuation.93% of WFLI’s current stablecoin market cap is held by Binance for support. This indicates very low organic adoption, and the business volume is heavily inflated.WLFI might be just one of many Trump family “white-label licensing projects”: They could be as ruthless in dumping and operations as they were with the Trump token and various Trump NFTs, likely incapable of long-term commitment.Liquidity in the crypto market, especially for altcoins, has long dried up: Secondary market players hardly believe any story not backed by solid business data, and most newly listed tokens go into free fall.
……
As an investor, which side of the argument you lean towards is a matter of perspective.
In the author’s view, the decisive factor for WLFI token’s short-term price movement after listing will depend, on one hand, on the final content and timing of the Genius Act’s passage. More importantly, however, it hinges on whether the Trump family, in its various backroom deals and transactions, is willing to position WLFI as a relatively central medium of exchange for mutual benefits. This would manifest as “influential individuals/business entities/sovereign nations” actively embedding USD1 (even symbolically) into their business processes to gain political and commercial advantages – such as using USD1 as an investment currency (equity investments) or a settlement currency (cross-border trade).
If there is a lack of such concentrated business news following the listing, WLFI likely holds a precarious position within the Trump family’s business empire. They undoubtedly have more lucrative channels.
Let’s wait and see how WLFI develops after its listing.
So, when specifically will the WLFI token become transferable?
I speculate it will be after the US “Genius Act” is formally enacted (it has currently passed the Senate). That will be the optimal time for the project team to act freely, and it’s not far off.

By Alex Xu, Mint Ventures' research partner & Lawrence Lee, Mint Ventures' researcher

In the previously published first and second parts of “Sifting for Gold: Identifying Long-Term Investment Targets Through Market Cycles (2025 Edition)” we analyzed and introduced projects in the lending sector—Aave, Morpho, Kamino, and MakerDao—alongside staking sector projects like Lido and Jito, and trading sector projects including Cow Protocol, Uniswap, and Jupiter. As the final part of this series, this article will continue to spotlight projects with solid fundamentals and long-term potential for attention.
PS: This article reflects the stage-specific thoughts of the two authors at the time of publication. Their views may evolve over time, are highly subjective, and may contain factual, data-related, or logical errors.
None of the opinions expressed herein constitute investment advice. We welcome critiques and further discussions from industry peers and readers.
4. Crypto Asset Services: Metaplex
Current Business Status
Business Scope
The Metaplex Protocol is a digital asset creation, sales, and management system built on Solana and SVM-compatible (Solana Virtual Machine) blockchains. It provides developers, creators, and enterprises with tools and standards to build decentralized applications. The crypto asset types supported by Metaplex include NFTs, FTs (Fungible Tokens), Real World Assets (RWA), gaming assets, and DePIN assets.
In terms of crypto asset services, Metaplex’s offerings can be divided into two main categories: Digital Asset Standards and Program Library (for asset issuance, sales, and management). The former provides asset issuers with token standards that are highly compatible with the SVM ecosystem and feature low creation/management costs, while the latter offers a suite of tools and services for creators to mint, sell, and manage their assets.
The majority of NFT and FT issuers on Solana are Metaplex users.
Over the past six months, Metaplex has further expanded its business horizontally into other foundational service areas of the Solana ecosystem through its new division, Aura Network, including digital asset indexing and Data Availability (DA) services.

Metaplex’s Product and Service Matrix (Source: Developer Documentation)
In the long term, Metaplex aims to become one of the most critical multi-domain infrastructure service providers within the Solana ecosystem.
Beyond Solana, Metaplex currently also operates on the Sonic and Eclipse blockchains.
Revenue Model
Metaplex’s business model is straightforward: It generates service fees by offering on-chain asset-related services, including asset minting, digital asset indexing, and data availability services.
While Metaplex offers a wide range of services and products, not all are fee-based. A detailed fee schedule for specific services is provided below：

MPL Asset Service Fee Structure (Source: Developer Documentation)

Aura Service Fee Structure (Source: Developer Documentation)
The Aura business line remains in its early stages, with the majority of Metaplex’s current revenue contributed by its asset minting and management services (MPL).
Business Data
We will focus on two core metrics: the number of assets minted through its services and Protocol revenue.
Before presenting and analyzing these two metrics, we will first examine the distribution of asset types issued via the Metaplex protocol.

Data source: Metaplex Public Dashboard, the same below
The chart above illustrates the trend in the proportion of NFT and FT assets utilizing Metaplex’s Metadata (which provides additional data for digital assets, such as images, descriptions, etc., and is used by nearly all assets).
We observed that in early 2024, NFTs still dominated the assets issued via the Metaplex protocol, accounting for approximately 80% of the total. However, starting in April 2023, the share of FT assets surged rapidly and has since become the primary asset category serviced by Metaplex, now representing over 90% of total activity.
Notably, the majority of these FT assets are Meme projects, whose issuers currently constitute Metaplex’s primary client base and revenue contributors.
This indicates that the current boom or decline of Meme projects on Solana directly impacts Metaplex’s business trajectory.
Let’s now examine the specific operational metrics.
Number of Assets Minted (Monthly)

As observed, the number of assets minted via Metaplex began to rebound from its trough in September 2023, peaked at a historic high in January 2024 (with over 2.3 million assets minted), and subsequently declined gradually. By March 2024, the metric had largely retreated to levels seen in June 2023 (approximately 960,000 assets minted). This trend is closely aligned with the activity fluctuations of Meme trading within the Solana ecosystem. The higher the Meme activity, the greater the volume of assets issued through Metaplex.
Protocol Revenue

Metaplex’s protocol revenue mirrors the trend in its asset minting volume, reaching a historic peak of 4.3 million USD in January 2024, followed by a rapid decline. The projected protocol revenue for March 2024 stands between 1.2 million and 1.3 million USD, returning to levels observed in the first half of 2023.
Protocol Incentives
Unlike most Web3 protocols whose operational metrics rely on subsidies, Metaplex’s revenue is entirely organic, driven by genuine demand from asset issuers. However, from January to early March 2024, Metaplex executed a $1 million USD token incentive program in collaboration with Orca, Kamino, and Jito to boost liquidity for its native token MPLX. This program has now concluded.
Competitive Landscape
As the earliest standard-setter for digital assets on Solana, Metaplex currently faces no formidable competitors in the realm of asset standards and their derivative services within the Solana ecosystem.
Competitive Advantages
Metaplex’s competitive edge stems from its role as the creator and maintainer of Solana’s core asset standards, which underpin the ecosystem’s digital assets—ensuring interoperability and liquidity across NFTs, FTs, Real World Assets (RWA), Decentralized Infrastructure (DePIN), gaming assets, and more.
This foundational position implies that asset issuers who build and manage assets using Metaplex would face significant time, technical, and economic costs if attempting to migrate their projects to alternative protocols.
Moreover, new developers and projects prioritizing ecosystem compatibility are incentivized to adopt Metaplex’s asset formats, as doing so guarantees seamless integration with Solana’s infrastructure (e.g., wallets) and products (e.g., DeFi platforms, trading interfaces).
Beyond asset services, Metaplex’s newly expanded offerings—Aura Network, which focuses on data indexing and data availability (DA) services—are poised to become a second growth trajectory for the protocol. Given the high overlap between Aura’s target users and Metaplex’s existing client base, these new services are likely to gain faster adoption among current partners.
Main challenges and risks
The continued cooling of Solana Meme has led to a persistent decline in asset minting volume, resulting in reduced business revenue. This downward trend, which began in January, has shown no signs of reversal as of now.Metaplex’s current revenue model relies on one-time fees charged per asset type created. Projects with fixed or non-diversifying asset types cannot generate sustained recurring revenue for the protocol.
Valuation benchmark
Metaplex’s native protocol token is MPLX, with a total supply of 1 billion.
Currently, the primary utility of MPLX is governance voting. Additionally, since March 2024, Metaplex has announced plans to allocate 50% of protocol revenue to token buybacks (though in practice, the protocol has not strictly adhered to this threshold, with most buybacks ranging between 10,000 and 12,000 SOL). The repurchased tokens are deposited into the treasury to fund ecosystem development.

As of now, monthly buybacks have consistently exceeded 10,000 SOL.
Given the absence of directly comparable projects in Metaplex’s niche, we primarily evaluate its valuation through the market capitalization-to-monthly protocol revenue ratio, using historical benchmarks for context.

As of now, Metaplex’s valuation relative to its Q1 protocol revenue remains at a multi-year low, reflecting the market’s pessimistic expectations for Solana’s asset issuance sector.
5. Hyperliquid: The Embattled Derivatives & L1 Hybrid
Hyperliquid stands out as one of the few functional new projects launched this cycle. Mint Ventures published an in-depth analysis of Hyperliquid in late 2024, which interested readers can refer to for further details.
Current Business Status
Hyperliquid’s operations can be divided into three segments: a derivatives exchange, a spot exchange, and a blockchain (L1). While all three are live, the derivatives exchange remains the core business in terms of trading volume and market influence.
For the derivatives exchange, trading volume and open interest are its key metrics.
Hyperliquid’s derivatives platform soft-launched in June 2023, initiated a points program in November 2023, and saw a surge in trading volume and open interest following its official token airdrop in late November 2023. Since December 2023, Hyperliquid’s daily derivatives trading volume has averaged between 4 billion and 7 billion, peaking at a single-day record of 18.1 billion. Open interest has also risen sharply, fluctuating between 2.5 billion and 4.5 billion since December.

Source: Hyperliquid Official Website
Hyperliquid’s custodial funds began surging in November 2023 and have since fluctuated around 2 billion USD. However, a series of recent attacks caused its custodial fund to stop tumbling from 2.5 billion USD to 1.8 billion USD within a short period.

On the user front, Hyperliquid has seen a rapid surge in its address count, with cumulative trading addresses now approaching 400,000.

Regarding spot trading, Hyperliquid previously supported only native assets on its L1 blockchain, with HYPE dominating the majority of trading volume. However, in February 2024, Hyperliquid launched uBTC, a decentralized BTC spot trading solution tailored for its platform. Despite this addition, Hyperliquid’s BTC spot trading volume remains modest, averaging between 20 million and 50 million daily, which constitutes a relatively small portion of its total daily spot trading volume (approximately $200 million).

Hyperliquid spot trading volume Source：DeFillama
Additionally, Hyperliquid employs a decentralized mechanism (HIP-1) for spot asset listings, allowing public auctions for listing eligibility. The proceeds from these auctions effectively function as Hyperliquid’s “listing fees,” whose volatility is illustrated in the chart below：

historical auction price for Hyperliquid’s spot listing qualification Source: ASXN
As shown, Hyperliquid’s listing fees have experienced significant fluctuations. While they peaked at nearly 1 million USD in December 2023, they have since declined to around 50,000 USD amid waning market enthusiasm for altcoins.
Regarding its EVM integration, Hyperliquid launched HyperEVM in alpha on February 18, 2024, and completed its integration with the existing HyperCore protocol on March 26, 2024. However, due to incomplete infrastructure—such as the absence of critical components like cross-chain bridges, limited deployment of EVM-compatible protocols, and a lack of official incentive programs—HyperEVM’s overall activity remains subdued. Metrics including TVL, trading volume, and transaction count place it roughly 20th among all blockchain networks.

TVL, transaction volume, and TX data of each chain Source: Geckoterminal
Hyperliquid allocates all protocol-generated revenue—including derivatives trading fees, spot trading fees, and proceeds from listing eligibility auctions—to the Assistance Fund (AF) for $HYPE token buybacks after deducting the portion distributed to HLP (Hyperliquid’s liquidity provider program).
Over the past 30 days, Hyperliquid generated $42.05 million USD in revenue, ranking fourth behind Tether, Circle, and Tron, and surpassing major L1 blockchains like Solana and Ethereum, as well as applications such as Pump Fun and Pancakeswap. Notably, except for Tron, the revenue of other top-earning protocols is either unrelated to their native tokens or lacks an associated token entirely.

30-day revenue ranking of all protocols Source：DeFillama
Competitive Landscape
Given that HyperEVM is currently in a “live testing” phase, we will analyze Hyperliquid’s competitive landscape by focusing on its two core segments: the derivatives exchange and the spot exchange.

Transaction volume share of decentralized derivatives exchanges Source：Dune
Hyperliquid has already established itself as the dominant leader in decentralized derivative exchanges.
Compared to leading centralized exchanges, Hyperliquid’s derivatives trading volume is also rising rapidly. The chart below illustrates the ratio of Hyperliquid’s derivatives trading volume to that of Binance, Bybit, OKX, and Gate:

Ratio of Hyperliquid contract transaction volume to that of centralized exchanges Source：Syncracy report
In the spot trading sector, Hyper’s average daily trading volume in the past month was around $180 million, ranking 12th among all Dex.

Top 15 DEX by Spot Trading Volume Source: DeFillama
Hyperliquid’s Competitive Advantages
Hyperliquid’s rapid growth in derivatives trading is underpinned by the following factors:
Adoption of the order book model, widely proven in trading ecosystems, enabling a seamless transition for users migrating from centralized exchanges and facilitating market maker participation.Aggressive contract listing strategy. Hyperliquid pioneered Pre-launch token futures and pure DEX token contracts while swiftly capitalizing on trending assets. This positions Hyperliquid as the exchange with the deepest liquidity for many newly launched tokens.Lower fee structure. Compared to GMX’s ~0.1% all-in fee (including 0.06–0.08% trading fees, slippage, and borrowing costs), Hyperliquid charges only 0.0225% (source: Mint Ventures), offering a significant cost advantage.
These factors have solidified Hyperliquid’s dominance in decentralized derivatives trading. Additionally, its points program (launched November 2023) and generous airdrop strategy further bolstered user loyalty, leaving Hyperliquid with no direct competitors in the decentralized derivatives space.
However, these advantages alone are insufficient to ensure long-term competitiveness, as rivals could replicate Hyperliquid’s mechanisms, listing strategies, and fee models. Currently, Hyperliquid’s sustainable competitive edges lie in:
A lean, agile team with strong execution. Despite a compact team of 10–20 members, Hyperliquid has delivered three major products—a derivatives exchange, spot exchange, and L1 blockchain—within two years. While these products have imperfections, the team’s innovation and delivery capabilities outpace peers.Strong brand equity. Despite recent controversies (e.g., ETH and JELLY contract incidents), Hyperliquid maintains superior brand recognition and remains the go-to platform for on-chain derivatives traders.Network effects. Its market leadership since mid-2024 has entrenched Hyperliquid with deeper liquidity than competitors, creating self-reinforcing network effects.
Notably, full transparency of data—while user-friendly—does not inherently serve as a competitive advantage. In fact, this feature may harm Hyperliquid’s business in both the short and long term, as analyzed in the upcoming JELLY contract case study.
Main challenges and risks
Derivatives Trading Mechanism Risks:
Hyperliquid recently faced two major incidents:
50x Leveraged ETH Long Liquidation: A whale’s highly leveraged ETH long position was liquidated, resulting in a 4 million USD loss for HLP (Hyperliquid Liquidity Pool). The root cause was flawed retained margin rules, which have since been patched.
JELLY Contract Incident: Triggered by improper position size caps for low-market-cap assets. When JELLY launched, its market cap was about 200 million USD, and Hyperliquid applied a standard 30 million USD position cap. However, by the time of the incident, JELLY’s market cap had collapsed to under 10 million USD, yet the cap remained unchanged, creating an exploitable loophole. This led to 15 million USD in peak HLP losses (24% of HLP’s historical profits). Hyperliquid ultimately settled positions at pre-manipulation prices, sparking debates about its decentralization claims.
Both incidents exposed vulnerabilities in Hyperliquid’s core trading mechanics. While post-incident fixes were implemented, fundamental risks persist: Fully transparent on-chain positions (size, liquidation prices) inherent to decentralized derivatives exchanges, combined with HLP acting as the sole counterparty, create theoretically infinite attack vectors. No matter how rules are designed, loopholes may exist and be exploited in blockchain’s “dark forest.” Until these core mechanisms are revised, Hyperliquid remains susceptible to future attacks. This is currently the primary market concern regarding Hyperliquid.
Security Risks
Hyperliquid’s funds are primarily held in its Arbitrum bridge contract and a multi-sig wallet. The security of these components is critical. In December 2023, North Korean hackers probed Hyperliquid’s contracts, causing custodial funds to temporarily plummet from 2.2 billion USD to 1.9 billion USD.
Delayed HyperEVM Progress
A significant portion of $HYPE’s valuation hinges on HyperEVM’s success. However, progress has lagged since its launch. If delays persist: The L1 valuation premium (typically far higher than derivatives exchanges) embedded in $HYPE will erode. As a standalone derivatives exchange, $HYPE’s current valuation appears stretched (see analysis below).
Valuation benchmark
Hyperliquid’s current revenue primarily stems from derivatives/spot trading fees and spot listing fees. The protocol allocates this revenue uniformly: after subsidizing HLP (Hyperliquid Liquidity Pool) returns, 100% of the remaining funds are directed to the Assistance Fund (AF) for HYPE buybacks. Consequently, HYPE’s valuation can be analyzed using both P/S and P/E models since the buyback portion functions as revenue and approximates net profits for token holders.
Hyperliquid’s revenue in the past 30 days was $42.05 million, with an annualized revenue of $502 million. Based on the current circulating market cap of $4.2 billion, its circulating PS is 8.33, while the fully diluted PS is 24.96. When calculated based on circulating PS, Hyperliquid’s valuation is comparable to that of GMX and ApolloX within the derivatives exchange sector. However, compared to Layer 1 protocols, Hyperliquid’s valuation remains relatively low.

By Alex Xu, Mint Ventures' research partner & Lawrence Lee, Mint Ventures' researcher

In our previously published “Sifting for Gold: Identifying Long-Term Investment Targets Through Market Cycles (2025 Edition – Part I)“, we analyzed lending sector projects, including Aave, Morpho, Kamino, and MakerDAO, as well as staking sector projects Lido and Jito. Part II will continue exploring fundamentally strong projects with long-term potential.
PS: This article reflects the authors’ perspectives as of publication date, which may evolve over time. The views expressed are highly subjective and may contain factual, data, or logical errors. None of the content constitutes investment advice. We welcome critiques and further discussions from industry peers and readers.
3. Trading Sector：Cow Protocol、Uniswap、Jupiter
3.1 Cow Protocol
Current Business Status
Product and Mechanism
Cow Protocol is a decentralized trading aggregation protocol. Its core product is the decentralized trading aggregator, CoW Swap. The “CoW” in the name stands for Coincidence of Wants, referring to the matching mechanism that directly aligns the needs of buyers and sellers. CoW Swap uses batch auctions as a price discovery mechanism, consolidating users’ trading intentions (order demands) and settling them collectively in each block.

This mechanism allows users’ orders to be directly matched without needing traditional market makers or liquidity pools. When two parties want to exchange assets that meet each other’s needs, the transaction can be completed directly, avoiding intermediate fees. For orders that cannot be directly matched, CoW Swap routes the remaining orders to decentralized exchanges (DEXs) or other aggregators to obtain liquidity. This design minimizes slippage and fees, while batch matching ensures that all transactions executed in the same batch share the same settlement price, eliminating price unfairness due to transaction order.
Additionally, CoW Swap introduces a Solver bidding mechanism: multiple third-party solvers compete to provide users with the best execution strategy, where the winner gains the right to execute the batch and also covers the on-chain gas fees. Users only need to sign their order intentions offline, without having to pay on-chain fees themselves, and incur no transaction costs if unfilled. This “intention matching + solver bidding” model enhances user experience (no need to worry about gas losses from failed transactions) and provides a degree of MEV (Maximal Extractable Value) protection—since order matching occurs off-chain, solvers must bid to return MEV to the user, making front-running and other MEV attacks less effective.
CoW Swap currently operates on Ethereum, Arbitrum, Gnosis, and Base.
Beyond Cow Swap, another product of Cow Protocol is MEV Blocker, developed in collaboration with CoW DAO, Beaver Build, and Agnostic Relay. By switching the wallet’s RPC to MEV Blocker, users’ transactions are routed through a private searcher network (instead of entering Ethereum’s public mempool visible to all searchers, which leads to MEV attacks), preventing sandwich and front-running attacks from the start.
*The process of regular transactions on the Ethereum network being packaged into blocks: Users initiate transactions, which first enter the public mempool; searchers monitor the mempool for MEV opportunities and package transactions into bundles; builders receive bundles from searchers and construct blocks; validators receive blocks from builders, verify them, and add them to the blockchain.
Revenue Model
Cow Protocol’s revenue sources are broadly divided into two categories:
Surplus from CoW Swap Transactions: This refers to the extra savings CoW Swap provides to users through its bidding network, compared to the initial quote. CoW Swap currently charges a fee of 50% on surpluses across most networks, but this fee does not exceed 1% of the transaction volume. Additionally, for external protocols (partners) integrated with Cow Protocol, Cow Protocol takes 15% of the transaction fees generated by these partners as a service fee, with the percentage defined by the partner but not exceeding 1% of the transaction volume. Lastly, Cow Protocol charges a fee on the total network transaction volume for certain networks like Gnosis and Arbitrum, currently set at 0.1% of the transaction volume (excluding special trades like stablecoins).Revenue from MEV Blocker: A rate of about 10% is deducted from the revenue validators earn through MEV Blocker.
In the income structure of the protocol, the majority of revenue is contributed by the surplus from CoW Swap transactions, so our focus will primarily be on CoW Swap’s business data.
Business Data
We will focus on two key business metrics: the transaction volume of Cow Protocol and its protocol revenue.
Transaction Volume

Data Source：Dune
As an emerging intent matching protocol, CoW Swap has experienced rapid development over the past three years. In 2021, the protocol was still in its early stages, with small transaction volumes. Entering 2022-2023, the CoW Protocol saw its business data improve as demand for MEV protection and efficient aggregated trading grew in the DeFi space. By 2024, transaction volume increased significantly: monthly volumes hit a record high at the end of 2024, with nearly 7.8 billion in December alone and around 6.9 billion in February 2025, far exceeding previous years.
Notably, CoW Swap is increasingly favored by DAOs and professional institutions for providing large, low-slippage trading solutions. In 2023, about one-third of the DAO on-chain transaction volume was completed through CoW Swap, and by February this year, this proportion had risen to 79.5%.

