Dear Founders, Investors, and Friends,

It's great to have you back for the March 2026 edition of Blockwall Insights. Here's what we're covering today:

• Spiko and Amundi Launch SAFO: The Fastest-Growing Tokenized Fund in the World

• The CARI Network: U.S. Banks Build a Shared Blockchain Ledger for Tokenized Deposits

• The White House Makes Its Case for Stablecoin Yield and the CLARITY Act

• Blockwall Portfolio Update

• Key Events of the Last Few Weeks

• What We’ve Been Reading

Executive Summary

In March, Spiko and Amundi, one of Europe’s leading asset managers, launched SAFO, a tokenized fund that moves beyond simple Treasury tokenization to offer institutional-grade yield through so-called Total Return Swaps. The product reached nearly $400 million in assets under management within three weeks, outpacing even BlackRock’s BUIDL at launch. For Blockwall, this is a particularly meaningful milestone: Spiko is a portfolio company, and SAFO’s rapid adoption validates the thesis that tokenization is ready to deliver real, scalable financial products.

Across the Atlantic, five major U.S. regional banks announced the CARI Network, a shared tokenized deposit platform built on ZKsync’s Prividium, a permissioned Ethereum Layer-2. Led by Gene Ludwig, a former U.S. Comptroller of the Currency, the initiative marks a significant shift. Regulated banks are now actively building on blockchain infrastructure. What makes this especially notable is the consortium model itself. Rather than each bank issuing its own token, all five share a single interoperable token, designed to compete directly with stablecoins while remaining within the regulatory perimeter.

Meanwhile, the White House turned up the pressure on the legislative front. The Council of Economic Advisers released a report arguing that banning stablecoin yield would boost bank lending by just $2.1 billion, a mere 0.02% of total loans, while costing consumers an estimated $800 million. The same day, Treasury Secretary Scott Bessent used a Wall Street Journal op-ed to push Senate Republicans to advance the CLARITY Act. The message from the administration is unmistakable: comprehensive digital asset legislation needs to reach the president’s desk this year, and the banking lobby’s arguments are being dismantled one by one.

Spiko and Amundi Launch SAFO: The Fastest-Growing Tokenized Fund in the World

Spiko, a Blockwall portfolio company, and Amundi, Europe’s largest asset manager, launched the Spiko Amundi Overnight Swap Fund (SAFO), a tokenized fund that has quickly become the fastest-growing product in the tokenized fund space. Within three weeks of launch, SAFO reached nearly $400 million in assets under management, outpacing even BlackRock’s BUIDL at the same stage.

What is SAFO?

SAFO is a UCITS-compliant fund approved by France’s Financial Markets Authority (AMF) and managed by Amundi. Unlike most tokenized funds that simply wrap government bonds or Treasuries, SAFO uses a more sophisticated structure to generate above-risk-free yields while maintaining daily liquidity.

The mechanism works in three steps:

• Portfolio holdings: The fund invests in major publicly traded company shares from indices like the MSCI World, S&P 500, and STOXX Europe 600. Assets are held in custody with CACEIS Bank, a subsidiary of Crédit Agricole.

• Total Return Swap: The fund enters a Total Return Swap (TRS) agreement with BNP Paribas. Under this contract, the fund’s daily portfolio performance is passed to the bank.

• Guaranteed yield: In return, BNP Paribas pays a predetermined daily yield consisting of the risk-free rate plus a fixed spread, currently above 0.25% for euros, US dollars, and British pounds, and around 0.15% for Swiss francs.

The result is a product that behaves like an enhanced cash instrument: predictable yield, daily liquidity, no lock-ups, and full regulatory oversight under the UCITS framework.

Who is it for?

SAFO is designed for corporates, institutional investors, and individuals looking for returns above risk-free rates without sacrificing liquidity or regulatory protection. Available in four currencies (euros, US dollars, British pounds, and Swiss francs), it targets use cases ranging from corporate treasury management to digital asset businesses looking to put idle capital to work productively.

Why does it matter?

The speed of SAFO’s growth is the most telling signal. Reaching nearly $400 million in AUM within three weeks, with over 700 unique holders in the first week alone, demonstrates that there is significant unmet demand for tokenized yield products that go beyond basic Treasury wrappers. The fact that a European startup, working with Europe’s largest asset manager, has outpaced BlackRock’s flagship tokenized product at launch suggests that the center of gravity in tokenized finance may be more distributed than many assumed.

The CARI Network: U.S. Banks Build a Shared Blockchain Ledger for Tokenized Deposits

A few weeks ago, multiple major U.S. regional banks announced the CARI Network, a consortium for tokenized deposits built on ZKsync's Prividium, a permissioned Ethereum Layer-2. The five founding members collectively hold nearly $780 billion in assets, and the initiative is led by Gene Ludwig, a former U.S. Comptroller of the Currency.

What are tokenized deposits?

Unlike stablecoins, which are issued by non-bank entities and backed by reserves, tokenized deposits are digital representations of cash that sit directly on a bank’s balance sheet. They remain direct liabilities of the issuing bank, fully integrated with existing banking systems and regulatory frameworks. In practical terms, a tokenized deposit on the CARI Network functions like a regular bank deposit. It is insured, regulated, and backed by the bank. But it moves on blockchain infrastructure with the speed and programmability that entails.

How does the CARI Network work?

What makes the CARI model distinctive is its shared token architecture. Rather than each bank issuing its own distinct tokenized deposit, all five institutions share a single interoperable token. A Huntington customer and a KeyBank customer holding CARI tokens hold the same token, making peer-to-peer and business-to-business transfers seamless regardless of which bank each party uses.

The underlying technology, ZKsync’s Prividium, is a private, permissioned Layer-2 network anchored to Ethereum. The system inherits Ethereum’s security and settlement guarantees while maintaining the privacy and access controls that regulated financial institutions require.

Why does it matter?

The CARI Network is significant on multiple levels.

First, it represents one of the clearest signals yet that U.S. banks are moving from exploratory blockchain pilots to production infrastructure. These are major regional institutions with nearly $800 billion in combined assets, building a shared ledger they intend to operate commercially by year-end.

Second, the consortium model is explicitly designed to compete with stablecoins. As stablecoin adoption grows, and as the CLARITY Act debate sharpens the question of how digital dollars should be regulated (more on that later), banks are positioning tokenized deposits as the regulated alternative: same speed, similar programmability, but with deposit insurance and bank-grade compliance. This for example stands in contrast to Qivalis, the first European consortium working together on a EUR stablecoin that includes players such as BNP Paribas, ING, and Deka.

Third, the choice of infrastructure is telling. Building on a permissioned Ethereum Layer-2, rather than a fully proprietary or private chain, signals a pragmatic convergence between traditional banking and public blockchain technology. The banks have chosen to build on top of crypto-native infrastructure and adapt it to their regulatory reality.

The question now is whether the consortium model, and the network effects it promises, can scale quickly enough to compete with the growing stablecoin ecosystem. The commercial rollout in Q4 2026 will be the first real test.

The White House Makes Its Case for Stablecoin Yield and the CLARITY Act

Last week, the White House Council of Economic Advisers (CEA) released a 21-page report arguing that banning yield on stablecoins would do little to support bank lending while imposing measurable costs on consumers. The same day, Treasury Secretary Scott Bessent published a Wall Street Journal op-ed pushing Senate Republicans to advance the CLARITY Act, the comprehensive digital asset market structure bill that has become the administration's top legislative priority in the space.

What did the CEA report find?

The report, calibrated using Federal Reserve and FDIC data on deposits, lending, and bank liquidity, challenged the banking industry’s core argument against stablecoin yield. Banks have warned that if stablecoins offer competitive returns, deposits would shift out of the traditional system, reducing lending capacity, particularly at smaller community banks.

The CEA’s findings undercut that argument directly:

• Minimal lending impact: Banning stablecoin yield would increase bank lending by approximately $2.1 billion, just 0.02% of total bank loans.

• Significant consumer cost: The ban would cost consumers an estimated $800 million, implying a cost-benefit ratio of 6.6. In other words, the cost to consumers would be more than six times the benefit to bank lending.

• Reserve recycling: Most stablecoin reserves are parked in Treasuries that cycle back into the banking system anyway, limiting the net impact on deposit availability.

Why is the White House pushing so hard?

The CLARITY Act is the legislation that would establish a comprehensive regulatory framework for digital assets in the U.S. It would grant the CFTC exclusive jurisdiction over digital commodity spot markets while maintaining SEC authority over investment contract assets. For the industry, it represents the most significant potential regulatory milestone in years: clear rules of the road that would unlock institutional participation at scale.

The stablecoin yield question has been the primary political obstacle. The GENIUS Act, a narrower stablecoin-focused bill, bans issuers from paying interest directly but leaves open a workaround via intermediaries. Banks have lobbied to close that workaround in the CLARITY Act, warning of deposit flight. The White House report is a direct response to that lobbying effort.

Where does this leave us?

On Polymarket, the CLARITY Act currently has a ~47% chance of passing this year. Failure to advance it out of committee before May could severely imperil its prospects before the November 2026 midterms. The clock is ticking.

Blockwall Portfolio Update

Following the Spiko update above, we are excited to share that our portfolio company Kulipa recently announced its $6.2 million seed round, co-led by Flourish Ventures and 1kx, with participation from White Star Capital, Fabric Ventures, and Blockwall. We committed to the round last year and are glad to see it come together with such a strong group of co-investors. The round brings Kulipa’s total funding to $9.2 million.

Kulipa builds the infrastructure that lets fintechs and crypto wallets issue white-label stablecoin payment cards. In simple terms, Kulipa handles all the complexity behind the scenes, from payment processing and fraud management to settlement and compliance, so that wallet providers can offer their users a card that spends stablecoins at any merchant terminal, online checkout, or via Apple Pay and Google Pay. Since launching its infrastructure in early 2025, Kulipa has issued over 120,000 cards across 20 customers.

We are proud to support Kulipa in their mission to bridge the gap between self-custody wallets and everyday payments. As stablecoins become a core settlement layer, making them spendable at the point of sale is an essential piece of the puzzle. For our full investment thesis on Kulipa and the future of direct digital payments, see our post here.

Key Events of the Last Few Weeks

1. Mastercard acquires BVNK for $1.8 billion. The payments giant purchased the stablecoin infrastructure company that helps businesses connect traditional banking rails with blockchain networks. The deal follows a failed attempt to acquire Zerohash a few months earlier and signals how strategically important stablecoin infrastructure has become for incumbent payment networks. (Source: Mastercard)

2. Credit Agricole prepares euro stablecoin launch. Europe’s second-largest banking group, managing €2.4 trillion in assets, is reportedly structuring a euro-denominated stablecoin with a launch expected this summer. (Source: Blockstories)

3. Tether signs Big Four firm for audit. The engagement would mark the first full independent financial audit for the world’s largest stablecoin issuer, a milestone the industry has been waiting on for years. (Source: Tether)

4. BNP Paribas now offers crypto ETPs. French clients of Europe’s largest bank can now invest, through their brokerage accounts, in six ETNs tracking the price of Bitcoin and Ether. (Source: BNP)

5. SoFi launches Big Business Banking. The new offering enables enterprise partners to manage both fiat and crypto banking through a single nationally chartered bank. SoFi serves 13.7 million members and holds over $50 billion in assets. Initial participants include firms like Cumberland, Fireblocks, Galaxy, and Mastercard. (Source: Businesswire)

6. Bitpanda launches Vision Chain. The Layer-2 network provides banks and fintechs with infrastructure to issue and settle tokenized assets under EU frameworks such as MiCA and MiFID II. Interestingly, transaction fees are paid in regulated EUR stablecoins. (Source: Bitpanda)

7. Ramp introduces Stablecoin Accounts. Customers of one of the fastest-growing money operations platforms can now hold stablecoins, earn rewards on their balances, and pay vendors and employees worldwide. The feature remains in public beta. (Source: Ramp)

What We’ve Been Reading

1. The Liquidity Illusion: Private Credit’s Reckoning and the On-Chain Answer (Blockwall) — A deep dive into the structural flaws of private credit funds exposed by BlackRock’s HLEND withdrawal cap and the MFS collateral fraud, and why blockchain infrastructure is the answer. For the full analysis, see the Blockwall Insights Substack.

2. Beyond Dollarization: The Rise of Local Currency Stablecoins (Dune x Visa) — While USD stablecoins dominate the headlines, a second wave of local currency stablecoins is quietly gaining traction. This report maps the on-chain data behind non-USD stablecoins across payments, FX, treasury, and DeFi, covering EUR, BRL, JPY, and SGD. For the core insights, see Dominic's LinkedIn post.

3. Agentic Finance and Stablecoins (Dynamic / Fireblocks) — A great overview of the emerging agentic payments landscape, its current state of adoption, and how crypto fits into the underlying technology stack.

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

Innovation in robotics is surging like never before. Figure recently introduced their Figure 03 humanoid robot designed for both household and commercial applications. It can do some household tasks like folding clothes and loading a dishwasher, but it’s not perfect yet. Tesla is operating Optimus humanoid robots in limited internal pilot programs on factory floors. Autonomous drones and legged robots are increasingly explored for hazardous inspection tasks, such as inspecting power grids. At the same time, companies like Unitree Robotics and tactile (sense of touch) technologies like FlexiTac are aiming to navigate messy homes, staying safe around pets and children, and assisting with everyday chores. Intelligent robots, once ready, will emphasize general intelligence and situational awareness, recognizing, for example, that a spilled glass of water needs attention without explicit instruction.

Investors are allocating significant capital toward the technology stack expected to underpin the next generation of robotics hardware. In January 2026, Skild AI raised $1.4 billion in a Series C round at a valuation of $14 billion to scale its universal robotic foundation model, while Figure AI raised more than $1 billion in its 2025 Series C round at a post-money valuation of $39 billion to expand humanoid manufacturing capacity and industrial deployments. Apptronik extended its Series A to $935 million, and NEURA Robotics added €120 million in its Series B financing, highlighting a growing consensus that Physical AI is emerging as a strategic foundation for both consumer and industrial robotics.

Are we at the inflection point for intelligent robotics adoption?

The acceleration we are seeing in this area is the result of a convergence of technologies. For decades, the building blocks were being developed separately i.e., advanced AI algorithms, high-fidelity sensors, manipulators, and real-time control systems. Only recently have these pieces started to fit together, enabling robots that can perceive, reason, and act effectively in real-world environments. Here’s a breakdown of the key categories driving this “Robotics Inflection Point”:

The Economics: Hardware is finally commoditized. In the past, robots were expensive because every part was custom-made. Now, they are benefiting from the Consumer Electronics and EV (Electric Vehicle) supply chains.

• Actuators: High-torque humanoid actuators were historically expensive, often costing $1,000+ per joint in low-volume industrial systems. New vertically integrated designs from companies such as Tesla and Unitree Robotics are pushing some actuator component costs into the hundreds of dollars.

• Sensors: The cost of LIDAR and depth cameras has dropped dramatically over the past decade. High-end units that once cost around $10,000 can now be found for a few hundred dollars, thanks to advances in solid-state designs, mass production, and adoption in automotive and mobile devices.

• Batteries: Massive global investment in electric vehicles has driven down the cost of high‑density lithium‑ion batteries and improved their reliability, allowing many robots to operate for 2–4 hours on a single charge.

Edge Computing: Robots must process information locally because real-time control tasks, like balancing or catching objects, cannot tolerate network delays. Edge chips like NVIDIA’s Jetson Thor are designed to run AI inference on-board, processing multiple sensor streams simultaneously. This lets robots process and track their environment locally, enabling rapid responses to changing conditions without depending on a network connection.

The “Brain” Breakthrough (AI Models): This is the biggest change. We moved from “if/then” programming to “World Models”. A world model is an AI model that watches videos and learns how the real world works. Instead of programming a robot to “turn the doorknob,” we show it 10,000 videos of operating doors. The AI builds a mental map of how physics works by simply observing the videos. This allows the robots to develop physical intuition and mentally simulate a scenario before taking an action. If a model can learn how objects move and react by watching videos, it can later use that learning to handle specific tasks like finding its way in a warehouse or folding laundry. Google Deepmind Genie 3 and NVIDIA Cosmos are two leading examples of this new class of world models.

Bottomline: Cheap Robotics Hardware + Powerful Chips + AI Models = Democratisation of Intelligent Robotics.

While these machines are becoming more intelligent, the cost continues to decline e.g. Noetix Bumi (USD 1400) robot now costs approximately same as an iPhone 17 Pro Max. The convergence of falling hardware costs, better AI chips, and more capable world models is creating more accessible intelligent robotics and expanding development beyond deep‑tech labs.

If the ChatGPT moment for robotics arrives in the near future, we will most likely see industrial and logistics deployments first before true household humanoids. While many challenges remain before intelligent robotics is truly democratized, a rational optimist would recognize that the trends are pointing toward a future where widespread adoption is increasingly possible.

Major software breakthroughs usually follow hardware breakthroughs. Instagram and TikTok only became possible once the necessary hardware existed. If intelligent robotics hardware reaches mass availability in the near future, it raises an interesting question: will robotic apps be the next wave?

What are the current challenges slowing down the momentum?

Robotics Training Data: This is the ultimate bottleneck for general-purpose intelligent robotics. Unlike text-based AI, which can scrape the entire internet, robots need real-world experience, feeling forces, balancing, and interacting with objects, etc. Collecting this kind of data is slow, expensive, and labor-intensive.

The “Physicality” Problem: Watching videos can’t fully teach a robot how to manipulate objects or move safely, it must experience forces and contact firsthand. Teleoperation, where a human guides the robot in real time, captures both intent and force and serves as the gold standard for data collection. Producing hundreds of hours of high-quality data, like Unitree’s 340-hour release, requires a human operator present the entire time, making it far less scalable than digital data collection. Here is a video from the dataset showing a teleoperation training where a robot is sorting fruits by placing the watermelon in the pink plate, the banana in the yellow plate, and the avocado in the green plate.

Sim-to-Real Gap: Simulation can generate vast amounts of data cheaply, but robots often fail when transferring skills to the real world due to unmodeled physics or unpredictable environments.

Onchain Machine Economies

The combination of blockchain and robotics offers a practical solution to robotics current challenges. Token incentives can help coordinate millions of robots and reward contributors who remotely operate devices or share sensor data. Each interaction becomes a valuable data asset, building a fast-growing, community-owned robotics dataset that scales beyond any single company.

Tokenizing the Data Collection

Robotics data is extremely valuable, but real-world sensory and interaction data is scarce, making it a rare resource for AI training. Large companies collect massive amounts of driving and industrial data through their fleets, giving them a scale advantage that independent developers generally cannot match.

Decentralised Physical AI aims to change this by allowing users to remotely pilot robots or contribute sensor data from their devices, with token incentives for valuable contributions. Instead of a single company hiring hundreds of operators, a decentralized network can coordinate thousands of hobbyists globally. Contributors who help a robot navigate tricky surfaces or unusual conditions can upload that data and earn rewards. While these platforms are still early, they point toward a future where robotics data could be shared more broadly, reducing the dominance of a few large corporations.

Robots as Economic Agents

In a Robot-as-a-Service model, intelligent robots themselves could be “tokenized” assets. Each robot (or a fraction of its usage time) could be represented by a digital token, allowing multiple users to own, lease, or share access to it. Payments for the robot’s services, whether delivering packages, performing maintenance, or farming, could be made in tokens or stablecoins directly to the robot’s wallet. This setup enables autonomous revenue generation, where the robot earns for its work, covers its own operational costs like energy or software updates, and distributes profits automatically to token holders. Essentially, a web3 protocol that turns robots into programmable, self-sustaining service providers with transparent and trackable earnings.

Physical AI Market Map

The boundary between digital intelligence and physical action is dissolving as a new wave of intelligent machines learns to navigate and understand the messy reality of our three-dimensional world.

At the heart of this revolution are the AI Models, the sophisticated brains developed by companies like Physical Intelligence, and Skild AI that move beyond static code to provide general-purpose intelligence for various physical forms. These models allow robots to treat agility and mobility as software problems, enabling a single unified “brain” to inhabit multiple types of robotic bodies. This intelligence layer is supported by the simulation platforms and data pipelines, such as those provided by Zeromatter, which allow for the safe training of systems in virtual environments before they are deployed in the real world.

Parallel to the advancement of robotic brains is the rise of Decentralised Physical AI, a sector that moves away from monolithic control toward open, shared ecosystems, e.g., the Fabric Protocol, a decentralized infrastructure network is being built that provides autonomous robots and AI agents with on-chain identities and crypto wallets. It uses cryptographic proofs to verify machine work and coordinate complex tasks through an open, public ledger. The native token powers the network, serving as the primary currency for service fees, operator staking, and governance.

Companies like Auki, Peaq, and IoTeX are building a “machine economy” where robots can share 3D maps, verify data, and even transact autonomously for services. This decentralized approach ensures that the spatial data and coordination layers required for global robotics operations are not controlled by a single corporate gatekeeper but are instead accessible through a transparent and verifiable infrastructure.

The practical application of these technologies aims to transform the industrial and consumer sectors. In the industrial realm, autonomous construction equipment from Bedrock Robotics and warehouse automation from Mytra are redefining labor, while inspection robots from ANYbotics handle routine maintenance in hazardous environments. Simultaneously, the consumer market is nearing a breakthrough in domestic help with the development of humanoids by Figure and Unitree.