Data Source：Dune
Protocol Revenue

Data Source：Dune
After entering 2024, the Cow Protocol began actively exploring revenue generation, conducting multiple rounds of revenue testing. This resulted in a steady month-by-month increase in income. January 2025 marked the highest revenue month, with 641 ETH earned. Calculated at an average ETH price of 3,328 per month, this amounts to approximately 2.13 million. In February, revenue was 586 ETH, with an average ETH price of 2,668, bringing in 1.56 million.
Protocol Incentives

Data Source: Tokenterminal
Currently, Cow Protocol’s main expenses are token incentives given to network solvers. These solvers receive COW tokens as rewards based on the quality of the trading solutions they provide, specifically the surplus they generate for traders. According to Token Terminal statistics, over the past year, spending on COW token rewards was approximately 7.4 million. In January and February 2025, protocol token incentives were 858,000 and 961,000, respectively, both below the protocol′s revenues of 2.13 million and $1.56 million for the corresponding months.
According to Cow Protocol’s official disclosure of the 2024 project budget in January, excluding development costs, the token rewards given to solvers amounted to about 5.2 million, while the annual protocol revenue was approximately 6 million, meaning revenue has already surpassed the token incentive expenditure.
Competitive Landscape
The main battlefield for Cow Protocol is the decentralized exchange aggregator sector. Initially dominated by 1inch, the landscape has diversified over the past two years. According to The Block’s latest data from March 2025 (excluding UniswapX), 1inch has lost its leading position (following a March 5th attack on its Fusion function, resulting in losses of over $5 million and increasing user concerns about its security), now ranking second with a 22.8% market share. Meanwhile, CoW Swap has taken the lead with 33.85%, marking its first time at the top in monthly data.

Data Source: The Block
In addition to 1inch and CoW, the other top five aggregators include ParaSwap, 0xAPI/Matcha (an aggregation interface provided by the 0x protocol), KyberSwap, and Bebop. These competitors each hold a market share of around 10% or less. ParaSwap and 0x have a longer history and stable user base, while KyberSwap (transitioning from Kyber Network to aggregation) and Wintermute’s Bebop have recently gained incremental users. Overall, competition in the DEX aggregator space remains fierce, with new players continually emerging. Although CoW Protocol has become the new leader, its position is not yet secure.
Beyond traditional aggregation products, two other noteworthy competitors are Uniswap’s UniswapX and Particle Network’s cross-chain trading platform, UniversalX.
Uniswap
UniswapX is a cross-platform aggregation trading feature launched by the Uniswap team in the second half of 2023. Essentially, UniswapX provides users with a similar mechanism of intent orders and fillers. Users submit offline signed orders on the Uniswap front end, and third-party “fillers” in the network can fill these orders and trade on-chain for the users. The process involves fillers providing a quote and enjoying exclusive matching rights for a short period. If the transaction isn’t completed within this time, it enters a Dutch auction phase, allowing more fillers to bid. This model is quite similar to CoW Swap’s solver bidding, both being off-chain matching and on-chain settlement solutions. Leveraging Uniswap’s brand and extensive user base, UniswapX quickly integrated into its front-end interface and went live on the Ethereum network. It’s noteworthy that there were industry accusations of UniswapX “copying” CoW Swap’s intent matching model. Critics, including Curve’s official channels, pointed out that CoW Swap had already pioneered the solver model, suggesting UniswapX was not an original innovation. Despite the controversy, UniswapX swiftly captured substantial trading volume within the Uniswap ecosystem. In early 2024, its share in the EVM aggregation trading market briefly exceeded 10% (compared to CoW Swap’s 14% at that time). However, its market share gradually declined, and according to data disclosed by Cow Protocol in March, UniswapX’s market share in aggregated trading is now around 5.5%.
UniversalX
UniversalX is another highly anticipated new project focusing on cross-chain aggregated trading. Launched by Particle Network, it went live on the mainnet at the end of 2024. The aim is to enable trading of assets across any chain without the need for cross-chain bridges. Its core concept is “chain abstraction,” allowing users to deposit assets from multiple chains into a unified on-chain account. Through the UniversalX platform, users can trade tokens from any chain using a unified balance, with the platform automatically handling cross-chain exchanges and settlements in the background. As a new entrant in the aggregator space, UniversalX targets the cross-chain trading niche, setting itself apart from projects like CoW Protocol, which primarily focus on single-chain aggregation. However, as the multi-chain ecosystem evolves, UniversalX could potentially become a competitor to CoW Protocol. If CoW Protocol expands to more chains or offers cross-chain capabilities, it would enter the competitive domain of UniversalX.
Cow Protocol’s Competitive Advantages
In the face of intense competition, Cow Protocol has been able to rise and grow steadily, and its competitive advantages can be analyzed from two aspects: product and brand.
Product:
Technical and Mechanism Advantages of Trading Products: Cow Swap is the first protocol to apply batch auction matching and solver competition to DEX aggregation, giving it a first-mover advantage. Its unique Coincidence of Wants matching mechanism allows direct trades without relying on traditional liquidity pools, reducing slippage and fees. The unified clearing price mechanism prevents price manipulation due to trade order, enabling heavy traders, particularly institutions, to execute at fair prices. In comparison, later approaches like UniswapX and 1inch Fusion have similar ideas but differ in implementation. For instance, CoW Swap uses sealed bidding every block, where all solutions are submitted simultaneously and executed optimally, minimizing MEV opportunities. This is considered more effective at preventing unfair practices like front-running than UniswapX’s time-limited exclusive fills and Dutch auctions.MEV Protection and Security: The combination of Cow Protocol’s trading services and MEV Blocker further enhances protection against MEV, removing user trades from Ethereum’s public mempool and allowing trusted solvers to batch them before publishing on Ethereum. This effectively reduces the risk of MEV attacks such as front-running and sandwich attacks. The protocol also imposes strict limits on the slippage and execution results of solver quotes, compressing the space for miners and searchers to extract MEV. These measures make Cow Swap one of the most user-protective trading platforms currently available, especially appealing for large trades and DAO treasury managers due to its strong MEV protection.
Brand
Cow Protocol, as the first to introduce batch auction matching and solver competition mechanisms, combined with its MEV-resistant features, has established a strong value proposition of safety and cost savings for traders. It has become the top choice in the minds of large traders, a preference that is unlikely to change easily. This user habit stems from the brand and reputation built on the product’s strengths, which is also the source of the protocol’s eventual profitability.

1inch’s monthly active users over the past year, Data Source：Tokenterminal

Cow Protocol’s monthly active users over the past year, Data Source：Tokenterminal
Main challenges and risks
Intense Competitive Environment
In the fiercely competitive landscape of aggregated trading platforms, established projects like 1inch, Kyber, and DoDo are leading the charge, while new players such as Bebop, backed by Wintermute, join the fray. Additionally, products like CEX and wallets that have closer user proximity, and possess strong entry points and frontend advantages, along with chain-abstract concepts like UniversalX, are continuously exploring trading product innovations and striving for greater user penetration. Over the long term, their relationship with Cow Protocol is more competitive than collaborative. Therefore, even though Cow Protocol has currently surpassed 1inch to become the leader in market share, maintaining this position in such a high-pressure environment is challenging. It directly affects the protocol’s bargaining power with users and suppliers (solvers), creating a clear conflict between the goals of “market share” and “protocol profit.”
Market Cycles
A downturn in the overall market cycle will lead to a contraction in total trading volume, impacting CoW Swap’s transaction volumes significantly, which is self-explanatory. Other trading products are similarly affected, so this point will not be elaborated further.
Ties to the EVMEcosystem
Currently, Cow Protocol only operates within the Ethereum ecosystem. If the Ethereum ecosystem underperforms compared to other blockchains, it will naturally limit Cow Protocol’s potential for development. Uniswap, discussed later, faces a similar risk, so I won’t repeat this point.
Valuation benchmark
COW Token
Cow has a total supply of 1 billion tokens. According to Coingecko, the current circulation rate is about 41.5%, with a projected token inflation rate of 19.61% over the next year.
Currently, the primary use case for Cow tokens is governance. As protocol revenue increases, there may be token buybacks. Previously, there were attempts to reduce fees through Cow staking.
Valuation
Looking at Cow’s valuation over time, its FDV hit a new high in this cycle as business metrics continue to rise. Excluding the initial month’s anomalies due to extremely low token circulation, the peak market cap reached 990 million at the end of December last year but then experienced a sharp decline, now standing at approximately 280 million.
We compare Cow’s Price-to-Sales (PS) ratio by analyzing the FDV in relation to protocol revenue.

The chart shows that despite Cow’s FDV maintaining an upward trajectory over the past year or so, its PS ratio has exhibited a notable decline alongside rising business revenue, making it more valuation-attractive compared to previous levels.
From a horizontal comparison perspective among competitors, within comparable projects in the aggregation protocol sector, 1inch serves as the most direct counterpart. Given that 1INCH currently lacks a direct token value capture mechanism and the protocol does not generate stable, publicly disclosed protocol revenue, we primarily conduct the comparative analysis through the FDV-to-trading volume ratio between the two protocols.

From the chart, we can see that as Cow’s price decreased and business data improved, its market cap to trading volume ratio fell below that of 1inch for the first time since February 2025, offering better relative value.
3.2 Uniswap
Current Business Status
Core Products
Uniswap is the largest decentralized exchange (DEX) on Ethereum. Its main products currently include the DEX protocol (now deployed on the Ethereum mainnet and several scaling chains) and the newly launched Unichain, a dedicated Layer 2 network.
The fee switch for the Uniswap protocol hasn’t been activated yet, so the protocol itself hasn’t generated direct revenue in the past. However, Uniswap Labs does charge a 0.15% interface fee on token trades via its official front end.
With the launch of Unichain in November 2024, there will be a new way to distribute value directly to UNI holders by staking UNI to share in transaction sequencer fees without needing to activate the fee switch.
Business Data
For Uniswap, the key business metrics are trading volume and fees. As for Unichain, we focus on the number of active addresses on the chain, the main ecosystem, and the amount of capital on the chain.
DEX Trading Volume and Fees

Uniswap’s Trading Volume and Fees, Source：tokenterminal
Uniswap’s trading volume has generally continued to grow with the market, hitting all-time monthly highs in March and December of the past year. However, with the market cooling recently, trading volume has noticeably declined.
It’s worth noting that in this cycle, Uniswap’s fee metrics have not surpassed the peak and secondary peak of the previous cycle, indicating that the fee rates are decreasing over time, leading to more intense competition among liquidity providers (LPs).
Multi-Chain Data
Thanks to multi-chain deployment (currently covering 11 EVM chains), especially with Coinbase’s launch of Base, Uniswap’s active users reached a record high of 19 million last October. This growth rate in active users far outpaces the growth in trading volume, highlighting Layer 2’s ability to attract new users.

Multi-Chain Distribution of Uniswap’s Monthly Active Addresses, Source：tokenterminal
Among them, Base is the main contributor to active users, accounting for 82% of Uniswap’s active users across all chains.

Source：tokenterminal
However, in terms of trading volume, Ethereum remains Uniswap’s main battleground, accounting for about 62% of the volume, followed by Arbitrum with 23%, and then Base with 8.4%.

Source：tokenterminal
Unichain’s Business Data
Since its official launch in early February this year, Unichain has grown rapidly. By early March, the number of weekly active addresses reached nearly 120,000, ranking 7th among all L2 projects, ahead of well-known L2s like zkSync, Manta, and Scroll.

Source：tokenterminal
However, the value of assets bridged on Unichain remains low, currently only around $14 million.

Source：tokenterminal
In terms of the ecosystem, Unichain’s official list includes over 80 projects, but most have not yet launched. For example, in DeFi, aside from Uniswap itself, the only notable app currently live is Venus, with total deposits of $5.67 million.
Competitive Landscape
Over the past year, Uniswap has remained a leader in the DEX market within the EVM ecosystem, holding the top market share. However, its overall market share has been declining. The chart below shows the market share trends of all DEXs in the EVM ecosystem (including all EVM L1 and L2).

Source：Dune
The second place is Pancakeswap, and the third is Aerodrome, which are the leading DEXs on Bnbchain and Base, respectively (even though Uniswap has also been deployed on these two chains).

Source：Dune
ETH, Bnbchain, and Base are the three largest chains by transaction volume in the EVM ecosystem, which aligns with the market share rankings of Uniswap, Pancakeswap, and Aerodrome.
As for Unichain, since it’s relatively new, its ecosystem is still quite underdeveloped and is in the early stages of application and funding. Apart from a good growth in active users, its other metrics lag significantly behind mainstream L2s.
Uniswap’s Competitive Advantages
Uniswap’s competitive advantages can be summarized as follows:
Network Effects and Liquidity Depth The largest liquidity pools attract the most traders and vice versa. More traders and transaction volume draw more tokens to deploy liquidity here, creating a self-reinforcing cycle.Brand and User Habit Stickiness As the first project to popularize the AMM model in the DeFi space, Uniswap has unparalleled brand recognition and credibility. It holds a strong position in the minds of traders and liquidity providers. Even with a plethora of DEXs and aggregators available, many users habitually conduct transactions on Uniswap’s front-end, despite it charging an additional transaction fee. Uniswap’s brand has been instrumental in building its L2 platform, attracting many quality projects for testing and joining right from the start, with rapid user growth.Ecosystem Positioning Through Multi-Chain Deployment Uniswap has deployed its products on most major EVM chains, consistently ranking in the top three by transaction volume. This strategy has helped Uniswap maintain its foundational ground in the multi-chain era and laid the groundwork for subsequent multi-chain aggregation features, facilitating easier liquidity interchange across chains.
Main challenges and risks
Intense Competitive Landscape and the Impact of New Models
Despite Uniswap’s relative advantage in market share, it faces significant challenges. On one hand, its traditional Ethereum competitors like Curve are holding their ground. On the other hand, Uniswap’s expansion on other EVM L1 and L2 chains is proving difficult, with strong local competitors on each chain (such as Pancake on BNB Chain, Aerodrome on Base, and Camelot on Arbitrum). Emerging trading models also pose a significant challenge: RFQ (Request-For-Quote) protocols and batch auction matching are on the rise. Projects like CoW Swap allow market makers (solvers) to quote prices directly, improving efficiency for large trades and reducing AMM slippage and MEV. This is particularly favored by professional traders and large holders, significantly diverting trading volume from Uniswap. Although Uniswap introduced a similar mechanism with UniswapX, it hasn’t slowed the growth of projects like CoW Swap. Additionally, products with strong front-end advantages, such as wallets and CEXs, are aggressively entering the trading scene, attempting to influence user behavior upstream. This potential shift relegates Uniswap to a more passive “price taker” role in a fiercely competitive pricing environment.
Community Governance Inefficiency and Lack of Value Pegging for Tokens
Investors who have been following the Uniswap governance forum for a long time will find that, compared to other DeFi projects with higher governance efficiency and better reputations (like Aave), Uniswap’s governance efficiency is quite low. This is specifically manifested in slow decision-making, resource wastage, and insufficient focus on strategic metrics. For example: 1. The community’s most concerned issue, the fee switch, has been discussed repeatedly for nearly three years with no result; 2. Various donations and budgets are provided for research and organizations unrelated to Uniswap’s North Star metric (trading volume), but the outcomes have been of little benefit to the project. The low level of community governance and the neglect and tardiness regarding the value pegging of Uni tokens clearly have a long-term negative impact on the tokens’ price.
Valuation benchmark
Since Uniswap has yet to achieve formal protocol revenue and Unichain’s fees are negligible compared to its market value, we use the ratio of Uniswap’s market value to its fees (PF) for both vertical and horizontal valuation comparisons.

Source：tokenterminal
From a vertical comparison, Uniswap’s PF in February this year was 6.77, at an absolute historical low. Since the issuance of Uniswap’s token, only three months have had a lower PF: May and June of 2022 (due to the Three Arrows Capital crisis) and April 2024 (due to a major altcoin pullback and Uniswap receiving a Wells Notice from the SEC). In March, this indicator rose slightly to 7.26. From this indicator, it is evident that the market is extremely pessimistic about the prospects of the Uni token.

Source：tokenterminal
For horizontal comparison, I chose Pancake and Aerodrome, both of which are DEX projects with market shares second only to Uniswap. I did not choose Curve because it has lending as a main business in addition to being a DEX, which makes it less comparable to the other three.
From the PF indicators of these three, Uniswap’s valuation appears significantly higher than Pancake and Aerodrome. However, we need to consider two additional factors:
Uniswap hasn’t provided any token subsidies, whereas Pancake and Aerodrome are still engaging in large-scale token subsidies. Especially Aerodrome, whose token incentives were as high as $27 million in February (See the chart below)

Uniswap also has Unichain as a second growth curve.Uniswap’s multi-chain ecosystem is better developed. Although Pancake has deployed on multiple chains, its operational performance has a significant gap compared to Uniswap, while Aerodrome is a single-chain DEX.
Overall, even considering the business similarities between Uniswap, Pancake, and Aerodrome, the horizontal valuation comparison (Price-to-Fundamental) of Uniswap is less informative than the vertical comparison.
3.3 Jupiter
Current Business Status
Jupiter started with trade aggregation and has expanded through product development and acquisitions, creating a comprehensive ecosystem around Solana’s on-chain transactions. It is also expanding horizontally to other chains and ecosystems. The main products within the Jupiter system include:
Main site self-operated trading products: These include aggregated trades (Instant), market orders (Trigger), and conditional orders (Recurring). These were Jupiter’s earliest products and remain the most widely used, with a record 57 million trades in a single day on January 20th.

Source: Dune
The main site’s Trenches product, formerly known as Ape.pro, was initially a specialized tool for memes, similar to products like Phonton/GMGN. However, after being integrated into Trenches in late February, its product format became much like Jupiter’s aggregated trading offerings.The main site’s Perps product operates similarly to GMX, providing leveraged long and short positions, as well as yield farming for BTC, ETH, and SOL. The TVL for this segment peaked at over 2 billion, making it a major component of Jupiter′s TVL. During peak times, the average daily trading volume was close to 1 billion, serving as Jupiter’s primary cash flow business in its early stages.

Jupiter Derivatives Exchange’s TVL (left axis) and Trading Volume (right axis) Source: DeFillama
These can be considered Jupiter’s main products at present. In addition, the Jupiter ecosystem also includes the following products:
The meme trading platform Moonshot. In January 2025, Jupiter announced the acquisition of a majority stake in Moonshot, a rapidly emerging meme trading platform in the past six months. Moonshot has attracted numerous users with its seamless fiat deposit system and smooth trading process, creating a “Moonshot effect,” especially during the launch of TRUMP, which was particularly popular.

Trading Volume of Moonshot (Left Axis) and Fees (Right Axis) Source：Dune
The liquidity platform Meteora. Founded by one of Jupiter’s early co-founders, Ben Chow, Meteora is considered an important part of the Jupiter ecosystem, despite not having a clear control relationship with Jupiter. Meteora plans to issue its own token, and while it belongs to the Jupiter ecosystem, its connection with the JUP token is relatively indirect.The LST product jupSOL quickly captured a significant market share after its launch in 2024. Currently, jupSOL ranks fourth after jitoSOL, bnSOL, and mSOL.

Solana LST Market Share (Top Gray Block Represents jupSOL) Source: Dune
Launchpad LFG: Besides the JUP token itself, LFG launched several projects in 2024, including the governance token ZEUS for the cross-chain communication protocol Zeus, the governance token CLOUD for the LST protocol Sanctum, and the governance token DBR for the cross-chain protocol Debridge, along with other meme projects. Although there are fewer projects launched, the quality is relatively high.Investment Portfolio Management Platform Jupiter Portfolio: In January, Jupiter announced the acquisition of the on-chain portfolio tracker Sonarwatch and officially launched Jupiter Portfolio on January 30th.Mobile Wallet Jupiter Mobile: After acquiring Solana’s mobile wallet Ultimate Wallet, Jupiter introduced its mobile wallet.Cross-Chain Network Jupnet: Launched at the end of January this year, Jupnet aims to allow access to all chains, currencies, and assets with one account. However, it does not yet have a user-friendly version for end consumers.Trading Terminal Coinhall: Acquired by Jupiter in September 2024, Coinhall primarily facilitates the trading of Cosmos ecosystem tokens. Through this acquisition, Jupiter gained the capability to build its own trading terminal, which is utilized in its Trenches product. Currently, on-chain trading of Cosmos ecosystem tokens is not very frequent, with daily trading volumes below $10 million.

Source: Coinhall Official Website
In addition to the consumer-facing products mentioned, Jupiter has also been active in other areas, such as acquiring Solana’s browser, SolanaFM. They are developing a variety of products, including the cross-chain network Jupnet.
From a product layout perspective, Jupiter, as the largest consumer gateway on Solana, covers nearly all business directions except for lending. Even in Solana’s diversified business environment, Jupiter’s reach is extensive. Beyond their own operations, they aggressively expand their business boundaries through acquisitions.
Revenue Model
Currently, Jupiter’s revenue-generating services include:
Aggregated trading services (including Trenches) with fees ranging from 0.05% to 0.1%; spot orders and DCA orders have a fee of 0.1%.Derivatives services are based on GMX’s mechanism. The main fees come from a 0.06% charge when opening and closing positions, as well as borrowing fees, price impact fees, etc. However, not all the derivatives fees go to JupiterDAO; 75% of the fees are allocated to liquidity providers (JLP), and the remaining 25% is taken by JupiterDAO.
Other services are offered without fees.
Token Incentives
Jupiter does not have a regular token incentive program. Its main incentives come from two rounds of retrospective airdrops.
Competitive Landscape
Trading is the core service offered by Jupiter. Other services like LST, Launchpad, and wallet can be seen as ways to leverage traffic brought in by trading. Therefore, we’ll focus on analyzing Jupiter’s competitive situation in aggregated and derivative trading.
Aggregated Trading
In the competitive landscape of Solana trading entry points, Jupiter quickly surpassed Orca and Raydium in the first half of 2024, thanks to its multi-liquidity pool routing capabilities and excellent user experience. By Q2 2024, Jupiter held a dominant position, accounting for 51% of Solana’s trading volume (source: Messari）。
However, with the rise of meme tokens and platforms like Pump.fun, specialized meme trading tools such as Photon, Trojan, Bullx, and GMGN rapidly encroached on Jupiter’s market share. These platforms offered faster trading speeds and comprehensive meme trading support, becoming the preferred “meme trading gateways.” In response, Jupiter launched a similar tool, ape.pro, in October last year, but it failed to gain traction and was eventually integrated into the main site’s Trenches product. As a result, Jupiter’s share of Solana’s trading volume dropped to 38% by Q5 2024 (source: Messari）
During the meme frenzy, meme trading accounted for 90% of Solana’s network volume. The loss of market share in meme trading gateways is Jupiter’s biggest challenge in the realm of aggregated trading.
Derivatives Trading
Jupiter’s derivatives exchange is currently the second-largest on-chain derivatives platform, with trading volume second only to Hyperliquid, which we’ll discuss in the next section. Specifically on the Solana chain, Jupiter has a clear advantage over its main competitor, Drift, with its trading volume being roughly 5 to 10 times that of Drift recently.

Ranking of 7-Day Derivatives Exchange Trading Volume Source：DeFillama
Looking at DAU, the gap between the two over the past month is also roughly an order of magnitude.

Data Source: Dune
In the derivatives trading field, Jupiter’s position on the Solana network is difficult to shake in the short term.
Main challenges and risks
Despite launching Jupnet to expand cross-chain operations, Jupiter’s core business currently remains on Solana. The biggest uncertainty for Jupiter is whether the Solana network can maintain its prosperity and active on-chain trading.
In addition to the aforementioned challenges related to the Meme trading entry competition, other challenges and risks Jupiter faces include:
Overly Aggressive Expansion, Effectiveness in Doubt
Jupiter’s expansion strategy is much more aggressive than most Web3 projects, with ambitious business ideas that have led to frequent acquisitions over the past year to broaden its scope. However, many of these acquisitions have not achieved the expected results, such as the acquisitions of Moonshot and Coinhall.
At its peak, Moonshot had a daily trading volume of 660 million and generated revenues of tens of millions of dollars. Currently, the daily trading volume has dropped to less than 5 million, with revenue not exceeding $10,000. Although Jupiter has not disclosed the acquisition costs or payment details, it’s clear that acquiring Moonshot today would be less expensive for JUP token holders.

Trading Volume of Moonshot (left axis) and Fees (right axis) Source：Dune
The acquisition of Coinhall helped Jupiter build its meme trading product, Trenches. However, in terms of both trading volume and market presence, Trenches still lags significantly behind leading meme trading products like Photon, Bullx, Trojan, and GMGN.
No Proprietary Liquidity Pool
Jupiter does not have its own liquidity pool. Its supported platform, Metrora, has started a rewards program and plans to launch an independent token issuance. This means that JupiterDAO, or the JUP token, cannot capture trading fees from the “token trading in liquidity pools” step, fees that have contributed to Raydium’s revenue of over $22 million this past January.
Untested by Bear Market
In a bear market, many assumptions taken for granted during a bull run might be challenged. For example, users trading memes on the Solana chain currently seem willing to pay Jupiter’s 0.05% fee, as competitor meme tools charge between 0.5% to 1%. However, if trading enthusiasm declines during a bear market, users might become more sensitive to transaction fees, putting Jupiter in a conflict between “market share” and “net profit” objectives.
Moreover, Jupiter’s product lineup includes a wallet, the cross-chain network Jupnet, and the portfolio management tool Jupiter Portfolio—all of which are unlikely to generate significant short-term revenue. Maintaining such an extensive product line during a bear market raises significant questions.
Valuation benchmark
JUP has a total supply of 10 billion, with 3 billion tokens burned following a vote at the end of January, leaving a maximum of 7 billion tokens in circulation. Currently, 2.63 billion are circulating, representing a 38.5% circulation rate. Among the non-circulating tokens, 810 million team tokens will begin vesting over the next 21 months. Additionally, 700 million tokens will be released in a Jupiter airdrop in January next year. With an inflation rate exceeding 40% over the next year, JUP remains a low-circulation, high-inflation token.

Current distribution of JUP tokens, Source：Jupiter Governance Forum
At the end of January, Jupiter announced that 50% of its protocol revenue will be used to buy back JUP, with purchased JUP being locked for three years.
The chart below, sourced from DeFiLlama, shows Jupiter’s protocol revenue since last October. Note that unusual values for Jupiter’s aggregator revenue on February 10th and March 10th may contain errors; however, I couldn’t find alternative data sources for Jupiter’s revenue. It’s evident that Jupiter’s main income currently comes from derivatives trading (blue bars), which is partly due to the significant decline in meme trading enthusiasm since the introduction of fees by the Jupiter aggregator.

Source：DeFillama
Since Jupiter just completed a significant economic model update at the end of January, introducing a transaction fee of 0.05%-0.1%, the P/S data for February and March are more relevant.
According to data collected by DeFiLlama, Jupiter’s revenue for February was 31.7 million, with an annualized revenue of 380 million. This corresponds to a P/S (circulating) of 3.65 and a P/S (fully diluted) of 9.5. As of March 18th, the revenue was 12.25 million, translating to an annualized revenue of 253 million, with a P/S (circulating) of 5.45 and a P/S (fully diluted) of 14.15.

Source：DeFillama
Whether comparing horizontally with CoW Swap or vertically with Jupiter itself, the current valuation of JUP seems relatively low.
Of course, these figures are based on the recent popularity of Solana. As Solana’s hype potentially decreases in a bear market, maintaining such high revenue will be challenging. We’ve already observed this trend when comparing data from March to February.

By Alex Xu, Mint Ventures' research partner & Lawrence Lee, Mint Ventures' researcher
Introduction: Altcoin Bear Market – Fundamental Investing Still Works
Undoubtedly, this bull cycle has witnessed the worst performance of altcoins in crypto history.
Contrary to historical patterns where altcoins surged and Bitcoin’s market dominance rapidly declined after previous bull market initiations, Bitcoin’s dominance has steadily climbed from about 38% in November 2022 (the market bottom) to over 61% today. This trend persists despite the exponential growth in altcoin supply during this cycle, highlighting the unprecedented weakness of altcoin prices.

BTC Dominance Chart Source: Tradingview

The current market trajectory aligns with Mint Ventures’ analysis in Preparing for Primary Wave: My Periodic Strategy on This Bull Market Cycle (March 2024). In that report, we argued that only three of the four key bull market drivers were present:
Bitcoin halving (supply-demand dynamics) ✓Loose monetary policy or dovish expectations ✓Regulatory easing ✓Innovative asset models or business paradigms ✗
Consequently, we advised tempering expectations for legacy altcoin categories—including smart contract platforms (L1s/L2s), GameFi, DePIN, NFTs, and DeFi—and recommended the following strategy:
Increase allocation to BTC and ETH (with a long-term preference for BTC)Limit exposure to legacy altcoin sectors (DeFi, GameFi, DePIN, NFTs)Seek alpha in emerging narratives: Memes, AI, and Bitcoin ecosystem
To date, this strategy has largely proven effective (though the Bitcoin ecosystem has underperformed expectations).
However, it’s worth noting that despite the overall sluggish price performance of most altcoins this cycle, a few altcoin projects have performed significantly better than BTC and ETH over the past year. The best examples are Aave and Raydium, which were highlighted in the Mint Ventures report titled Altcoins Keep Falling, Time to Refocus on DeFi published in early July 2024 during the altcoin market’s lowest ebb.
Starting from early July last year, Aave’s peak increase relative to BTC exceeded 215%, and 354% relative to ETH. Even after substantial price corrections, Aave’s increase relative to BTC is still 77%, with a 251% increase relative to ETH.

AAVE/BTC Exchange Rate Source: Tradingview
Starting from early July last year, Raydium’s peak increase relative to BTC exceeded 200%, and 324% relative to ETH. Currently, despite the overall decline in the Solana ecosystem and the negative impact of Pump.fun’s self-developed DEX, Raydium’s gain relative to BTC remains positive and significantly outperforms ETH.

RAY/BTC Exchange Rate Source: Tradingview

Considering that BTC and ETH, especially BTC, have significantly outperformed most altcoins this cycle, Aave and Raydium have stood out in terms of price performance among altcoins.
This is because, unlike most altcoin projects, Aave and Raydium have stronger fundamentals. Their core business data set new records in this cycle, and they possess unique moats with stable or rapidly expanding market shares.
Even during an “altcoin bear market,” betting on projects with outstanding fundamentals can yield Alpha returns exceeding BTC and ETH, which is the primary goal of our research efforts.
In this report, Mint Ventures will identify quality projects with solid fundamentals from thousands of listed crypto projects. We’ll track their recent business performance and market share, analyze their competitive advantages, assess their challenges and potential risks, and provide some valuation references.
It’s important to emphasize:
The projects mentioned in this article have certain advantages and appeal, but they also face various issues and challenges. Readers might have differing opinions on the same project after reading.Likewise, projects not mentioned in this article do not imply “poor fundamentals” or that “we’re not optimistic about them.” We welcome you to recommend projects you find promising and share your reasons.This article represents the stage-based thoughts of the two authors as of publication. Future changes may occur, and the views are highly subjective, with possible errors in facts, data, or reasoning. All opinions in this article are not investment advice, and we welcome criticism and further discussion from industry peers and readers.
We will analyze the projects from several dimensions, including current business status, competitive landscape, main challenges and risks, and valuation status. Below is the main text.
1. Lending Sector: Aave, Morpho, Kamino, MakerDao
DeFi remains the sector with the best product-market fit in the crypto business world, and lending is one of its most crucial sub-sectors. It features mature user demand and stable business revenue, attracting numerous excellent projects, both new and established, each with its own strengths and weaknesses.
For lending projects, the most critical metrics are active loans and revenue. It’s also important to assess the protocol’s expenses, particularly token incentives.
1.1 Aave: The King of Lending
Aave is one of the few projects that has successfully navigated three crypto cycles, maintaining stable growth. It completed financing through an ICO in 2017 (then called Lend, with a peer-to-peer lending model) and surpassed the then-leader Compound in the previous cycle. Today, it consistently holds the top position in lending volumes. Aave currently offers services across most major EVM-compatible L1 and L2 chains.
Current Business Status
Aave’s primary business model involves operating a pool-based lending platform, generating income from lending interest and liquidation penalties during collateral liquidations. Additionally, Aave’s stablecoin business, GHO, is now in its second year, providing Aave with direct interest income.
Active loans

Aave’s loan volume Data source: Tokenterminal
Aave’s total loan volume has surpassed its previous cycle’s (November 2021) peak of 12.14 billion since November of last year, reaching an all−time high of 15.02 billion in late January 2025. However, as market activity has cooled recently, the loan volume has declined and currently stands at approximately $11.4 billion.
Revenue

Aave’s protocol revenue Data source: Tokenterminal

Similar to its loan volume, Aave’s protocol revenue has consistently exceeded its previous peak from October 2021 since November last year. Over the past three months, Aave’s weekly protocol revenue (excluding GHO interest income) has mostly remained above 3 million. However, recent cooling market sentiment coupled with declining interest rates has driven weekly protocol revenues down to the 2 million+ range over the last fortnight.
Token Incentives

Aave’s token incentive expenses Data source: Aave Analytics

Aave currently maintains substantial token incentives, distributing 822 AAVE daily (worth approximately 200,000 at the current market price of 245 per AAVE). This elevated incentive value stems from Aave’s significant price appreciation over the past six months.
Notably, unlike most protocols that directly tie token incentives to user deposit/borrow activities, Aave’s incentives are allocated to its Safety Module (deposit protection fund). Consequently, Aave’s core lending/borrowing metrics remain driven by organic demand rather than artificial incentives.
However, in our view, Aave’s incentive allocation to its Safety Module remains excessive. The current incentive scale could be reduced by at least 50% without compromising protocol security. This issue will likely resolve organically with the rollout of Aave’s new tokenomics model, particularly the upcoming Umbrella module, which will phase out AAVE-based incentives for the Safety Module.
For a detailed analysis of Aave’s updated tokenomics, refer to Mint Ventures’ 2024 report: Exploring The Updated AAVEnomics: Buybacks, Profit Distribution, and Safety Module Shift
Competitive Landscape
In terms of loan volume (EVM chains), Aave’s market share has remained relatively stable, consistently holding the top position since June 2021. In the second half of 2023, its market share briefly dropped below 50%, but since the beginning of 2024, it has regained momentum and is now stable at around 65%.

Data Source: Tokenterminal

Aave’s Competitive Advantages
Since I analyzed Aave last July, its core competitive advantages have remained largely unchanged, stemming from four main aspects:
Continuous Accumulation of Security Credibility: Unlike many new lending protocols that experience security incidents within their first year, Aave has operated without any security breaches at the smart contract level. This strong track record is a key consideration for DeFi users, especially large-scale “whale” users, in choosing a lending platform. Notably, Justin Sun is a long-term user of Aave.Bilateral Network Effects: Similar to many internet platforms, DeFi lending is a typical two-sided market where depositors and borrowers form the supply and demand sides. Growth in deposits or lending on one side spurs growth on the other, making it harder for new competitors to catch up. Additionally, greater overall platform liquidity results in smoother transactions for both sides, attracting big fund users who further stimulate platform growth.Superior DAO Management: The Aave protocol is fully governed by a DAO, offering more transparent information disclosure and thorough community discussion for important decisions compared to centralized team management. Aave’s DAO includes active participation from professional institutions such as top VCs, university blockchain clubs, market makers, risk management providers, third-party development teams, and financial advisory teams. This diversity and active governance have enabled Aave to balance growth and security, outperforming its predecessor Compound in both product development and asset expansion.Multi-Chain Ecosystem Presence: Aave is deployed on nearly all EVM L1/L2 chains, with its TVL consistently ranking at the top. The upcoming V4 version of Aave will enable cross-chain liquidity, enhancing its advantages in this area. Aave plans to expand further to Aptos (its first non-EVM chain), Linea, and make a return to Sonic (formerly Fantom).
Challenges and Risks
Although Aave’s market share has been steadily increasing over the past year, new competitors like Morpho are growing rapidly.
Unlike Aave, where collateral assets, risk parameters, and oracles are centrally managed by Aave DAO, Morpho offers a more open approach. It provides a foundational lending protocol that allows independent markets to be built without permission, with the freedom to choose collateral assets, risk parameters, and oracles. Morpho also introduces vaults, akin to investment funds, managed by professional third parties like Gaunlet. Users can deposit funds directly into these vaults, and the managing institutions will assess risks and decide where to lend funds to generate returns.
This open and modular model allows Morpho to quickly enter new or niche markets, such as lending markets for innovative stablecoin projects like Usual and Resolv, enabling users to gain project rewards or points through leveraged loans.
Further analysis on Morpho will be provided later.
In addition to competition from within the Ethereum ecosystem, Aave’s development is also influenced by competition between the Ethereum ecosystem and other high-performance L1 chains. If ecosystems like Solana continue to erode Ethereum’s territory, Aave, which is heavily invested in the Ethereum ecosystem, will undoubtedly face limitations in its business potential.
Additionally, the highly cyclical nature of the crypto market directly affects Aave’s user demand. In bear market cycles, speculation and arbitrage opportunities shrink rapidly, leading to a significant decline in Aave’s lending volume and protocol income—common challenges for all lending protocols.
Valuation Reference
In terms of longitudinal valuation, Aave’s current PS ratio (fully diluted market cap to protocol income) is 28.23, sitting in the median range for the past year, still far from the PS values in the hundreds during the peaks of 2021-2023.

Mainstream Lending Protocols PS (Based on FDV) Data Source: Tokenterminal

When compared horizontally, Aave’s PS metric is much lower than that of Compound, Silo, and Benqi, but higher than Venus.
It’s important to consider that DeFi, similar to traditional financial enterprises, has highly cyclical revenue multiples. Typically, PS decreases rapidly during bull markets and increases during bear markets.
1.2 Morpho: The Rising Star
Morpho started as a yield optimization protocol based on Compound and Aave, originally acting as a symbiotic project. However, in 2024, it officially launched the permissionless lending protocol Morpho Blue, becoming a direct competitor to major lending projects like Aave. After its launch, Morpho Blue experienced rapid business growth and was favored by new projects and assets. Morpho currently operates on Ethereum and Base.
Current Business Status
Morpho offers several products, including:
Morpho Optimizers
Morpho’s initial product aimed to enhance capital efficiency for existing DeFi lending protocols like Aave and Compound. It optimized fund usage by depositing user funds on these platforms to earn base yields and matching funds peer-to-peer based on borrowing demand.
As Morpho’s first-generation product, Morpho Optimizers accumulated significant users and funds, helping Morpho Blue avoid a cold start. However, despite still holding substantial funds, the interest rate optimization from its matching feature has become negligible. This product is no longer a focus on Morpho’s development and has stopped allowing new deposits and loans since December last year.

Due to the extremely low matching rate, the interest rate optimization by Optimizers is currently only 0.07% Source: https://optimizers.morpho.org/

Morpho Blue (or simply Morpho)
Morpho Blue is a permissionless lending protocol that allows users to create custom lending markets. Users can freely choose parameters such as collateral assets, loan assets, liquidation ratios (LLTV), oracles, and interest rate models to create independent markets. The protocol’s design ensures that market creators can manage risks and returns based on their assessments without external governance intervention, thus meeting diverse market needs.
After its launch, Morpho Blue’s rapid growth put pressure on lending giant Aave, which subsequently introduced the Merit incentive program. According to the program, users following the incentive rules on Aave receive rewards, while those using Morpho may face reduced incentives.
Before Morpho Blue, most isolated lending markets focusing on niche or new assets, like Euler and Silo, were generally unsuccessful, with most funds still concentrated on centrally managed platforms like Aave, Compound, and Spark, using mainstream blue-chip assets as collateral.
Morpho Blue has successfully paved the way, thanks to several factors:
A long-standing, positive safety record. Before Morpho Blue, Morpho Optimizers managed substantial funds without any issues, earning DeFi users’ trust.Serving only as the underlying protocol for lending markets, it opens parameters such as asset support, asset parameter design, oracle selection, and fund management permissions:This further liberalizes the lending market, allowing for a quick response to market demands. New asset issuers actively build markets on Morpho to offer leverage services, and specialized risk service providers like Gauntlet can create and profit from their own evaluated vaults without relying solely on servicing major platforms like Aave and Compound.It enables further specialization in lending services, where participants focus on their roles, enriching product options. Crucially, “free outsourcing” reduces costs associated with self-operated businesses, such as frequent protocol upgrades, code audits, and services from specialized risk providers.
MetaMorpho Vaults
MetaMorpho Vaults are asset management tools designed to simplify the lending process, providing liquidity and yield opportunities. Users earn returns by depositing assets into vaults managed by professional teams, which are optimized based on unique risk configurations and strategies. Currently, funds from these vaults primarily flow into various lending markets built on Morpho Blue.

The product structure diagram of Morpho

After understanding Morpho’s product situation, let’s take a look at the key business data of Morpho.
Active loans

Morpho’s loan volume Data source: Tokenterminal
Morpho’s highest total loan volume, similar to Aave, was at the end of January, reaching 2.35 billion, and is currently 1.9 billion.
Morpho has not officially initiated protocol fees yet, so there is no protocol revenue. However, we can observe the “Fee” (the total income earned by depositors from the protocol) to estimate the potential revenue Morpho could generate if it decides to implement protocol fees.

Comparison of Fees between Morpho and Aave Data source: Tokenterminal

In February 2025, Aave generated a total fee of 67.12 million, while Morpho generated 15.59 million.
During the same period, Aave created 8.57 million in protocol revenue from the generated 67.12 million fee, indicating an approximate fee retention rate of 12.8% (just a rough calculation).
Since Aave is a lending protocol operated by the Aave Dao, it can direct all income from its lending market to its treasury while covering operational expenses.
On the other hand, Morpho serves as an underlying protocol for lending markets and involves numerous third-party participants, such as market creators and vault operators. Therefore, even if Morpho decides to activate protocol fees in the future, the proportion of revenue it can retain from the generated fees will likely be significantly lower than Aave’s, as it needs to be shared with other service providers. I estimate Morpho’s actual fee retention rate to be 30% to 50% of Aave’s, which is approximately 3.84% to 6.4%.
By calculating (3.84% to 6.4%) * 15.59 million, we can estimate that if Morpho implements protocol fees,its protocol revenue from February′s total fee of 15.59 million would range roughly from 598,700 to 997,800, which is 7% to 11.6% of Aave’s protocol revenue.
Token Incentives
Morpho also uses its own tokens for incentives, but unlike Aave, which incentivizes deposit insurance, Morpho directly incentivizes borrowing and lending activities. As a result, Morpho’s core business data may not be as organically strong as Aave’s.

Morpho’s Token Incentives Dashboard Source: https://rewards.morpho.org/

According to Morpho’s token incentive dashboard, in the Ethereum market, Morpho’s current overall subsidy rate for borrowing is approximately 0.2%, and for deposits, it is about 2%. In the Base market, the borrowing subsidy rate is about 0.29%, and the deposit subsidy rate is approximately 3%.
Morpho has frequently adjusted token incentives. Since December of last year, the Morpho community initiated three proposals to gradually reduce the token subsidies for user borrowing and lending activities.
The latest Morpho incentive adjustment occurred on February 21, reducing the number of reward tokens on ETH and BASE by 25%. Post-adjustment, the annual incentive expenditure of Morpho will be:
Ethereum: 11,730,934.98 MORPHO/yearBase: 3,185,016.06 MORPHO/year
Total: 14,915,951.04 MORPHO/year
Based on today’s Morpho market price (March 3, 2024), the corresponding annual incentive budget is $31.92 million. Given Morpho’s current protocol scale and generated fees, this incentive amount is quite substantial.
However, it is expected that Morpho will continue to reduce incentive expenditures and eventually cease subsidies altogether.
Competitive Landscape

Data Source: Tokenterminal

In terms of market share of total loan amounts, Morpho accounts for 10.55%, slightly higher than Spark, but still significantly behind Aave, placing it in the second tier of the lending market.
Morpho’s Competitive Advantages
Morpho’s moat mainly comes from the following two aspects:
Solid Security History: Morpho’s protocol hasn’t been around for too long; since the launch of its yield optimization product, it has been operational for nearly three years without any major security incidents. This track record has built a solid reputation for security, as evidenced by the increasing volume of funds it attracts, reflecting user trust.Focus on Lending Base Protocol: This approach, previously analyzed, helps attract more participants into the ecosystem, providing a richer and faster selection of lending options, enhancing specialization in different areas, and reducing operational costs.
Challenges and Risks
Morpho faces challenges from competition with other lending protocols, and the ecological impact of L1 competitors like Ethereum and Solana. Additionally, its token will face significant unlock pressures over the next year.
According to Tokenomist data, Morpho’s new token unlocks over the next year will equal 98.43% of its currently circulating supply, resulting in an inflation rate close to 100%. Most of these tokens belong to early strategic investors, early contributors, and Morpho DAO, potentially exerting significant downward pressure on the token price.
Valuation Reference
Although Morpho has not yet activated protocol fees, based on its generated protocol fees, we have estimated potential revenues upon fee activation. Based on its February protocol fee, projected revenue could range between 598,700 to 997,800.
Using today’s (March 3rd) FDV of $2,138,047,873 (Coingecko data) and the estimated income, its PS ratio ranges from 178 to 297, indicating a significantly higher valuation level compared to other mainstream lending protocols.

The PS ratios of mainstream lending protocols (based on FDV) Source：Tokenterminal

However, if calculated based on circulating market cap, Morpho’s circulating market cap as of today (March 3rd) is $481,361,461 (Coingecko data), resulting in a PS ratio of 40.2 to 67. Compared to other lending protocols, this metric is not excessively high.

The PS ratios of mainstream lending protocols (based on MC) Source：Tokenterminal

Of course, using FDV as a market cap reference is a more conservative valuation comparison method.
1.3 Kamino: The Number One Player on Solana
Kamino Finance is a comprehensive DeFi protocol based on Solana, established in 2022. Its initial product launch was an automated management tool for concentrated liquidity. Currently, it has integrated lending, liquidity, leverage, and trading functions. However, lending remains its core business, contributing the majority of the protocol’s revenue. Kamino charges various fees for its services. In the lending sector, these include a commission on interest income, an initial fee charged at the time of borrowing, and liquidation fees. For liquidity management, fees include deposit fees, withdrawal fees, and performance fees.
Current Business Status
Active Loans

Kamino’s Key Data Metrics Source: https://risk.kamino.finance/

Currently, Kamino’s loan size is 1.27 billion, with a peak loan volume of 1.538 billion occurring in late January this year.