The 2030 Vision

Through the lens of a rational optimist, the stage is set for a robotics renaissance. We are witnessing the convergence of four unstoppable forces: hardware costs are plummeting, AI models are scaling in intelligence, edge-compute chips are delivering unprecedented local power, and the “data problem” could be solved at scale by the industrial workforces of global manufacturing hubs. By 2030, this synergy will push Physical AI into every corner of our world, from autonomous farming to the high-stakes demands of firefighting and elder care.

History shows that transformative software innovation usually follows hardware stabilization. We might see the era of “Rented Intelligence” where standardized humanoids will run a standard operating system with an integrated app store. Much like the smartphone revolution before it, the coming years will be defined by a “Robot App Store” where you subscribe to skills rather than buying specialized devices. In this model, the value shifts from the machine itself to the specific "skills" it can execute. You won’t need to buy a specialized French language tutor robot, you will simply download a “French Language Skill App” to your general-purpose humanoid, and it will become a French language teacher. By the end of this decade, the premier holiday gift for the person with resources will no longer be a flagship folding smartphone, but a household companion that actually helps run the home.

This forecast is built on the pillars of my own "rational optimism," but the future is rarely a straight line. I am eager to have these assumptions challenged and want to hear your perspective, especially if it contradicts mine. Do you see a bottleneck I’ve missed, or a different reality for the "App Store" of robotics? Please share your thoughts in the comments; I’m looking forward to being challenged on my assumptions.

Call for Physical AI Startups and Experts: We’re looking to engage with startups and experts in Physical AI domain. If you’re pioneering advancements in this area, we encourage you to reach out. Connect with us on LinkedIn or reach out via email at syed@blockwall.vc

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

Dear Founders, Investors, and Friends,

It’s great to have you back for the February 2026 edition of Blockwall Insights. We apologize for the slight delay in getting this to you. The past few weeks have been packed with a full calendar, but we’re glad to finally have it in your hands. Here’s what we’re covering today:

1. TradFi’s DeFi Moment: BlackRock, Apollo, and Citadel Go Onchain

2. The Rise of Agentic Commerce: When AI Agents Become Economic Actors

3. Luxembourg Opens the Door: Crypto Enters Europe's UCITS Framework

4. Blockwall Portfolio Update

5. Key Events in February

6. What We’ve Been Reading (and Listening)

Executive Summary

In February, major financial players surprised with major moves in the decentralized finance space. BlackRock, Apollo, and Citadel all partnered up with onchain protocols and even invested in their governance tokens, signaling that the world's largest asset allocators increasingly view decentralized infrastructure as the next layer of financial markets.

Meanwhile, “agentic commerce” gained serious momentum. Stripe, Circle, Mastercard, and Santander all made moves to build infrastructure for a future in which AI agents transact and participate in the economy autonomously. The numbers are still small, but the convergence of AI and crypto rails is shaping up to be one of the most consequential verticals of the next decade.

On the regulatory front, Luxembourg's CSSF delivered a landmark update by allowing UCITS investment funds to allocate up to 10% to crypto assets. Given that Luxembourg administers roughly €5 trillion in UCITS assets and serves as the gateway for fund distribution across 30+ European countries, this is another major step toward crypto becoming part of the institutional investment toolkit across Europe.

At Blockwall, we see these developments as a powerful confirmation of our core thesis: the convergence of traditional finance, decentralized infrastructure, and emerging technologies like AI is already well underway.

TradFi’s DeFi Moment: BlackRock, Apollo, and Citadel Go Onchain

In February, several of the world's leading financial institutions took a decisive step closer to DeFi by deploying real capital into real onchain protocols.

First, BlackRock listed BUIDL, its tokenized money market fund, on Uniswap. This marks the first time the instrument is tradable on a decentralized exchange. While trading is still limited to qualified purchasers with $5 million or more in investable assets, BUIDL’s infrastructure provider Securitize hinted that retail access may follow.

So for now, think of it as a “stress test”: real institutional capital flowing through DeFi rails, testing 24/7 settlement between stablecoins and yield-bearing traditional assets. And if history is any indication, BlackRock's entry might mark the moment others will feel comfortable following.

Another interesting detail to the announcement was BlackRock's disclosure that it has purchased an undisclosed amount of Uniswap's governance token UNI, which can be seen as a direct bet on the protocol itself.

BlackRock wasn’t the only one investing into DeFi. A few days later, $900 billion asset manager Apollo announced an agreement to purchase 90 million MORPHO tokens — the native token of leading lending platform Morpho — over the next four years. The purchase represents roughly 9% of the token's total supply. Beyond the token acquisition, Apollo and Morpho said they will collaborate on lending markets built on Morpho's protocol. In practice, this means Apollo may soon develop its own onchain investment products using Morpho's infrastructure, following the path of crypto-native asset manager Bitwise.

And there was more. Alongside the announcement of its own blockchain network, leading cross-chain protocol LayerZero revealed strategic partnerships with the likes of DTCC, Citadel, and ARK Invest. As part of the collaboration, both Citadel and ARK disclosed investments into LayerZero's ZRO token.

Now, what’s really interesting about these headlines is the choice of tokens. While for LayerZero, it remains unclear whether value generated by the underlying infrastructure will ultimately accrue to the token holder or to the equity holders of the developing entity, both Uniswap and Morpho are committed to flowing all protocol value to their respective tokens. This is a significant distinction.

What we're seeing, in essence, is tokens becoming equity-like instruments. And going forward, the protocols that clearly define how value accrues to the token, rather than leaving it ambiguous, are likely to attract the most institutional attention. That dynamic could reshape how the entire market thinks about token valuation.

The Rise of Agentic Commerce: When AI Agents Become Economic Actors

Another topic that dominated headlines in recent weeks was agentic commerce. And for good reason.

In essence, the term describes a future in which AI agents become full economic actors with the ability to buy goods and services. In this model, agents execute transactions on behalf of users, whether that’s paying for food delivery or managing subscriptions. In more advanced scenarios, they operate fully autonomously, initiating and completing transactions without any human involvement.

And in the last weeks, major announcements around this sector came in quick succession:

• Stripe devoted an entire section in its annual letter to the emerging vertical, framing it as a generational shift comparable to the early days of the internet and committing to further develop its existing product suite to support agent-driven commerce.

• Circle, in its recent earnings call, identified finance around AI agents as a major catalyst for the company's growth.

• And on the more traditional side, Santander and Mastercard completed Europe's first live end-to-end payment executed by an AI agent.

The trend is clear: both traditional and crypto-native players are building the infrastructure that allows AI agents to transact, make payments, and participate directly in the digital economy.

Given the scale of the opportunity, these moves shouldn't come as a surprise. According to McKinsey, AI agents could mediate $3 to $5 trillion in global retail commerce by 2030. That would represent a majority of today's global e-commerce market, which stands at around $6.4 trillion.

But, looking at the current numbers, the vertical is still firmly in experimentation mode. Since October last year, x402, the leading payments protocol for agents developed by Coinbase, has processed transactions worth roughly $14.5 million. The dominant use cases so far involve agents paying for digital resources such as API access, data feeds, compute, and AI-generated content.

Still, the kinds of innovation this is likely to unlock further down the road can already be seen today. Take Felix, an autonomous agent that generated roughly $70,000 in 30 days by building and selling digital products. Or Kelly Claude, an agent that develops iOS apps end-to-end, from ideation to App Store submission. What we’re witnessing is the early emergence of an economy by AI agents, for AI agents.

We at Blockwall are very excited about this vertical. It is the perfect encapsulation of our thesis around the convergence of technologies, where crypto infrastructure provides the financial rails and AI provides the intelligence. We'll continue to keep a close eye on this space.

Luxembourg Opens the Door: Crypto Enters Europe’s UCITS Framework

Before we share our portfolio update, let’s highlight a major regulatory development that carries significant weight for crypto as an asset class.

In early February, Luxembourg’s financial regulator CSSF published a landmark update to its rules on crypto-assets for investment funds. For the first time since banning crypto exposure in 2018, the CSSF now allows UCITS, Europe’s most widely used retail fund structure, to allocate up to 10% of their portfolio to crypto-assets. The exposure must come through eligible securities, such as Exchange-Traded Products (ETPs).

To appreciate the significance of this move, consider the facts:

• Luxembourg is the largest fund domicile in Europe, administering roughly €5 trillion in UCITS assets out of approximately €34 trillion across the continent.

• A fund approved in Luxembourg can be distributed to retail investors in more than 30 countries through a single passport.

• Thus, when the CSSF revises the rules for UCITS, it tends to shape the direction of the broader European market.

This matters for several reasons. First, multi-asset funds can now include a crypto allocation within their existing mandates without needing separate vehicles. Second, the implications for retail access are substantial. Once crypto exposure sits inside a UCITS wrapper, retail clients can gain access to crypto through the same banking interface they already use for savings and investments. That’s a fundamentally different distribution channel than standalone crypto products.

The provision also allows regulated stablecoins to be used for processing fund subscriptions and redemptions. This removes a key friction point and opens the door for fund servicing infrastructure to become more digital.

Overall, this is a major development for our industry, one that pushes crypto further into the universe of investable assets.

Blockwall Portfolio Update

In February, our portfolio company Spiko crossed $1 billion in assets under management across its tokenized money market funds.

With that milestone, Spiko now trails only BlackRock’s BUIDL (roughly $2 billion) and Circle’s USYC (around $2.1 billion) in the tokenized MMF space, ahead of established players like Franklin Templeton (roughly $600 million).

This also makes Spiko the only European issuer in this group and the fastest-growing among them. Today, Spiko serves over 3,600 active clients across more than 20 countries, with both AuM and user numbers growing over 15% month over month.

With this momentum, we can’t wait to see what Paul-Adrien, Antoine, and the team will achieve in the months and years ahead.

For more figures on Spiko’s recent growth, please see this blog post.

Key Events in February

1. ICE integrates Polymarket data. The New York Stock Exchange (NYSE) operator now provides institutional clients with prediction market data and analytics. The integration follows ICE’s $2 billion investment in Polymarket in October last year. (Source: BusinessWire)

2. ICE expands crypto push with investment in OKX. In another move, the exchange operator invested in crypto exchange OKX at a $25 billion valuation. As part of the agreement, OKX will provide ICE with real-time crypto price feeds for U.S.-regulated crypto futures. The partnership also gives ICE access to OKX’s roughly 120 million global users and lays the groundwork for future products, including tokenized NYSE equities, with launches targeted for 2026. (Source: ICE)

3. Boerse Stuttgart Digital and tradias announce merger. The combination consolidates two of Germany’s most prominent digital asset infrastructure providers under one roof. (Source: Bloomberg)

4. Y Combinator adds stablecoin-based funding. Startups accepted into the prominent U.S. incubator can now choose to receive their $500,000 funding in stablecoins. (Source: Y Combinator)

5. Meta explores stablecoin comeback. The tech giant is evaluating how to integrate stablecoin payments across its family of apps and has issued a request for proposals to third-party firms, with Stripe cited by CoinDesk as a leading pilot partner. (Source: CoinDesk)

What We’ve Been Reading (and Listening)

1. Digital Transformation & Next-Gen Technology Study 2026 (Broadridge) — A study examining how financial institutions are accelerating digital transformation through AI, tokenization, and modern infrastructure. For the core insights, see Dominic’s LinkedIn post.

2. Quantum Computing: How Safe Is Your Bitcoin? (Unchained) — A podcast with a Bitcoin core developer exploring how the development community thinks about and actively works on solving the quantum threat. For the core insights, see Dominic’s LinkedIn post.

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

On March 6, 2026, that forcing function arrived.

BlackRock announced it was capping withdrawals from its $26 billion HPS Corporate Lending Fund (HLEND) for the first time in the fund’s four-year history. Investors had submitted redemption requests totalling 9.3% of the fund’s net asset value, roughly $1.2 billion. BlackRock honoured only $620 million of those requests, enforcing its contractual 5% quarterly cap and turning away nearly half of the capital seeking the exit. Its stock fell 7% that day. Shares of KKR, Ares, and Apollo fell 5–6% in sympathy. The market, in its blunt way, was repricing a structural risk that had been building quietly for years, and the HLEND gate was the clearest signal yet that distributing private credit to millions of individual investors without fundamentally reimagining its infrastructure was always going to end this way.

The Structural Problem: Selling Illiquidity as Semi-Liquid

Private credit has had an extraordinary run. From roughly $500 billion in assets under management a decade ago, the market has grown to nearly $2 trillion globally, with projections toward $3 trillion by 2028 according to Moody’s. Banks retreated from corporate lending following post-crisis regulation, creating a gap that alternative lenders filled with direct loans to mid-market companies at floating rates and attractive spreads. For institutional investors, the maths were compelling. For individual investors who piled in through non-traded BDCs (Business Development Companies) and interval funds, the product was framed, sometimes loosely, as semi-liquid income. That framing contained a structural tension that good markets tend to ignore until they can’t.

The loans inside HLEND are typically multi-year instruments extended to mid-market companies that cannot access public bond markets, bilateral, lightly reported, and priced by internal models rather than observable market data. When 9.3% of investors simultaneously decide they want their money back, triggered by AI-disruption anxiety, geopolitical volatility, and the cascading psychology of seeing peers head for the exit, the fund faces an impossible task: providing quarterly liquidity from assets that require years to mature.

Academic finance has a name for this: a liquidity transformation problem, as old as banking itself. Brunnermeier and Pedersen’s foundational work on market and funding liquidity showed that when asset illiquidity and funding fragility coincide, the resulting spiral amplifies losses far beyond what underlying fundamentals justify. The private credit BDC structure of 2026 has replicated precisely this tension, dressed in a new wrapper, distributed to a new investor class, and called it semi-liquid.

The Bank for International Settlements (BIS), in a recent bulletin on retail investors in private credit, put the dilemma plainly: BDCs and private credit ETFs marry shares traded in a liquid market to illiquid underlying assets that barely trade, and this mismatch could produce steep, persistent discounts in periods of stress. The BIS also flagged that BDCs’ debt-to-equity ratios, increasingly supported by bank credit lines, have tripled over the past 15 years, raising concerns about potential spillovers from non-bank financial intermediaries back into the banking system. That linkage matters more than it might appear, as the MFS collapse has since demonstrated.

The core problem is not that private credit funds gate withdrawals. A multi-year illiquid loan book was sold, at scale, to investors who believed they could exit within a quarter if the world changed.

HLEND is far from alone. BDC redemptions in the Cliffwater index rose from 1.6% in Q3 2025 to 4.8% in Q4 2025. Blue Owl has permanently closed the redemption window in at least one fund, converting it to a run-off vehicle. Blackstone avoided gating its BCRED only by injecting $400 million of firm and employee capital, an extraordinary step that bought confidence without addressing the underlying mechanics. Goldman Sachs estimates roughly $220 billion sits in retail-focused evergreen private credit funds, about 20% of the industry’s total lending exposure, and these are precisely the vehicles driving the current stress. The IMF’s 2025 Financial Stability Report found that around 40% of private credit borrowers now have negative free cash flow, up from 25% in 2021. Credit quality is quietly deteriorating at the exact moment investors are discovering the limits of the liquidity they thought they had.

The Opacity Problem: When You Can’t See the Collateral

The liquidity mismatch is the headline. The opacity problem is the more dangerous rot underneath, and the collapse of UK mortgage lender Market Financial Solutions (MFS) illustrates just how far it can spread.

MFS, a Mayfair-based bridging lender, was put into administration in late February 2026 amid creditor accusations of double-pledging its collateral. The shortfall in collateral backing loans to MFS entities is estimated at up to £930 million. Multiple lenders, including Barclays, Santander, Jefferies, TPG, and Apollo’s Atlas SP Partners, had extended hundreds of millions to the failed mortgage lender, each believing they held secured positions on real assets. The Bank of England’s (BoE) Prudential Regulation Authority is now grilling lenders, including Barclays, which had accumulated roughly £600 million in exposure to the MFS group, over whether they carried out sufficient risk assessments before extending those loans. The BoE has also announced the world’s first major stress test of the private capital market, the System-Wide Exploratory Scenario, explicitly in response to the back-to-back failures of MFS, Tricolor, and First Brands.

The fraud propagated not just among direct lenders but upstream through the banking system itself, via the credit lines that private credit funds routinely use to manage their own liquidity.

Context matters here too. A large part of MFS’s business involved backing property deals linked to a former land minister in Bangladesh who built a $295 million property portfolio in the UK before fleeing when the government collapsed in August 2024. The National Crime Agency froze 342 linked properties in June 2025. The red flags were visible. The infrastructure to act on them, and to prevent those same assets from being pledged multiple times simultaneously, simply did not exist.

The bankruptcies of US auto parts supplier First Brands and subprime auto lender Tricolor in late 2025 followed the same pattern: bilateral deals, lightly filed, with off-balance sheet liabilities invisible to investors until the bankruptcy judge opened the books.

Private credit’s opacity is not a bug that bad actors exploit. It is a structural feature of an industry that grew from a cottage market to a $2 trillion system without ever rebuilding its verification infrastructure.

What the Solution Needs to Do

Any infrastructure capable of addressing private credit’s structural vulnerabilities must satisfy at least four requirements.

1. Eliminate double pledging through cryptographic ownership. Collateral represented on-chain as a unique token cannot be simultaneously pledged elsewhere. The blockchain’s consensus mechanism enforces a single source of truth about ownership, replacing trust-based verification of off-chain registries with deterministic, mathematically enforced validation.

2. Create tranched, programmable liquidity. The BDC crisis stems from treating an illiquid loan pool as a fungible redemption vehicle. On-chain securitisation solves this by slicing the asset pool into tranches with explicitly encoded, immutable liquidity terms: senior tranches offering quarterly windows with priority claims on cash flows, junior tranches carrying longer lock-ups and higher yields. The terms are embedded in smart contracts rather than buried in a 200-page prospectus, so the liquidity a product promises is precisely the liquidity it can deliver. A tranche whose liquidity terms are encoded in an immutable smart contract cannot be gated.

3. Enable real-time collateral visibility. When loan-level data is recorded on-chain, investors can observe pool performance continuously rather than quarterly. NAV marks become verifiable rather than discretionary. Signs of stress, rising non-accrual rates, covenant breaches, LTV deterioration, surface when they occur rather than at the next reporting cycle. The SEC has launched investigations into valuation practices at major private credit managers; on-chain data would make those investigations largely redundant, because the data would already be public, timestamped, and immutable.

4. Break the back-leverage contagion chain. On-chain collateral registries enforce a single, publicly verifiable ownership record per asset: once an asset is tokenised and locked at origination, it cannot be pledged to any second counterparty until the original claim is fully discharged. The problem MFS exposed is simpler and older: the same physical asset pledged independently to multiple unrelated lenders, none of whom knew the others existed, with bank exposure travelling not just through direct lending but through the revolving credit lines extended to private capital groups who then on-lent. Blockchain removes the information asymmetry that made the fraud possible, structurally rather than through better due diligence.

Why Now Is Different

The tokenisation thesis for private credit is not new: KKR tokenised a healthcare fund on Avalanche in 2022, Hamilton Lane tokenised its SCOPE fund on Ethereum and Polygon in 2023, and Figure Technologies has tokenised over $10 billion in HELOCs.

The FSB’s revised guidance on liquidity management in open-ended funds already requires responsible entities to ensure their liquidity tools match the structural illiquidity of the underlying portfolio. The BoE’s System-Wide Exploratory Scenario is the first time a major central bank has directly stress-tested the private capital market as a potential source of systemic risk. The direction of regulatory travel is unambiguous: alignment between what a product promises and what it can structurally deliver is no longer optional. On-chain tranching provides that alignment by design rather than by disclosure.

The private credit industry has borrowed the language of accessibility, quarterly windows, monthly subscriptions, semi-liquid, without borrowing the infrastructure that makes genuine liquidity possible. Blockchain provides that infrastructure. The moment to deploy it seriously is when the cost of not doing so becomes visible.

If the $2 trillion private credit market moved even 10% of its loan book on-chain, $200 billion in assets would be tokenised. If on-chain structures reduced intermediary costs, currently estimated at up to 5% of transaction value in traditional securitisation, by even half, the savings on that pool alone exceed $5 billion per year. More importantly, the opacity losses from MFS, First Brands, and Tricolor, which collectively wiped tens of billions in investor and counterparty value, become structurally preventable.

This is precisely why, in November 2024, we announced our investment in Tranched.fi, a protocol rebuilding securitisation from first principles on-chain, with real-time collateral visibility, cryptographically enforced tranching, and up to 90% cost reduction versus traditional structures. You can read that article here. The events of Q1 2026 have validated the thesis faster than we expected.

Q1 2026 will be studied as the moment private credit’s growth story ran headlong into its structural contradictions: liquidity promises too loose, collateral visibility too opaque, verification infrastructure too analogue for the volume and velocity of capital it was being asked to move. BlackRock’s HLEND has delivered 10.7% annualised net returns since inception and the underlying loans, broadly, are performing. The problem is the wrapper and the plumbing, not the assets. Both can be fixed. Both are being rebuilt, on-chain, right now.

And we are actively looking for builders 👀. The opportunity is broader than any single protocol. On-chain collateral registries, secondary liquidity infrastructure for tokenised credit etc.. the full stack needs to be built. If you are a founder working on any part of this infrastructure, we would like to talk. Reach out to us or drop a note in the comments!