Kamino’s Borrowing Volume Trend Source: https://allez.xyz/kamino

Revenue

Kamino Protocol Total Revenue Source: DefiLlama

January was the highest revenue month for the Kamino protocol, reaching 3.99 million. February also performed well, with revenue at 3.43 million.

The revenue of the Kamino protocol comes from lending Source: DefiLlama

In January, for instance, lending accounted for 89.5% of Kamino’s protocol revenue.
Token Incentives
Unlike other lending protocols that directly use token incentives, Kamino employs a new incentive method called the “seasonal points system.” Users earn project points by completing designated activities and receive a share of the total token rewards at the end of the season based on their points.
Kamino’s first season lasted three months and distributed 7.5% of the total token supply as a genesis airdrop. The second season also lasted three months, distributing 3.5% of the tokens.
Based on the current token price, the total 11% of KMNO tokens distributed over these two seasons is valued at $105 million, significantly driving Kamino’s rapid growth over the past year.
Kamino’s third season is currently underway. Unlike previous seasons, it began on August 1st last year and has continued for over six months, with no end yet. This has not slowed Kamino’s growth; if the third season’s airdrop mirrors the second, the incentive could be valued between 30 to 40 million.
Notably, one of the main functions of Kamino’s KMNO token is to accelerate point acquisition through staking, enhancing user engagement and token retention.
Competitive Landscape
On the Solana blockchain, major lending protocols include Kamino, Solend, and MarginFi.
Kamino: Currently holds 70% to 75% of the market share (by loan volume), with its market presence on Solana even stronger than Aave’s on Ethereum.Solend: Led the market from 2022 to 2023 but experienced slowed growth in 2024, reducing its market share to below 20%.MarginFi: Faced a management crisis in April 2024, leading to a mass withdrawal of user assets and dropping its market share to single digits.
Kamino’s total value locked (TVL) has secured a stable position in the top two on Solana, second only to Jito, which focuses on staking. Its lending TVL has also significantly surpassed former competitors like Solend and MarginFi.
Competitive Advantages of Kamino
Rapid Product Iteration and Strong Delivery Capability: Founded in 2022 by members of the Hubble team, Kamino was initially positioned as the first concentrated liquidity market maker optimizer on Solana. This pioneering product met user needs in the concentrated liquidity market making by offering an automated, optimized yield liquidity vault solution. Building on this foundation, Kamino has expanded into lending, leverage, trading, and other modules, forming a full-stack DeFi product suite. Such integrated DeFi projects across multiple scenarios are rare, and Kamino’s team continues to explore new ventures.Proactive Ecological Integration: Kamino has been actively building a network of partnerships both within and outside the Solana ecosystem. A notable example is its integration with PayPal stablecoin—Kamino was the first Solana protocol to launch and support PYUSD lending, taking a leading role in the asset’s expansion. Additionally, its collaboration with Solana staking project Jito resulted in leverage products related to JitoSOL, attracting many SOL stakers to Kamino. With the announcement of Kamino Lend’s V2 upgrade in 2024, plans include introducing order book lending, supporting real-world assets (RWA), and opening modular interfaces for other protocols. These moves will further embed Kamino in Solana’s foundational financial infrastructure, making it harder for competitors to challenge its position as more projects are built on Kamino and new capital prefers to flow into it.Economies of Scale and Network Effects: The DeFi lending space exhibits a noticeable “winner-takes-all” effect, with Kamino’s rapid expansion in 2024 exemplifying this network effect. A high TVL and liquidity mean safer borrowing and lower slippage, boosting confidence for significant investors to enter the platform. This substantial fund scale acts as a competitive barrier: capital typically flows to platforms with the most liquidity, further augmenting the platform’s scale. Kamino benefits from the positive feedback of these network effects through its early accumulation of liquidity and users.Strong Track Record in Risk Management: To date, Kamino has not experienced any major security incidents or large-scale liquidations. In contrast, competitors like MarginFi have faced issues that drove ecosystem users toward Kamino.
Challenges and Risks
Aside from common risks faced by newer lending protocols, such as contract security and asset parameter design, Kamino’s potential issues include:
Token Economy, Inflation Pressure, and Profit Distribution
Kamino employs a points system similar to a Ponzi model, akin to Ethena. If the value of future airdropped tokens falls short of expectations, it may lead to some user attrition (though given its current scale, this is less of a concern for the project’s objectives). Additionally, according to tokenomics data, a significant amount of KMNO tokens will be unlocked over the next year, with an inflation rate of 170% based on the current circulating supply. Furthermore, all current protocol revenue seems to be funneled into the team’s pockets, without distribution to token holders or even being added to the treasury. While it’s typical for decentralized governance to be absent in early stages, if protocol revenue isn’t shifted to a DAO-controlled treasury and lacks transparent governance and financial planning, entirely monopolized by the core team, the expected value of protocol tokens may decline further.
Development of the Solana Ecosystem
Although Solana’s ecosystem development in this cycle has outperformed Ethereum, apart from memes, Solana has yet to see a track type with a clear Product-Market Fit (PMF). DeFi remains Ethereum’s strong point. Solana’s ability to expand asset types and capacity and attract more capital will be crucial for Kamino’s potential growth ceiling.
Valuation Reference

Kamino’s 30-day protocol revenue Data Source: https://allez.xyz/kamino/revenue

Using Kamino’s recent 30-day revenue and its Fully Diluted Valuation (FDV) as benchmarks, we calculate the Price-to-Sales (PS) ratio for its FDV and Market Cap based on data from CoinGecko, resulting in:
FDV PS = 34, MC PS = 4.7. This earnings multiple is relatively low compared to other major lending protocols.
1.4. MakerDAO: Old Roots, New Blossoms?
MakerDAO is one of the earliest DeFi protocols on the Ethereum blockchain, founded in 2015, making it nearly a decade old. With its first-mover advantage, its stablecoin DAI (including its upgraded version USDS) has long been the largest decentralized stablecoin in the market.
In terms of its business model, MakerDAO’s primary revenue comes from the stability fees paid for generating DAI and from the spread of DAI. This model is quite similar to the interest spread in lending protocols: borrowing DAI from the protocol incurs fees; providing excess liquidity to the protocol (sUSDS & sDAI) earns interest.
Moreover, looking at the business process, generating DAI with a CDP (Collateralized Debt Position) by depositing ETH is not much different from depositing ETH into AAVE to borrow USDC. Therefore, in early DeFi analyses, many regarded CDP protocols like MakerDAO as a form of lending protocol. With the brand upgrade to Sky, MakerDAO also launched a standalone lending protocol called Spark, which is why we consider MakerDAO as a lending protocol and analyze it in this section.
Current Business Status
Active Loans
For a stablecoin protocol, the most important metric is the scale of its stablecoin, which corresponds to the loan size for lending protocols.

Source: Sky Official Website

The loan size for MakerDAO is currently close to 8 billion. It is still below the last cycle′s peak of 10.3 billion.
Spark’s loan size is around $1.6 billion, higher than that of the established lending protocol Compound but slightly lower than Mophro mentioned above.

Source: Tokenterminal

Revenue
The concept corresponding to protocol revenue for MakerDAO and lending protocols should be the sum of all revenues, minus the interest costs paid to sDAI and sUSDS. From the chart below, we can see that MakerDAO’s revenue primarily consists of stability fees, totaling $421 million, which constitutes the vast majority of its income. Other contributions such as liquidation fees and price stability module charges are minimal.

Historical Revenue of MakerDAO Source: Sky Official Website

Within stability fees, the DAI issued through Spark is expected to generate an annualized stability fee of 140 million, while DAI directly generated from USDC can yield 125 million in stability fees. These two parts account for two-thirds of the stability fees. The remaining stability fees come from DAI generated by RWA (71.83 million) and crypto asset-collateralized (78.61 million).

MakerDAO’s Liabilities and Annual Revenue Source: Sky Official Website

To incentivize the generation of stability fees at this scale, MakerDAO is expected to pay 246 million annually, MakerDAO′s annual protocol revenue is approximately 175 million, with an average weekly income of $3.36 million.
MakerDAO also reported its protocol operating expenses, totaling 96.6 million annually. After deducting operating expenses from the protocol revenue, the net profit is approximately 78.4 million, which is the main source for MKR and SKY buybacks.
Token Incentives
One reason for MakerDAO’s recent brand upgrade is the lack of additional MKR reserves to incentivize new business growth. Currently, MakerDAO’s token incentives are mainly used to encourage the deposit of USDS. Since the incentive plan’s launch at the end of September 2024, 274 million SKY tokens have been distributed over five months, equivalent to 17.4 million, with an annualized incentive amount of around 42 million.

Source: Sky Official Website

Competitive Landscape
Currently, MakerDAO’s market share in the stablecoin sector is 4.57%. Stablecoins are one of the clearest areas of demand for cryptocurrency. As an established stablecoin, MakerDAO has built certain advantages, such as brand impact and first-mover advantage. This was evident in the previous Curve liquidity battle, where DAI, as part of 3CRV, could naturally benefit from significant incentives released by other stablecoin projects aiming to establish popularity.
However, the competitive situation for MakerDAO in the stablecoin sector is not optimistic. As shown in the market share chart below, MakerDAO’s market share (represented by the pink segment) decreased during this cycle instead of increasing.

Market Share of the Top Ten Stablecoins Source: Tokenterminal

The core factor behind this phenomenon is that DAI, the third-largest stablecoin, has lost (or perhaps never truly had) the function of a settlement tool. Currently, users hold USDT and DAI for entirely different purposes: USDT is primarily used as a settlement tool, while DAI is held for leveraging and yield purposes. Aside from both being pegged to the US dollar, they share few commonalities.
Stablecoins with settlement capabilities have strong network effects, but unfortunately, DAI lacks such functions, making it difficult to develop network effects.
In terms of issuance scale, DAI’s market share is gradually decreasing. DAI still hasn’t returned to its 2021 peak issuance level, while USDT’s issuance continues to rise, having doubled since the end of 2021.
Stablecoins solely as yield tools have limited potential. Growth relies on ongoing yield incentives and various external conditions (such as relatively high US Treasury rates). Achieving long-term organic growth is crucial for MakerDAO to thrive anew in the stablecoin market.
Challenges and Risks
Beyond the challenges we’ve previously analyzed, MakerDAO also faces competition from newcomers.
The new stablecoin player, Ethena, has grown rapidly. In less than a year, its market size is already 60% that of MakerDAO’s. Ethena’s core product focuses on yield-driven stablecoins and has a significant advantage over MakerDAO: its yield base—”arbitrage profits from cryptocurrency perpetual contracts”—is much higher than MakerDAO’s “Treasury RWA yields.” In the medium to long term, if Treasury rates continue to decline, USDE will demonstrate a greater competitive edge over DAI.
Furthermore, MakerDAO’s governance capabilities are concerning. With a team costing $97 million annually, MakerDAO’s governance outcomes are inefficient and opaque. A prime example is the costly rebranding from MakerDAO to SKY, only to later reconsider reverting to Maker—a process that seems almost whimsical.
Valuation Reference
With protocol revenue of $175 million, MKR’s current price-to-sales (PS) ratio is about 7.54, making it relatively cheaper compared to its main competitor, Ethena (22). Historically, MKR’s PS ratio has also been consistently low.

PS Ratios of Stablecoin Projects Excluding MakerDAO Source: Tokenterminal

2. Liquid Staking Sector – Lido and Jito
Liquid staking stands as one of crypto’s native verticals, offering enhanced liquidity and composability compared to native staking mechanisms. This inherent value proposition drives sustained demand and establishes its pivotal role within PoS chain ecosystems. Notably, the protocols commanding the largest TVL on Ethereum and Solana – the two most significant PoS chains – are both liquid staking solutions: Lido and Jito, which we will subsequently analyze.
For liquid staking protocols, the paramount evaluation metric remains staked asset volume (equivalent to TVL in this context). The operational model introduces a third-party dynamic through node operators, necessitating a revenue-sharing arrangement where protocol revenue is partially distributed to these network participants. Consequently, gross profit emerges as a more indicative performance benchmark than raw revenue figures. Concurrently, token incentives – representing protocol expenditure – must be rigorously evaluated to complete the economic assessment framework.
2.1 Lido: Treading Carefully on Ethereum
Current Business Status
Lido launched its operations at the end of 2020 with the opening of ETH staking, and within six months, it secured a leading position in Ethereum network liquid staking. Previously, Lido was the largest liquid staking service provider on the Luna network and the second largest on the Solana network, having expanded its services to nearly all major PoS networks. However, starting in 2023, Lido began a strategic contract, and currently, ETH liquid staking is Lido’s sole business. Its business model is straightforward: Lido stakes users’ ETH through various node operators on Ethereum, taking a 10% share of the staking rewards as protocol revenue.
Assets Staked
Currently, more than 9.4 million ETH are staked in Lido, accounting for about 8% of circulating ETH. This gives Lido a staking asset size (TVL) of over 20 billion, making it the protocol with the largest TVL today. At its peak, Lido′s TVL was nearly 40 billion.

Source: Tokenterminal

The fluctuation in the staked asset size, when measured in ETH, is much smaller. Since 2024, the amount of ETH staked with Lido has remained relatively stable. Most of the changes in Lido’s staked asset size are due to fluctuations in the price of ETH.

Lido’s Staked Asset Size in ETH Source: DeFiLlama
Lido’s staked asset size has continued to grow, primarily due to the gradual increase in Ethereum’s network staking rate (from 0% to 27%). As a leading liquid staking service provider, Lido has benefited from the overall market growth.
Gross Profit
Lido takes 10% of staking rewards as protocol revenue. Currently, this revenue is split, with 50% going to node operators and 50% to the DAO, resulting in a 5% gross profit. As shown in the chart below, Lido’s gross profit has steadily increased. Over the past year, the weekly gross profit of the Lido protocol has fluctuated between 750,000 and 1.5 million.

Source: Tokenterminal

It can be observed that Lido’s protocol revenue is strongly correlated with the size of staked assets, driven by their fee structure. Weekly changes in Lido’s protocol revenue are mainly due to fluctuations in the price of ETH.
Token Incentives
In the first two years after launch (2021-2022), Lido spent a significant amount of LDO tokens to incentivize the liquidity of its stETH and ETH. Over two years, it expended over $200 million in token incentives, which helped ensure ETH liquidity during major market liquidity crises, such as China’s BTC mining ban in May 2021, the LUNA crash in May 2022, and the FTX collapse in November 2022. This resulted in Lido’s leading position in liquid staking on the Ethereum network.
After this, Lido’s spending on token incentives significantly decreased, with expenditures below $10 million in the past year. The primary allocation of these token incentives is towards ecosystem development. Lido maintains its current market share with almost no need for token incentives.

Source: Tokenterminal

Competitive Landscape
In the realm of liquid staking projects on the Ethereum network, few can compete with Lido. Currently, the second-largest liquid staking project, RocketPool, has a staked asset size that is less than 10% of Lido’s.
Among newer projects, the Liquid Restaking project ether.fi poses some competitive pressure on Lido. However, ether.fi’s staked asset size is only about 20% of Lido’s. Additionally, with Eigenlayer’s token issuance, the growth rate of ether.fi’s staked assets have significantly slowed, making it unlikely to challenge Lido’s position in Ethereum staking.

Source： Dune

Over time, Lido has developed a significant moat:
Network Effects from stETH (wstETH) Liquidity and Composability: Beyond the liquidity advantages mentioned earlier, stETH is accepted as collateral by all major lending and stablecoin protocols. This unmatched composability among LSTs can significantly influence new stakers’ choices.Accumulation of Security Credit and Brand Recognition: Since its launch, Lido has not experienced major security mishaps. Combined with its long-standing market leadership, this reputation makes it a key consideration for whale users and institutions when selecting staking service providers. Notable examples include Justin Sun and Mantle, before developing their mETH, who used Lido’s services.
Challenges and Risks
Lido currently faces significant challenges related to the decentralization demands of the Ethereum network.
For PoS chains, stakers determine consensus formation, and the Ethereum ecosystem is particularly dedicated to decentralization among mainstream PoS chains. As a result, concerns about Lido’s scale have been quite “stringent.” When Lido’s staked assets reached 30% of the Ethereum network’s total, there were calls to limit Lido’s growth. The Ethereum Foundation has been actively adjusting its staking mechanisms to prevent any “overly large single staking entity” from emerging.
For dApps, a significant challenge is when their sole underlying blockchain doesn’t support or restricts their business development. This presents a long-term challenge for Lido. Despite recognizing this and focusing entirely on Ethereum by cutting off operations on other chains from 2023, results have been limited.
Moreover, while the current ETH staking rate is below 30% (at 28%), there’s still a notable gap compared to other top PoS chains like Solana (65%), ADA (60%), and SUI (77%). However, the Ethereum team has historically wanted to keep the staking rate under 30%, limiting Lido’s potential market expansion.
Additionally, ETH’s underperformance in this cycle has been challenging for Lido, whose success is closely tied to ETH’s price.
Valuation Reference
Over the past year, LDO’s PS ratio has been at historic lows. In the past six months, it has consistently remained below 20.

It’s also worth noting that there is a possibility of protocol revenue being converted into LDO revenue this year. Starting in 2024, there have been multiple community proposals to allocate protocol revenue (the 5% allocated to the DAO) to $LDO holders. However, the core team, out of caution, has opposed this idea, and several governance votes have not passed. With the regulatory environment becoming significantly more relaxed and the protocol achieving accounting profitability from 2024 onwards (meaning revenue exceeds all expenses, including team salaries), the core team has officially included in their 2025 goals a discussion on “directly linking protocol revenue to LDO.” We might see $LDO beginning to capture staking revenue from the protocol in 2025.

Lido Protocol Economics (the blue-purple line in the chart represents the protocol’s “net profit”) Source: Dune

2.2 Jito: Quietly Profiting on Solana
Current Business Status
Jito is a leading liquid staking service provider on the Solana network and also serves as an MEV infrastructure. In 2024, they began offering restaking services, although the scale is still small, with TVL just exceeding $100 million, and the revenue sources for restaking remain unclear. Jito’s main businesses are still liquid staking services and MEV provisioning.
The liquid staking service that Jito offers on Solana is similar to Lido’s on the Ethereum network, utilizing node operators to stake deposited SOL and extracting 10% from user earnings as protocol revenue.
In terms of MEV, the Jito Labs team previously took 5% of all income. However, with the recent launch of NCN (Node Consensus Networks) and proposals like JIP-8 at the end of January this year, the Jito protocol now obtains 3% of MEV revenue, distributed as follows: 2.7% goes to Jito DAO, 0.15% to stakers in the JTO Vault, and 0.15% to jitoSOL and other LST stakers.
When users conduct transactions on Solana, the gas fee they pay can be divided into three categories: base fee, priority fee, and MEV tip. The base fee is mandatory, while the priority fee and MEV tip are optional, both primarily aiming to increase transaction priority. The difference is that the priority fee boosts the transaction’s priority in the on-chain phase, which is universally set by the Solana protocol and belongs to validators (i.e., stakers). The MEV tip, however, is an independent agreement between the user and MEV service provider, aiming to obtain a higher transaction priority with the MEV provider (a prerequisite for being on-chain), with specific allocation determined by the MEV provider.
Currently, Jito’s MEV service returns 94% of the fees to validators, with 3% extracted by Jito Labs and 3% distributed to the Jito protocol. In the Solana network’s gas fees, the base fee is negligible, while the proportions of the priority fee and MEV tip are similar.

Solana Network’s REV (i.e., total fees paid by users) Source: Blockworks

Compared to Lido on Ethereum, Jito can extract more value from MEV revenue due to its near-monopoly in Solana’s MEV ecosystem (similar to Flashbots’ position in Ethereum).
Next, let’s look at Jito’s specific data:
Assets Staked
Currently, Jito’s staked assets (liquid staking) exceed $2.5 billion.

Data Source: Tokenterminal

In terms of SOL, Jito has staked 15.82 million SOL, which is approximately 3% of the total circulating supply of SOL. Over the past year, the amount of staked SOL has shown a steady linear increase.

Source: Jito Official Website

In the MEV domain, Jito holds a near-monopoly position in Solana. Of the 394 million SOL staked, over 94% utilize Jito’s MEV services.

Source: Jito Official Website

Gross Profit
Jito’s current protocol revenue comes from two sources: they take 10% of the yield generated by liquid staking and 3% of MEV income. Jito currently shares 4% of the liquid staking yield with node operators, resulting in a gross profit of 60% for this part of the revenue. Since I couldn’t find separate data for Jito’s gross profit, we’ll analyze it based on Jito’s revenue situation, as shown in the chart below:

Data Source: Tokenterminal

It can be seen that Jito’s revenue is closely tied to the activity on the Solana network. Starting from October 2024, their revenue increased significantly, exceeding 1 million weekly. There were two notable peaks: on November 20 and January 20, when Jito′s protocol revenue reached 4 million and $5.4 million, respectively, corresponding to major speculative waves on the chain. However, as activity on the Solana chain cooled, their revenue quickly decreased.
Regarding the MEV portion, since MEV revenue sharing was just introduced, I couldn’t find specific statistics on mainstream data sites or Dune. However, we can estimate based on Jito’s total MEV revenue. Below is Jito’s total MEV revenue situation:

Jito’s Total MEV Revenue Source: Jito Official Website

The trend of Jito’s total MEV revenue aligns with their liquid staking income. At its peak on January 20, this year, MEV’s total revenue was 100,000 SOL. After October 2024, the average daily MEV income was around 30,000 SOL, with a minimum of 10,000 SOL.
Using a protocol revenue rate of 3%, we back-calculate this period’s income. The highest single-day income was 3,000 SOL, equivalent to approximately 840,000 at the time. The highest weekly income was 14,400 SOL, about 3.7 million, and the average daily MEV income was 1,000 SOL (approximately 170,000U, For more details, readers can refer to the prediction in the JIP-8 proposal.
Overall, in addition to the current liquid staking revenue, MEV income can roughly increase Jito’s revenue scale by 50%.
From a gross profit perspective, liquid staking revenue generates an average weekly gross profit of around $600,000. The MEV revenue boasts a gross profit margin as high as 95% (with only the 0.15% allocated to jitoSOL not considered gross profit, and the portions entering the DAO and JTO Vault counted as gross profit). The corresponding gross profit is approximately $1,000,000 per week. This could increase Jito’s gross profit by about 150%, with the annualized gross profit reaching approximately $85 million.
It’s important to note that Jito’s revenue and gross profit are strongly related to the activity on the Solana network. As the meme trading frenzy on Solana has faded recently, their daily revenue has dropped to about 10% of its peak, showing significant volatility.
Token Incentives
For both liquid staking and MEV, Jito does not employ token incentives in their operations. The only form of token incentive was a 10% one-time token airdrop at launch.
Competitive Landscape
Restaking has not yet achieved a true product-market fit, so we will focus on Jito’s competitive situation in liquid staking and MEV.
In the Solana liquid staking market, although Jito launched in 2023, it has quickly risen to a leading position. Previously dominant players, Marinade and Lido, once held over 90% of the Solana liquid staking market. However, due to their own reasons, Jito has surpassed them.