Dear Founders, Investors, and Friends,

It’s great to have you back for the January 2026 edition of Blockwall Insights. Here’s what we’re covering today:

1. The CLARITY Act: Crypto vs. Banks in the Battle for Market Structure

2. WalletConnect Pay: The Crypto-Native Alternative to Visa and Mastercard

3. Bitwise Brings Institutional Asset Management Onchain

4. Gold and Silver Rallies Drive Surge in Onchain Derivatives Trading

5. Blockwall Portfolio Update

6. Key Events of the Last Weeks

7. What We’ve Been Reading

Executive Summary

January delivered one of the most politically charged months in crypto history. The CLARITY Act, the long-awaited market structure bill that would finally give the U.S. crypto industry regulatory clarity, hit a wall after Coinbase CEO Brian Armstrong publicly withdrew support, arguing the current draft would be “materially worse than the status quo.” Behind the scenes, tensions between the crypto industry and traditional banks reached a boiling point at Davos, where JPMorgan’s Jamie Dimon bluntly told Armstrong he was “full of s***” during a chance encounter. The confrontation laid bare the fundamental conflict at the heart of this debate: who will control the future of deposits and payments in America.

Meanwhile, infrastructure for crypto-native payments advanced. WalletConnect rolled out WalletConnect Pay, a system that allows consumers to pay merchants directly from their wallets, bypassing Visa and Mastercard entirely. With live deployments already underway and partnerships with payment terminal provider Ingenico, the service offers a glimpse of what payments could look like when they move fully onto blockchain rails, with fees up to five times lower than traditional card transactions.

In asset management, Bitwise took a significant step by announcing its first blockchain-based investment product. The offering targets 6% APY on stablecoins while allowing users to retain full custody of their assets. It marks a new era for institutional participation in DeFi, one where professional risk management meets transparent, permissionless infrastructure.

Finally, blockchain-based commodity derivatives experienced a breakout month as gold and silver rallies drove record trading volumes to decentralized trading platforms like Hyperliquid. This growth really showed why 24/7, global, and premissionless markets matter.

The CLARITY Act: Crypto vs. Banks in the Battle for Market Structure

The CLARITY Act, the long-awaited U.S. market structure bill, hit a wall last month. First a quick reminder on why its important and how the process looks like.

• CLARITY offers long-awaited legal certainty by defining key terms around digital assets and DeFi and dividing oversight between the SEC and CFTC. Crucially, by anchoring definitions into law, the bill would significantly reduce sensitivity to shifts in U.S. administrations’ approach to digital assets.

• The legislation requires action from both the U.S. Senate Banking Committee (which oversees the SEC and securities) and the Senate Agriculture Committee (which oversees the CFTC and commodities). Because of their separate jurisdictions, each committee drafts and marks up its own bill text. Once both are finalized, the texts are merged and the full Senate votes on the combined legislation.

Two weeks back, Coinbase CEO Brian Armstrong publicly raised concerns about the current draft by the Banking Committee, arguing it would be worse than having no bill at all. Among his main issues: the bill would effectively ban tokenized equities, restrict DeFi, and eliminate stablecoin rewards in ways that could let banks shut out crypto competition. In response, the Senate Banking Committee postponed its markup vote on the bill indefinitely.

Arguably, stablecoin rewards are the main problem here. Officially, banks fear that stablecoin yield might lure deposits away from community banks, creating bigger risks in the case of bank runs but also limiting access to liquidity for credit. From the crypto industry’s perspective, this rather seems like an attempt to defend bank’s regulatory moat, making it way harder for crypto companies to compete for client deposits.

What makes this whole situation so charged became clear in Davos. During the World Economic Forum, JPMorgan’s Jamie Dimon reportedly told Armstrong he was full of s***, just after Armstrong had publicly accused banks of obstructing crypto-friendly legislation. The confrontation shows just how intense the behind-the-scenes battle between banks and the crypto industry has become.

Now, when it comes to CLARITY, The legislative path isn’t entirely closed, though. Last week, the CFTC’s portion of the bill advanced out of the Agriculture Committee on a narrow 12-11 party-line vote, with no Democrats supporting it. But for the full bill to reach a Senate floor vote, the Banking Committee still needs to agree on its draft and reconcile it with the Agriculture Committee’s version.

As of now, its really difficult to asses which side has the bigger lobbying power and political leverage in Washington to push through with its agenda. Or whether an compromise can be reached.

We remain optimistic and keep a close eye on the negotiations.

WalletConnect Pay: The Crypto-Native Alternative to Visa and Mastercard

Wallet infrastructure firm WalletConnect made a clear push into payments this month, announcing their global rollout of WalletConnect Pay. The push is backed by Ingenico, a French payments technology provider, who brings WalletConnect Pay to its global network of more than 40 million point-of-sale terminals across 120 countries.

The idea is straightforward: instead of swiping a card that routes payments through Visa or Mastercard, consumers scan a QR code and pay directly from their wallet using stablecoins.

Now, paying with stablecoins isn’t entirely new. In fact, monthly volume of crypto card payments has surged from roughly $100 million in early 2023 to more than $1.5 billion by late 2025, implying a 106% compound annual growth rate. But all of those transaction still rely on Visa and Mastercard rails for settlement.

What’s new here is that WalletConnect Pay is trying to circumvent these networks by settling the payments directly onchain, embedding these payments inside existing payment service provider (PSP) workflows, and thus allowing merchants to accept crypto — while all the complexity is handled for them in the background.

Bypassing these traditional networks not only allows merchants to get paid near-instantly, it also reduced intermediaries involved in the payments and thus significantly cuts fees by around 2-4%. For low-margin businesses like coffee shops, where interchange fees eat into profits on every small purchase, that difference really matters.

Whether the solution gains mainstream traction will come down to merchant adoption and consumer behavior. But the infrastructure is there, and the economics favor disruption.

Bitwise Brings Institutional Asset Management Onchain

Bitwise, a $15 billion digital asset manager, became the first traditional asset manager to launch its own vault-based asset management strategy last month.

To understand why this matters, it helps to clarify what onchain vaults actually are. Vaults function similarly to traditional investment funds — they pool user capital and deploy it into professionally managed strategies designed to generate yield. The key distinction lies in custody. Assets are never held by the manager. They remain locked in smart contracts at all times, with execution happening transparently on public blockchains.

These vaults are one of the fastest-growing primitives in digital assets and are being used by major institutions. Coinbase relies on vault-based architectures for its lending product, allowing users to borrow stablecoins against BTC and ETH. Since launching in early 2025, the product has attracted nearly $2 billion in deposits.

Société Générale’s blockchain subsidiary, SG-FORGE, also uses onchain vaults to support liquidity and distribution for its euro- and dollar-denominated stablecoins.

Now, what sets Bitwise apart is how it approaches vault management. In prior institutional deployments, strategy design and risk management were outsourced to specialized third-party specialists. Bitwise is taking a different path — managing strategy and risk in-house.

The broader implication: onchain infrastructure has reached a level of maturity where traditional asset managers can offer institutional-grade strategies. And looking ahead, Bitwise is unlikely to remain an outlier, as more traditional asset managers are expected to explore similar onchain structures over the coming year.

Gold and Silver Rallies Drive Surge in Onchain Derivatives Trading

The recent surge in gold and silver prices did more than move commodity markets. It offered a clear, practical example of how blockchain-based financial infrastructure is starting to change who can trade assets, when they can trade them, and on what terms.

During the rally, a growing number of traders gained exposure to gold and silver through derivatives offered on decentralized platforms like Hyperliquid rather than traditional exchanges. Why? Because these platforms allow users to trade price exposure to real-world assets directly from a digital wallet, without opening a brokerage account or relying on market opening hours.

Over the last 14 days, the volume on these blockchain-based commodity derivatives broke $20 billion, while reaching roughly 1% of COMEX’s combined daily volume over the last two days. For context, COMEX is the world’s leading derivatives exchange for metals, and this ratio stood at just 0.1% a few weeks ago.

This shows how far blockchain infrastructure has matured, but also how large the opportunity remains. In the coming years, especially as more assets are tokenized and brought natively onchain, these ratios are likely to continue to grow.

Blockwall Portfolio Update

Our portfolio company Spiko reached two major milestones this month. First, it received MiFID authorisation. With that, the team is kicking off its next stage of growth:

1. European expansion: They can now distribute their tokenized products, which are already industry-leading and attracted $700M+ in deposits, beyond France.

2. Stronger institutional setup: Spiko can also act as a transfer agent for French funds. This allows asset managers to delegate the burden of register-keeping to Spiko, making partnerships easier to execute.

3. New products: Enhanced cash products, tokenized private credit, and other higher-yielding offerings become possible. This enables the team to execute on its core mission: building a fully onchain cash- and treasury-management solution for businesses.

Beyond that, Spiko surpassed $900 million in assets under management, overtaking industry giant Franklin Templeton, which was the first to launch a U.S.-registered tokenized money market fund in late 2022.

Having backed Spiko since their pre-seed stage, it makes us incredibly proud to see where Paul-Adrien Hyppolite, Antoine Michon, and their team are headed.

And we believe that 2026 will be a big year for them.

Key Events of the Last Few Weeks

1. UBS moves toward crypto trading for wealth clients. The Swiss banking giant is reportedly selecting partners to roll out a crypto offering, initially targeting private banking clients in Switzerland. (Source: Bloomberg)

2. Bitpanda eyes Frankfurt IPO. Europe’s largest retail-focused crypto platform is said to be preparing for a public listing in Frankfurt in the first half of the year. (Source: Bloomberg)

3. Bermuda partners with Coinbase and Circle to go onchain. The government is piloting stablecoin payments across its agencies, expanding USDC adoption with local businesses, and helping financial institutions integrate tokenization and other digital finance tools. (Source: Coinbase)

4. Ethereum Foundation outlines quantum roadmap. The plan includes funding for quantum research and lays out a path toward full quantum resistance over the coming years. (Source: Ethereum Foundation)

What We’ve Been Reading

1. How Wallets Will Reshape Financial Services (Blockwall) — Our investment manager Max Schneider explores why user-controlled wallets are poised to replace banks and brokerages as the primary gateway to global finance. A look at how the wallet layer could become the new front-end for everything from payments to investing.

2. The Hidden Power of Prediction Markets (Blockwall) — Our analyst Bjarmi Leó examines how financial incentives turn speculation into truth discovery. The piece goes beyond the gambling narrative and explores prediction markets as data-mining infrastructure for information finance.

3. Why Open Networks Win (a16z crypto) — This blog post makes a compelling argument for why the value unlocked by truly open networks will always exceed the profit captured by closed ones. For the core insights, see Dominic’s LinkedIn post.

4. Stablecoins in Payments (McKinsey) — McKinsey’s deep dive into stablecoins as payments infrastructure. The analysis finds that while stablecoins processed over $35 trillion in 2025, only about 1% reflected real-world payments; but that 1% is growing fast, especially in B2B. For the core insights, see Dominic’s LinkedIn post.

5. 12 Charts to Watch in 2026 (Keyrock & Dune) — The firms present 12 data-driven charts capturing the trends that will matter most for crypto this year. From prediction markets to RWA tokenization to DEX derivatives, a useful report for getting a feeling of what will matter in the onchain economy. For the core insights, see Dominic’s LinkedIn post.

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

The Next Paradigm Shift: From Accounts to Wallets

Today, most of us access financial services through accounts - a bank account, a brokerage account, or a crypto exchange account. These institutions offer convenient, unified interfaces for everything from saving and investing to borrowing and trading.

But convenience comes with a price: control.

When you operate within an account-based system, your financial institution acts as a gatekeeper and intermediary. They custody your funds, decide how your trades are routed, and often determine the venues and partners you interact with. In short, you are captive to their ecosystem.

Wallets represent a fundamental shift away from this model.

In a wallet-based system, you custody your own assets and connect directly to whichever protocol, marketplace, or counterparty you choose. There’s no middleman deciding which exchange executes your order or from where you source a loan.

This architecture removes intermediation, reduces rent-seeking behavior, and - most importantly - empowers users economically.

Just as the internet disintermediated information, wallets are now disintermediating finance.

Moving from accounts to wallets will be one of the most profound shifts in how we interact with money and markets.

Owning the User: The Strategic Role of Wallets

Crypto is inherently mobile-first, and wallets are the native user interface of this world. The wallet is where users first enter crypto, and where they conduct nearly all their activity thereafter. In many ways, the wallet is the browser of the decentralized economy.

Because wallets sit at the center of user interaction, they are strategically positioned to capture value in multiple ways:

Transaction Flow & Take Rates

The Wallets core function is to facilitate swaps, payments, and transfers directly through their interface.

Data and MEV Opportunities

Wallets aggregate transaction flows from millions of users, which is an immensely valuable data layer. This touches the emerging space of MEV (maximal extractable value), where transaction ordering can yield revenue opportunities, which can be detrimental to users. Luckily, players like Blink Labs (Blockwall portfolio company) are protecting users from negative MEV while creating shared upside for both wallets and users.

Distribution Power

Wallets have become powerful distribution channels. Protocols and applications integrate directly to reach users through swap interfaces, staking modules, or yield vaults and new dApps (decentralized applications) can be highlighted to users. This makes wallets a key gateway for new products.

In essence, whoever owns the end user is well positioned to capture significant value.

Wallets as Platforms, Not Just Tools

As the crypto landscape grows more complex with dozens of L1s, hundreds of L2s, and countless dApps - wallets increasingly act as abstraction layers. They hide the technical complexity of multi-chain activity and enable users to move seamlessly across ecosystems.

Meanwhile, wallets have evolved into sticky products. Switching is rare once users are embedded. Metamask is still the leading wallet today, even though many have complained about the user experience for years. This stickiness amplifies the wallet’s strategic leverage.

We’re also seeing wallets expand their value proposition through integrated experiences:

• Direct access to perpetual DEXs (like Hyperliquid)

• Embedded stablecoin yield vaults

• On/off ramps and debit cards

• Premium features and institutional-grade customizations for security and workflow management

Ultimately, the wallet becomes not just a key to crypto, but a full-service financial platform.

The Future of Wallet Monetization

Wallets are uniquely positioned to monetize across several vectors:

• In-wallet swaps and payments

• Selling (or sharing) order flow

• Yield products (staking, stablecoin vaults)

• On/off ramp integrations

• Debit cards and payment rails

• Premium subscriptions or advanced user features

• Acting as a distribution channel for emerging protocols

This diversity of revenue streams will only expand as wallets continue to own the user experience layer.

The Paradox That Isn’t

The thesis may sound contradictory:

Wallets empower users by removing intermediaries, yet they themselves become valuable intermediaries.

In reality, these two dynamics coexist harmoniously. Wallets give users choice and freedom, while still being able to curate experiences for those who value simplicity and convenience.

A wallet can recommend its preferred venues, charge take rates for integrated services, and still cannot prevent advanced users from connecting directly to alternative protocols.

Both user groups win: one gains simplicity, the other flexibility.

Conclusion

The shift from accounts to wallets is more than a UX improvement. It’s a structural reordering of financial power.

Wallets put control back into the hands of users while simultaneously becoming the most valuable access point in crypto. They own the interface, the user, and the flow of capital - making them the natural successors to the banks and brokerages of today’s account-based world.

As the crypto economy matures, the battle for the user will be fought and won at the wallet layer.

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

Prediction markets are often dismissed as gambling platforms. That couldn’t be further from the truth. Gambling relies on luck: no amount of research can change the odds of a dice roll or a roulette spin. Prediction markets, on the other hand, operate like stock markets. Prices aren’t set by a bookmaker; they emerge from collective intelligence. Participants buy and sell based on their own research, information, and understanding of the world.

The difference lies in agency. In prediction markets, your edge is knowledge. The more you know, the higher your chance of being right.

The Real Value: Data Mining With Financial Incentives

Speculation exists, but the deeper purpose goes beyond just making money. It’s the incentive mechanism that uncovers truth. Every trade is a data point, a reflection of what traders believe will happen and how confident they are. Platforms like Polymarket generate extraordinary data streams from this collective information flow, valuable enough to be seen as a data company more than a trading venue.

The market itself becomes a real-time engine of insight: price movements quantify public expectations before events unfold. Wrong forecasts cost money, right ones pay off. An elegant demonstration of the Efficient Market Hypothesis. Financial incentives push accuracy, compress deceit, and amplify genuine belief.

That’s why even the CIA explored these systems two decades ago, as documented in “Prediction Markets: Enhancing Intelligence Analysis.“ They understood that data tied to financial risk reveals clearer truth than surveys or polls ever could.

Proof of Incentive: A New Kind of Consensus

Think of prediction markets as human-operated blockchains. Bitcoin uses electricity to mine new blocks; prediction markets use humans to mine data. Electricity secures Bitcoin’s consensus; financial incentives secure prediction markets’ consensus.

This mechanism, call it Proof of Incentive, turns greed into a data engine. Just as Proof of Work transforms computational effort into scarcity, prediction markets transform human curiosity into measurable belief.

The result? Financialized opinions: infinitely sharper, faster, and more accurate than polls or expert panels.

Data Becomes Commodity

Data is already the most valuable resource of the 21st century; prediction markets simply financialize it more transparently. Once truth discovery is incentivized with money, accuracy skyrockets.

As proof:

• Orange juice futures have historically outperformed the U.S. National Weather Service in forecasting Florida freezes. (Academic studies, 1980s-2000s)

Incentives, not luck, drive the forecasting edge. Options trading works similarly but remains gated by regulation, collateral, and insider access. Prediction markets democratize that intelligence capture and expand it to thousands of potential outcomes, not just a few regulated assets.

Rediscovering Product-Market Fit

At Blockwall, we think the product-market fit for prediction markets goes far beyond speculation or even political forecasting. The real opportunity is as insurance for uncertainty. Instead of betting on elections, prediction markets become the infrastructure where institutions hedge any risk: farmers hedging crop failure through weather markets, corporations hedging currency exposure on forex outcomes, communities hedging earthquake risk through property damage markets.

Any measurable event becomes tradeable. The distinction between insurance, hedging, and speculation collapses into one unified system. By expressing complex or unconventional risks as tradable outcomes, prediction markets compete not only with derivatives and options but also with traditional insurance and corporate forecasting.

Imagine hedging rainfall risk through tokenized contracts verified by weather data, or covering rent fluctuations in on-chain real estate portfolios with dynamically adjusted prediction markets. These contracts turn almost any measurable uncertainty into a quantifiable, tradeable event.

Let’s take a Californian apple farmer worried about EU tariffs. No classic hedge exists for this risk. But the farmer can buy a contract that pays out if the EU actually imposes new tariffs. The market odds become embedded in news cycles too: when a crisis emerges or a claim is made, odds appear alongside coverage as a reality check, showing what money-backed consensus actually believes versus what talking heads assert.

Polymarket contract on whether the EU will impose new tariffs on US goods in 2025 shows real-time market odds which traders use to hedge or speculate on trade policy risk.

The Billion-Dollar Opportunity

The first killer applications won’t come from crypto-native traders. They’ll emerge in old-world industries desperate for better data feedback loops:

• Traditional Finance (highest TAM): Quarterly earnings outcomes, macro indicators (inflation, tariffs), sector catalysts.

• Agriculture: Forecasting weather, yields, commodity prices.

• Insurance: Hedging localized risks (hurricane paths, wildfire spread).

• Logistics: Pricing delivery delays, fuel volatility, supply disruptions.

Prediction markets supercharge decision loops in these sectors by converting uncertainty into priced information. When greed is gamified into truth discovery, efficiency follows.

From DARPA to DeFi

In the early 2000s, DARPA explored a government-backed prediction system called FutureMAP (Futures Markets Applied to Prediction), which included the Policy Analysis Market (PAM). It was shelved after political backlash in 2003, but the idea didn’t die. It quietly shifted toward private-sector development.

The CIA funded prediction market research starting in 2001 because they recognized that financial incentives create powerful signals of truth. Markets where money is at stake compress information more efficiently than expert panels or consensus estimates.

It’s wise not to fade prediction markets now. The technology has re-emerged on blockchains where censorship resistance, composability, and global liquidity make it unstoppable.

The Missing Piece: Who Monetizes the Data?

Here’s what’s changing: Until recently, prediction market data has been treated like a public good, free APIs for anyone to access. Polymarket is pioneering the shift toward enterprise data monetization.

Their October 2025 partnership with ICE (owner of the NYSE) makes ICE the global distributor of Polymarket’s event-driven data to institutional clients. This is the Bloomberg Terminal play: real-time market probability data becomes a licensed product for hedge funds, corporations, and financial institutions worldwide.

Bloomberg already integrated Polymarket election odds into Terminal in 2024, showing that institutional demand for this data exists. But ICE’s involvement signals something bigger: Wall Street is building infrastructure to make prediction market data a core asset class feed, the same way it distributes stock prices, options flows, and futures data today.

Polymarket is now targeting a $12-15 billion billion valuation while charging zero trading fees. Why? Investors aren’t buying a betting app; they’re buying data infrastructure. The model flipped from taking trading fees to monetizing the data itself.

Why This Matters

The shift from speculation to infrastructure reveals the true thesis: prediction markets aren’t about gambling. They’re about converting uncertainty into information. When Wall Street captures that data stream, prediction markets stop being a crypto novelty and become a foundational layer of capital markets.

The billions flowing into Polymarket and similar platforms don’t reflect trader enthusiasm. They reflect institutions betting that real-time, incentivized probability data will become a foundational commodity in finance—potentially as essential to modern markets as price feeds or economic indicators. That’s the hidden power at work.

Final Thoughts

Looking ahead to 2026, we expect prediction markets to evolve beyond their current narrow focus. While binary platforms like Polymarket and Kalshi serve as strong starting points, the real opportunity lies in their progression toward practical tools for investors and institutions to express risk, such as hedging temperature variance or tariffs rather than trading on elections and memes.

We anticipate that prediction markets will mature into a new type of financial market, enabling participants to express and hedge risks in ways that were not possible before blockchain and positioning them as core market infrastructure. Arrow Debreu securities in the form of conditional markets are now re-emerging onchain, bringing back ideas that previously failed due to limited infrastructure. We believe many of these concepts will gain traction in 2026.

This development aligns with the broader maturity thesis around dispersion, highlighting the need for tools, applications, and protocols that let investors form increasingly precise views on the world. As more markets are built onchain and connected to DeFi, we see strong potential for a new class of financial products that integrate user positions and market data from these systems, making prediction markets the natural hedging layer for tokenized assets.

In 2026, we will be watching closely for founders building solutions that make prediction markets more expressive, data rich, and practical for real-world use cases.

If you’re working on these challenges or know projects pushing this frontier, I would love to exchange ideas or hear your perspective

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

Dear Founders, Investors, and Friends,

As we approach the end of 2025 and another holiday season, we want to take a moment to thank you for your continued trust and support. This year has been intense, at times volatile, and ultimately defining for the maturation of crypto, digital assets, and Web3 as an investable asset class.

Across our LP base, portfolio, and broader network, we feel privileged to partner with people who are building and allocating with a long-term view. Your conviction and collaboration are what make our work possible.

In this “Year in Review”, we revisit the most important developments of the past twelve months and highlight how they have shaped our strategy at Blockwall. We also reflect on the progress we have made as a firm and outline how we plan to allocate capital, grow our capabilities, and support founders in the years ahead.

We wish you and your families a peaceful holiday season and a healthy, successful start into the new year.

Table of Contents

1. Highlight Summary

2. 2025: A New Era for Crypto and Web3

3. Private, Public, and M&A Market Overview

4. Reflections on Our Growth in 2025

5. The Road Ahead

Highlight Summary

2025 marked a structural turning point for crypto and Web3. After several years shaped by regulatory uncertainty and uneven market conditions, the environment shifted toward clarity, execution, and institutional participation.

In the U.S., the change in regulatory stance replaced enforcement-driven ambiguity with defined frameworks for stablecoins and market structure. In Europe, MiCA fully went live and policymakers moved to make tokenized capital markets viable at scale. Together, these developments reduced one of the industry’s most persistent risks and created a more predictable operating environment for companies and investors.

This clarity translated into tangible adoption. Stablecoins moved beyond crypto-native use cases into payments, treasury, and settlement, with banks, fintechs, and global enterprises deploying them at scale. Tokenization followed a similar path, led by money market funds, public-sector participation, and early capital markets pilots that demonstrated onchain finance is moving from experimentation into production. Across private and public markets, activity returned in a more disciplined form, marked by selective capital deployment, consolidation, and renewed access to institutional distribution.

Within this context, Blockwall continued to scale as an early-stage platform. Fund I was fully repaid at a 5.5x net DPI, placing it among the top-performing venture funds globally of its vintage. Fund II progressed into a phase where a growing share of the portfolio entered scaling stages and secured follow-on capital, while Fund III completed its first close and began deployment.

A key enabler of this scale has been X-Ray, Blockwall’s proprietary AI-powered sourcing engine. X-Ray allows us to systematically scan the global Web3 founder landscape, identify relevant teams earlier, and engage founders proactively. By embedding data and automation into our sourcing process, we significantly expanded deal flow and geographic reach while keeping the core team deliberately lean.

Looking ahead, the industry is entering a phase where foundational infrastructure is being built, regulatory frameworks are in place, and institutional participation is still in its early innings. Historically, this combination has created some of the most attractive conditions for early-stage investing. Blockwall is positioned to operate in this environment with a proven track record, a maturing portfolio, and a scalable sourcing platform designed to capture opportunities early as this next phase unfolds.

2025: A New Era for Crypto and Web3

A Regulatory Turning Point in the U.S.

The year began with a decisive shift in U.S. policy. Under the new administration, regulators moved from regulation-by-enforcement to actively shaping new regulatory frameworks.

The GENIUS Act progressed from proposal to law, creating the first federal framework for fully reserved, supervised stablecoins.

The CLARITY Act advanced in parallel, offering a clearer boundary between securities and commodities, and thus providing a clear division of oversight between SEC and CFTC. Bank regulators followed suit: the OCC explicitly allowed banks to custody crypto, issue stablecoins and run nodes, while the FDIC withdrew earlier restrictive guidance. At the same time, high-profile enforcement actions against Coinbase, Uniswap, Consensys, Robinhood and others, were dropped or dismissed.

Regulatory uncertainty, for a long time the main brake on widespread institutional and enterprise participation, finally gave way to a predictable operating environment.

In parallel, Europe made its own structural leap.

MiCA fully went live, giving the EU its first unified rulebook for stablecoins and crypto service providers. In addition, the European Commission proposed a major overhaul of the DLT Pilot Regime to make tokenized capital markets viable at scale.

The goal is to remove the early constraints that kept participation low, open the framework to a wider range of financial institutions, and create the conditions for large-scale issuance, trading and settlement of tokenized securities.

Crucially, the reforms would also allow Europe’s major market infrastructures to adopt DLT-based settlement without overhauling their entire regulatory setup.

With both the U.S. and the EU now defining, rather than resisting, crypto’s operating rules, the conditions for institutional adoption became materially stronger.

Stablecoins Move Into Mainstream Finance

Regulatory clarity immediately unlocked adoption. Institutions and fintechs are no longer just circling the space. Visa, PayPal, Mastercard, and Shopify are all actively exploring, building, or launching stablecoin-related products.

JPMorgan, for example, issued JPMD, the first deposit token from a global bank on a public blockchain. Major enterprises like Sony and Siemens continued to run real-world settlement pilots.

Some payment companies went even further: Fintech-giant Stripe embedded stablecoins into its core infrastructure and revealed the development of Tempo, its own Layer 1 network built for high-throughput stablecoin payments, which is expected to go live next year.

In terms of actual growth numbers, stablecoins also had one of its best years so far in 2025. Total market capitalization of stablecoins grew by 50% to around $310 billion.

Stablecoins also processed $46 trillion in transactions last year (around $9 trillion adjusted for real use), which is more than Visa and PayPal combined.

Stablecoin issuers now hold $152 billion in U.S. Treasuries, ranking above Germany and South Korea, making them politically significant to the U.S. government.

These figures make it clear that stablecoins are no longer a crypto-native phenomenon, but a building block of global payment and treasury systems.

Tokenization Reaches the Core of Capital Markets

Tokenization followed the same trajectory. The most mature use case, tokenized money market funds, became a true anchor for institutional activity.

In Europe, Banque de France executed onchain repos using tokenized MMFs, and Bpifrance allocated part of its balance sheet into a tokenized euro MMF issued by Spiko, a Blockwall portfolio company, which demonstrates that public institutions now feel confident interacting with tokenized instruments directly.

Speaking of Spiko: Beyond being named “Startup of the Year” at AMTechDay, one of Europe’s premier conferences for innovation in the asset management industry, the company saw rapid adoption. This year alone, its assets under management grew from around $130 million to more than $600 million, making it the leading European issuer of tokenized money market funds and one of the largest globally.

In the U.S., capital markets infrastructure also began to shift. DTCC launched a blockchain-powered collateral platform as a pilot designed for institutional settlement. Google, through its DLT pilots with CME and other financial institutions, further signaled that tokenization is becoming part of mainstream market infrastructure.

At the same time, platforms like Kraken and Robinhood introduced onchain stocks and ETFs, which are tokenized wrappers that provide price exposure to underlying equities. These instruments do not confer shareholder rights and are not native issuances, but they represent an important transitional step. They also show early demand, since the total value of tokenized stocks grew from nearly zero to roughly $550 million since July.

With companies like Superstate in the U.S. actively working toward native onchain equities, we expect strong continued growth in this vertical and the first fully tokenized issuances as early as next year.

Private, Public, and M&A Market Overview

Private Markets

Crypto startups saw a healthy flow of capital in 2025. Total crypto VC investment currently stay at roughly $13 billion year-to-date and is projected to close the year between $18-25 billion, making 2025 the strongest year since the 2021-2022 boom, albeit still below peak levels.

Capital deployment skewed toward more mature companies. Throughout the year, around 56-57% of invested capital went into later-stage rounds (Series B and beyond), compared to 43-44% into early-stage ventures. This marks a shift from prior years and reflects the continued maturation of the industry.

At the same time, early-stage activity remained resilient. Pre-seed and seed deal counts held steady, signaling sustained founder activity and continued new company formation.

Overall, the venture market in 2025 was characterized by disciplined growth. More capital returned to the space, but with a clear preference for proven teams and scalable business models.

Global Regional Trends

Venture investment remained geographically diverse but U.S.-led. The United States accounted for roughly 30% to nearly 50% of global crypto VC deployment in each quarter. At the same time, the rebound was global, with strong activity in regions benefiting from increasing regulatory clarity, particularly Europe and Asia-Pacific.

Sector Trends

Capital concentrated in sectors aligned with compliance, scalability, and institutional use cases. Centralized exchanges, brokerage and fintech platforms, blockchain infrastructure (Layer 1 and Layer 2 technologies, staking services), and payments and stablecoin-focused applications attracted the majority of funding. In contrast, investment in entertainment and purely speculative crypto applications continued to decline, underscoring a clear shift toward utility-driven models.

Public Markets

Crypto markets experienced a strong rally in 2025. In July, total cryptocurrency market capitalization surpassed $4 trillion for the first time. Bitcoin led the move, breaking above $120,000 in July and reaching a new all-time high of around $126,000 in early October.

In Q4, markets corrected as profit-taking coincided with rising macro uncertainty. Higher oil prices and a more cautious stance from the Federal Reserve tempered the risk-on environment. As a result, the market is expected to close the year slightly below mid-year highs, around $3.0 trillion, compared to roughly $3.4 trillion at the start of the year.

Crypto IPOs and Public Listings

2025 marked a breakthrough year for crypto companies accessing public equity markets. In June, Circle, the issuer of USDC, completed a landmark IPO on the NYSE. The offering was among the best-performing IPOs of the year, with strong aftermarket performance that clearly demonstrated renewed investor appetite for crypto and digital asset businesses.

Momentum carried into August, when Bullish, an institutional-focused crypto exchange operator, also went public in New York. Like Circle, the listing was well received and reinforced the view that public markets were once again open to crypto-native companies. Together, these IPOs helped reopen the public markets for the sector and encouraged additional players to follow suit, including firms such as Gemini and other digital asset platforms exploring or initiating listing processes.

Since then, share prices have retraced alongside broader market volatility, and investor sentiment has cooled. This raises an open question for the year ahead: whether the IPO window remains meaningfully open, or whether public market activity will moderate as valuations normalize and market conditions become more selective.

Beyond IPOs, the year also marked deeper mainstream integration. Coinbase was added to the S&P 500, and policy discussions advanced around allowing crypto exposure within 401(k) retirement plans.

Record Year for Crypto M&A

Industry consolidation accelerated meaningfully in 2025. By late November, announced crypto M&A deal value reached $8.6 billion across 133 transactions, according to PitchBook, marking a record year for the sector.

Notable transactions included:

• Coinbase acquiring Deribit for $2.9 billion

• Kraken acquiring NinjaTrader for $1.5 billion

• Ripple acquiring Hidden Road for $1.25 billion

This surge in M&A activity reflects a maturing industry, with leading players using consolidation as a strategic growth lever amid clearer regulation and improved market conditions.

ETFs and Investment Products

Crypto investment products experienced record inflows in 2025. Year-to-date net inflows into digital asset ETPs exceeded $45 billion, surpassing prior annual records, with Bitcoin and Ether products capturing the vast majority of demand. Assets under management across global crypto ETFs and ETPs peaked near $260 billion mid-year before retracing in Q4 alongside broader market corrections to around $180 billion as of December.

Product breadth also expanded meaningfully, with around 340 crypto ETP products being live globally at of December.

A key inflection point came in early fall, when U.S. regulators approved a streamlined, generic listing framework for digital asset ETFs. This materially shortened approval timelines and enabled faster market entry.

As a result, the final quarter of the year saw the first spot ETFs tied to large-cap altcoins such as Solana and XRP, alongside early multi-asset products. This regulatory shift sets the stage for a broader wave of digital asset ETFs in 2026, significantly expanding institutional access beyond Bitcoin and Ether.

Digital Asset Treasury Companies

In 2025, digital asset treasury (DAT) companies emerged as an important marginal buyer of major crypto assets, reinforcing price momentum during the rally. Alongside rising ETF flows, these vehicles offered public market investors an alternative way to gain exposure to crypto through equities, often with embedded leverage to the underlying assets held on the balance sheet.

• Reminder: The DAT model traces back to Strategy under Michael Saylor, which began accumulating Bitcoin in 2020 by issuing equity and convertible debt and deploying the proceeds into BTC. The objective is to increase crypto holdings per share over time by using public market access to continuously expand the balance sheet. Strategy’s early success, including periods of equity outperformance relative to Bitcoin, turned this approach into a widely copied playbook.

That playbook scaled rapidly this year. Strategy remained the dominant player, holding roughly $60 billion in Bitcoin, equivalent to around 2% of total BTC supply by mid-December. Ethereum followed a similar path. BitMine emerged as the largest ETH-focused treasury company, holding roughly 2% of ETH supply, valued at approximately $11 billion. Smaller treasury strategies also formed around assets such as Solana, signaling experimentation beyond Bitcoin and Ether.

Into the year-end, however, the model entered a more uncertain phase. As both crypto prices and equity valuations corrected, access to fresh capital tightened. With continued accumulation dependent on favorable market conditions, digital asset treasury companies now sit at an inflection point, as investors assess whether the strategy represents a durable structural feature of crypto markets or a short-term phenomenon closely tied to the current cycle.

Reflections on Our Growth

This year, we continued professionalizing and scaling Blockwall across all dimensions.

Our Funds

2025 marked an important milestone for us. We fully repaid Fund I at a net DPI of 5.5x, placing us among the top 5% of global venture funds of our vintage.

Fund II continued its strong development throughout the year. We now count 24 investments in the portfolio, several of which achieved significant follow-on rounds in 2025, including Spiko and Validation Cloud, both raising their Series A rounds. Many companies have entered the scaling phase, and we are approaching the final stretch of the Fund II investment period.

In parallel, we executed the first closing of Fund III end October and now have approximately €22.5 million closed, and we already signed the first investment of the new fund. Our target remains €50 million, and we expect continued momentum over the coming months.

Scaling through AI: Introducing X-Ray

Last year, we recognized the operating leverage that AI can introduce into early-stage investing. This is why one of our core strategic priorities has been building X-Ray, our proprietary AI-powered sourcing engine designed to systematize how we scan the global Web3 founder landscape.

In 2025, X-Ray moved from an internal experiment to the backbone of our global deal flow:

• This year we doubled our annual deal flow and screened more than 5,500 startups. Roughly 70% of these opportunities, around 3,800 in total, came from outbound sourcing driven by X-Ray.

• X-Ray has fundamentally reshaped our funnel. Instead of relying on inbound references, we can now reach founders proactively and engage with them much earlier in their journey.

• As of today, the system tracks >170,000 profiles globally and organizes them into a dynamic social graph that highlights meaningful signals.

To further accelerate X-Ray’s development, we are increasing our engineering capacity and will bring a full-time AI engineer on board early next year.

Web3 Handbook

In July, after months of focused research and writing, we published our Web3 Handbook. It provides a structured overview of the Web3 landscape, not from a technical or academic angle, but from the perspective of an active investor or curious reader looking to understand the core ideas shaping the ecosystem.

Although long-form (around a 90-minute read), it remains a high-level introduction that you can read end to end or explore selectively. It does not attempt to cover every aspect of Web3, but highlights the themes we consider most relevant today. If you missed it, you can find it here.

Research Highlights

In addition to our published Web3 Handbook and building on last year’s efforts, we once again published some of our own research and shared more insights about our investments this year.

Some Highlights include…

1. An overview of (Re)Staking pt2

2. DeFi Needs a Jony Ive Moment: Why We Invested in Rebind

3. From keys to cards, bridging self-custody and everyday payments

4. Stablecoins: The Internet’s Financial Base Layer

Investments We Made

This year, we signed nine deals, with one of them to be announced at a later date:

1. Rebind: A mobile-first, non-custodial DeFi app that makes it effortless to buy crypto and access curated on-chain yield strategies through simple social logins and passkeys. See here on why we invested.

2. Blu: An onchain neobank serving the 47.5 million unbanked people across LATAM, giving them access to credit cards and a way to build a real financial identity.

3. Kirha: An infrastructure gateway for the emerging Model Context Protocol (MCP), an open standard enabling large language models to access real-time, structured data sources and compensate providers via blockchain-based micropayments.

4. Spectarium: Game developer, who is building a cross-platform, gameplay-first action RPG inspired by global mythologies, delivering a Web2-level experience that uses Web3 only where it truly adds value: ownership, trading, and community.

5. Den: Developer of an end-to-end wallet solution to manage onchain funds and increase security, enabling enterprise-grade onchain custody.

6. Kulipa: Provider of white-label crypto card infrastructure for self-custodial wallets, enabling users to spend stablecoins directly from their wallets without relinquishing custody, bridging on-chain assets with real-world payments. See here why we invested.

7. Yousend: A stablecoin-based remittance platform enabling fast, low-cost cross-border transfers between North America, Europe, and key African corridors.

8. Flyra: Developer of “the Banking OS” for migrants. Essentially, it’s an all-in-one system designed for global workers and their families, where money lives and moves easily. They can store it, spend it, borrow when needed, and even grow it.

Blockwall Investor Summit

A major highlight of the year was our 3rd investor summit in Frankfurt, where we brought together an incredible group of investors, founders, and industry leaders.

The summit was a platform for deep discussions about Web3, crypto, finance, and the future of the internet, and it sparked meaningful conversations about where the industry is headed.

To get an impression of the summit, please see our trailer here.

And for those looking to dive deeper into the conversations, below you can find the list of all panels, fireside chats, and keynotes:

1. Institutional-Ready: Web3 goes Mainstream — with Bert Staufenbiel (KfW), Ivan de Lastours (Bpifrance), Christoph Hock (Union Investment), and Torsten Hunke (VanEck Europe). You can view the full panel here.

2. Future of Banking in an Onchain World — with Manfred Knof (Commerzbank), Mathias Imbach (Sygnum Bank). You can view the full panel here.

3. Web3’s Potential to Disrupt and Building Animoca into a Billion USD Company — with Yat Siu (Animoca Brands). You can view the full fireside chat here.

4. The Future of Capital Markets — with Paul-Adrien Hyppolite (Spiko), Michael Duttlinger (Cashlink), Hendrik König (Bankhaus Metzler). You can view the full panel here.

5. Stablecoins: Instant, Compliant, Programmable — with Dorothea Ysenburg (Mastercard), Alexander Hoeptner (AllUnity), Casper Yonel (Blu Financiero), Christopher Beck (tradias). You can view the full panel here.

6. Founder Spotlight — with:

• Paul-Adrien Hyppolite (Spiko). You can watch the spotlight on Spiko here.

• Casper Yonel (Blu). You can watch the spotlight on Blu here.

• Gaia Ferrero Regis (Byzantine). You can watch the spotlight on Byzantine here.

• Steven Figura (Rebind). You can watch the spotlight on Rebind here.

• Romain Schneider (Spectarium). You can watch the spotlight on Spectarium here.

• Axel Cateland (Kulipa).You can watch the spotlight on Kulipa here.

7. From Investor to Operator — with Arjun Sethi (Kraken). You can watch the full fireside chat here.

Thank you to everyone from the Blockwall team who made this possible: Jannis Choulidis, Nikos Choulidis, Damien Roch, Max Schneider, Syed Armani, Leonard Lang, Havard Rivedal, Bjarmi Leo, Lars Singbartl, and Lisa Bourcarde.

For anyone who couldn’t attend: Over the coming weeks and months, we’ll be sharing more content and highlights of the Summit with you. To stay in the loop, feel free to follow our Blockwall account on LinkedIn.

The Road Ahead

Looking into next year, our priorities are clear.

On the fund side, we expect to complete the investment period of Fund II by mid-year and to increasingly concentrate on follow-on rounds, as more portfolio companies transition from early traction into scaling phases. In parallel, we will continue deploying Fund III and work toward the €50 million target fund size mentioned earlier, with a selective, high-conviction approach.

At the same time, we will keep strengthening Blockwall’s technical capabilities. A key focus will be the continued expansion of X-Ray, further embedding data, automation, and AI into our sourcing and market analysis. Our main goal remains to identify strong teams early and maintain a systematic, global view of the opportunity set as the market scales.

From a market perspective, we remain constructive. Regulatory clarity in the U.S. and Europe has materially improved the environment for institutional adoption, and we expect this to continue driving activity in stablecoins, tokenization, and onchain financial infrastructure. As these building blocks mature, we also expect DeFi activity to reaccelerate, supported by deeper liquidity and more institutional as well as fintech/ enterprise participation.

Overall, we see the year ahead as one of execution and expansion. The foundations have been laid, and both the market and our portfolio are moving into a phase where scale, discipline, and focus will matter most.

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

From Speculation to Infrastructure

Much of crypto’s early narrative was built around creating a new form of money. Bitcoin was framed as “sound money”, a store of value immune to fiat debasement. But when it comes to day-to-day utility speaking about transactions, remittances and settlements, Bitcoin and other volatile crypto assets fall short. Their performance as a medium of exchange and unit of account is hindered by volatility, lack of price anchoring, and policy uncertainty.