Solana Liquid Staking Market Share Source: Dune

Since the end of 2023, the Solana liquid staking market has seen an influx of new players like Blazestake and Jupiter joining the fray. However, Jito’s market share remained unaffected initially. Starting in October 2024, exchange-based SOL liquid staking products (mainly Binance’s bnSOL, as well as Bybit’s bbSOL) caused a dip in Jito’s market share. This shift primarily arises from centralized exchanges’ inherent asset custodial advantage, as they converted their SOL investment products from native staking to liquid staking, offering users a superior experience and thereby quickly increasing their market share. From Figure 1, we also observe that the growth from bnSOL and bbSOL is relatively independent, not encroaching on the share of any specific LST protocols.
Currently, over 90% of Solana’s staking is still native, with less than 10% involving liquid staking. This leaves significant room for growth compared to Ethereum’s approximately 38% liquid staking rate. While participating in Solana’s native staking is much easier for average users than Ethereum’s, Solana’s liquid staking ratio may not eventually match Ethereum’s. Nonetheless, liquid staking offers better liquidity and composability. In the future, Jito is expected to continue benefiting from the overall increase in Solana’s liquid staking scale.

Solana Staking Market Share Source: Dune

In the MEV sector, Jito commands over 90% of the market share with virtually no competition. The potential for this market largely depends on the future activity on the Solana chain.
Overall, Jito has a solid leading edge in both the liquid staking and MEV sectors on the Solana network. This was also underscored when the SEC’s ETP working group consulted Jito on ETF staking issues.
Challenges and Risks
Jito’s current business and income are heavily reliant on the popularity of the Solana network, making this the primary risk they face. After the TRUMP and LIBRA events, interest in Meme coins cooled rapidly, causing a sharp decline in SOL’s price and a resulting decrease in Jito’s revenues. Whether Jito’s business can regain momentum in the future will largely depend on Solana network activity.
In the liquid staking domain, competition from centralized exchanges could impact Jito’s market share.
From an investment standpoint, another potential risk is the circulation rate of the JTO tokens, which is less than 40%. A significant 15% unlock occurred last December, and there will be continuous linear unlocking over the next two years, with an inflation rate of 62% in the next year. The selling pressure from early investors is also a potential risk factor.

Source: Tokennomist

Valuation Reference
With the recent rise in Solana’s popularity, the fully diluted PS valuation of JTO has rapidly decreased, currently down to around 33. This valuation does not yet account for the recently started MEV income. If MEV income is considered, the fully diluted valuation of JTO would decrease to approximately 22.

Source: Tokenterminal

Additionally, JTO might accelerate revenue sharing. Currently, 0.15% of the MEV revenue collected by the protocol is allocated to JTO stakers. As revenue continues to grow, more income will likely be distributed to JTO stakers in the future.

بواسطة لورانس لي، باحث في Mint Ventures
1. المقدمة
يمكن اعتبار Hyperliquid واحدة من أبرز النقاط في سوق التشفير مؤخرًا، بعيدًا عن اتجاهات الذكاء الاصطناعي والميم. لقد جذبت استراتيجياتها للاستحواذ على السوق - رفض التمويل من راس المال المخاطر، تخصيص 70% من رموزها للمجتمع، وإعادة توزيع جميع إيرادات المنصة على مستخدميها - اهتمامًا واسعًا. بالإضافة إلى ذلك، من خلال استخدام إيراداتها مباشرة لإعادة شراء رموز HYPE، دفعت Hyperliquid القيمة السوقية المتداولة لـ HYPE لتتجاوز بسرعة UNI، مما أكسبها مكانًا بين أفضل 25 عملة مشفرة. في الوقت نفسه، دفعت هذه الطريقة النمو المتفجر لمقاييس الأعمال الخاصة بالمنصة عبر جميع المجالات.

بواسطة أليكس شو، شريك بحث في Mint Ventures
مقدمة
إذا كان علينا تسمية البلوكتشين من الطبقة 1 الذي شهد أكبر نمو تجاري في دورة السوق الصاعدة هذه، فإن معظم الناس سيجيبون على الأرجح: سولانا.
سواء كان عدد العناوين النشطة أو إيرادات رسوم المعاملات، فقد توسعت حصة سولانا في السوق بين طبقات 1 بسرعة:
العناوين النشطة: حصة سولانا من العناوين النشطة قد نمت من 3.48% إلى 56.83%، بزيادة سنوية قدرها 1533%.

حصة سوق العناوين النشطة شهريًا لـ L1.

بقلم لورانس لي، باحث في شركة مينت فنتشرز
بعد تأمين جولتين متتاليتين للتمويل، بما في ذلك استثمار بقيمة 12 مليون دولار بقيادة Polychain وتمويل من Binance Labs، برز Solayer، وهو مشروع إعادة استثمار على سلسلة Solana، كواحد من أبرز المشاريع القليلة في مجال DeFi مؤخرًا. كانت قيمة TVL الخاصة به تتزايد باطراد، متجاوزة الآن Orca وتحتل المرتبة 12 في قيمة TVL على سلسلة Solana.

تصنيفات TVL لمشروع Solana
المصدر: DeFiLlama
باعتباره قطاعًا فرعيًا أساسيًا للعملات المشفرة، يتمتع قطاع التخزين بأكبر قيمة إجمالية مقفولة (TVL) بين جميع صناعات التشفير. ومع ذلك، وعلى الرغم من أهميته، فإن الرموز التمثيلية لمشاريع التخزين الرئيسية، مثل LDO وEIGEN وETHFI، واجهت صعوبات كبيرة في هذه الدورة. بصرف النظر عن العوامل المتأصلة المرتبطة بشبكة Ethereum، هل هناك أي أسباب إضافية وراء هذه التحديات؟

بواسطة ليديا وو، باحثة في Mint Ventures

بيانات صالحة حتى 8 أكتوبر 2024
TL; DR
في معنى ضيق، تستبعد أسواق التنبؤ عادة القمار التقليدي والمراهنات الرياضية. تركز أكثر على اكتشاف المعلومات ومساعدة اتخاذ القرار العام.
لا يمكن أن تكون أسواق التنبؤ دائمًا "دقيقة". وغالبًا ما تحدث الإخفاقات لأن الناس يميلون إلى التعامل مع الاحتمالات التي تقدمها أسواق التنبؤ كحقائق راسخة.
أدخلت العملات المشفرة مبالغ معاملات أكثر حرية وتجربة دفع أكثر سلاسة إلى أسواق التنبؤ.

بقلم لورانس لي، باحث في شركة مينت فنتشرز
مقدمة
لقد شهد اقتصاد العملات المشفرة نموًا كبيرًا، مما أدى إلى إنشاء بنية تحتية متطورة على السلسلة. وعلى الرغم من هذه التطورات، لا تزال تجربة المستخدم بحاجة إلى التحسين. يعد تعزيز تفاعل المستخدم أمرًا بالغ الأهمية لأنه قد يجذب المزيد من المشاركين إلى نظام blockchain البيئي. ومن المرجح أن يحفز هذا المزيد من تطوير البنية التحتية وتنويع نماذج الأعمال، مما يخلق ديناميكية حيث يحفز التقدم في مجال واحد النمو في مجال آخر - وهي الظاهرة التي قد نصفها بأنها "تأثير الخطوة الشبيه بالسلم". قد تعتمد "لحظة 1995" للعملات المشفرة على ظهور تطبيق قاتل أو نظام تشغيل موجه للمستخدم.

By Lydia Wu, Researcher at Mint Ventures

If you found yourself baffled upon your first encounter with the “chain abstraction” concept, you’re not alone. 
It appears significant, with numerous projects, and extensive funding, all claiming to be the standard… yet its practical use still needs to be discovered. Is “chain abstraction” just another buzzword in the pipeline of new Web3 concepts? 
This article will start with the concept, return to the fundamental questions, and aim to make something out of nothing.
TL; DR:
The purpose of abstraction is to hide complexity, and the levels of abstraction in the Web3 context are often higher than in Web2, making it more challenging.Modularity simplifies the process of building blockchains. Meanwhile, chain abstraction involves restructuring the relationships among chains and enhancing the experience for both users and developers.Analyzing cross-chain asset transfers, cross-chain communication, interoperability, and chain abstraction: A conceptual hierarchy centered on coordinating state changes (transactions) across different chains, though these concepts often blur into one another in practice.Intent-based chain abstraction solutions are becoming a popular architecture, with many component-based products potentially coming together like puzzle pieces to gradually shape the final form of chain abstraction.Current discussions and efforts around chain abstraction have yet to break free from an infrastructure-centric orthodoxy. The validity of chain abstraction as a real issue depends on active on-chain engagement, advancements in modularity, and the influx of new users and developers. The future of chain abstraction is not a straightforward journey; it requires an evaluation of its impact on long-tail chains and an exploration of non-DeFi applications.
What exactly is chain abstraction?
Is chain abstraction a real problem?What kind of problem does chain abstraction belong to?What is the difference between cross-chain, interoperability, and chain abstraction?
Is Chain Abstraction A Real Problem?
—Not necessarily. A problem’s validity depends on its context. Imagine asking someone 500 years ago for their opinion on an energy crisis.
So, where does the discussion of chain abstraction come from?
The answers vary but often touch on key terms such as the Ethereum roadmap, modularity, intent, and mass adoption… At present, the most compelling perspective seems to be that chain abstraction represents the latter stages of modularity. 
A clear definition of chain abstraction is essential to grasp this perspective.
In computer science, “abstraction” is the process of extracting high-level operations and concepts from the backend processes, intended to simplify comprehension by masking complexity. For example, most Web2 users merely need to be familiar with browsers and ChatGPT, remaining oblivious to the underlying complexities or even the notion of abstraction itself.
Similarly: 
Account Abstraction: Facilitates seamless account functionality by hiding internal details like addresses, private keys, and mnemonic phrases, to facilitate a seamless user experience. Chain Abstraction: Ensures seamless operation across chains by hiding internal specifics such as consensus mechanisms, gas fees, and native tokens.
In traditional software development, abstraction, and modularity are interconnected and critical concepts. Abstraction outlines the system’s structural hierarchy, whereas modularity is the practice of implementing this structure. Each module symbolizes a level of abstraction, and the interactions between modules hide their internal complexities, which aids in code extension, reuse, and maintenance. Without abstraction, the demarcations between modules would be intricate and challenging to manage.

Lecture 3 Scribe Notes: Abstraction and Modularity
It’s important to recognize that Web2 products often perform abstraction and modularity within closed or semi-closed ecosystems, concentrating abstraction layers within a single platform or application in controlled environments, typically devoid of cross-platform or systemic compatibility concerns. In contrast, within the Web3 framework, driven by the commitment to decentralization and open ecosystems, the dynamics between modularity and abstraction are considerably more complex.
Although modularity can help deal with abstraction issues within single chain and reduce the barriers to chain development, it has not entirely addressed the abstraction of user and developer experiences in a multi-chain context. There’s a noticeable “island effect” among various chains and ecosystems, particularly evident in the fragmentation of liquidity, developers, and users. The introduction of chain abstraction involves redesigning the relationships among different chains to facilitate their interconnectivity, integration, and compatibility, as demonstrated in an article released by Near in January of this year.
We can argue that the urgency of chain abstraction as a legitimate concern is intimately tied to the evolution of the following factors:
On-chain activity: Whether the presence of diversified dAPPs leads to increased user engagement on chain.Progress in Modular Blockchain: Whether heightened on-chain activities encourage the development of more rollups and appchains.Barriers for New Users and Developers: To what extent does the current blockchain environment inhibit the entry of newcomers and developers (referring to the friction in a rising trend, rather than frustration in a stagnant state)?
What Kind of Problem Does Chain Abstraction Belong to?
Chain abstraction itself is an abstract concept that operates at a high-dimensional level within the Web3 narrative. This may partly explain why it presents as both all-inclusive and somewhat perplexing. Specifically, chain abstraction is not a solution but an instructive philosophy.
Similar to how Bitcoin today, after several halvings, dramatic price fluctuations, and the introduction of ETFs, has transcended its original identity as a technology solution or an asset. It has transformed into a timeless ideology and a crypto totem that embodies core cryptographic values and will continue to steer industry innovation and development well into the future.

Differences and Connections: Cross-chain, Interoperability, and Chain Abstraction
These concepts can be understood on a spectrum from concrete to abstract. They represent a conceptual hierarchy centered on coordinating state changes (transactions) across different chains, yet often involve a great deal of grey area in practical use.

Cross-chain applications and protocols can broadly be divided into two main categories:
Cross-chain Asset Transfer: Such as cross-chain bridges, cross-chain Automated Market Makers (AMMs), and cross-chain aggregators.Cross-chain Communication: Protocols such as Layerzero, Wormhole, and Cosmos IBC, etc.
Asset transfer also relies on message passing. In cross-chain asset transfer applications, the message layer typically involves a set of on-chain smart contracts and state update logic. Abstracting this message-passing functionality into a universal, protocol-layer solution is what defines a cross-chain communication protocol.
Cross-chain communication protocols can handle complex operations across blockchains, including governance, liquidity farming, NFT trading, token issuance, and gaming interactions. Interoperability protocols extend these capabilities further, delving into deeper data processing, consensus, and validation to ensure consistency and compatibility between different blockchains. In practice, however, these two concepts are often two sides of the same coin and can be used interchangeably depending on the context.
The essence of chain abstraction includes blockchain interoperability but also introduces an additional layer focused on enhancing the experiences of users and developers. This aspect is closely linked to the intent narrative that has gained attraction in this cycle. The integration of intent with chain abstraction will be further detailed in the subsequent sections.
What specific issues are involved in chain abstraction?
How can chain abstraction be achieved?Why is the integration of intent with chain abstraction significant?
How can chain abstraction be achieved?
Different projects have distinct interpretations and entry points concerning chain abstraction. We can classify these into two schools: the Classical School, which emerged from interoperability protocols and focused on developer-side abstraction, and the Intent School, which incorporates new intent architectures and concentrates more on user-side abstraction.
The roots of the Classical School can be traced back to Cosmos and Polkadot, well before the advent of the chain abstraction concept. Newer entrants like Optimism Superchain and Polygon Agglayer are now focusing on liquidity aggregation and interoperability within the Ethereum L2 ecosystem. Cross-chain communication protocols such as Layerzero, Wormhole, and Axelar are expanding to additional chains and striving for greater adoption to amplify their network effects.
Within the Intent School, L1 projects like Near and Particle Network are devoted to offering comprehensive chain abstraction solutions. Additionally, component-based strategies that tackle specific challenges are prevalent, especially within DeFi protocols, exemplified by UniswapX, 1inch, and Across Protocol.
For both the Classical and Intent schools, the fundamental design principles emphasize secure and fast cross-chain functionalities along with intuitive user interactions. Key features include unified user interfaces, seamless cross-chain functionality for dAPPs, as well as the management and subsidy of gas fees.

Why is the integration of intents with chain abstraction significant?
“Intent-based protocols” are emerging in abundance, and this section will explore why they have become a popular architectural choice and their potential implications. 
Similar to abstraction and modularity, intent is not a native concept in Web3. Intent recognition has been a significant aspect of natural language processing for decades and has been extensively studied in human-computer dialogues.
When discussing intent research in Web3, it’s impossible to ignore the famous paper by Paradigm. While similar design principles have already been implemented in products like CoWSwap, 1inch, and Telegram Bots, it was this paper that formally articulated the essence of intent architecture: users simply define what they want to achieve and leave the complexities of the process to be handled by third parties. This philosophy aligns with the focus of chain abstraction on enhancing user experience, providing a distinct and practical solution approach.
The market features a diverse range of frameworks for chain abstraction, with the CAKE framework (Chain Abstraction Key Elements) from Frontier Research being particularly prominent. This framework, which incorporates intent architecture, organizes the various technologies and solutions of chain abstraction into distinct layers: permission layer, solver layer, and settlement layer. Other frameworks have fine-tuned this approach, such as Everclear, which added a liquidation layer between the solver layer and settlement layer.

Source: Frontier Research

Specifically:
Permission Layer: Central to this layer is account abstraction, acting as the portal for dAPP users to request intent quotes. Solver Layer: This is generally an off-chain third-party solver layer tasked with fulfilling user intents.Settlement Layer: Once users approve transactions, tools such as oracles and cross-chain bridges come into play to guarantee the execution of transactions.
In the Solver Layer, solvers are third-party off-chain entities known by various titles—such as solvers, resolvers, searchers, fillers, takers, and relayers—in different protocols. These solvers are generally required to stake assets as collateral to be eligible to compete for orders.
The process of using intent-based products is similar to filling a limit order. In cross-chain scenarios, to quickly satisfy user intents, solvers often advance funds and collect a risk premium upon settlement. This arrangement is similar to a short-term loan where the loan duration is equivalent to the blockchain state syncing time, and the interest is akin to a service fee.
The comprehensive solutions represented by Near, which hopes to combine permission, solver, and settlement layers into a unified infrastructure, are in the early stages of proof-of-concept, making it difficult to observe and evaluate its utility.
Conversely, component-based solutions, particularly those in cross-chain DeFi protocols, have demonstrated advantages over traditional cross-chain solutions. Across Bridge, the flagship product of Across Protocol, utilizes an intent-centric architecture to offer higher speed, lower price, and stronger fee-generating capability among EVM-compatible cross-chain bridges, with its benefits being particularly pronounced in smaller transactions.

The bridge speed and fees of different cross-chain products in Jumper

Bridge speed and fees of L2-L1 chains on Across Protocol and Stargate

Across Protocol has a higher fee-generating capability, Source: DefiLlama
According to the roadmap, Across Protocol plans to launch a modular settlement layer to facilitate cross-chain intents in its third phase. Uniswap Labs and Across Protocol have co-proposed ERC-7683, which seeks to simplify the entry process for solvers by standardizing intent expressions and creating a universal network for solvers. 
Intent-based chain abstraction solutions will likely become a popular architecture, with many components potentially assembling the ultimate standard of chain abstraction like pieces of a puzzle.
What challenges exist in our understanding and implementation of chain abstraction?
What issues stem from an infrastructure-centric perspective? What other concerns related to chain abstraction are worth further exploration?
What issues stem from an infrastructure-centric perspective? 
As leading interoperability protocols, Layerzero has raised a cumulative $290 million and Wormhole $225 million, yet the substantial FDV and low market cap have led their tokens to become symbols of the much-criticized VC tokens of this cycle, undermining market confidence in the chain abstraction.
Returning to the cartoon at the beginning, it is apparent that chain abstraction projects, despite their unique technology stacks and token standards, are often branded as “useless infrastructure” due to the stagnant external market growth. Additionally, the downturn in metrics before and after Layerzero’s airdrop has intensified doubts regarding the market demand for “cross-chain communication.”

Significant decline in metrics following the airdrop by Layerzero
On the ERC-7683 forum page, developers discussed the role of the ERC standard itself in response to criticism that cross-chain asset transfer functionality is too minor, not universal enough. Proponents of minimalist ERCs argue that tool-level standards are sufficient to address existing problems and can be combined with existing standards, making adoption relatively easier.
Given that the design philosophy of intent architecture is largely application-focused, “universal, full-stack, and compatible” protocol standards can sometimes become “too vague to be meaningful” or “too complex to address real-world problems.” This leads to an ironic phenomenon: the chain abstraction protocols, which are born to solve fragmentation issues, end up providing fragmented solutions themselves.

ERC-7683: Cross Chain Intents Standard
What other concerns related to chain abstraction are worth further exploration?
Similar to how globalization affects underdeveloped regions, chain abstraction makes it more difficult to maintain TVLs for new and long-tail chains. What effect will this have on the adoption of chain abstraction?A study by Variant suggests that UniswapX may lead to a new situation where long-tail tokens are directed towards AMMs, while mainstream tokens are increasingly filled by off-chain solvers. Is this the future trend for DEXs? Will there be a global solver layer stacked on top of the global liquidity layer in the future?Besides DeFi protocols, what other forms might intent-based product architectures take?Will chain abstraction become the next big trend after modularity, or will it turn out to be a major bubble

بقلم Alex Xu، الشريك البحثي في ​​Mint Ventures

لقد كانت Aave على رادارتي منذ فترة طويلة، وقبل بضعة أيام فقط، كشف فريق الحوكمة الخاص بها، ACI، عن مسودة للرموز المميزة التي تمت ترقيتها لـ Aave في منتدى الحوكمة. يعرض هذا الاقتراح تفاصيل التحسينات المتوقعة في المجالات الرئيسية، بما في ذلك التقاط قيمة الرمز المميز لـ Aave والتحسينات على وحدات أمان البروتوكول.
لمزيد من الأفكار حول Aave، اقرأ بحثي الأخير Altcoins Keep Falling، حان وقت إعادة التركيز على DeFi، حيث أقوم بتقييم حالتها الحالية ومزاياها التنافسية وتقييم الرمز المميز بدقة.

بقلم Alex Xu، الشريك البحثي في ​​Mint Ventures ولورنس لي، الباحث في Mint Ventures
مقدمة
على الرغم من كونها واحدة من أكثر القطاعات نضجًا في مجال العملات المشفرة، فقد أظهرت مشاريع التمويل اللامركزي DeFi أداءً مخيبًا للآمال في هذا الاتجاه الصعودي. على مدار العام الماضي، شهد قطاع التمويل اللامركزي زيادة متواضعة بنسبة 41.3%، متخلفًا بشكل كبير عن متوسط ​​نمو السوق البالغ 91% وارتفاع إيثريوم بنسبة 75.8%.

المصدر: أرتميس
وبالتركيز على البيانات من عام 2024 وحده، من الصعب القول بأن أداء قطاع التمويل اللامركزي إيجابي، مع انخفاض إجمالي قدره 11.2٪.

By Lydia Wu, Researcher at Mint Ventures

Please note: As Quilibrium’s mainnet has not yet launched, and public information is limited, the descriptions of its incentive mechanisms, tokenomics, financing, and roadmap are based on public resources and may change in the future. This article is intended for research and educational purposes and should not be taken as investment advice. We welcome any feedback.
Key Insights 
Theses
Quilibrium aims to bridge the gap between the computational capabilities of the traditional internet and the decentralized nature of blockchain, establishing a unique decentralized cloud computing architecture. This synthesis offers a balanced approach, leveraging strengths from both worlds.Quilibrium has developed a database-driven operating system that resonates with the workflows of traditional software development, potentially attracting mainstream software developers. This system also supports Web3 developers in crafting sophisticated crypto applications, providing a versatile foundation for diverse development needs.The design of Quilibrium’s architecture places a strong emphasis on security and privacy, appealing to enterprises seeking to adopt cryptographic technologies while protecting sensitive data. For individual users, the early success of Farcaster showcases the potential of decentralized applications to engage users and drive profitability.Cassie Heart, the Founder and CEO of Quilibrium, is a former senior engineer at Coinbase and developer of Farcaster, leading a team recognized for its profound expertise, consistent performance, and innovative approach.
Risks 
The project is in its early stages, with its mainnet yet to be launched. Additionally, the complexity of the project means that both its technological feasibility and market demand remain untested.In the short term, Quilibrium could encounter competitive challenges from the more established Arweave AO, particularly in terms of user perception and developer engagement.Furthermore, the lack of clearly defined tokenomics and the possibility of fluctuations in the token release rate present significant risks for investors.
Valuation
Given that Quilibrium is in its early stages, an accurate valuation is not currently feasible. However, when examining the circulating and fully diluted market cap, Quilibrium appears competitively valued compared to other market players with similar concepts.
Business Analysis
Quilibrium defines itself as a “decentralized internet layer protocol, providing the creature comforts of Cloud without sacrificing privacy or scalability,” and as a “decentralized Platform-as-a-Service(PaaS) solution.” This section explores Quilibrium’s business model by addressing the following key questions:
What issues exist with traditional internet cloud computing? Why is there a need for new decentralized computing platforms? What makes Quilibrium unique compared to other popular blockchain architectures?