Stablecoins fix this. They provide fiat-denominated stability while inheriting the programmability, speed, and borderless nature of Web3 rails. This makes them the default value layer for the emerging digital economy.

Why Stablecoins Matter

At its core, money exists to facilitate exchange. Stablecoins offer a uniquely internet-native, programmable, and global medium that does this efficiently. They don’t attempt to replace fiat; they amplify it - across borders, time zones, and infrastructure gaps.

Stablecoins didn’t emerge as groundbreaking infrastructure for the digital economy, they were born out of necessity. In 2014, projects like BitUSD on the BitShares blockchain and later Tether (originally “Realcoin”) sought to bring fiat liquidity into the fragmented crypto market. Their primary role was simple, yet powerful: acting as a safe haven from volatility, enabling traders and users to park funds in dollar-pegged tokens without exiting the crypto ecosystem.

Over time, that initial use case - anchoring value for traders - has evolved. Today, stablecoins serve as the critical bridge between traditional finance and Web3, offering 24/7 settlement, low-friction FX, and programmable money rails. Looking ahead, the highest-impact trajectories lie in:

• Cross-border payments, treasuries, and payroll in emerging markets, where volatility and traditional FX costs make stablecoins an operational necessity.

• On-chain real-world (RWA) markets and DeFi, with stablecoins as the foundational medium of value.

• An autonomous, AI-driven economy, where stablecoins act as the preeminent digital currency for machine-to-machine commerce.

By acknowledging their origin and mapping that lineage to these forward-looking, high-impact scenarios, we underscore stablecoins’ true value: not as a stopgap in crypto, but as the backbone of internet-age money.

How Big Are Stablecoins?

Today, the global stablecoin market stands at ~$300 billion1 in circulating supply.

This growth has been driven largely by crypto-native use cases (DeFi, trading, custody). But the next wave is coming from real-world adoption: cross-border payments, B2B settlements, AI-native commerce, and sovereign financial rails.

This shift hasn’t gone unnoticed. Incumbents are now actively building around stablecoin infrastructure.

Stripe made three acquisitions in 2025: Bridge, a stablecoin orchestration platform, Privy, a wallet infrastructure provider serving over 75 million wallets, and the team behind Valora, a mobile-first crypto wallet. These moves enable Stripe to launch stablecoin financial accounts in 100+ countries, allowing businesses to hold, send, and receive stablecoins alongside traditional rails like ACH and SEPA.

PayPal’s PYUSD is live across Ethereum, Solana, and Stellar, integrated into PayPal and Venmo, and offers yield on idle balances, bringing stablecoin functionality into everyday consumer finance.

Visa partnered with Bridge to launch stablecoin-linked cards in Latin America, enabling stablecoin spending with fiat conversion at the merchant layer.

Circle’s IPO was met with strong institutional demand, underscoring stablecoin’s arrival as a regulated investable asset class.

This wave of adoption is further reinforced by regulatory momentum. The U.S. recently passed the Genius Act, a landmark bipartisan bill establishing the first federal framework for payment stablecoins. It mandates full-reserve backing, public disclosures, and consumer protections, bringing regulatory clarity without stifling innovation.

But beyond compliance, the bill reflects a broader strategic calculus: stablecoins backed by U.S. Treasuries can serve as a powerful tool of dollar export, extending USD demand globally at a time when the dollar’s reserve currency status faces renewed geopolitical challenges.

The $16 Trillion Opportunity

To contextualize the scale of the stablecoin opportunity: global M2 money supply is estimated at ~$96 trillion3. If stablecoins ultimately capture a digitizable portion of global money supply comparable to e-commerce’s share of total commerce (~17%)4, this implies a ~$16 trillion market - a 54× expansion from today’s $300 billion supply.

Even partial adoption positions stablecoins as one of the few multi-trillion-dollar opportunities in Web3 over the next decade.

Our Skin in the Game

We are actively investing behind our conviction in stablecoins as a foundational layer of the digital economy. We back founders building critical infrastructure across the payment and settlement stack, with use cases that extend well beyond crypto-native contexts.

Nilos is building enterprise-grade payment infrastructure that leverages stablecoins to simplify global money movement for businesses. By enabling instant cross-border settlement, multi-currency management, and treasury automation through a unified API, Nilos reduces dependence on traditional correspondent banking networks. It offers a compelling alternative for companies operating in fragmented or high-cost financial environments.

Kulipa focuses on bridging on-chain assets with real-world spending. Its platform enables wallets and fintechs to issue Visa-compatible cards, allowing users to spend stablecoins seamlessly at the point of sale. Real-time conversion from stablecoins to fiat ensures smooth merchant acceptance, while preserving a crypto-native backend. This infrastructure plays an important role in extending stablecoin utility into everyday payments.

YouSend is building a stablecoin-powered payments platform, designed to streamline cross-border money movement. The platform enables near-instant, low-cost transfers to local bank accounts or e-money wallets, offering a more efficient alternative to traditional remittance channels. In doing so, it brings the benefits of stablecoins to real-world financial inclusion use cases.

Flyra is building a banking platform for migrants that connects how money is earned, moved, and spent across borders. Using stablecoin rails, funds flow instantly from payroll or gig apps into users’ wallets and cards, where they can be spent, used for bills, or saved directly, replacing slow cross-border flows.

Spiko is pioneering a nuanced variant of the stablecoin model by issuing tokenized money-market funds backed entirely by U.S. and Eurozone Treasury Bills and fully regulated under EU UCITS frameworks. These tokenized shares (e.g., USTBL, EUTBL) function as digital cash equivalents, compatible with EVM-based wallets and blockchain applications.

Collectively, these companies are contributing to the evolution of stablecoins from a liquidity tool within crypto markets to a robust, programmable value layer for global commerce. But this is only the beginning. As stablecoins continue to evolve into a foundational layer for global payments, capital markets, and machine-driven economies, we see further opportunity to invest across the broader ecosystem. In the sections that follow, we outline the key growth drivers and investment themes where we believe the next wave of category-defining companies will emerge, and where we are actively looking to partner with ambitious teams building at the frontier.

Key Growth Drivers & Investment Themes

As stablecoins become programmable financial primitives, we see six core areas where they are unlocking real economic value:

1. Emerging Markets & Cross-Border Transfers

• Businesses replacing banks and TradFi rails with stablecoin-based solutions to pay suppliers and employees across and within borders, avoid FX costs and settlement delays, manage treasury, and optimize working capital.

• Individuals using stablecoins to hedge against local inflation, access USD-based savings, and participate in global financial services otherwise unavailable to them.

• Expats turning to stablecoin-based remittance channels to unlock exotic corridors and move money in and out of countries more efficiently and affordably.

2. DeFi & Tokenized Markets

• With real-world assets moving (RWA) on-chain, stablecoins are becoming the necessary base layer for expressing fiat-denominated value, enabling credit, settlement, and market-making in tokenized environments.

• We expect stablecoin-powered DeFi to scale further as corporate treasuries and TradFi participants begin engaging through permissioned pools and regulated protocols.

3. Stablecoin Issuance

• Interest-bearing stablecoins (e.g., Ethena’s sUSDe, USDM) bridging on-chain capital to real-world yield sources.

• Programmable stablecoins embedding compliance, tax logic, or purpose-limited flows at the protocol level.

• Regulated, fully-reserved stablecoins issued by licensed banks and fintechs emerging as credible alternatives to commercial bank deposits.

• Region-specific stablecoins (e.g., Euro, Peso, Naira) gaining interest, particularly in jurisdictions where unfettered USD inflows threaten monetary sovereignty and capital controls.

4. Middleware & Tooling

• Infrastructure layers for stablecoin issuance, custody, compliance, accounting, and reporting are critical for enterprise and institutional adoption.

• Cross-chain protocols enabling stablecoin mobility across Ethereum, Solana, Cosmos, and Layer 2 ecosystems.

• Data infrastructure, from oracles to behavioral analytics, unlocking visibility into stablecoin usage, velocity, and risk exposure.

5. On-Chain Treasuries & Corporate Finance

• Startups, DAOs, and crypto-native firms increasingly hold and manage stablecoins for treasury, payroll, and working capital, especially in high-volatility jurisdictions or sectors.

• The opportunity lies in building products for yield optimization (e.g., tokenized T-Bills), programmatic disbursement, cap table management, and compliance reporting, all natively integrated with stablecoin rails.

• This area will be especially critical as more companies transition to on-chain operations and demand tools that match the sophistication of traditional finance.

6. AI & Stablecoins

• As agents and protocols become autonomous, stablecoins are emerging as the optimal medium of exchange, offering price stability, low latency, and interoperability.

• Use cases include machine-to-machine payments, AI-native marketplaces, and autonomous financial operations executed by smart contracts or agents.

Final Thoughts

Stablecoins may no longer be the quiet corner of crypto. Their growth today is driven by genuine adoption. They embody what the Web3 ecosystem needs: clear utility, global scale, and real-world demand. They’re not here to replace money, but to make it work better, across every layer of the economy.

For founders building in this space, or adjacent verticals like tokenized finance, AI agents, or on-chain payments, this is an inflection point.

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

The size of the payments river

Global non-cash transactions have grown more than tenfold in less than twenty years, driven mainly by cards and account-to-account payments.

In the United States, card payments already make up roughly 63% of monthly consumer payments by number when you look at cash, cards and electronic transfers together. The euro area and the broader European Union look similar in pattern, even if the mix between cards and instant payments differs. Non-cash volumes are growing faster than GDP and cash’s share of point-of-sale transactions keeps falling.

On the consumer side, digital wallets are projected to account for about 61% of global e-commerce spending and 46% of point-of-sale spending by 2027, according to Worldpay’s Global Payments Report.

The conclusion is straightforward and well known: the main user interface for money in the traditional world is plastic or a phone screen linked to card and account rails so crypto has to find its way into spenders pocket to make it a valid payment use case.

As a comparison it was estimated that monthly stablecoin payment volume through cards would amount for approx. 1 billion dollars at the beginning of 2025: Still a drop in the ocean in comparison with real world payments volumes.

The missing bridge

For all the innovation that’s happened in DeFi, one thing has remained surprisingly hard paying for a coffee with your crypto wallet. In practice, the experience has looked something like this:

• Fiat and crypto rails lived in different universes. To move value you had to go through exchanges and repetitive KYC checks.

• Card issuance sat in the hands of legacy payment service providers who were not set up to plug in self custody wallets in a co mpliant way.

• Merchants did not want volatility, token tickers, or reconciliation headaches at checkout. They wanted the same thing they already had: predictable settlement, clear reporting, and chargeback processes.

The result was a first generation of “crypto cards” that were fun to tweet about and annoying to use. Many of them behaved more like prepaid vouchers than real cards, and some high profile programs got shut down when compliance and licensing reality caught up. Binance having to close its EU card program in 2023 is one example of how fragile these setups could be.

Turning on-chain balances into real-world spend

Given this backdrop, the key question is not whether people will want to pay with value held on chain. The adoption numbers suggest they already do, just indirectly. The question is which infrastructure will make that usage practical and safe.

In our view, the bridge layer between self-custody and cards had to solve four things at once:

1. Real card programmes, not marketing experiments. That means handling program management, BIN sponsorship, KYC and AML flows, chargebacks, dispute management, lifecycle events and network rules in a way that regulators and issuers are comfortable with.

2. Stablecoin-aware settlement. At the point of sale, the merchant expects a standard card transaction in fiat. Under the hood, the system should be able to authorise against stablecoin balances, convert at predictable rates and reconcile without manual work.

3. Global coverage with regional depth. The main corridors today still run through the US and the EU, but users are spread globally. A serious platform needs to be able to launch programmes in multiple jurisdictions while respecting local constraints.

4. Developer-grade tooling for wallets and fintechs. Teams that build consumer wallets, payment apps or neobanks want APIs, webhooks, dashboards and clear SLAs, not custom one-off integrations with each issuer or processor.

Where stablecoins and cards quietly converge

If global digital payments are a trillion dollar flow each year, and stablecoins already settle volumes on the order of Visa and ACH combined, the overlap between those two worlds is not a side quest. It is a core part of how the financial system of the next decade will move money.

Most institutional discussions around tokenisation still focus on securities, funds and wholesale settlement. That is important, but everyday payments are where users interact with money most often. Bringing self-custody and stablecoin balances into that loop is a way to:

• Raise the utility of tokenised assets beyond “parked yield”.

• Shorten the path between on-chain liquidity and real-world spending.

• Give issuers, treasurers and regulators a live testbed for programmable money in a familiar card format.

From our perspective, this checks all the boxes of how web3 payments should feel like:

• It reduces friction where Web3 meets real-world usage.

• It is directly exposed to regulatory clarity in the US and EU instead of trying to route around it.

• Revenues can scale with transaction volume through interchange and software fees, which is a model the market understands.

The story here is not that “everyone will pay with crypto tomorrow”. The story is that the global payments system is already mostly digital, stablecoins have quietly become a large settlement layer, and regulation in the US and EU is starting to give those instruments a clear legal home.

In that context, making self-custody wallets usable at the same terminals and online checkouts people already trust feels less like a speculative bet and more like normalising an obvious missing piece.

We think that is good for users, for issuers and, over time, for the resilience and efficiency of the broader financial system as well as opening up a world where self custody enables individuals to be their own banks for their everyday life especially in areas where banking is still a luxury that many cannot afford.

If adoption really pick-up the numbers get interesting pertty fastfast. Using the ECB’s H2-2024 baselines as a proxy, the euro area ran about 77.6 billion non-cash payments in that half, with cards at 57% and an average card ticket around €39 in H1-2024. Annualized, that implies roughly 88–90 billion card transactions and €3.3-3.6 trillion of card GMV.

If stablecoin-funded wallets take just 1–3% of those transactions by the 2027–2028 window, you are looking at ~0.9–2.7 billion transactions and €30–€110 billion of spend flowing from programmable balances into standard card acceptance. At typical issuer/processor economics of ~50–80 bps, that supports a €150–€900 million annual revenue pool before SaaS and value-added fees, with further upside as cross-border spreads compress and dispute overheads drop. This scenario is not outlandish given stablecoins already clear on the order of $9 trillion over the last twelve months and touched roughly $1.25 trillion in September 2025 alone, which suggests the funding rail is already operating at payments scale.

The team building that bridge: Kulipa

At Blockwall we have been lucky to partner with an outstanding team ‘(👋 Axel and Michael) in that field, sharing the same vision and bringing field experience from well established companies like Mastercard, Binance or Whatsapp.

Kulipa builds a payment stack that lets wallets, stablecoin-native fintechs and more traditional financial apps issue cards that spend directly from digital assets, while presenting as normal Mastercard debit or prepaid cards to merchants. Under the hood they handle program management, EMI partnerships, KYC and AML flows, card lifecycle and reconciliation, and they expose all of this through APIs, webhooks and an operations dashboard.

On the product side, their initial deployments focus on stablecoin spending from self-custody wallets like Solflare or Ready. A card transaction triggers a conversion from stablecoins to fiat at the terminal, with no extra integration needed for the merchant also supporting Apple Pay or Google Pay for users.

In other words: they make crypto spendable.

It’s a deceptively simple idea, but one that has technically and operationally been hard to execute and we’re excited to see what next under their sleeves! 🔥💳

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

Dear Founders, Investors, and Friends,

It’s great to have you back for the October 2025 edition of Blockwall Insights. Here’s what we’re covering today:

1. Market Structure Stress Test: The October 10th Crash

2. Fintechs are Coming for U.S. Banks

3. Convergence: Crypto and Traditional Finance Draw Closer

   • Galaxy Launches GalaxyOne

   • Hyperliquid Brings U.S. Equities Futures Onchain

   • Coinbase Builds the Onchain Capital Markets Stack

4. Enterprise Adoption: IBM and Oracle Move into Digital Assets

5. Blockwall Company Update

6. Key Events of the Last Weeks

7. What We’ve Been Reading

Executive Summary

October delivered a defining stress test for global crypto markets. A late-day geopolitical shock triggered the largest selloff in the industry’s history, erasing more than $600 billion and forcing a rapid deleveraging cycle. Centralized venues faltered under pressure, while decentralized systems processed record liquidations without failures, reinforcing the shift of trust, liquidity, and trading activity toward transparent onchain infrastructure.

Regulatory and competitive dynamics in the U.S. financial system accelerated. A surge of fintechs and crypto firms applied for national trust bank charters, positioning themselves to handle payments, custody, and stablecoin issuance directly. Regulators signaled readiness to approve these new digitally native institutions, setting up direct competition with incumbent banks.

The broader convergence of crypto and traditional finance advanced through three major moves: Galaxy’s retail expansion with GalaxyOne, Hyperliquid’s introduction of perpetual markets for traditional assets, and Coinbase’s acquisition of Echo to unify the full lifecycle of onchain capital formation. Each development brings traditional instruments closer to programmable, global market infrastructure.

Enterprise adoption strengthened as IBM and Oracle introduced institutional digital asset platforms that integrate custody, settlement, and tokenization into existing financial systems, pushing the technology into mainstream capital markets.

For Blockwall, the successful first closing of Blockwall Capital III and the momentum at our Investor Summit reflect a market that has matured into real deployment. Portfolio highlights from Spiko and Tranched underline the pace at which the ecosystem is professionalizing. The direction is clear: financial markets are consolidating around open, resilient, and programmable infrastructure.

Market Structure Stress Test: The October 10th Crash

This month, the crypto market witnessed its largest selloff ever, surpassing previous crashes like the 2021 flash crash and the FTX collapse. It erased over $600 billion (roughly 15%) of crypto’s total market capitalization, with a record-breaking $20 billion in positions liquidated across 1.6 million individual accounts.

While the trigger was a tweet by U.S. President Donald Trump threatening new tariffs on China, two structural dynamics amplified the shock.

First, the timing. Trump’s tariff announcement hit after U.S. markets had closed, leaving crypto as the only major asset class still trading. With no ETF inflows or traditional liquidity available to offset the move, the full repricing occurred within crypto venues.

Second, leverage in the markets had quietly reached record levels. As the first liquidations began, they cascaded through the system, wiping out open interest by over 60% and sending many assets down 70-90% within seconds.

This is where the difference between centralized and decentralized market resilience became obvious:

• As volatility spiked, market makers withdrew from order books, exposing the lack of natural bids in long-tail assets.

• Binance, the world’s largest centralized exchange, experienced an hour-long outage.

• Major exchanges triggered widespread Auto-Deleveraging (ADL) events, forcibly closing even profitable positions to remain solvent. For many traders, this move came as a surprise and revealed just how little transparency exists around these
  mechanisms.

DeFi applications, on the other hand, handled the stress test far better, with all mechanisms working as intended:

• Lending platforms like Aave and Morpho processed record liquidations without incurring any losses for their users.

• Hyperliquid, the industry’s largest decentralized derivatives trading venue, stayed fully operational throughout the crash.

• Ethena, the platform behind the largest decentralized synthetic dollar, USDe, handled billion-dollar redemptions with only a minor deviation from its dollar peg.

This is also why, after the crash, researchers observed a rise in onchain trading volumes and a capital rotation toward blockchain-based applications.

Combined with the broader trend of trading volumes migrating onchain throughout the year, the message is clear: trust and liquidity are moving to permissionless and transparent infrastructure that scales under pressure.

When it comes to the broader market, it failed to recover meaningfully, with uncertainty and fear still dominating sentiment. Whether an end to the U.S. government shutdown and greater clarity on trade policy will stabilize markets remains to be seen.

Fintechs are Coming for U.S. Banks

October also intensified the competition between fintechs, crypto firms, and traditional banks. Within weeks, several major fintech and crypto players applied for national trust bank charters from the U.S. Office of the Comptroller of the Currency (OCC). Stripe’s stablecoin subsidiary Bridge, Sony Bank’s Connectia Trust, and Peter Thiel-backed Erebor Bank all joined the list. They follow earlier applicants including Circle, BitGo, Ripple, Paxos, and Coinbase.

Now, why are they doing this? Since the passage of the GENIUS Act in July, the OCC charter has become the key regulatory pathway for firms aiming to merge payments, custody, and stablecoin issuance. It offers three main advantages: a single federal oversight regime, legal custody of stablecoin reserves, and eligibility for a Federal Reserve master account, allowing direct Fedwire access and near-instant settlement without relying on commercial banks.

In short, this means entities holding this charter can hold and move money independently of traditional intermediaries. It will make them compete directly with banks for deposits and payments, creating a new class of digitally native institutions that merge custody, settlement, and payments within a single stack. This ultimately changes and challenges the notion of what a “bank” can be.

This is an especially pressing question for incumbent banks. And while they were able to shield themselves from similar disruptions in the past through regulatory intervention (as seen with Meta’s Libra initiative), this time regulators appear more open to change. The relatively fast preliminary approval for Erebor Bank by the OCC illustrates that shift.

If the outstanding charters are granted in the coming months as well, traditional banks will need to adapt quickly to a new competitive reality.

Convergence: Crypto and Traditional Finance Draw Closer

Meanwhile, crypto-native firms already pushed further into traditional finance. In that regard, three announcement especially stood out: Galaxy Digital’s launch of GalaxyOne, Hyperliquid’s expansion in equity and commodity derivatives, and Coinbase’s acquisition of onchain fundraising platform Echo.

Galaxy launches GalaxyOne

Historically focused on institutional trading, lending, and asset management, Galaxy is now expanding into the retail market. With GalaxyOne, the company aims to bring traditional and crypto asset trading, investing, and yield generation together under one platform.