Cassie Heart on Farcaster

Business Positioning
Start with Computing
In both Web2 and Web3, “computing” is a vital concept, acting as the catalyst for the development, execution, and scaling of applications. 
In traditional Internet frameworks, computing tasks are usually handled by centralized servers. The emergence of cloud computing has improved the scalability, accessibility, and cost-efficiency of these tasks, increasingly becoming the dominant form of computing.
Cloud services offered by major providers are generally categorized into three main types: Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). Each category meets different user needs and capabilities, offering varying levels of resource control. While SaaS is most familiar to end-users, PaaS and IaaS are primarily targeted at developers.

Made by Lydia@MintVentures

Data source: S2 Lab, Made by Lydia@Mint Ventures

In mainstream blockchains like Ethereum, computing is handled by decentralized nodes. This approach operates without central servers, with each node executing tasks locally and ensuring data accuracy and consistency through a consensus mechanism. However, the capability and speed of decentralized computing often fall short compared to traditional cloud services. 
Quilibrium aims to balance the robust computing power and scalability of the traditional internet with the decentralization of blockchain, paving the way for new possibilities in application development.

Cassie Heart’s Live Streaming

Centralization in Computer Systems
For most end users, the centralization of computer systems is not easily perceivable, as they mainly interact with the hardware layer. PCs, smartphones, and other devices are distributed globally and run independently under individual control, giving the impression that hardware-level systems are not centralized.
However, in contrast to this hardware dispersion, computer systems are significantly more centralized at the network architecture and cloud computing service levels. In the first quarter of 2024, Amazon AWS, Microsoft Azure, and Google Cloud collectively held over 67% of the cloud service market share, far outpacing newer entrants.

Source: Synergy Research Group
Moreover, benefiting from the AI boom, cloud service providers continue to grow stronger. Microsoft Azure, as the exclusive cloud provider for OpenAI, has reversed its previous slow performance, now showing accelerated growth. In Microsoft’s fiscal third quarter of 2024 (the first calendar quarter of 2024), Azure and other cloud services saw a revenue increase of 31%, surpassing market expectations of 28.6%.

Data Source: Microsoft, Made by Lydia@MintVentures

In addition to market competition, privacy and security concerns related to centralized computing systems are increasingly in the spotlight. Each outage at major cloud service providers has a widespread impact. Between 2010 and 2019, AWS experienced 22 sudden outages, averaging 2.4 outages per year. These disruptions not only affected Amazon’s e-commerce business but also impacted the online services of companies reliant on AWS, including Robinhood, Disney, Netflix, and Nintendo.
Introduction of Decentralized Computing
In this context, the need for decentralized computing is increasingly emphasized. As centralized cloud service providers move towards distributed architectures—by replicating data and services in multiple locations to prevent single points of failure and enhancing performance through edge storage—the focus of decentralized computing narratives has shifted towards data security, privacy, scalability, and cost-efficiency. 
Let’s explore several concepts of decentralized computing proposed by various projects, all aiming to disperse data storage and processing to create a globally distributed computing platform that supports the development of decentralized applications:
World Computer: This generally refers to Ethereum, which provides a global smart contract execution environment. Its key functionalities include decentralized computing and the uniform execution of smart contracts worldwide.Internet Computer: Typically refers to the ICP developed by the Dfinity Foundation, with its goal of enhancing the Internet’s capabilities to enable decentralized applications to operate directly on the Internet.Hyper Parallel Computer: Generally refers to the AO protocol introduced by Arweave, a distributed computing system built on the Arweave network, noted for its high parallelism and fault tolerance.
It’s important to note that ICP, AO, and Quilibrium are not traditional blockchains in the usual sense. They do not rely on a linear block structure but maintain fundamental principles like decentralization and data immutability. They can be seen as natural expansions of blockchain technology. Although ICP has not yet fully achieved its ambitious goals, the advent of AO and Quilibrium has opened up new possibilities that could influence the future of Web3.
The table below contrasts the technical features and application focuses of the three platforms, helping readers evaluate “whether Quilibrium might follow in ICP’s footsteps” and highlighting the differences between Quilibrium, another pioneering solution in decentralized computing, and AO, often dubbed the “Ethereum killer.”

Consensus Mechanism
In traditional blockchains, the consensus mechanism functions at a fundamental and abstract level, determining how the network achieves consensus, processes and verifies transactions, and executes other activities. The selection of different consensus mechanisms influences key aspects of the network such as security, speed, scalability, and decentralization.
Quilibrium’s consensus mechanism, known as “Proof of Meaningful Work” (PoMW), mandates that miners engage in genuinely beneficial tasks for the network, including data storage, data indexing, and network maintenance. The design of the PoMW consensus mechanism integrates multiple fields such as cryptography, multi-party computation, decentralized systems, database architecture, and graph theory. It aims to lessen dependence on single resources like energy or capital, preserve the network’s decentralized nature, and uphold security and scalability as the network expands.
The incentive mechanism is crucial for the efficient functioning of the consensus mechanism. Quilibrium’s incentive allocation is dynamic, adjusting based on network conditions to align incentives with current demands. Additionally, Quilibrium introduces a multi-proof mechanism, allowing a node to verify multiple data segments, ensuring the network remains operational even with a shortage of nodes and core resources.
To help your understanding, we can use a simplified formula to calculate the ultimate earnings or miners, where the unit reward adjusts dynamically with the network size.
Earnings = Score × Unit Reward
The score is calculated based on various factors, and the formula is as follows:

The parameters are defined as follows:
Time in Mesh for Topic: Longer engagement and greater stability yield a higher score.First Message Deliveries for Topic: A higher number of initial message deliveries increases the score.Mesh Message Delivery Rate/Failures for Topic: Nodes with higher delivery rates and fewer failures receive higher scores.Invalid Messages for Topic: Fewer instances of delivering invalid messages lead to a higher score. 
The weighted sum of these four parameters is subject to a topic cap (TC), which serves to keep the score within a certain range and prevent unfair scoring due to excessively high individual parameters.
Application-Specific Score: Defined by the particular application.IP Collocation Factor: Higher scores are awarded to nodes with fewer others sharing the same IP address.

Quilibrium Dashboard

Quilibrium currently operates over 60,000 nodes, and the actual earnings of these nodes may vary due to the differing parameter weights between versions. From version v1.4.19 onwards, miners can view their earnings in real-time, although the earnings can only be claimed once the mainnet goes live.
Network Architecture
Quilibrium’s core business is its decentralized PaaS solution, characterized by a network model that includes communication, storage, data querying and management, and operating systems. This section highlights the distinctive aspects of its design compared to other blockchains. Readers interested in technical specifics and methodologies can refer to the official documents and whitepaper.
Communication
Communication serves as the foundational component of the Quilibrium network and consists of four parts:
a. Key Generation
Quilibrium introduces a key generation mechanism called PCAS (Planted Clique Addressing Scheme), based on graph theory. Like traditional blockchain technology, PCAS utilizes asymmetric encryption: each user possesses a public key and a private key. The public key is used for encrypting messages or verifying signatures and can be made public, while the private key is used for decrypting messages or creating signatures and is kept private. The main differences lie in the methods of key generation, forms, and application scenarios.

b. End-to-End Encryption
End-to-end encryption (E2EE) is a vital component that ensures secure communication between nodes. With E2EE, only the parties directly involved in the communication can view the plaintext data. Systems or intermediaries that assist in message delivery are unable to read the contents.
Quilibrium utilizes an end-to-end encryption method known as Triple-Ratchet, which provides enhanced security over traditional ECDH schemes. Unlike traditional schemes that use a single static key or periodically update the key, the Triple-Ratchet protocol updates the key after each communication session. This ensures forward secrecy, post-compromise security, deniability, and replay protection, and supports out-of-order message delivery. This method is particularly suited for group communications, although it is relatively more complex and computationally costly.
c. Shuffled Lattice Routing
Mixnets function as a black box that receives messages from senders and forwards them to recipients, ensuring that external attackers, even with access to information outside the black box, cannot correlate senders with recipients.
Quilibrium utilizes Random Permutation Matrix (RPM) technology, which forms a shuffled network architecture that is complex in structure and resistant to both external and internal attacks, thereby providing enhanced anonymity, security, and scalability.
d. Peer-to-Peer Communication
GossipSub is a peer-to-peer messaging protocol that operates on a publish/subscribe model, extensively employed in blockchain technologies and decentralized applications (DApps). Quilibrium’s BlossomSub protocol enhances the traditional GossipSub framework, focusing on improving privacy safeguards, increasing resilience against Sybil attacks, and enhancing overall network performance.
Storage
Most traditional blockchains use cryptographic hash functions for foundational data integrity verification and rely on consensus mechanisms to maintain network consistency. This method presents two primary limitations:
There is no built-in verification for the duration of storage, lacking direct defenses against timestamps or computational capability-based attacks.The separation between storage and consensus mechanisms can result in challenges related to data synchronization and consistency.
Quilibrium’s storage strategy employs a Verifiable Delay Function (VDF) to create a timestamp-dependent chain structure that integrates storage with consensus mechanisms. This approach has several key features:
Input processing: Utilizing hash functions like SHA256 and SHAKE128 to process inputs ensures that minor data variations result in substantial changes in hash values, enhancing resistance to tampering and facilitating easier verification.Delay Assurance: The computation is deliberately designed to be lengthy, with each task relying on the results of the previous step and unable to be hastened by increased computing power. This ensures outputs are based on consistent timestamp calculations. As the process is non-parallelizable, any attempts to recompute or alter the publicly disclosed VDF outcomes would take significant time, allowing network participants to detect and react.Quick verification: Verifying a VDF result takes less time than generating it, requiring only a handful of mathematical tests or some supplementary data to confirm its validity.

Quilibrium Whitepaper
This timestamp-based proof chain structure operates independently of block generation in traditional blockchains, theoretically reducing the incidence of MEV attacks and front-running behaviors.
Data Query and Management
Traditional blockchains primarily employ straightforward key-value storage or Merkle Trees for data management, which generally restricts their capability to represent complex relationships and facilitate advanced queries. Additionally, most existing blockchain systems lack inherent privacy safeguards during query execution by nodes, setting the stage for the development of privacy-enhancing technologies like zero-knowledge proofs.
​​Quilibrium has introduced “Oblivious Hypergraph”, integrating hypergraph structures with Oblivious Transfer technology, which facilitates complex querying capabilities while preserving data privacy. Specifically:
Hypergraph Structure: This allows for edges that connect multiple vertices, significantly improving the ability to depict complex relationships. It can directly map various database models, enabling the representation and querying of any type of data relationship.Oblivious Transfer Technology: This ensures that nodes processing the data remain unaware of the actual content being accessed, thereby enhancing privacy during the querying process.
Operating System
The operating system is not a native concept in the blockchain space. Most traditional blockchains focus on consensus mechanisms and data immutability, often lacking complex operating systems. For instance, while Ethereum supports smart contracts, its operating system functions are quite basic, primarily limited to transaction processing and state management.
Quilibrium has engineered an operating system that leverages its hypergraph database and has implemented regular operating system primitives such as file systems, schedulers, IPC mechanisms, message queues, and control key management. This integration directly with the database enhances the capability to develop sophisticated decentralized applications.

Quilibrium Whitepaper

Programming Languages
Quilibrium has chosen Go as its primary programming language, augmented by Rust and JavaScript. Go is favored for its robust capability in handling concurrent tasks, straightforward syntax, and vibrant developer community. According to the Tiobe index, Go has climbed significantly in popularity, reaching the 7th position in the latest June rankings. Other notable blockchain projects that utilize Go for core development include Ethereum, Polygon, and Cosmos.

Quilibrium

Tiobe
Project Overview
Development Path and Roadmap
Quilibrium released its white paper in December 2022, outlining a roadmap that is segmented into three distinct phases: Dusk, Equinox, and Event Horizon.
Currently, in its early stages, Quilibrium development team conducts network updates and iterations bi-weekly. The network is now on version v1.4.20, with plans to skip the 1.5 phase of the roadmap, transitioning directly from version 1.4 to 2.0. Version 2.0, marking the mainnet release, concludes the Dusk phase and is slated for official release in late July, enabling the bridging of $QUIL tokens.
According to provisional plans, the Equinox and Event Horizon phases will facilitate more sophisticated applications, such as streaming services and AI/ML model training.
Team Members and Funding
Cassie Heart, the founder and CEO of Quilibrium, brings a robust background with over 12 years of experience in software development and blockchain technology, previously holding a position as a senior software engineer at Coinbase. 
Her disapproval of centralized social media platforms has led her to choose Farcaster as the primary platform for both her personal and Quilibrium’s official communications. On Farcaster, Cassie’s profile has attracted over 310,000 followers, including prominent individuals such as Ethereum’s founder, Vitalik Buterin. She is also an active contributor to Farcaster’s development.
The Quilibrium project, initiated in April 2023, has shown consistent progress. According to the development dashboard, the team consists of 24 developers, under Cassie Heart’s leadership.
The founder and CEO of Quilibrium, Cassie Heart, previously served as a senior software engineer at Coinbase, bringing over 12 years of experience in software development and blockchain technology. 
Due to her disapproval of centralized social media platforms, both her personal and Quilibrium’s official project accounts are predominantly active on Farcaster. Cassie’s Farcaster profile boasts over 310,000 followers, including notable figures like Ethereum’s founder, Vitalik. Additionally, Cassie contributes to the development of Farcaster.
According to the development dashboard for Quilibrium, the project started in April 2023 and has progressed steadily ever since. The dashboard lists 24 developers, led by Cassie Heart.

Quilibrium

The Quilibrium team has not publicly disclosed its financial backing or the investors involved.
Tokenomics
$QUIL is the native token of Quilibrium, with a completely fair launch. All tokens are generated through node operations. According to Cassie, the team manages a small fraction of the nodes, yet holds less than 1% of the total tokens.
$QUIL operates without a fixed tokenomics and has no cap on the total supply. However, the supply is dynamically adjusted based on the rate of network adoption—more tokens are released as incentives for node operation as the network expands; conversely, if growth slows, the rate of token release is reduced accordingly.
The following table outlines projections made by both the team and community members regarding the token emissions schedule. Currently, 340 million tokens are in circulation, with the anticipated final supply expected to converge at around 2 billion, subject to the ecosystem’s evolution.

Source: @petejcrypto
Risks
At this stage, Quilibrium faces several potential risks:
The project is in its early stages, with its mainnet yet to be launched. Additionally, the complexity of the project means that both its technological feasibility and market demand remain untested.In the short term, Quilibrium could encounter competitive challenges from the more established Arweave AO, particularly in terms of user perception and developer engagement.Furthermore, the lack of clearly defined tokenomics and the possibility of fluctuations in the token release rate present significant risks for investors.
Valuation
Valuing public-blockchain-type infrastructures is inherently complex, considering multiple factors like TVL, active on-chain addresses, dApps, and the developer community. Quilibrium remains in its early stages, and the token $AO of Arweave AO is not open for trading, preventing us from determining an accurate valuation.
For reference, we list the circulating market value and fully diluted market value of projects with some conceptual overlap with Quilibrium (data as of June 23, 2024).

Source: CoinGecko, Last updated time: June 23th, 2024
References and Acknowledgments
This report is greatly supported by the reviews and feedback from @PleaseCallMeWhy, @ImDavidWeb3, and Connor.
Reading List
https://quilibrium.com/quilibrium.pdfhttps://paragraph.xyz/@quilibrium.comhttps://dashboard.quilibrium.com/https://www.youtube.com/watch?v=Ye677-FkgXE&ab_channel=CassandraHearthttps://dune.com/cincauhangus/quilibriumhttps://source.quilibrium.com/quilibrium/ceremonyclient/-/graphs/main?ref_type=headshttps://www.tiobe.com/tiobe-index/https://www.blocmates.com/meal-deal-research-reports/quilibrium-crypto-not-blockchain-long-live-the-internethttps://www.statista.com/chart/18819/worldwide-market-share-of-leading-cloud-infrastructure-service-providers/https://s2-labs.com/admin-tutorials/cloud-service-models/https://medium.com/@permadao/%E5%8E%BB%E4%B8%AD%E5%BF%83%E5%8C%96%E4%BA%91%E6%9C%8D%E5%8A%A1%E8%BF%9B%E5%8C%96%E5%8F%B2-%E4%BB%8E-dfinity-ic-%E5%88%B0-arweave-ao-839b09b4f3ffhttps://www.microsoft.com/en-us/investor/earnings/FY-2024-Q3/press-release-webcasthttps://x.com/perma_daoCN/status/1798565157435830416https://x.com/Pow2wer/status/1802455254065402106

بقلم Alex Xu، شريك بحثي في ​​Mint Ventures

مقدمة
كانت هذه الدورة من سوق العملات المشفرة الصاعدة هي الأكثر غير ملهمة من حيث الابتكار التجاري. على عكس السوق الصاعدة السابقة، التي شهدت اتجاهات هائلة مثل DeFi وNFTs وGameFi، تفتقر هذه الدورة إلى نقاط ساخنة مهمة في الصناعة. ونتيجة لذلك، كان هناك نمو بطيء في قاعدة المستخدمين، والاستثمار في الصناعة، ونشاط المطورين.
ويتجلى هذا الاتجاه أيضًا في أسعار الأصول المشفرة. على مدار الدورة بأكملها، فقدت معظم العملات البديلة، بما في ذلك ETH، قيمتها باستمرار مقارنة بـ BTC. يعتمد تقييم منصات العقود الذكية إلى حد كبير على ازدهار تطبيقاتها. عندما يركد الابتكار في تطوير التطبيقات، يصبح من الصعب رفع تقييم السلاسل العامة.

By Alex Xu, Research Partner at Mint Ventures
Introduction
In our last report, we mentioned that compared to the previous two cycles, the current cryptocurrency bull run is missing the new business models and asset narratives. Artificial Intelligence (AI) is one of the novel narratives in the Web3 space this cycle. This article delves into the hot AI project of the year, IO.NET, and organizes thoughts on the following two questions:
The necessity of AI+Web3 in the commercial landscapeThe necessity and challenges of deploying a decentralized computing network
I will organize key information about the representative project in the decentralized AI computing network: IO.NET, including product design, competitive landscape, and project background. I will also speculate on the project’s valuation metrics.
The insights on The Business Logic Behind The Convergence of AI and Web3 part draw inspiration from “The Real Merge” by Michael Rinko, a research analyst at Delphi Delphi. This analysis assimilates and references ideas from his work, highly recommended for further reading The Real Merge.
Please note that this article reflects my current thinking and may evolve. The opinions here are subjective and there may be errors in facts, data, and logical reasoning. This is not financial advice, but feedback and discussions are welcomed.
The Business Logic Behind The Convergence of AI and Web3
2023: The “Annus Mirabilis” for AI
Reflecting on the annals of human development, it’s clear that technological breakthroughs catalyze profound transformations – from daily life to the industrial landscapes and the march of civilization itself.
In human history, there are two significant years, namely 1666 and 1905, which are now celebrated as the “Annus Mirabilis” in the history of science.
The year 1666 earned its title due to Isaac Newton’s cascade of scientific breakthroughs. In a single year, he pioneered the branch of physics known as optics, founded the mathematical discipline of calculus, and derived the law of gravitation, which is a foundational law of modern natural science. Any one of these contributions was foundational to the scientific development of humanity over the next century, significantly accelerating the overall progress of science.
The other landmark year is 1905, when a mere 26-year-old Einstein published four papers in quick succession in “Annalen der Physik,” covering the photoelectric effect, setting the stage for quantum mechanics; Brownian motion, providing a pivotal framework for stochastic process analysis; the theory of special relativity; and the mass-energy equivalence, encapsulated in the equation E=MC^2. Looking back, each of these papers is considered to surpass the average level of Nobel Prize-winning work in physics—a distinction Einstein himself received for his work on the photoelectric effect. These contributions collectively propelled humanity several strides forward in the journey of civilization.
The year 2023, recently behind us, is poised to be celebrated as another “Miracle Year,” thanks in large part to the emergence of ChatGPT.
Viewing 2023 as a “Miracle Year” in human technology history isn’t just about acknowledging the strides made in natural language processing and generation by ChatGPT. It’s also about recognizing a clear pattern in the advancement of large language models—the realization that by expanding model parameters and training datasets, we can achieve exponential enhancements in model performance. Moreover, it seems boundless in the short term, assuming computing power keeps pace.
This capability extends far beyond language comprehension and conversation generation; it can be widely applied across various scientific fields. Taking the application of large language models in the biological sector as an example: 
In 2018, Nobel Laureate in Chemistry, Frances Arnold, said during her award ceremony, “Today we can for all practical purposes read, write, and edit any sequence of DNA, but we cannot compose it. ” Fast forward five years to 2023, a team of researchers from Stanford University and Salesforce Research, an AI-focused startup, made a publication in “Nature Biotechnology.” Utilizing a large language model refined from GPT-3, they generated an entirely new catalog of 1 million proteins. Among these, they discovered two proteins with distinct structures, both endowed with antibacterial function, potentially paving the way for new bacterial resistance strategies beyond traditional antibiotics. This signifies a monumental leap in overcoming the hurdles of protein creation with AI’s assistance.Before this, the artificial intelligence algorithm AlphaFold predicted the structures of nearly all 2.14 billion protein types on Earth within 18 months—a milestone that amplifies the achievements of structural biologists throughout history by several magnitudes.
The integration of AI models promises to transform industries drastically. From the hard-tech realms of biotech, material science, and drug discovery to the cultural spheres of law and the arts, a transformative wave is set to reshape these fields, with 2023 marking the beginning of it all.
It’s widely acknowledged that the past century has witnessed an exponential rise in humanity’s ability to generate wealth. The swift advancement of AI technologies is expected to accelerate this process.