The move leverages Galaxy’s existing institutional lending operations. Customer deposits are used to fund professional-grade loans, enabling depositors to earn up to 8% APY. In essence, Galaxy is repackaging institutional infrastructure for a retail audience, offering the same systems and credit relationships that previously served only funds and corporates.

This strategy carries broader implications for the market. By channeling traditional capital onto onchain rails, Galaxy is helping integrate conventional financial flows with decentralized infrastructure. As liquidity in DeFi deepens and becomes less scarce, rates are likely to compress, making the ecosystem more efficient and appealing to professional allocators. It marks another step toward a more mature, interconnected market where crypto and traditional finance no longer operate in isolation.

Hyperliquid Brings U.S. Equity Futures Onchain

Hyperliquid, crypto’s leading decentralized derivatives platform, made a major push toward integrating traditional assets. Its latest upgrade enables the creation of perpetual markets, meaning futures contracts without an expiry date, for any asset class, including commodities and U.S. equities such as Tesla and Nvidia.

While initial traction on the first market that allows traders to speculate on the Nasdaq remained moderate, with open interest accounting for roughly 0.8% of Hyperliquid’s total, and creating these markets still relatively complex and costly for users, the move is nonetheless significant.

It gives anyone with a smartphone and an internet connection direct price exposure to U.S. capital markets, a major step toward more open and inclusive global finance. It also marks Hyperliquid’s expansion beyond crypto derivatives and toward a universal trading layer where all assets can exist side by side. This shows how financial markets are gradually merging into shared, programmable infrastructure that allows participants to trade both crypto and traditional instruments under the same ruleset.

Coinbase Builds the Onchain Capital Markets Stack

The last and most significant announcement in October highlighting the convergence between traditional and onchain finance was Coinbase’s $375 million acquisition of Echo, the leading onchain fundraising platform.

While some may question such a high price tag for a platform that has likely generated limited revenue so far, the strategic value for Coinbase is substantial. Combined with the firm’s existing infrastructure, Echo enables Coinbase to cover the entire lifecycle of digital assets onchain:

• Issuance: Echo, facilitating compliant onchain fundraising

• Token management: Liquifi, the platform Coinbase acquired earlier this year

• Secondary trading: Coinbase’s centralized exchange

• Decentralized trading and DeFi integration: Base, Coinbase’s Layer 2 network

Together, these components create a comprehensive, end-to-end infrastructure for both primary and secondary markets, positioning Coinbase as a central hub for onchain capital formation.

The acquisition also lays the groundwork for expansion beyond crypto tokens. Coinbase has already indicated plans to extend these capabilities to tokenized securities and real-world assets once regulatory clarity allows.

Taken together, all these moves show the direction of travel. Crypto firms are no longer building parallel systems; they are integrating with traditional markets, adopting familiar instruments, and reengineering financial infrastructure from the ground up. The lines between fintech, crypto, and traditional finance are blurring, and the resulting market will be unified, not divided, by technology.

Enterprise Adoption: IBM and Oracle Move Into Digital Assets

Finally, October saw major enterprise technology providers enter digital asset infrastructure. IBM launched Digital Asset Haven, a platform for institutions to custody, manage, and settle tokenized assets. Built with wallet provider Dfns, Haven integrates IBM’s mainframe security stack with crypto-native wallet capabilities, enabling clients to interact with exchanges and DeFi protocols through a single interface.

IBM’s positioning is strategic. The company already runs the backbone of global payment and capital markets systems. Extending that reliability to digital assets gives institutions a path to tokenization without migrating to external providers. Haven’s launch will start with a cloud-based service this year, followed by on-premise deployment for regulated banks in 2026.

Oracle followed with its own announcement of Digital Asset Data Nexus, a platform set to launch in 2026 supporting both permissioned and public blockchains. Like IBM’s initiative, it targets financial institutions seeking to issue and transact digital assets natively within their existing environments.

Now, with these moves, tokenization is advancing into institutional finance not only from the outside but also from within the existing system, accelerating its integration into global markets.

Blockwall Company Update

Reflections on Blockwall’s 3rd Investor Summit

Another fantastic Blockwall Investor Summit is in the books. This time, we were also pleased to announce a major milestone:

The first closing of our new fund, Blockwall Capital III.

This fund builds on the insights and track record of Fund I and Fund II, with a holistic focus on pre-seed and seed investments in the Web3 space.

And as the panels at our Summit have once again shown, the timing just couldn’t be better.

- Blockchain infrastructure is finally scalable

- Regulation has caught up through frameworks like MiCA in Europe and the Genius Act in the U.S.

- Large financial institutions such as BlackRock and Franklin Templeton, and major fintechs like Stripe and Robinhood, are all participating in the market

- Stablecoins, tokenization, and onchain payments have become integral to corporate treasury and cash management, enabling instant, low-cost transfers and real liquidity

In short: the Web3 ecosystem has matured from experimentation to real adoption.

And it was truly inspiring to see these developments echoed across the conversations and panels at the Summit.

Thank you to all speakers for your valuable insights: Bert Staufenbiel, Ivan de Lastours, Christoph Hock, Torsten Hunke, Manfred Knof, Mathias Imbach, Yat Siu, Paul-Adrien Hyppolite, Michael Duttlinger, Hendrik König, Dorothea Ysenburg, Alexander Hoeptner, Casper Yonel, Christopher Beck, Gaia Ferrero Regis, Steven Figura, Romain Schneider, Axel Cateland, and Arjun Sethi.

And thank you to everyone from the Blockwall team who made this possible: Jannis Choulidis, Nikos Choulidis, Damien Roch, Max Schneider, Syed Armani, Leonard Lang, Havard Rivedal, Bjarmi Leo and Lars Singbartl.

For anyone who couldn’t attend: Over the coming days, weeks, and months, we’ll be sharing more content, highlights, and the full recording of the Summit with you. To stay in the loop, feel free to follow our Blockwall account on LinkedIn.

Celebrating Tranched and Spiko

This month, two of our French portfolio companies had reason to celebrate.

First, Spiko was named Startup of the Year at AMTechDay, one of Europe’s premier conferences showcasing innovation in the asset management industry. In addition, its onchain treasury products have surpassed €500 million in assets under management. Congratulations, Antoine and Paul-Adrien!

Second, Tranched was selected as part of the Future 40 2025, STATION F’s annual list recognizing the 40 best-performing startups on campus – representing just 4% of the 1,000+ companies there. Very well done, Michaël and Clément!

Key Events of the Last Few Weeks

1. Luxembourg proposes Bitcoin allocation. The country’s Intergenerational Sovereign Wealth Fund (FSIL) plans to allocate 1% of its portfolio, around $7 million, to Bitcoin through ETFs, according to the finance minister. This would make Luxembourg the first Eurozone country whose sovereign wealth fund adopts a strategic allocation to digital assets. (Source: Luxembourg Times)

2. Major players receive MiCA licenses. Fintech giant Revolut, crypto platform Blockchain.com, and Bitcoin app Relai can now offer their crypto services across the European Economic Area. (Source: LinkedIn)

3. Bitwise debuts BSOL ETF. The first-ever staked spot SOL ETF in the U.S. recorded $56 million in first-day trading volume, making it the highest-volume ETF launch of the year. (Source: Bitwise)

4. More crypto IPOs on the way. Tokenization platform Securitize filed to go public through a SPAC merger valued at $1.25 billion. Further, Axios reported that MetaMask creator Consensys had selected JPMorgan and Goldman Sachs as lead underwriters for its upcoming IPO. (Sources: Securitize, Axios)

5. FCA lifts retail ban on crypto ETNs. The UK regulator now allows retail investors to access crypto exchange-traded notes (cETNs) provided they are listed on an FCA-recognized exchange and have approved prospectuses. (Source: LinkedIn)

6. DekaBank expands crypto trading to retail clients. Previously limited to institutional investors, the service will now reach retail clients through Boerse Stuttgart Digital. DekaBank is one of Germany’s largest asset managers, overseeing more than €400 billion in assets. (Source: Boerse Stuttgart Group)

7. Morgan Stanley lifts crypto fund restrictions. The bank informed advisors that crypto investments are now open to all clients across all account types, including retirement accounts. This change affects 16,000 advisors managing $2 trillion in wealth. (Source: CNBC)

8. Ten major banks form new stablecoin consortium. Santander, BNP Paribas, Bank of America, UBS, Deutsche Bank, Citi, and others are joining forces to explore issuing a 1:1 reserve-backed digital currency on public blockchains, initially focused on G7 currencies. The announcement follows ING, UniCredit, and DekaBank’s euro stablecoin initiative planned for 2026. (Source: BNP Paribas)

9. JPMorgan to accept Bitcoin and Ether as collateral. After previously allowing only ETP-based loans, the bank will now accept spot BTC and ETH as collateral for institutional clients before year-end, signaling a deeper integration of crypto assets into traditional financing. (Source: Bloomberg)

What We’ve Been Reading

1. Stablecoin Payments from the Ground Up (Artemis) — A data-driven study of how stablecoins are reshaping global payments, from consumer transactions to corporate treasury. The report maps real-world adoption, settlement volumes, and regional usage patterns, offering a granular look at how stablecoins are evolving into a core financial infrastructure layer. For the core insights, see Dominic’s LinkedIn post.

2. State of Crypto 2025 (a16z) — An annual deep dive into the crypto ecosystem, analyzing key industry metrics across infrastructure, DeFi, consumer apps, and regulation. The report highlights the rise of onchain finance, developer activity trends, and how crypto adoption is shifting toward utility-driven use cases. For the core insights, see Dominic’s LinkedIn post.

3. Digital Digest (State Street) — A quarterly publication exploring how tokenization, AI, and digital finance are reshaping institutional markets. This edition focuses on operational readiness, regulatory alignment, and how large asset managers are preparing for the transition to a tokenized financial system. For the core insights, see Dominic’s LinkedIn post.

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

Dear Founders, Investors, and Friends,

September was a notable month for digital assets in Europe. From the Sibos conference placing stablecoins at the heart of the global payments agenda to major European banks launching a shared Euro stablecoin initiative, institutional adoption moved from talk to execution. Meanwhile, Societe Generale entered DeFi, and across the Atlantic, the SEC unlocked faster approvals for crypto ETFs.

Let’s take a closer look at what happened, and why it matters.

Table of Contents

• Institutional Adoption

  • Sibos 2025: Digital assets move to center stage

  • Nine Banks, One Coin: Europe’s new stablecoin consortium

  • Societe Generale pushes EUR stablecoin into DeFi

• U.S. Regulatory Update

  • SEC streamlines crypto ETF approvals

Sibos 2025: Digital assets move to center stage

Frankfurt played host to this year’s Sibos, Swift’s flagship conference for global payments and financial infrastructure. And for the first time, digital assets weren’t just a side conversation. They were front and center, with the opening directly setting the tone: Swift CEO Javier Pérez-Tasso announced a blockchain-based prototype for 24/7 cross-border payments, developed with Consensys and supported by more than 30 major banks including JPMorgan, HSBC, and BNP Paribas.

What followed were many announcements that mainly revolved around the one thing most interesting to the payments industry right now: stablecoins. For example, Swift revealed it is piloting stablecoin-to-fiat conversions, while Clearstream – Europe’s leading post-trade infrastructure provider – announced plans to integrate Circle’s USDC and EURC stablecoins into its securities infrastructure, a clear signal that tokenized cash is starting to find a place in traditional financial systems.

Also, it wasn’t just what was discussed, but who. Just a few years ago, digital assets were the domain of innovation labs, often times with rather small budgets and teams. This year, though, the conversations were led by global heads of custody, treasury, and capital markets. That shift signals a clear change in mindset: traditional players are no longer exploring if blockchain has value, they’re figuring out how to deploy it. And how to do it at scale.

Nine Banks, One Coin: Europe’s New Stablecoin Consortium

But the fact that institutions are now seriously engaging with digital assets didn’t just become clear at Sibos. A few days before the conference, another major announcement came out of Europe: nine of the continent’s largest banks, including ING and UniCredit, announced a new consortium to launch a euro-denominated stablecoin, with the rollout planned for the second half of 2026.

While this isn’t the first bank-led stablecoin initiative, it is the first major collaborative approach.

And the logic seems pretty clear: a common standard is more efficient than fragmented issuance. As Floris Lugt of ING noted in an interview: “We also saw that if each bank would issue their own stablecoin, then they need to become interchangeable. That’s complex and inefficient. A lot of the benefits of blockchain are immediately taken away.”

The new stablecoin will be issued by a dedicated entity in the Netherlands, supervised within the Eurozone. Each bank will hold an equal stake, and the consortium remains open to new participants. Governance and reserve management are designed to ensure neutrality, scalability, and broad adoption.

Importantly, the project is chain-agnostic. No new network will be launched. Instead, the focus is on integrating into existing ecosystems, including decentralized finance (DeFi).

Initial demand is expected from corporates and institutions for use cases like cross-border and tokenized securities settlement. And when it comes to retail users, the main goal is to become a general means of onchain payments.

Whether the consortium model – and the stronger network effects it promises – will help them reach their goals remains to be seen. Still, it’s encouraging to see European institutions taking the “stablecoin race” seriously and working to bring the euro into the digital realm, which so far has been almost entirely dominated by the U.S. dollar.

Societe Generale Pushes EUR Stablecoin into DeFi

Other institutions, meanwhile, are already making significant moves in DeFi.

Societe Generale, through its blockchain arm SG-FORGE, has become the first global systemically important bank to integrate its stablecoins (EURCV and USDCV) into permissionless DeFi protocols.

First, users can now lend and borrow EURCV on Morpho, one of the leading decentralized lending protocols. These loans are overcollateralized, meaning users deposit assets like ETH, BTC, or tokenized money market funds to borrow against.

One of those collateral options is a tokenized money market fund issued by Spiko, a Blockwall portfolio company.

Second, SG-Forge has launched trading pools for EURCV on Uniswap, allowing anyone to buy or sell the stablecoin in a fully decentralized, permissionless manner.

Obviously, these integrations are designed to boost the availability and usability of EURCV across crypto-native environments.

And the move has other major implications. If a Tier-1 bank can successfully operate within DeFi frameworks while meeting regulatory standards, others are likely to follow – and they will. DeFi, after all, has proven to be one of the strongest catalysts for stablecoin adoption.

DeFi protocol Ethena offers a clear example. Through deep integrations with lending platforms such as Aave, their synthetic dollar, USDe, has grown its circulating supply to nearly $14 billion in under two years, making it the third-largest USD stablecoin in record time.

PayPal, too, understands the power of DeFi incentives. The company currently distributes around $70,000 in additional rewards to users who hold its PYUSD stablecoin in DeFi protocols – a campaign that has coincided with a sharp rise in PYUSD supply.

But while incentives can attract liquidity, keeping it is far more difficult. Real utility is what makes liquidity “stick.” For banks and corporates, this means having a clear vision of what their stablecoin is meant to achieve before launching costly incentive programs. Otherwise, those efforts risk becoming expensive experiments.

How (Europe’s) new entrants navigate this new terrain will be fascinating to watch.

SEC Streamlines Crypto ETF Approvals

For the last major announcement in September, we look over the Atlantic to the U.S.

There, the SEC approved a new fast-track approval process for digital asset ETFs. Under the updated rules, exchanges such as Cboe, Nasdaq, and NYSE can now list spot crypto ETFs that meet standardized requirements without needing individual green lights from the regulator.

Concretely, this means that not all ETFs require the previously standard 240-day review cycle. Now, qualifying products can move to market in a matter of weeks.

According to Galaxy Research, 11 crypto assets, including SOL, DOT, DOGE, and XRP, currently meet the criteria, and just days after the rule change, we already saw spot ETFs launched for assets like DOGE and XRP, kicking off what many expect to be a wave of launches.

Now, what impact can we expect? Bitwise CIO Matt Hougan offered some helpful historical context: when the SEC introduced the generic listing standards for traditional ETFs in 2019, the average number of new launches tripled. He expects crypto to follow a similar trajectory, evolving from just a handful of flagship products to a much broader market.

Beyond that, Hougan anticipates a rise not only in single-asset ETFs but also in index-based products that track a basket of digital assets, making diversified exposure easier for investors.

According to Hougan, this expansion matters because a broader product landscape attracts more traditional investors and leads to deeper allocations. Crypto allocations that today represent 0.5% or 1% of institutional portfolios could grow meaningfully as more specialized and diversified products come to market.

Key Events of the Last Few Weeks

1. Openbank launches cryptocurrency trading in Germany. Santander’s digital banking arm has rolled out crypto trading for retail customers, allowing users to buy, sell, and hold digital assets like Bitcoin and Ethereum alongside traditional investments in a unified platform. (Source: Santander)

2. BlackRock explores ETF tokenization. The world’s largest asset manager is working on turning ETFs, particularly those backed by real-world assets like stocks, into blockchain-based tokens. (Source: Bloomberg)

3. Morgan Stanley issues crypto allocation guidance. For the first time, the bank’s Global Investment Committee has recommended Bitcoin exposure via spot ETFs, with suggested allocations of 2 to 4% depending on portfolio strategy. The guidance supports 16,000 advisors managing $2 trillion in assets. (Source: X)

4. Stripe introduces stablecoin issuing platform. The payments giant has launched “Open Issuance,” a platform that lets businesses issue their own stablecoins, while Stripe handles reserves, liquidity, and compliance behind the scenes. Early adopters include major crypto players Phantom and Metamask. (Source: Stripe)

5. CME Group to launch 24/7 crypto futures and options trading. The world’s largest derivatives exchange plans to offer round-the-clock crypto trading in early 2026, pending regulatory approval. (Source: CME Group)

6. Coinbase launches stablecoin lending inside its app. Users can now lend USDC directly within the Coinbase app, earning yields of up to 10%. The feature is powered by DeFi protocol Morpho and further integrates decentralized finance into mainstream user experiences. (Source: Coinbase)

7. Brex to enable stablecoin payments for 20,000 businesses. The leading spend management platform is rolling out USDC payment functionality on Solana. This allows customers to send and receive stablecoins for faster, low-cost settlement. (Source: Brex)

What We’ve Been Reading

1. Stablecoins 2030 (Citi) — A forward-looking report exploring how stablecoins could reshape payments, banking, and capital markets by 2030. Covers adoption drivers, regulatory frameworks, reserve models, technical architecture, and the competitive landscape between private and public digital money initiatives.

2. What Is a Stablecoin? (McKinsey) — An explainer on the mechanics, risks, regulation, and institutional impact of stablecoins as they become core to the digital money ecosystem.

3. The Compelling Case for Crypto (Franklin Templeton) — An eight-part investor memo outlining why digital assets are becoming a strategic asset class. Topics include portfolio diversification, institutional adoption, blockchain-driven business models, shifting U.S. regulation, generational wealth trends, and the role of ETPs in making crypto more accessible.

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

Dear Founders, Investors, and Friends,

Despite the holiday season being in full swing, August wasn’t short of important events: In the U.S., the SEC and Trump administration signaled a historic shift toward bringing capital markets onchain with “Project Crypto” and clarity on liquid staking. Additionally, an executive order opened up retirement plans to crypto, potentially unlocking billions in inflows. Meanwhile, Circle, Stripe, and Google unveiled competing Layer-1 strategies aimed at institutional adoption, while DeFi giant Aave launched “Horizon” to integrate tokenized RWAs into DeFi lending at scale.

Together, these moves highlight the accelerating convergence of TradFi, DeFi, and big tech infrastructure.

So, without further ado, let’s unpack what happened this month and why it matters.

Table of Contents

• U.S. Regulatory Update

  • SEC’s Project Crypto: Bringing capital markets onchain

  • Hester Peirce pushes for financial privacy

  • SEC provides clarity on liquid staking

  • Trump opens 401(k) plans to digital assets

• Everyone Is Building Layer-1s Again

  • Circle launches Arc: A stablecoin-first network

  • Stripe & Paradigm launch payments-focused blockchain Tempo

  • Google doubles down on GCUL, its blockchain platform for institutions

• DeFi & Tokenization

  • Aave launches Horizon: Borrow stablecoins against RWAs at scale

U.S. Regulatory Update

Last month once again saw major announcements by the Trump administration and the SEC regarding digital asset regulation.

Paul Atkins Unveils "Project Crypto"

In one of the most pro-crypto statements ever made by a U.S. regulator, SEC Chair Paul Atkins unveiled "Project Crypto," a sweeping agenda to move U.S. capital markets onchain. It includes:

• Double down on tokenization: Move trading, clearing, and settlement onchain to keep U.S. capital markets globally competitive.

• Clear classification: Clarify which tokens are securities and let tokenized ones trade freely.

• Regulatory frameworks for tokenized equities: Allow issuers to raise capital directly onchain.

• Integrated trading platforms: Let securities and non-securities trade side-by-side on regulated “super apps.”

• Open infrastructure: Support both decentralized protocols and centralized operators.

Hester Peirce Advocates for Financial Privacy

In another SEC speech, Commissioner Hester Peirce called for the modernization of the U.S. banking framework, including outdated laws like the Bank Secrecy Act, to meet the privacy requirements of a fully digital financial system. She specifically highlighted:

• Support for zero-knowledge proof technology,

• Legal protection for open-source developers,

• New privacy frameworks for digital finance.

It’s the first time an SEC Commissioner has spoken this extensively in support of financial privacy, and it’s especially refreshing to hear such remarks after the SEC’s previously hostile stance toward the crypto industry.

SEC Greenlights Liquid Staking

The SEC also issued a formal statement clarifying that liquid staking is not a securities activity, removing a major barrier for staking-based financial products.

This opens the door for fully staked ETPs in assets like ETH or SOL, boosting capital efficiency for issuers and yields for investors without sacrificing liquidity.

Crypto for U.S. Retirement Plans

Lastly, President Trump signed an executive order allowing private equity, real estate, and digital assets to be integrated into 401(k) retirement plans.

With ~70 million Americans contributing roughly $1.25 trillion to 401(k) plans annually, even a very modest 1% allocation would translate into $12.5 billion of digital asset inflows.

Although this napkin math sounds compelling at first, there’s a catch. Fidelity, which services 40% of the 401(k) market, launched a Bitcoin option back in 2022, but adoption has been slow. The reason? Employers must opt in and assume fiduciary risk – a hurdle many are unwilling to take.

Still, with the order, the regulatory green light is there. Now it’s a question of real client demand and “institutional courage.”

Everyone Is Building Layer-1s Again

In recent weeks, three major companies across crypto, payments, and tech revealed that they are developing their own Layer-1 networks. Let’s dive into each of them.

Circle Launches Arc – A Stablecoin-First Layer-1

Circle, issuer of the second-largest U.S. stablecoin USDC, announced Arc, a Layer-1 primarily designed to address institutional concerns with public blockchains – namely gas volatility, lack of privacy, and poor enterprise integration.

Key features include:

• USDC as native gas: No ETH or another native token required. All fees are paid in USDC.

• Permissioned validators: Arc will be operated by vetted institutions to ensure compliance, rather than an open validator set like on Ethereum.

• Performance: With ~10,000 transactions per second and with <100ms finality, Arc’s performance should be on par with high-throughput networks like Solana and Sui.

• Confidentiality: To enable privacy, transaction amounts are encrypted while sending and receiving addresses remain visible. At the same time, regulators and auditors can be granted read-only access through “view keys” to ensure compliance.

For Circle, Arc is about more than just delivering better stablecoin infrastructure. The primary goal is to capture more value from USDC payment flows and expand beyond an issuance-only model – a model increasingly under pressure.

On the one hand, there are distribution partners (like Coinbase) which are demanding a large share of the yield from the underlying reserves.

On the other hand, the model is highly exposed to interest rate swings. For instance, a 100 bps cut would trim gross revenue by ~25%, forcing ~40% growth in USDC supply just to offset the loss.

Now, whether launching its own Layer-1 is the right strategy to escape these forces remains to be seen.

What is certain, though, is that Circle isn’t the only one with this approach. Rival Tether has already funded two stablecoin-focused networks (Plasma and Stable), with payments giant Stripe now also joining the Layer-1 race.

Stripe Announces Payments-Focused Blockchain Tempo

Together with our colleagues from U.S. VC firm Paradigm, Stripe announced Tempo, a payments- and stablecoin-focused Layer-1 network.

The project launches with heavyweight partners including Anthropic, Deutsche Bank, DoorDash, Nubank, OpenAI, Revolut, Shopify, Standard Chartered, and Visa.

Like Circle’s Arc, Tempo is designed for institutions, but with some differences:

• Performance: 100,000 transactions per second with sub-second finality.

• Fee model: Any stablecoin can be used to pay transaction fees, not just one issuer’s.

• Decentralization & Neutrality: While Tempo will go live with a permissioned validator set, Tempo plans to transition to a permissionless model. Further, anyone can issue a stablecoin on Tempo, unlike the chains built and funded by Circle and Tether, which are designed to build their ecosystems around their respective stablecoins.

The last point, in particular, should create an important differentiation and attract enterprises and institutions to build on Tempo as an "open platform."

And interestingly, Tempo isn’t the only player in town that wants to establish itself as a credibly neutral base layer for institutional finance – despite obvious signs that this promise might end up being nothing more than a sales pitch.

Google Puts Spotlight on GCUL

Amid the wave of new Layer-1 announcements, Google also stepped forward with more clarity on its own blockchain initiative. While the company has already talked about blockchain initiatives in the past, this was the first time it explicitly positioned its Google Cloud Universal Ledger (GCUL) as a Layer-1 network – one designed to serve as a central platform for tokenization, digital asset management, and payments for financial institutions.

Key features include:

• Blockchain-as-a-Service: The services are expected to be offered through a single API, with fees billed monthly rather than on a per-transaction basis. This model is closer to cloud services than conventional blockchains.

• Private and permissioned (for now): For now, GCUL operates as a private and permissioned network, with built-in compliance features like KYC-verified accounts. However, Google notes the potential to become more open as “regulations evolve.”

• Developer-friendly: GCUL supports Python-based smart contracts, a far more common programming language, lowering the entry barrier for enterprise developers and financial engineers which may want to build on network.

As mentioned earlier, this isn’t the first time GCUL has made a public appearance. Back in March, Google Cloud and CME Group, the world’s largest derivatives exchange, announced a pilot for wholesale payments and asset tokenization using the network. At that time, however, it was still framed simply as a “distributed ledger,” with no mention of the terms “Layer-1” or “blockchain.”

And now, with a $2.5 trillion market cap, Alphabet is the largest company to date to openly commit to building its own blockchain infrastructure. Given its reach to billions of users and deep ties with institutional partners, GCUL arrives with distribution power most crypto-native projects can only dream of.

But as with every new venture, a player like Google will also face serious challenges. For example, GCUL is non-EVM-compatible, meaning existing Ethereum applications (and developers) cannot be ported directly. Google must therefore build an entirely new ecosystem from scratch, something that is notoriously difficult to pull off.

That’s why we’re very curious to see what strategy Google and the other upcoming Layer-1s will pursue to establish themselves in the crypto ecosystem. At Blockwall, we’ll be watching closely how these networks aim to differentiate, not just in branding but in the features, integrations, and functionalities they bring to market.

A key challenge will be attracting developers, since strong developer traction drives new applications and ultimately brings users to the network. Institutional adoption, however, follows a different logic and depends more on factors like compliance, enterprise-grade integrations and infrastructure. It remains to be seen how much better the new contenders can really perform on these fronts compared to already entrenched Layer-1 blockchains like Ethereum and Solana.

Having these dynamics in mind, we think its fair to say that the battle for mindshare and liquidity between those players will probably be one of the most defining developments in the months ahead.

Aave Launches Horizon to Bring More Institutions Onchain

Aave, the largest DeFi lending protocol, unveiled Horizon, a new Ethereum-based market for borrowing stablecoins against tokenized real-world assets (RWAs).

The goal is to increase the utility of RWAs such as tokenized U.S. Treasuries and private credit, a market now sitting at $26 billion, and further drive institutional adoption of digital assets.

Whitelisted institutional clients can already post RWAs, starting with tokenized private credit funds and Treasuries from RWA protocols Centrifuge and Superstate, as collateral to borrow stablecoins.

But what currently hinders the growth and utility of RWAs in DeFi? Primarily, tighter integrations into lending markets. One of the biggest challenges is pricing. Unlike tokens, which are priced continuously on liquid exchanges, RWA valuations depend on NAVs reported by issuers. This creates risks of delayed or faulty updates that could trigger unintended liquidations.

To solve this, and provide institutional clients additional safeguards, Aave made some important tweaks to its codebase to enable Horizon:

• Special oracle: Together with Chainlink, Aave built a new oracle to handle NAV-based pricing and reduce liquidation risks.

• Emergency functionalities: RWA issuers can pause lending operations if something unusual happens.

• Collateral recovery tools: Issuers also can reassign collateral to a new wallet if keys are lost or other issues arise.

In the coming months, more issuers are expected to join, including Securitize, VanEck, and WisdomTree, which will bring additional RWA collateral types into Horizon.

Now, what are the concrete use cases opening up for institutional capital through Horizon? The ones with the strongest demand are so-called looping strategies, where institutions borrow stablecoins against their RWAs, reinvest them into the same RWA to boost effective yields, and repeat the process.

This added utility is likely to make DeFi yields more competitive with traditional finance and attract a broader set of institutional investors.

Overall, Horizon is a significant milestone and a major step forward for DeFi.

ICYMI: Blockwall Web3 Handbook

For everyone that missed it: Recently, we published the first version of our Web3 Handbook.

It offers a broad yet structured overview of the Web3 space – not from a purely technical or academic lens, but from the perspective of an active investor, innovator, or Web3-curious reader seeking to understand the foundational ideas shaping this ecosystem.

While long-form (~90 minutes read), it remains a high-level introduction. Feel free to read it end-to-end or dive into the sections most relevant to you. It does not aim to cover every aspect of Web3, but rather highlights the themes we believe are most important right now.

Read the Handbook

Key Events of the Last Few Weeks

1. U.S. Department of Commerce puts GDP data onchain. The agency has begun publishing GDP, PCE, consumer spending, and real final sales data across Bitcoin, Ethereum, and Solana with the help of Chainlink – a symbolic step toward treating blockchains as neutral, tamper-proof infrastructure for public data. (Source: U.S. Department of Commerce)

2. Global stock exchanges call for crackdown on tokenized stocks. In a letter to the SEC, ESMA, and IOSCO, the World Federation of Exchanges warned that tokenized equities mimic shares without granting shareholder rights, raising concerns about investor protection and market stability. (Source: Reuters)

3. Federal Reserve ends oversight program on crypto and DLT. The Fed is winding down its dedicated supervisory framework for banks engaged in digital asset activities, removing what many banks had considered an overly restrictive layer of oversight. (Source: Federal Reserve)

4. Wyoming launches state-backed stablecoin on seven blockchains. The Frontier Stable Token (FRNT) makes Wyoming the first U.S. state to issue a public stablecoin, with deployment across Ethereum, Solana, and five other networks. (Source: Bloomberg)

5. ECB weighs permissionless blockchains for retail digital euro. According to the Financial Times, the European Central Bank is considering a move toward permissionless infrastructure, spurred by competitive pressure following the U.S. passage of the GENIUS Act on stablecoins. (Source: Financial Times)

What We’ve Been Reading

1. Digital Assets Report (White House) — A new report outlines the U.S. government’s roadmap for strengthening the financial system through digital assets and payments, with priorities including real-time payment infrastructure and public-private collaboration.

2. Get Off Zero (Coinbase Asset Management) — This paper highlights five practical ways institutions can move from zero crypto exposure and shows how even modest allocations can enhance overall portfolio performance.

3. Blockchain-Based Mobility (Toyota Blockchain Labs) — Toyota explores how blockchain can support capital formation in mobility, including funding autonomous fleets, with the aim of unlocking new utility in transportation ecosystems.

4. Project Crypto Investment Memo (Bitwise) — CIO Matt Hougan analyzes SEC Chair Paul Atkins’ “Project Crypto” speech and identifies three areas best positioned to benefit: Ethereum, DeFi, and crypto super-apps.

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

Dear Founders, Investors, and Friends,

July marked a turning point for U.S. crypto regulation, with the GENIUS Act becoming law and the CLARITY Act clearing the U.S. House. Meanwhile, tokenized stocks took center stage, and digital asset treasury companies poured billions into the market, helping drive BTC to new all-time highs and sparking a broader resurgence in altcoins — most notably ETH.

So, without further ado, let's unpack the month’s most important developments.

U.S. Crypto Regulation: GENIUS Becomes Law

This is what the industry has been waiting for. On July 17th, the U.S. House passed the GENIUS Act with a supermajority of 308–122. Just one day later, President Trump signed it into law.

The GENIUS Act introduces the first U.S. federal framework for payment stablecoins, with key provisions including:

• Full reserve backing: 1:1 backing with cash, U.S. Treasuries, or repurchase agreements, held in segregated accounts at U.S. banks or regulated institutions

• Federal registration: Issuers must register with the Federal Reserve or OCC, with larger issuers ($10B+ circulation) falling under direct federal oversight

• Tiered regulation: Smaller issuers (under $10B) may operate under qualifying state regimes instead of federal oversight

• Regular reporting: Monthly, independently audited reports on reserve composition and financial health

• No yield sharing: Stablecoin issuers are prohibited from paying interest directly to users, keeping stablecoins in the payments lane rather than competing with bank deposits

• Corporate restrictions: Commercial companies face antitrust checks and must create separate entities to issue stablecoins (the "Libra clause")"

In short: the green light is on. Banks, fintechs, and infrastructure providers now have the clarity to turn pilot programs and announcements from the recent months into products. Expect the stablecoin landscape in the U.S. to evolve quickly.

But beyond domestic adoption, the Act has far-reaching geopolitical implications. Because so much of the crypto economy already settles in stablecoins, anchoring reserves inside U.S. financial institutions puts the regulation of a large part of the onchain economy within U.S. jurisdiction. This could serve as a powerful strategic lever in the years ahead.

The bigger picture? The U.S. is offering a regulatory framework the industry is eager to work within; a move that potentially intensifies the battle for talent and crypto innovation between the U.S., Europe, and the rest of the world.

Crypto Market Structure Bill Clears U.S. House

The same day GENIUS was passed, lawmakers advanced a second major piece of legislation. The CLARITY Act passed the House with a 294–134 vote and is now being discussed in the Senate.

CLARITY is the first comprehensive crypto market structure bill designed to regulate the digital assets industry, addressing a long-standing question: Which digital assets qualify as securities, and which fall under the category of commodities?

Under CLARITY, blockchain-native assets with functional utility and decentralized control would be regulated by the CFTC as "digital commodities." In contrast, assets tied to centralized issuers or resembling investment contracts would remain under SEC oversight.

Another key aspect is how the bill incorporates decentralization as a regulatory dividing line. Entities that directly manage or custody user funds — such as centralized exchanges or custodians — will face more stringent requirements. But actors including wallet providers, validators, frontend developers, and app teams that do not touch user funds, could qualify for tailored exemptions and lighter-touch regulation.

Similar to the EU's MiCA, CLARITY is designed to give the U.S. a competitive edge by creating an environment where Web3 developers and digital asset companies can operate with more certainty, bringing innovation back onshore. However, unlike MiCA's unified European framework and strict definition of different token types (E-Money tokens, Utility Tokens, Asset-referenced tokens), CLARITY introduces regulatory clarity by splitting responsibility between federal agencies, based on the technical and operational structure of projects and tokens. Time will tell which approach leads to better results.

But as of now, it's way too early for any predictions. The final form of the legislation may (and certainly will) change before it becomes law, and its ultimate impact will depend on how it's implemented. Still, the U.S. is signaling to the world that it intends to lead on digital asset regulation, offering a clear path forward where many jurisdictions still hesitate.

And the U.S. wants to move quickly, with key lawmakers having set a clear target: deliver a finalized market structure bill to the President’s desk by the end of September.

Tokenized Stocks Gain Significant Attention

Tokenized stocks took a major leap forward last month with both Kraken and Robinhood launching their offerings (on the same day).

While Kraken's xStocks offering initially features 55 tokenized U.S. stocks and 5 ETFs and is not officially available in major jurisdictions like the U.S., the EU, Australia, Canada, and the UK, Robinhood's offering includes a whopping 200 stocks and ETFs that are now available to eligible users, focusing on the EU.

However, the initial excitement around what this means for blockchain adoption was quickly tempered by some important questions about what these "tokenized stocks" actually deliver.

Kraken's xStocks are blockchain-based tokens backed 1:1 by actual shares held in custody by a regulated entity in Jersey. While these tokens can be self-custodied, traded onchain, and used in DeFi applications, holders don't have direct legal ownership of the underlying stocks. Instead, they hold tokens that track price performance without voting rights, dividend rights, or any claim to the company's assets.

Robinhood's approach is different but equally limited when it comes to voting rights and dividend claims. Their tokenized stocks are derivative contracts tracking U.S. stock prices, recorded onchain but operating within Robinhood Europe's closed ecosystem. This means: in contrast to Kraken, the tokens cannot leave the Robinhood platform and thus cannot be self-custodied — although Robinhood said that this will change in the months ahead.

Naturally, these limitations raised an obvious question: are we looking at genuine innovation here, or just a familiar product dressed up in shinier packaging?

While it's a fair critique given what's available today, we still need to keep in mind that this is really just the beginning of bringing equities onchain. Meanwhile, the broader momentum and potential impact is hard to ignore: For users in emerging markets dealing with limited brokerage access or currency instability, tokenized stocks, in their eventual full form, represent direct access to U.S. capital markets and a compelling tool for wealth creation and preservation.

Still, the key word there is "eventually." Right now, the regulatory pieces still need to fall into place so that token holders can actually get the same rights as traditional shareholders. But given how fast things are moving in Washington, that future doesn't feel very far away.

Coinbase Announces Push into Social

While everyone was announcing tokenized stock offerings, Coinbase made a bold move in a completely different direction: social.

The company unveiled an overhaul of its Coinbase Wallet (now the Base App) and a new suite of developer primitives, all aimed at accelerating adoption of its onchain ecosystem.

The centerpiece is the new Base App, which combines social feeds, payments, messaging, and trading into what CEO Brian Armstrong calls an "onchain super app." The app features a social feed powered by the social network protocol Farcaster, where every post is tokenized through the Zora protocol, allowing users to collect or trade posts as tokens directly within the feed.

Underlying this is the new Base Account system, which creates a portable onchain identity for users. Think of it as storing your name, email, and address onchain so you can carry that information across different applications. This also powers Coinbase's new "Sign in with Base" feature — essentially their version of "Sign in with Google" for the onchain world.

Further, the company is rolling out Base Pay, an express checkout system for USDC transactions on the Base Chain, which will be integrated into Shopify.

For Coinbase, this push represents an interesting strategic shift. Rather than just facilitating crypto trading and DeFi activity, the company is now seemingly betting on transforming its blockchain network into something like an app store and a platform where users can engage directly with onchain applications.

Considering the broader picture, one could see a rationale behind the move. The exchange's Base Chain is already Ethereum's most active Layer 2, and by broadening its focus beyond DeFi, it could attract more developers, apps, and users, thereby strengthening its lead, accelerating Base Chain's path to mainstream adoption, and generating revenues that substantially exceed what DeFi alone could produce.

However, the strategy carries significant risk. Social lies outside Coinbase's core competencies and Web3 social is a category that has yet to demonstrate clear product-market fit. Still, if executed well, the potential upside may well justify the risks.

The Rise of Digital Asset Treasury Companies

July saw a notable acceleration in what has come to be known as the digital asset treasury model, which was pioneered by Michael Saylor and Strategy. At its core, the concept is simple: public companies raise capital (e.g. through issuance of their own stocks or debt) to acquire crypto assets.

Now, unlike traditional Bitcoin treasuries like Strategy, which only hold BTC as "digital gold," newly emerging vehicles are acquiring other assets and aim to actively manage their positions, targeting increases in tokens per share over time.

And the scale of these digital asset treasuries (DATs) is growing fast. Today, 38 publicly listed firms hold over $100 million in Bitcoin, while 5 companies have built comparable Ethereum positions. These ETH-based treasury companies, in particular, made headlines last month, acquiring approximately $6 billion in ETH, contributing meaningfully to Ethereum’s 55% price surge in July.

Whenever trends like this emerge, it’s worth zooming out. Put simply: these vehicles are financial engineering in its cleanest form. They do not deliver any meaningful fundamental value, nor do they create new access to crypto markets (despite frequent claims of democratizing exposure, the underlying assets are already widely accessible).

And while their impact has been undeniably positive for market prices in the short term, the longer-term effects are far more uncertain. Leverage is already creeping into some of these strategies. If conditions change, or if some of these firms signals intent (or are even forced) to sell part of their holdings to meet their debt obligations, markets could react sharply.

For liquid market participants, this is a trend worth monitoring closely. Because what looks like a tailwind today, could quickly become a risk factor tomorrow.

P.S. For those interested in a deeper dive into DATs, we've included a link to a podcast that covers the topic in more detail in our "What We've Been Reading" section down below.

Portfolio Update

In July, one of our portfolio companies reached a major milestone: Spiko raised $22M for its Series A.

The round is led by Index Ventures, with participation from 199 Ventures, Athletico Ventures, Bpifrance's Digital Venture Fund, White Star Capital, Frst, Rerail, and ourselves at Blockwall.

After backing Spiko's pre-seed round, we doubled down by participating in this Series A.

Beyond that, the round saw participation from notable business angels including Revolut CEO Nik Storonsky, Wise CTO Harsh Sinha, Kyriba founder Jean-Luc Robert, Bridge co-founder Zach Abrams, Blackstone co-CIO Lionel Assant, and Pennylane's founding team (Arthur Waller, Felix Blossier, Tancrède Besnard).

Just one year after launch, Spiko has achieved $400 million in assets under management.

Beyond that, the team:

• launched Europe's first tokenized money market fund

• became the biggest issuer of tokenized treasuries on the Arbitrum layer-2

• is one of the top 10 biggest issuers of tokenized treasuries globally

It’s no stretch to say that projects like Spiko are the main drivers of crypto's institutional adoption.

They're building the infrastructure that brings real capital on blockchains, thereby fueling the growth of the "Onchain Economy".

And Spiko's success also carries broader implications for Europe.

Through their "Spiko Euro" product, they're accelerating adoption of EUR-linked investment products in a digital economy that remains 99% USD-dominated.

For more insights, please see Spiko’s blog post.

Congratulations Antoine and Paul-Adrien! Proud to support your journey from the beginning.

ICYMI: Blockwall Web3 Handbook

For everyone that missed it: Last month, we published the first version of our Web3 Handbook.