Global Total GDP Trend, Data Source: World Bank Group

Merging AI and Crypto
To grasp the inherent need for the fusion of AI and crypto, it’s insightful to look at how their distinct features complement each other.
The Symbiosis of AI and Crypto Features
AI is distinguished by three main qualities:
Stochasticity: AI is stochastic, with its content production mechanism being a difficult-to-replicate, enigmatic black box, making its outputs inherently stochastic.Resource Intensive: AI is a resource-intensive industry, requiring significant amounts of energy, chips, and computing power.Human-like Intelligence: AI is (soon to be) capable of passing the Turing test, making it increasingly difficult to distinguish between humans and AI.
※ On October 30, 2023, researchers from the University of California, San Diego, unveiled the Turing test scores for GPT-3.5 and GPT-4.0. The latter achieved a score of 41%, narrowly missing the pass mark of 50% by just 9 percentage points, with humans scoring 63% on the same test. The essence of this Turing test lies in how many participants perceive their chat partner to be human. A score above 50% indicates that a majority believes they are interacting with a human, not a machine, thereby deeming the AI to have successfully passed the Turing test as at least half of the people could not distinguish it from a human.
As AI paves the way for groundbreaking advancements in human productivity, it simultaneously introduces profound challenges to our society, specifically:
How to verify and control the stochasticity of AI, turning it into an advantage rather than a flawHow to bridge the vast requirements for energy and computing power that AI demandsHow to distinguish between humans and AI
Crypto and blockchain technology could offer the ideal solution to the challenges posed by AI, characterized by three key attributes:
Determinism: Operations are based on blockchain, code, and smart contracts, with clear rules and boundaries. Inputs lead to predictable outputs, ensuring a high level of determinism.Efficient Resource Allocation: The crypto economy has fostered a vast, global, and free market, enabling swift pricing, fundraising, and transfer of resources. The presence of tokens further accelerates market supply and demand alignment, rapidly achieving critical mass through incentivization.Trustlessness: With public ledgers and open-source code, anyone can easily verify operations, creating a “trustless” system. Furthermore, Zero-Knowledge (ZK) technology further ensures that privacy is maintained during these verification processes.
To demonstrate the complementarity between AI and the crypto economy, let’s delve into three examples.
Example A: Overcoming Stochasticity with AI Agents Powered by the Crypto Economy
AI Agents are intelligent programs designed to perform tasks on behalf of humans according to their directives, with Fetch.AI being a notable example in this domain. Imagine we task our AI agent with executing a financial operation, such as “investing $1000 in BTC.” The AI agent could face two distinct scenarios:
Scenario 1: The agent is required to interact with traditional financial entities (e.g., BlackRock) to buy BTC ETFs, encountering many compatibility issues with centralized organizations, including KYC procedures, document verification, login processes, and identity authentication, all of which are notably burdensome at present.
Scenario 2: When operating within the native crypto economy, the process becomes simplified. The agent could directly carry out the transaction through Uniswap or a similar trading aggregator, employing your account to sign in and confirm the order, and consequently acquiring WBTC or other variants of wrapped BTC. This procedure is efficient and streamlined. Essentially, this is the function currently served by various Trading Bots, acting as basic AI agents with a focus on trading activities. With further development and integration of AI, these bots will fulfill more intricate trading objectives. For instance, they might monitor 100 smart money addresses on the blockchain, assess their trading strategies and success rates, allocate 10% of their funds to copy their trades over a week, halt operations if the returns are unfavorable, and deduce the potential reasons for these strategies.
AI thrives within blockchain systems, fundamentally because the rules of the crypto economy are explicitly defined, and the system allows for permissionlessness. Operating under clear guidelines significantly reduces the risks tied to AI’s inherent stochasticity. For example, AI’s dominance over humans in chess and video games stems from the fact that these environments are closed sandboxes with straightforward rules. Conversely, advancements in autonomous driving have been more gradual. The open-world challenges are more complex, and our tolerance for AI’s unpredictable problem-solving in such scenarios is markedly lower.
Example B: Resource Consolidation via Token Incentives
The formidable global hash network backing BTC, boasting a current total hash rate of 576.70 EH/s, outstrips the cumulative computing power might of any country’s supercomputers. This growth is propelled by simple and fair incentives within the network.

BTC Hashrate Trend

Moreover, DePIN projects like Mobile, are exploring token incentives to cultivate a market on both the supply side and demand side to foster network effects. The forthcoming focus of this article, IO.NET, is a platform designed to aggregate AI computing power, hoping to unlock the latent potential of AI computing power through a token model.
Example C: Leveraging Open Source and ZK Proof to Differentiate Humans from AI While Protecting Privacy
Worldcoin, a Web3 project co-founded by OpenAI’s Sam Altman, employs a novel approach to identity verification. Utilizing a hardware device known as Orb, it leverages human iris biometrics to produce unique and anonymous hash values via Zero-Knowledge (ZK) technology, differentiating humans from AI. In early March 2024, the Web3 art project Drip started to implement Worldcoin ID to authenticate real humans and allocate rewards.

Worldcoin has recently open-sourced its iris hardware, Orb, ensuring the security and privacy of biometric data.

Overall, due to the determinism of code and cryptography, the resource circulation and fundraising advantages brought by permissionless and token-based mechanisms, alongside the trustless nature based on open-source code and public ledgers, the crypto economy has become a significant potential solution for the challenges that human society faces with AI.
The most immediate and commercially demanding challenge is the extreme thirst for computational resources required by AI products, primarily driven by a substantial need for chips and computing power.
This is also the main reason why distributed computing power projects have led the gains during this bull market cycle in the overall AI sector.
The Business Imperative for Decentralized Computing
AI requires substantial computational resources, necessary for both model training and inference tasks.
It has been well-documented in the training of large language models that once the scale of data parameters is substantial, these models begin to exhibit unprecedented capabilities. The exponential improvements seen from one ChatGPT generation to the next are driven by an exponential growth in computational demands for model training.
Research from DeepMind and Stanford University indicates that across various large language models, when handling different tasks—be it computation, Persian question answering, or natural language understanding—the models only approximate random guessing unless the training involves significantly scaled-up model parameters (and by extension, computational loads). Any task’s performance remains nearly random until computational efforts reach 10^22 FLOPs. Beyond this critical threshold, task performance improves dramatically across any language model.
*FLOPs refer to floating-point operations per second, a measure of computing performance.

Emergent Abilities of Large Language Models

Emergent Abilities of Large Language Models

The principle of “achieving miracles with great effort” in computing power, both in theory and verified in practice, inspired OpenAI’s founder, Sam Altman, to propose an ambitious plan to raise $7 trillion. This fund is intended to establish a chip factory that would exceed the current capabilities of TSMC by tenfold (estimated to cost $1.5 trillion), with the remaining funds allocated for chip production and model training.
In addition to the computational demands of training AI models, the inference processes also require considerable computing power, albeit less than training. This ongoing need for chips and computational resources has become a standard reality for players in the AI field.
In contrast to centralized AI computing providers like Amazon Web Services, Google Cloud Platform, and Microsoft’s Azure, decentralized AI computing offers several compelling value propositions:
Accessibility: Gaining access to computing chips through services like AWS, GCP, or Azure typically requires weeks, and the most popular GPU models are frequently out of stock. Additionally, consumers are usually bound by lengthy, rigid contracts with these large corporations. Distributed computing platforms, on the other hand, provide flexible hardware options with enhanced accessibility.Cost Efficiency: By leveraging idle chips and incorporating token subsidies from network protocols for chip and computing power providers, decentralized computing networks can offer computing power at reduced costs.Censorship Resistance: The supply of cutting-edge chips is currently dominated by major technology companies, and with the United States government ramping up scrutiny of AI computing services, the ability to obtain computing power in a decentralized, flexible, and unrestricted manner is increasingly becoming a clear necessity. This is a core value proposition of web3-based computing platforms.
If fossil fuels were the lifeblood of the Industrial Age, then computing power may well be the lifeblood of the new digital era ushered in by AI, making the supply of computing power an infrastructure for the AI age. Similarly to how stablecoins have emerged as a vigorous derivative of fiat currency in the Web3 epoch, might the distributed computing market evolve into a burgeoning segment within the fast-expanding AI computing market?
This is still an emerging market, and much remains to be seen. However, several factors could potentially drive the narrative or market adoption of decentralized computing:
Persistent GPU Supply Challenges: The ongoing supply constraints for GPUs might encourage developers to explore decentralized computing platforms.Regulatory Expansion: Accessing AI computing services from major cloud platforms involves thorough KYC processes and scrutiny. This could lead to greater adoption of decentralized computing platforms, particularly in areas facing restrictions or sanctions.Token Price Incentives: Increases in token prices during bull markets could enhance the value of subsidies offered to GPU providers by platforms, attracting more vendors to the market, increasing its scale, and lowering costs for consumers.
At the same time, the challenges faced by decentralized computing platforms are also quite evident:
Technical and Engineering ChallengesProof of Work Issues: The computations in deep learning models, due to the hierarchical structure where the output of each layer is used as the input for the next, verifying the validity of computations requires executing all prior work, which is neither simple nor efficient. To tackle this, decentralized computing platforms need to either develop new algorithms or employ approximate verification techniques that offer probabilistic assurance of results, rather than absolute determinism.Parallelization Challenges: Decentralized computing platforms draw upon a diverse array of chip suppliers, each typically offering limited computing power. Completing the training or inference tasks of an AI model by a single chip supplier quickly is nearly impossible. Therefore, tasks must be decomposed and distributed using parallelization to shorten the overall completion time. This approach, however, introduces several complications, including how tasks are broken down (particularly complex deep learning tasks), data dependencies, and the extra connectivity costs between devices.Privacy Protection Issues: How can one ensure that the data and models of the client are not disclosed to the recipient of the tasks?
Regulatory Compliance ChallengesDecentralized computing platforms, due to their permissionless nature in the supply and demand markets, can appeal to certain customers as a key selling point. However, as AI regulatory frameworks evolve, these platforms may increasingly become targets of governmental scrutiny. Moreover, some GPU vendors are concerned about whether their leased computing resources are being used by sanctioned businesses or individuals.
In summary, the primary users of decentralized computing platforms are mostly professional developers or small to medium-sized enterprises. Unlike cryptocurrency and NFT investors, these clients prioritize the stability and continuity of the services provided by the platforms, and pricing is not necessarily their foremost concern. Decentralized computing platforms have a long journey to go before they can win widespread acceptance from this discerning user base.
Next, we will delve into the details and perform an analysis of IO.NET, a new decentralized computing power project in this cycle. We will also compare it with similar projects to estimate its potential market valuation after its launch.
Decentralized AI Computing Platform: IO.NET
Project Overview
IO.NET is a decentralized computing network that has established a two-sided market around chips. On the supply side, there are globally distributed computing powers, primarily GPUs, but also CPUs and Apple’s integrated GPUs (iGPUs). The demand side consists of AI engineers seeking to complete AI model training or inference tasks.
The official IO.NET website states their vision:
Our MissionPutting together one million GPUs in a DePIN – decentralized physical infrastructure network.
Compared to traditional cloud AI computing services, this platform highlights several key advantages:
Flexible Configuration: AI engineers have the freedom to select and assemble the necessary chips into a “cluster” tailored to their specific computing tasks.Rapid Deployment: Unlike the lengthy approval and wait times associated with centralized providers such as AWS, deployment on this platform can be completed in just seconds, allowing for immediate task commencement.Cost Efficiency: The service costs are up to 90% lower than those offered by mainstream providers.
Furthermore, IO.NET plans to launch additional services in the future, such as an AI model store.
Product Mechanism and Business Metrics
Product Mechanisms and Deployment Experience
Similar to major platforms like Amazon Cloud, Google Cloud, and Alibaba Cloud, IO.NET offers a computing service known as IO Cloud. This service operates through a distributed and decentralized network of chips that supports the execution of Python-based machine-learning code for AI and machine-learning applications.
The basic business module of IO Cloud is called Clusters——self-coordinating groups of GPUs designed to efficiently handle computing tasks. AI engineers have the flexibility to customize the clusters to meet their specific needs.
The user interface of IO.NET is highly user-friendly. If you’re looking to deploy your own chip cluster for AI computing tasks, simply navigate to the Clusters page on the platform, where you can effortlessly configure your desired chip cluster according to your requirements.

Cluster Page on IO.NET

First, you need to select your cluster type, with three options available:
General: Provides a general environment, suitable for early stages of a project where specific resource requirements are not yet clear.Train: A cluster designed specifically for the training and fine-tuning of machine learning models. This option provides additional GPU resources, higher memory capacity, and/or faster network connections to accommodate these intensive computing tasks.Inference: A cluster designed for low-latency inference and high-load work. In the context of machine learning, inference refers to using trained models to predict or analyze new datasets and provide feedback. Therefore, this option focuses on optimizing latency and throughput to support real-time or near-real-time data processing needs.
Next, you need to choose a supplier for your cluster. IO.NET has partnerships with Render Network and the Filecoin miner network, allowing users to select chips from IO.NET or other two networks as the supply source for their computing clusters. This effectively positions IO.NET as an aggregator (note: Filecoin services are temporarily offline). It’s worth noting that IO.NET currently has over 200,000 GPUs available online, while Render Network has over 3,700 GPUs available.
Following this, you’ll proceed to the hardware selection phase of your cluster. Presently, IO.NET lists only GPUs as the available hardware option, excluding CPUs or Apple’s iGPUs (M1, M2, etc.), with the GPUs primarily consisting of NVIDIA products.

Among the officially listed and available GPU hardware options, based on the data tested by me on the day,  the total number of online GPUs available within the IO.NET network was 206,001. The GPU with the highest availability was the GeForce RTX 4090, with 45,250 units, followed by the GeForce RTX 3090 Ti, with 30,779 units.
Furthermore, there are 7,965 units of the highly efficient A100-SXM4-80GB chip (each priced above $15,000) available online, which is more efficient for AI computing tasks such as machine learning, deep learning, and scientific computing.

The NVIDIA H100 80GB HBM3, which is designed from the ground up for AI (with a market price of over $40,000), delivers training performance that is 3.3 times greater and inference performance that is 4.5 times higher than the A100. Currently, there are 86 units available online.

Once the hardware type for the cluster has been chosen, users will need to specify further details such as the geographic location of the cluster, connectivity speed, the number of GPUs, and the duration.
Finally, IO.NET will calculate a detailed bill based on your selected options. As an illustration, consider the following cluster configuration:
Cluster Type: General16 A100-SXM4-80GB GPUsConnectivity tier: High SpeedGeographic location: United StatesDuration: 1 week
The total bill for this configuration is $3311.6, with the hourly rental price per card being $1.232.

The hourly rental price for a single A100-SXM4-80GB on Amazon Web Services, Google Cloud, and Microsoft Azure is $5.12, $5.07, and $3.67 respectively (data sourced from Cloud GPU Comparison, actual prices may vary depending on contract details).
Consequently, when it comes to cost, IO.NET offers chip computing power at prices much lower than those of mainstream providers. Additionally, the flexibility in supply and procurement options makes IO.NET an attractive choice for many users.
Business Overview
Supply Side
As of April 4th, 2024, official figures reveal that IO.NET had a total GPU supply of 371,027 units and a CPU supply of 42,321 units on the supply side. In addition, Render Network, as a partner, had an additional 9,997 GPUs and 776 CPUs connected to the network’s supply.

Data Source: io.net

At the time of writing, 214,387 of the GPUs integrated with IO.NET were online, resulting in an online rate of 57.8%. The online rate for GPUs coming from Render Network was 45.1%.
What does this data on the supply side imply?
To provide a benchmark, let’s bring in Akash Network, a more seasoned decentralized computing project.
Akash Network launched its mainnet as early as 2020, initially focusing on decentralized services for CPUs and storage. It rolled out a testnet for GPU services in June 2023 and subsequently launched the mainnet for decentralized GPU computing power in September of the same year.

Akash Network GPU Capacity

According to official data from Akash, even though the supply side has been growing continuously since the launch of its GPU network, the total number of GPUs connected to the network remains only 365.
When evaluating the volume of GPU supply, IO.NET vastly exceeds Akash Network, operating on a dramatically larger scale. IO.NET has established itself as the largest supply side in the decentralized GPU computing power sector.
Demand Side

From the demand side, IO.NET is still in the early stages of market cultivation, with a relatively small total volume of computation tasks being executed on its network. The majority of GPUs are online but idle, showing a workload percentage of 0%. Only four chip types—the A100 PCIe 80GB K8S, RTX A6000 K8S, RTX A4000 K8S, and H100 80GB HBM3—are actively engaged in processing tasks, and among these, only the A100 PCIe 80GB K8S is experiencing a workload above 20%.
The network’s official stress level reported for the day stood at 0%, indicating that a significant portion of the GPU supply is currently in an online but idle state.
Financially, IO.NET has accrued $586,029 in service fees to date, with $3,200 of that total generated on the most recent day.

Source: io.net

The financials concerning network settlement fees, both in terms of total and daily transaction volumes, align closely with those of Akash. However, it’s important to note that the bulk of Akash’s revenue is derived from its CPU offerings, with an inventory exceeding 20,000 CPUs.

Source: Akash Network Stats

Additionally, IO.NET has disclosed detailed data for AI inference tasks processed by the network. As of the latest report, the platform has successfully processed and validated over 230,000 inference tasks, though most of this volume stems from BC8.AI, a project sponsored by IO.NET.

Source: io.net

IO.NET’s supply side is expanding efficiently, driven by expectations surrounding an airdrop and a community event known as “Ignition.” This initiative has rapidly attracted a significant amount of AI computing power. On the demand side, however, expansion remains nascent with insufficient organic demand. The reasons behind this sluggish demand—whether due to uninitiated consumer outreach efforts or unstable service experiences leading to limited large-scale adoption—require further evaluation.
Given the challenges in quickly closing the gap in AI computing capabilities, many AI engineers and projects are exploring alternatives, potentially increasing interest in decentralized service providers. Moreover, IO.NET has not yet implemented economic incentives or activities to boost demand, and as the product experience continues to improve, the anticipated equilibrium between supply and demand holds promise for the future.
Team Background and Fundraising Overview
Team Profile
The core team of IO.NET initially focused on quantitative trading. Up until June 2022, they were engaged in creating institutional-level quantitative trading systems for equities and cryptocurrencies. Driven by the system backend’s demand for computing power, the team began exploring the potential of decentralized computing and ultimately focused on the specific issue of reducing the cost of GPU computing services.
Founder & CEO: Ahmad Shadid
Before founding IO.NET, Ahmad Shadid had worked in quantitative finance and financial engineering, and he is also a volunteer at the Ethereum Foundation.
CMO & Chief Strategy Officer: Garrison Yang
Garrison Yang officially joined IO.NET in March 2024. Before that, he was the VP of Strategy and Growth at Avalanche and is an alumnus of the University of California, Santa Barbara.
COO: Tory Green
Tory Green serves as the Chief Operating Officer of IO.NET. He was previously the COO of Hum Capital and the Director of Business Development and Strategy at Fox Mobile Group. He graduated from Stanford University.
IO.NET’s LinkedIn profile indicates that the team is headquartered in New York, USA, with a branch office in San Francisco, and employs over 50 staff members.
Funding Overview
IO.NET has only publicly announced one funding round—a Series A completed in March this year with a valuation of $1 billion, through which they successfully raised $30 million. This round was led by Hack VC, with participation from other investors including Multicoin Capital, Delphi Digital, Foresight Ventures, Animoca Brands, Continue Capital, Solana Ventures, Aptos, LongHash Ventures, OKX Ventures, Amber Group, SevenX Ventures, and ArkStream Capital.
Notably, the investment from the Aptos Foundation might have influenced the BC8.AI project’s decision to switch from using Solana for its settlement and accounting processes to the similarly high-performance Layer 1 blockchain, Aptos.
Valuation Estimation
According to previous statements by founder and CEO Ahmad Shadid, IO.NET is set to launch its token by the end of April 2024.
IO.NET has two benchmark projects that serve as references for valuation: Render Network and Akash Network, both of which are representative decentralized computing projects.
There are two principal methods to derive an estimate of IO.NET’s market cap: 
The Price-to-Sales (P/S) ratio, which compares the FDV to the revenue; FDV-to-Chip Ratio (M/C Ratio)
We will start by examining the potential valuation using the Price-to-Sales ratio:

Examining the price-to-sales ratio, Akash represents the conservative end of IO.NET’s estimated valuation spectrum, while Render provides a high-end benchmark, positing an FDV ranging from $1.67 billion to $5.93 billion.
However, given the updates to the IO.NET project, its more compelling narrative, coupled with its smaller initial market cap and a broader supply base, suggest its FDV could well surpass that of Render Network.
Turning to another valuation comparison perspective, namely the “FDV-to-Chip Ratio”.
In the context of a market where demand for AI computing power exceeds supply, the most crucial element of decentralized AI computing networks is the scale of GPU supply. Therefore, we can use the “FDV-to-Chip Ratio,” which is the ratio of the project’s fully diluted value to the number of chips within the network, to infer the possible valuation range of IO.NET, providing readers with a reference.

Utilizing the market-to-chip ratio to calculate IO.NET’s valuation range places us between $20.6 billion and $197.5 billion, with Render Network setting the upper benchmark and Akash Network the lower.
Enthusiasts of the IO.NET project might see this as a highly optimistic estimation of market cap.
It is important to consider the current vast number of chips online for IO.NET, stimulated by airdrop expectations and incentive activities. The actual online count of the supply after the project officially launches still requires observation. 
Overall, valuations derived from the price-to-sales ratio could offer more reliable insights.
IO.NET, built upon Solana and graced with the convergence of AI and DePIN, is on the cusp of its token launch. The anticipation is palpable as we stand by to witness the impact on its market cap post-launch.
Reference
The Real MergeUnderstanding the Intersection of Crypto and AI

By Lawrence Lee, Researcher at Mint Ventures

Introduction
Mint Ventures has always been keeping a keen eye on Web3 gaming. Although the once-popular Play-to-Earn model, brought by the previous bull market, has fallen out of the discussion—highlighted by the dramatic collapse of Axie Infinity and StepN as Ponzi schemes—their peak engagement levels showcased millions of daily active users, marking the crypto space’s first encounter with “Massive Adoption.” Unlike social products, another category with the potential for Massive Adoption, games naturally feature a richer and more complex economic ecosystem. This affords teams refined space and greater control to implement various taxation strategies, coupled with the immersive experiences and irrational consumption brought about by exquisite design, thereby more likely to maintain a relative balance in the ecosystem for a long time. Furthermore, Web3 gaming adeptly leverages crypto’s tokenization opportunities, leading to widespread investor optimism about its future.
Following the era of Axie and StepN, Web3 gaming has enjoyed the following favorable conditions:
The ongoing enhancement of infrastructures. In 2024, game developers are presented with an abundance of choices in blockchain technology. Whether opting for existing Layer1 solutions like Solana, Layer2 solutions like Arbitrum, employing one-click blockchain deployment services offered by platforms such as Avalanche Subnets and OP Stack, or embracing the trend towards modular blockchain for a custom design, developers now have access to a variety of efficient and cost-effective options. On the wallet front, both MPC and Abstract Account (AA) wallet technologies have reached commercial viability, effectively addressing the issue of private key management for ordinary users.Gradual Recovery of Market Conditions, notably spurred by the recent approval of Bitcoin ETFs, has ignited a robust rally across the crypto space, making crypto once again attract more attention from the general public. This provides a significant boost to the potential user base for Web3 game projects.
Compared to traditional Web2 games, Web3 games maintain clear competitive edges:
The lifecycle of a typical Web3 game, marked by “NFT sales – FT issuance – game launch,” provides various revenue streams through NFT royalties and FT transaction fees even before the game’s official launch. This model enables game development teams to start earning revenue from day one of their project, helping to balance out the lengthy development process and significant costs involved. Post-launch, the ability to levy fees across different aspects is far more flexible than in Web2 games. The prospect of earlier and more varied monetization strategies is an attraction for game development teams toward the Web3 space.Web3 gaming has yet to be dominated by powerful distributors, which means high user acquisition costs common in Web2 gaming are not a concern here. Put simply, Web3 gaming isn’t as fiercely competitive, presenting an open field ripe for development by talented teams.
We’ve observed a lot of skilled game development teams venturing into Web3 gaming. These teams are creating many games with excellent narratives, engaging gameplay, and high playability. The supply side of Web3 games has seen significant development, which also forms the favorable conditions of Web3 games.
Given these developments, Mint Ventures maintains its keen interest in Web3 gaming. Ultiverse is a game project that Mint Ventures has been continuously following since the previous bear market stage. Despite the downturn, Ultiverse has continued to build, constantly enriching its product matrix, actively enhancing its storytelling, and also possesses an excellent investment background. Recently, they have launched several airdrop activities aimed at attracting new users, which are worth keeping an eye on.
Disclosure: Mint Ventures participated in Ultiverse’s ElectricSheep NFT Builder Round and holds ElectricSheep NFTs.
Ultiverse Landscape
Ultiverse is a blockchain-based metaverse with deep integration with AI. Its architecture is divided into 4 layers:

Protocol Layer: Ultiverse uses the Bodhi Protocol as the foundation of the entire ecosystem. According to its official documents, the Bodhi Protocol employs large language models and Stable Diffusion to generate a variety of in-game content. This AI-driven approach helps to provide comprehensive support across the ecosystem by producing more intelligent non-player characters (NPCs) and enriching narrative backgrounds.
Infrastructure: Ultiverse abstracts a series of gaming infrastructures into SDKs, which will be available for developer utilization. These infrastructures include MPC wallets, AA wallets, native marketplaces, and a DID system. Moreover, its proprietary live streaming platform, Ultiverse Live, has captured the attention of 350,000 followers on Binance live, alongside receiving close to 40 million likes, offering substantial visibility for its collaborators. Additionally, Ultiverse’s infrastructure features its dedicated task platform, Mission Runner.
Core Assets: Ultiverse’s prime assets presently encompass the Electric Sheep NFT, Meta GF NFT, and World Fragment. 
Electric Sheep NFT, as the first asset of the Ultiverse ecosystem and one of its core assets, has a total supply of 7000. Launched in July 2022 at 0.5 ETH, its floor price now hovers around 2 ETH, providing holders with quadruple returns in ETH and octuple in USD, significantly strengthening its community foundation. Holders of Electric Sheep gain early access and boosted rewards across numerous Ultiverse ecosystem projects, in addition to being eligible for airdrops of Ultiverse’s governance token, $ULTC.

The Floor Price Trend of Electric Sheep NFT

The Meta GF NFT was issued at the end of 2022, positioned as an AI companion that supports customizable appearances, designed to join players in their explorations within the Ultiverse.
Meanwhile, the World Fragment NFT, pending release, is designated to be airdropped to Electric Sheep NFT holders. As detailed in official documents, players can merge fragments to forge unique worlds. Ownership of varied World NFTs can unlock distinct, AI-driven personal experiences in the game. This includes divergent storylines, characters, world objectives, and core conflicts, among other elements, suggesting that different NFTs pave the way for unique gameplay experiences.
Dapp, also known as “Micro Worlds” within the Ultiverse ecosystem, are divided into two categories: those in partnership with Ultiverse and those developed internally by Ultiverse. Partner Dapps includes the likes of the casual education simulation game Meta Merge and the upcoming racing game BAC on Blast. These partnerships extend beyond mere collaboration for traffic acquisition to encompass a deeper level of asset interoperability. For example, Meta Merge once airdropped its token $MMM to Electric Sheep holders, and Meta Merge’s NFT holders can also receive a portion of the upcoming $ULTC airdrop. The other category consists of Dapps developed in-house by Ultiverse, including Ulti-pilot, Terminus, and Endless Loop, which were just launched at the end of February.
Launched in March, Terminus is a pivotal platform within the Ultiverse ecosystem, built using the cutting-edge UE5 engine, and is available in both PC and VR versions. Official documentation reveals Terminus as a distinctive virtual world where, different from average games, all NPCs are powered by sophisticated AI. These NPCs can engage players in diverse, highly interactive dialogues and interactions, which could significantly influence the gameplay and its outcomes. Furthermore, the game’s characters are also AI-operated, allowing for their continuous evolution even when the player is offline. This feature cements Terminus as an eternally active game universe.

Terminus Gameplay

Ulti-pilot was launched in February and serves as the gateway for users to experience the Ultiverse world. Users can dispatch their characters to explore the Ultiverse world and can earn substantial $Soul incentives, which are redeemable for the governance token, $ULTC, in the future.
Endless Loop is an MMORPG game within the Ultiverse, also built upon the UE5 engine. The game has not yet been launched.
The product structure of Ultiverse reveals that it aspires to be more than a game; it aims to evolve into an AI-driven metaverse platform. This ambition entails connecting with a vast user base while simultaneously engaging with many Web3 projects, thereby bringing its Meta-Fi concept to fruition.
In the future roadmap, Ultiverse is poised to focus on the comprehensive rollout of its products in 2024, which includes launching both the PC and VR editions of Terminus and fostering collaborations with additional gaming partners. In the latter half of 2024, they aim to introduce a Game Launchpad and initiate their Rollup. This approach is designed to enhance support for their gaming collaborators and to further solidify their vision of a Web3 gaming ecosystem.
Financing and Partners
Ultiverse has completed three rounds of financing, with an impressive lineup of investors:
On March 18, 2022, Ultiverse completed a $4.5 million seed round financing at a valuation of $50 million. This round was co-led by Binance Labs and Defiance Capital, with participation from Three Arrows Capital and SkyVision Capital.
Following closely on March 25, 2022, Binance Labs made an additional investment of $5 million in Ultiverse, executed through an equity purchase. Nicole Zhang, the director at Binance Labs, emphasized that this investment aims to ensure that Binance Labs retains a voice in the strategic direction of Ultiverse’s team moving forward.
On February 14, 2024, Ultiverse successfully closed a strategic funding round, securing $4 million on a valuation of $150 million. The round was led by IDG Capital, with notable contributions from many leading investors such as Animoca Brands, Polygon Ventures, MorningStar Ventures, Taiko, ZetaChain, Manta Network, and DWF Ventures. This round was also marked by the engagement of prominent NFT influencers and KOLs, including Dingaling, Grail.eth, Christian2022.eth, and 0xSun, among others.

Ultiverse’s Investors

Overall, Ultiverse boasts a remarkable investment pedigree, featuring top-tier VCs, market makers, exchanges, public blockchains, and influencers, all of which can support Ultiverse’s multifaceted development.
Frank, the founder of Ultiverse, graduated from Carnegie Mellon University and had a deep passion for gaming. With over 200 members, the team’s background is equally impressive, boasting veterans from esteemed gaming companies such as Gameloft, Blizzard, Ubisoft, and Tencent who contributed to the development and design of well-known games like Elden Ring, Assassin’s Creed, and Prince of Persia.
As its goal is to become a platform that connects players with games, Ultiverse has forged an extensive network of partnerships, collaborating broadly with various projects and communities within the gaming ecosystem.
An example is the “Finding Your Path Partners” campaign held by Terminus in March, a concerted effort by Ultiverse alongside a variety of collaborators, including public blockchains like Zetachain, other gaming ventures such as Ainchess, infrastructure service providers like Rpggo and Particle Network, gaming guilds including N9Club and GuildFi, and NFT communities like the Weirdo Ghost Gang.

UltiverseDAO

Moreover, Ultiverse recently revealed that it has established collaborations with more than 300 teams in the AI and gaming realms across both Web2 and Web3. This extensive partnership network includes virtually all the top Web3 gaming projects, advancing Ultiverse’s ambition to develop a comprehensive gaming platform.

Tokenomics
Ultiverse has unveiled the utilities and tokenomics of its governance token $ULTC:

In the Ultiverse ecosystem, $ULTC has three primary utilities: 
GovernanceEntry Pass, Dapps looking to integrate with the Ultiverse ecosystem are required to pay with $ULTC, with a portion of these tokens allocated to usersPayment Method, $ULTC serves as a payment method for assets within the Ultiverse ecosystem
The total supply of $ULTC is set at 10 billion tokens, with its allocation detailed as follows:

Ultiverse Token Structure Overview

A point of interest is that 8% of the total token supply will be allocated for airdrops, targeting holders of the Electric Sheep NFT and MetaGF NFT, $Soul token holders, and holders of other assets within the ecosystem.
The current floor price of Electric Sheep NFT is around 2 ETH, with a total market cap of approximately 14,000 ETH, equivalent to about $47.6 million. If we base our calculations on Electric Sheep NFT holders receiving 2% of the $ULTC supply, this would equate to a fully diluted market cap for $ULTC of $2.38 billion. Such a valuation aligns closely with that of another Game+Ai project, Portal, which was recently listed on Binance, suggesting a fair valuation. Beyond the $ULTC airdrop, the Electric Sheep NFT carries several additional benefits within the Ultiverse ecosystem, including access to the previously mentioned World NFT.
$Soul represents the “points” system within the Ultiverse ecosystem, initially available through staking Electric Sheep NFT as a reward for early holders. The team previously announced the redeem ratio of $Soul to $ULTC as 100:1. After unveiling the tokenomics, Ultiverse sparked a series of initiatives aimed at drawing new users, aiming to leverage Soul to further promote the Ultiverse brand. Among these, the Ulti-pilot campaign that started in late February will release 10 billion $Soul (equivalent to 100 million $ULTC, accounting for 1% of the total supply), drawing significant user participation.
Conclusion
Ultiverse stands out as a project meriting attention for the following reasons:
It occupies a favorable position in Web3 gaming, poised for breakout success in the bullish cycle.Throughout the bear market, Ultiverse’s team has consistently built upon its foundation, delivering not only engaging products but also cultivating a tightly-knit community.With the striking progress of artificial intelligence over the past year drawing global interest, Ultiverse’s strategic integration of AI throughout its platform anticipates positive reception as the AI+gaming narrative gains prominence.The project benefits from a robust investment background.

By Lydia Wu, Researcher at Mint Ventures

Decoupling the classical chain concept
The figures on DefiLlama and CoinMarketCap seem to conclusively show that TON is an “under-the-radar giant among chains” — consistently ranking within the top 20 in terms of market cap, yet its 24-hour trading volume lingers beyond the top 100. Despite reaching a new peak in Total Value Locked (TVL) at $53 million, it failed to enter the top 50 public chains; moreover, its market cap to TVL ratio hit an astonishing 293, which is 33 times that of Ethereum.

Source: DefiLlama, CoinMarketCap

Recent months have seen a decoupling in the Ethereum-defined concept of chains, facilitated by the advent of Rollups and modular approaches, diluting the traditional narrative around blockchain legitimacy. The market has accepted Blast’s mere name without substantial blockchain functionality and acknowledged Arweave AO’s actions of leveraging network effect for actual public chain operations.
This shift has accelerated the unleashing of TON’s potential under its “less legitimacy” positioning. The market’s evaluation of TON now extends beyond TVL-centric narratives of classic chains, suggesting a closer look at metrics like daily and monthly active users, adding a new dimension to understanding its value.
Recently, the founder of Telegram, Pavel Durov, shared with the Financial Times that Telegram’s monthly active users have soared past 900 million, reaching a valuation of over 30 billion USD, and the company is contemplating an Initial Public Offering. This starkly contrasts with Meta’s 3 billion monthly active users and a market capitalization of 1.3 trillion USD, placing Telegram’s valuation at just 1/40th of Meta. Telegram’s user demographic is notably concentrated in Asia, Europe, South America, and the Middle East, characterized by a significant presence of retail investors and a robust demand for peer-to-peer payments, positioning it as an ideal audience onboarding into the Web3 space. As Telegram continues to expand, if TON can draw in 30% of Telegram’s users within the next 3 to 5 years, it could effectively bolster its valuation.

Source: DefiLlama, CoinMarketCap, Nansen, Token Terminal

New Paradigm of Web3 Creator Economy: Leveraging Telegram for Content Packaging and Value Transfer
Redefining Distribution: How Telegram Activates the Web2 Incremental Growth Market
Last year, I outlined the three stages of the Web3 creator economy, with Phase 1.0 embracing the straightforward “blockchain+” approach, integrating centralized content creation with Web3 distribution mechanisms, predominantly through NFTs. This model remains mainstream, except NFTs are beginning to be used more as speculative Pre-token tools rather than as creative mediums.
Throughout this year, my immersion in the TON ecosystem has gradually made me realize that, along the same attention-driven pathways, the role of NFTs wrapping content, vouchers, and governance are seamlessly supplanted by a more intuitive “channel-advertising-payment” framework. The briefly celebrated Friend.tech serves as an intermediate form of this idea—wrapping group chats into assets, albeit with limited content scalability and an unsustainable economic model.
Compared to many NFT and SocialFi projects still struggling to find application scenarios for their assets, the TON ecosystem, developed on the Telegram platform, offers a more friendly product experience and value network for Web2 developers, creators, and users — on existing social networks, further deconstructing the Web3 distribution model into a combination of traditional Web2 business practices, middleware wallets, and Web3 financial settlements. This approach not only simplifies the onboarding process for both creators and users but also diversifies the creators’ revenue streams through mechanisms like ad revenue sharing.

Source: Lydia @Mint Ventures

From Content to Services, Trading Bots Facilitate the Transition of Web3 User Base
WeChat, a super App in the Web2 space, has achieved ecosystem expansion from a content-centric to a service-oriented ecosystem by launching service accounts and mini-programs. Telegram has followed a similar path by introducing business accounts and service-oriented bots to solidify its position as a key gateway for mobile traffic, among which Trading Bots have won the favor of the crypto degens.
The Trading Bot sector has seen explosive growth since 2023, emerging as one of the few products with genuine demand and cash flow during the bear market. As the market shifts from bear to bull , the financial allure of these Bots has intensified, with leading protocols like Banana Gun and Unibot generating daily revenues exceeding $200,000. Though a minority are hosted on websites and Discord, the majority of Trading Bots are integrated through Telegram.

Source: https://dune.com/whale_hunter/dex-trading-bot-wars

At this stage, the operation of Trading Bots and TON are not closely related, primarily leveraging Telegram’s Bot module for integration with Ethereum and Solana. However, the popularity of Bots has greatly contributed to market education and the nurturing of user engagement within the TON ecosystem. As crypto enthusiasts grow more comfortable with innovative interaction models like Bots, the barrier to exploring other non-trading products within the TON ecosystem will significantly diminish. Supported by a fully on-chain identity system and payment infrastructure, TON is theoretically poised to develop a coherent system for content packaging and value transfer.
Exploring the Bazzar Mode: The Bots and Mini Apps of TON
The TON ecosystem currently hosts a range of products that, at first glance, seem to consist merely of simply Telegram Bot portals combined with HTML5 websites, coupled with lively Telegram groups flooding the screen, making one feel as if they are in a bustling and chaotic bazzar.
In the Meme project Notcoin, players engage in the activity of tapping on coins to earn points. Additionally, they can join teams led by celebrities, such as Telegram’s founder Durov, or gain attraction by sending “red packets” to friends. Through its no-frills gameplay and viral marketing strategy, Notcoin quickly attracted 5 million players within just a week, with the current player base exceeding 26 million and 1 million followers on X. In the recently launched Pre-Market trading, the biggest deal was a purchase of one billion points with 1100 $TON, which was equivalent to approximately $4521.

Farcaster, a favorite among crypto influencers, introduced its Frames in January 2024, celebrated for being “a groundbreaking innovation.” Yet, this feature’s efficacy on the densely populated mobile landscape leaves something to be desired. Although users can perform basic Swap and Mint operations, when it comes to more complex interactions, even to the extent of the simplest mini-games, executing these within a diminutive frame that takes up less than one-third of a smartphone screen can be a significant visual challenge.
By contrast, what is rarely mentioned is that the integration of Telegram and TON has already achieved an almost seamless transition from chat boxes to semi-native applications, with the response speed of calling up applications via Bots even faster than WeChat mini-programs. 

In June 2015, Telegram launched its Bot feature with limitations such as the inability to custom interface design and the absence of direct client-server communication. Based on this functionality, Trading Bots act more as intermediary interfaces than independent apps, facing constraints in response speed and the challenge of conducting multiple simultaneous interactions.
In April 2022, Telegram rolled out the Mini App, granting developers complete control over user interfaces and enabling direct client-to-server communication. Mini Apps provides a more friendly user experience and enhanced composability, with seamless wallet integration and other infrastructure capabilities, making it well-suited for deploying Web3 products. Mini Apps have the potential to supplant all mobile websites.
After the launch of Mini Apps, Bots have not been relegated to obsolescence; instead, they play a “relay room” role. They serve as the primary gateway for user interactions, seamlessly connecting a series of Mini Apps.

Source: TON x Fans

Source: Lydia

Deploying a Bot or Mini App is relatively easy. Users can swiftly configure their Bot through a Q&A format on the Telegram @BotFather channel. Additionally, they can explore a virtual dining experience with a Mini App by visiting @DurgerKingBot and experiencing the setup firsthand.
Unique On-Chain Experience: A Spotlight on the TON Ecosystem
Lite Gaming
In the current landscape, where blockchain capabilities far exceed demand, the platform choice—whether it’s on Ethereum Layer2, Solana, or Binance Smart Chain—makes little difference to a game’s playability. Yet, games imbued with strong social attributes, like chess, card games, or other party games, would offer vastly different experiences when it comes to one-click sharing for team formation on Telegram or waiting for random matches with strangers on the network.
Originally an MMORPG game on Facebook, Tap Fantasy attracted over 700,000 players after venturing into Web3 on the Binance Smart Chain and Solana blockchains. By August 2023, Tap Fantasy became the premier IDO project on TonUP, the first Launchpad within the Ton ecosystem, with its token $MC achieving a sell-out in just half an hour. Come November 2023, a TON-based new version of Tap Fantasy was rolled out by Pluto, a Web3 gaming incubator. This update broke through 600,000 players in three months, with the on-chain players exceeding 16,000. A robust in-game economy propelled the value of the $MC token from a 1:5 to a 1:1 exchange rate against TON.
Catizen, a new game developed by Pluto, merges AI technology with the metaverse concept to offer a unique cat-raising experience. Its beta version was released on March 7, 2024, quickly attracting a community of over 160,000 players and 13,000 blockchain participants in merely five days. Catizen also partnered with $FISH, a leading meme within the TON ecosystem, announcing an upcoming airdrop to $FISH token holders following the conclusion of its beta testing phase.

Source: Tap Fantasy TON version dashboard

Source: Catizen dashboard

Social Inscriptions and Memes
As a novel approach to asset distribution, the expansion of the Bitcoin inscription ecosystem to multiple chains is a trending experiment. TON’s inscription ecosystem has cleverly incorporated Telegram’s front-end and native wallet, streamlining user interactions while implementing safeguards against spambots.
$NANO: As the first TON-20 inscription, it has injected the TON ecosystem with 20 million interactions and 36,000 unique minting addresses.$GRAM: Drawing its name from the Telegram Open Network’s native token, which faced regulations from the SEC, it pioneered the deployment, minting, and transferring processes via the Telegram Mini Apps.$TONOT: Breaking $NANO’s records with 61,000 unique minting addresses and 57,000 holders, TONOT facilitates transitions between inscriptions, NFTs, and tokens. Its roadmap extends to in-game currencies, decentralized identities (DID), and staking mechanisms, among other features.
Meme assets had a period of scarcity on the lesser-known TON blockchain, creating a gap in crypto awareness and interaction with TON, until Notcoin captured widespread attention.
$NOT: Notcoin plans to airdrop $NOT tokens in late March or early April. Pre-market trading for $NOT is currently active on Getgems, an NFT marketplace within the TON ecosystem.$REDO: Inspired by a sketch made by Durov, during a protest, $REDO has risen to become the meme with the highest market cap within the TON ecosystem.$FISH: Marking its place as the TON ecosystem’s first social meme, Ton Fish has amassed a community exceeding 18,000 holders.$TPET: Emerging from the Ton Fish ecosystem, $TPET fair launch is ongoing until March 26. It is positioned to be the key token for the upcoming game Ton Pet: Tik Ton, offering $FISH and NFT holders a chance to participate in an airdrop.
Multichain Liquidity Launchpad
XTON is the first launchpad to introduce multichain liquidity within the TON ecosystem, featuring team members from the TON Foundation. XTON is scheduled to finalize its mainnet launch and token sale in Q1 2024 and to kick off its first project in Q2 2024. In line with XTON’s vision, the TON ecosystem is poised to bridge the gap and facilitate bilateral traffic integration between the Web2 social networking giant and the Web3 EVM-compatible world.
Moving Toward a Future of Interconnectivity
Since March, with the announcement of Telegram using TON to process advertising revenues, Binance launching a USDⓈ-M TON perpetual contract, and Telegram seeking an IPO, the TON token, previously dormant, has swiftly achieved a notable leap in both price and on-chain activity.

Source: https://www.tonstat.com/
Reflecting on TON’s journey since its 2018 inception—from Telegram’s launch to community stewardship, the establishment of the first cross-chain bridge, to the evolution of its infrastructure—the TON ecosystem’s resilience and dynamism stand out. With a 2024 focus on stablecoins, cross-chain bridges, and expansion in the Asian market, there’s an eagerness to witness TON evolve into a genuinely open network fostering interconnectivity across various regions, ecosystems, and applications, potentially offering each participant a glimpse into the long-promised future of blockchain technology.
*Data referenced in this article is updated to March 13, 2024.
Reference
Transforming Telegram to Web3 with Toncoin – TOKEN2049 Singapore 2023Telegram Game ‘Notcoin’ Launches Pre-Market Trading Ahead of AirdropPractical Guide to Developing Telegram Bots and Mini-AppsTON’s roadmapAn In-depth Analysis of Inscriptions within TON Ecosystem

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المؤلف: لورانس لي، باحث في شركة مينت فنتشرز

أطروحة الاستثمار
شاركت شركة Gelato بشكل كبير في مجال خدمات المطورين لسنوات عديدة وقامت بتطوير مجموعة شاملة من الأدوات والخدمات للمطورين. ومن المتوقع أن تحقق تقدمًا كبيرًا في مجال الأعمال من خلال دمج هذه العروض مع منصة Rollup-as-a-Service (RaaS) التي أطلقتها الشركة مؤخرًا في نهاية عام 2023.