It offers a broad yet structured overview of the Web3 space — not from a purely technical or academic lens, but from the perspective of an active investor, innovator, or Web3-curious reader seeking to understand the foundational ideas shaping this ecosystem.

While long-form (~90 minutes read), it remains a high-level introduction. Feel free to read it end-to-end or dive into the sections most relevant to you. It does not aim to cover every aspect of Web3, but rather highlights the themes we believe are most important right now.

Read the Handbook

Key Events of the Last Few Weeks

1. Banque de France develops onchain repo system on Ethereum. According to Blockstories, the current architecture behind the French central bank's protocol features a tokenized money market fund from our portfolio company Spiko. Full-scale testing is expected to begin before the end of 2025. (Source: Blockstories)

2. JPMorgan is partnering with Coinbase. Starting this fall, Coinbase users will be able to pay with their Chase cards directly on the exchange. By 2026, they’ll also be able to link their bank accounts and convert credit card loyalty points into the USDC stablecoin on Base Chain. (Source: Coinbase)

3. Another crypto company joins the S&P 500. Block, Jack Dorsey's Bitcoin-focused payments firm is now among the top 500 publicly traded companies in the U.S. (Source: Bloomberg)

4. Germany's Sparkassen to offer crypto trading by mid-2026. Though the country's public savings banks don't plan on actively promoting or advising on crypto investments, they plan to offer access to regulated crypto assets via their Sparkasse app by next year. (Source: CoinDesk)

5. BBVA launches crypto services for Spanish retail customers. The bank now offers Bitcoin and Ether trading and custody to all retail clients in Spain through its mobile app, alongside traditional banking products. (Source: BBVA)

What We’ve Been Reading

1. The Crypto Treasury Playbook (Blockworks) — In this podcast, Ben Forman and Josh Solesbury from crypto VC ParaFi Capital dive deep into the details and current trends around publicly traded crypto vehicles.

2. Blockchains as Emerging Economies (Fidelity Institutional) — In this report, Fidelity presents a novel framework called “digital GDP” to assess blockchains like Ethereum and Solana as standalone economies.

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

Dear Founders, Investors, and Friends,

While the Middle East tensions kept investors on the edge, June was packed with big acquisitions, regulatory progress, and technological advancements. All developments that continue to bridge the gap between Wall Street and the crypto ecosystem.

So, without further ado, let's dive into last month's most important stories.

Stripe Builds Its Crypto Infrastructure Stack

Stripe made its second big crypto move this year, acquiring wallet infrastructure provider Privy. Coming just months after their $1.1 billion Bridge purchase in October, this signals Stripe is methodically building a complete stack for internet-native money.

The logic behind the combination is compelling. Bridge handles the money movement layer, letting businesses send stablecoins easily across borders. Privy solves the equally critical custody challenge, giving users a place to hold and manage those digital assets without the need for an own wallet. More importantly: It lets users create wallets using familiar Web2 methods like email, while all the blockchain complexity gets handled behind the scenes.

Since launching in 2021, Privy has been quietly winning over crypto developers. Their embedded wallet SDK now powers over 75 million wallets across 1,000 teams.

The acquisition creates powerful synergies for Stripe's broader strategy. Merchants can now seamlessly offer crypto wallets directly to customers. Consumer fintech apps can embed stablecoin functionality via Stripe's APIs. Even gig platforms can hold and manage balances for freelancers without taking on the regulatory burden of becoming financial institutions themselves.

Let’s see what other use cases might emerge going forward.

U.S. Senate Advances the GENIUS Act

Washington is taking notice. In May, the U.S. Senate advanced the GENIUS Act, a bipartisan bill creating the first federal framework for payment stablecoins.

The bill mandates full reserve backing (cash, Treasuries, repos), issuer registration with the Fed or OCC, and introduces a threshold system: firms with under $10 billion in circulation may operate under qualifying state regimes, while larger players fall under federal oversight. It also prohibits stablecoins from sharing yield with retail users — a clause critics argue protects banks, not consumers.

It also includes a controversial carve-out: the bill exempts the sitting President and Vice President from the issuer restrictions — a provision that effectively allows politically affiliated initiatives, such as Liberty Financial’s USD1, which is linked to the Trump family, to proceed without constraint.

Now, how does GENIUS differ from the EU's MiCA? Mainly by being more issuer-friendly. Under MiCA, "significant" stablecoin issuers must keep up to 60% of reserves in commercial bank deposits, restricting access to higher-yielding assets like Treasuries and cutting into their revenues. Further, some argue this approach concentrates run risks on commercial banks during periods of large-scale redemptions.

Still, the GENIUS Act isn’t final. Further revisions are expected, and it must be reconciled with the House’s Stable Act before reaching the President’s desk and ultimately become law.

Mastercard Embraces Onchain Payments

In another headline, Mastercard and Chainlink teamed up to launch a new DeFi app called Swapper Finance. It enables users to purchase tokens directly on decentralized exchanges using traditional Mastercard transactions, without the need to navigate centralized exchanges or complex onramping processes.

While players like Visa and Mastercard have been experimenting with crypto for years, only now are we seeing concrete product launches that actually matter. But what changed? Well, regulation. Companies that were once cautious about compliance can finally move from pilot programs to real deployments. With the current momentum building across traditional finance, expect to see much more of this in the coming months as other payment giants follow suit.

Coinbase Announces Major Product Updates

At its State of Crypto Summit in New York, Coinbase unveiled a comprehensive product suite and strategy that spans both institutional and consumer adoption.

On the business side, they launched Coinbase Business, an all-in-one platform for companies looking to integrate crypto into daily operations. Early access users can make stablecoin payments to vendors and employees, earn yield on idle balances, and connect directly with accounting tools.

For consumers, they revealed the Coinbase One Card, offering up to 4% Bitcoin cashback via the American Express network. The card launches this fall and represents Coinbase's push into traditional fintech territory, competing directly with traditional providers and existing crypto cashback offerings.

Perhaps most interestingly, Coinbase announced native DEX integrations within its Coinbase app, allowing users to swap onchain assets without needing self-custodial wallets. Combined with their recently launched Bitcoin lending product, this shows how Coinbase is quietly bringing DeFi functionality to mainstream users through familiar interfaces — thereby also increasing activity on their Base Layer 2.

Beyond that, the exchange is entering a new market. Starting July 21st, Coinbase will allow its U.S. customers to trade Perpetual Futures for the first time.

Coinbase's growing product suite reflects the exchange's evolution from a simple trading platform into something much more ambitious. The company is essentially monetizing its own operational backbone — all the custody systems, payment rails, and treasury infrastructure it developed internally are now being packaged as services for other businesses.

It's reminiscent of how Amazon transformed its internal logistics and cloud infrastructure into AWS, creating an entirely new revenue stream. And now Coinbase appears to be betting that becoming the pick-and-shovel provider for crypto adoption will be more valuable than just facilitating trades.

Coinbase and Shopify Reinvent Crypto Payments

One of the month's clearest signals that stablecoins are hitting the mainstream came from Fiserv's announcement of FIUSD. While the company isn’t well-known by the general public, it’s one of the largest fintech infrastructure providers in the U.S., powering payment processing and banking services for 10,000 financial institutions and millions of merchants.

According to Fiserv, the company has been watching crypto from the sidelines for years, but needed regulatory clarity before making any big moves. The recent momentum around the GENIUS Act finally gave them the green light they were waiting for. Now they're moving fast to catch up.

With FIUSD, Fiserv doesn't want to compete with other issuers and stablecoins. Instead, it wants to use the technology to provide its institutional customers easy access to stablecoin functionality and its benefits — which they, in turn, can offer their own customers via Fiserv's infrastructure.

The technical setup makes this particularly powerful. Fiserv is partnering with Paxos, which also powers PayPal's PYUSD, creating seamless interoperability between the two stablecoins. This means users could transfer funds between traditional bank accounts and PayPal wallets without friction, exactly the kind of cross-platform functionality that could drive real adoption.

But the move isn't just about stablecoins either. Fiserv sees this as its entry point into programmable payments, tokenized deposits, and real-world assets. Essentially, it wants to retrofit the infrastructure it's built for traditional finance to work with the onchain economy. If it proves to be successful, it will be a huge win for the crypto industry.

JPMorgan Brings Bank Money Onchain

The most important institutional milestone this month came from JPMorgan.

The bank launched JPMD — a deposit token — on Coinbase’s Base network, marking the first time a systemically important bank issued such a product on a public blockchain.

But why even tokenize bank deposits instead of launching an own stablecoin? Well, regulatory context is key here. With the recent passage of the GENIUS Act in the U.S. Senate, stablecoin issuers are now explicitly barred from sharing yield with users. In contrast, banks issuing deposit tokens fall under existing banking regulations and can continue to distribute interest, making products like JPMD increasingly attractive to institutions seeking compliant, yield-bearing onchain cash alternatives.

Initially, access will be limited to JPMorgan’s institutional clients, targeting use cases like cross-border payments, digital asset settlement, and onchain liquidity management.

While the launch remains a pilot and some technical questions persist, the move offers a clearer view of where digital money is headed: tokenized deposits may become the preferred solution for banks and financial institutions, while stablecoins are likely to primarily serve fintechs, wallets, and consumer-facing apps.

Portfolio Update

In June, we announced one of our recent rounds. Alongside our partners at Greenfield, we invested in the €1.6 million pre-seed round of Rebind.

In short, Rebind is building a product that wants to deliver a "Jony Ive Moment" for crypto — making DeFi more accessible through a strong focus on user-friendliness.

To get more insights into our investment thesis behind Rebind, see the blog post by our Associate Leonard Lang.

Blockwall at DappCon VC Day in Berlin

Blockwall, represented by our Investment Manager Max Schneider, supported the inaugural DappCon VC Day.

The event brought together a vibrant group of founders and investors, and was filled with high-quality pitches across exciting Web3 verticals, from prediction markets to stablecoins and payments.

We kicked off with a unique reverse pitch from the VCs, giving founders insight into who they were speaking with and what each fund brings to the table. It was a great format that encouraged more meaningful conversations throughout the day.

Congratulations to the winners! The innovation and talent on display were truly impressive.

Successful SuperReturn Side-Event

During SuperReturn and SuperVenture, we hosted another successful LP and GP gathering, bringing together friends from across the venture ecosystem.

This year, we expanded beyond our usual crypto and Web3 focus to connect networks spanning diverse verticals — from health tech and climate tech to AI, defense tech, and enterprise SaaS — with participants representing Europe, North America, and Asia.

The cross-vertical approach sparked fascinating conversations and opened new collaboration opportunities across traditionally siloed sectors. We're already planning next year's edition and looking forward to continuing these valuable connections.

Key Events of the Last Few Weeks

1. Polymarket partners with X. The prediction market platform is integrating with Elon Musk's social network to combine betting data with real-time social insights. Users will see live annotations from Grok and relevant X posts alongside market movements, though specific partnership details remain undisclosed. (Source: Bloomberg)

2. Walmart and Amazon explore stablecoin strategies. According to the Wall Street Journal, America's largest retailers are investigating stablecoin issuance to cut billions in credit card processing fees. (Source: WSJ)

3. Texas establishes Bitcoin reserve. Governor Greg Abbott signed legislation creating a publicly funded Bitcoin reserve, separate from the state's main treasury. Texas appropriated $10 million to kickstart the program, joining a growing list of U.S. states embracing crypto as a strategic asset. (Source: Axios)

4. SoFi launches comprehensive crypto features. The $25 billion Nasdaq-listed fintech will enable its 10+ million users to receive paychecks in stablecoins, make cross-border blockchain transfers, and access onchain rewards. (Source: SoFi)

5. Bybit builds onchain ecosystem on Solana. The world's second-largest crypto exchange unveiled a suite of Solana-based products, including Byreal DEX, Revive Vault for enhanced SOL staking yields, and Reset Launch token launchpad. The move reflects centralized exchanges' push into DeFi territory. (Source: Blockworks)

What We’ve Been Reading

1. Coinbase's State of Crypto Q2 2025 — An analysis of cryptocurrency adoption trends among enterprises, small businesses, and institutional players, with particular emphasis on the accelerating growth in stablecoins and real-world assets.

2. The Legacy Payment Model's Reckoning with Stablecoins (Rob Hadick) — Dragonfly's Rob Hadick makes the case that stablecoins represent more than integration with existing payment infrastructure, they signal its replacement. Through direct ledger-to-ledger transfers, stablecoins promise to streamline the entire payment stack and catalyze next-generation fintech solutions.

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

This handbook offers a broad yet structured overview of the Web3 space — not from a purely technical or academic lens, but from the perspective of an active investor, innovator, or Web3-curious reader seeking to understand the foundational ideas shaping this ecosystem. While long-form (~90 minutes read), it remains a high-level introduction. Feel free to read it end-to-end or dive into the sections most relevant to you. It does not aim to cover every aspect of Web3, but rather highlights the themes we believe are most important right now.

P.S. For anyone who wants to download the handbook, please follow the link here.

Table of Contents

1. Introduction

2. Why Web3 Matters

   2.1 Web 1.0: The Internet’s Beginnings

   2.2 Web 2.0: The New Reality

   2.3 Web 3.0: Returning to Old Ideas

3. What are Crypto and Web3?

   3.1 The Difference Between Crypto and Web3

   3.2 Blockchains

4. Web3’s Potential to Disrupt

   4.1 Finance

   4.2 Payments & Stablecoins

   4.3 Physical Infrastructure Networks

   4.4 Social

   4.5 Digital Ownership

   4.6 Privacy

   4.7 Gaming

5. Why Now is the Right Time to Invest?

   5.1 Scalability

   5.2 Improved User Experience

   5.3 Institutional Adoption

   5.4 Regulation

6. Outlook: The Convergence of Technologies

   6.1 Web3 x Artificial Intelligence

   6.2 Web3 x The Internet of Things (IoT)

   6.3 Web3 x Metaverse

7. Our Vision for 2035

8. Bonus: Investing in Traditional Firms vs. Web3

   8.1 A Brief Introduction to Tokens

   8.2 Traditional vs. Crypto Businesses

   8.3 Tokenomics

   8.4 MakerDAO as an Example of Effective Tokenomics

   8.5 Final Considerations

1. Introduction

The concept of 'Web3' remains unclear to many - even though it could become one of the most transformative technological shifts of the 21st century.

Often associated with digital currencies or digital collectibles (NFTs), the term 'Web3' is frequently dismissed without a deeper look at the underlying technology. This handbook aims to change that.

In the following pages, we’ll provide a clear, high-level overview of crypto and Web3, the breakthrough technologies behind them, their guiding principles, and how they’re reshaping the internet.

At Blockwall, we’ve viewed blockchain technologies and the emergence of blockchain-based applications as the next evolution of the internet since we raised our first fund in 2018. That conviction remains core to our investment thesis.

By the end of this handbook, you’ll understand how we conceptualize this emerging industry, the investment case behind Web3 companies, and why now is a uniquely interesting time to engage and start investing in the space.

Let’s begin by briefly revisiting how the internet evolved over the last 40 years - to better understand why Web3 matters today.

2. Why Web3 Matters

2.1 Web 1.0: The Internet’s Beginnings

Undoubtedly, the internet stands as one of the most transformative technological revolutions of the twentieth century. Its earliest iteration, commonly referred to as Web 1.0, relied on foundational protocols such as HTTP (Web) and SMTP (Email) to enable users to share and access information globally and instantaneously. However, this version primarily comprised static websites that lacked the interactive features of today’s internet, as it did not facilitate direct user-to-user engagement. Consequently, this phase became widely recognized as the "read-only web" - a one-way exchange of information dominated by content consumption rather than collaboration.

The infrastructure of Web 1.0 was defined by its open, permissionless nature, ensuring universal and equal access for users worldwide. Innovations built on its protocols and networks remained fully owned by their creators - so long as they adhered to legal standards, their digital properties were immune to removal or interference by third parties.

This was the case because users often created and hosted their own content (i.e. static websites) directly on their own servers, without any intermediaries in between.

Looking back, this era brought to life many applications that significantly changed the way we live. Examples include the first graphical web browsers like Mosaic and Netscape, search engines like Google and Yahoo, and e-commerce marketplaces like Amazon and eBay.

But in the following 20 years, things changed - for better and for worse.

2.2 Web 2.0: The New Reality

The Evolution from Web 1.0 to Web 2.0

Beginning in the mid-2000s, the rise of early social networks revolutionized how the average user interacted with the internet. These platforms empowered anyone to publish content effortlessly online, fostering connections between users and enabling direct engagement with shared material - transforming the internet into a dynamic, participatory space. This shift earned the era its designation as the read-write web, or Web 2.0.

Over time, social networks experienced significant growth, with Facebook currently being the most used platform, boasting around 3 billion monthly active users (MAU). Ultimately, this led to a handful of companies (those controlling the networks) to control a disproportionate amount of the traffic generated on the web.

The Ad-Driven Revenue Model and Centralization

To monetize their platforms, tech companies adopted the ad-driven revenue model. In this framework, networks aggregate vast quantities of user data - tracking behaviors, preferences, and interactions - to construct social graph profiles that map users’ digital identities and connections. These profiles are then monetized by enabling advertisers to target hyper-specific audiences.

Most of the revenue generated through this model goes to the network operators (e.g., Meta or Google), despite the fact that advertisers are essentially paying for users' data. Additionally, it is the users and their generated content that make these networks valuable and appealing to new users in the first place. So why do we, as users, willingly forgo the enormous revenues - such as Meta's $160 billion last year alone - produced from our data? Because, in exchange, we are "granted" the ability to consume, create, and share content on these platforms "for free."

While this granted billions of people free access to groundbreaking technologies and simplified global connection, audience-building, and content sharing - benefits of undeniable significance - it also centralized power over internet content publication and consumption in the hands of corporations, essentially eroding user control.

As of today, “the top 1 percent of social networks account for 95 percent of social web traffic and 86 percent of social mobile app use. The top 1 percent of search engines account for 97 percent of search traffic, and the top 1 percent of e-commerce sites account for 57 percent of e-commerce traffic.”1

The internet, once defined by open access and decentralized governance, has shifted toward a highly centralized structure, trading its permissionless ethos for closed, corporately controlled ecosystems.

The Consequences

Today, many individuals and small businesses rely on 'Big Tech' to connect with others, build audiences, reach customers, and generate income. However, this reliance entails significant risks, as these companies can arbitrarily change the rules, or even strip away audiences and profits through deplatforming or shadowbanning, often without warning.

One of the most notable and contentious examples of this power was Twitter’s decision (now known as X) to permanently ban former U.S. President Donald Trump in response to his role in inciting the January 6th Capitol insurrection. Going even further back in time, developers also suffered from sudden and impactful policy changes. In 2012, Twitter shut down third-party access to its API, thereby completely killing the nascent but growing market for alternative Twitter clients and other apps that used the social network’s data to power their applications.

Moreover, the algorithms fueling these networks control everything we see. This affects not only our individual lives but also society as a whole. Yet, the underlying code is not only controlled by a few people but is also hidden from public examination.

Another concern is how these companies utilize their power to extract value, as discussed earlier, and also actively constrain startups in order to strengthen their own position - thus suppressing innovation and creativity.

A prominent example is Apple’s App Store, which charges a commission of up to 30% on all in-app purchases made by users. Additionally, Apple exercises full control over which developers are permitted to publish apps on the platform.

In essence, these dynamics are rendering the current web less dynamic and less open - innovation is constrained, creators are disempowered, and users operate in increasingly closed ecosystems.

Recognizing this imbalance, a movement has emerged over the past decade to restore user sovereignty, aligning the internet’s evolution with its foundational principles of openness and self-governance.

2.3 Web 3.0: Returning to Old Ideals

Web3 aims to reverse this trend - not by going back to Web 1.0, but by combining its openness with the dynamic capabilities of Web 2.0.

The goal is to return ownership to users through new decentralized infrastructure. Instead of relying on trust in corporations, Web3 introduces verifiable, trust-minimized systems powered by blockchains. Consequently, operators no longer have the unilateral ability to modify the rules.

Web3 platforms follow three key principles:

• Decentralization: Infrastructure is collectively owned and governed by users and developers, not controlled by centralized platforms.

• Permissionlessness: Anyone can participate without requiring approval or gatekeeping.

• Trustlessness: Rules are enforced automatically via code and incentives, removing the need to trust intermediaries.

A cornerstone of Web3 is the concept of digital ownership, enabling users to truly own their digital lives, including data, content, assets, and identity. Especially, as technologies like Augmented Reality (AR), Virtual Reality (VR), Artificial Intelligence (AI), and the Internet of Things (IoT) become increasingly integral to our everyday lives, robust ownership guarantees in the digital realm will shift from being a 'nice to have' to a critical necessity.

To understand how Web3 delivers on this vision, we need to start with its foundational technology: blockchains.

3. What are Crypto and Web3?

3.1 The difference between Crypto and Web3

Before delving into blockchain technology, it is essential to clarify the distinction between ‘crypto’ and ‘Web3’, although these terms are frequently used interchangeably.

The term ‘crypto’ refers to the ecosystem of blockchain-based innovations, particularly financial applications enabled by cryptography and blockchain technology - a name derived from the cryptographic principles foundational to these systems.

The industry originated with the creation of Bitcoin, the world’s first blockchain network, introduced by a pseudonymous developer (or developer team) named Satoshi Nakamoto in 2008. Satoshi envisioned Bitcoin as a decentralized “peer-to-peer electronic cash system”, on which people could transact the network’s native digital currency, Bitcoin (BTC), without the need for a central authority - such as a bank or government - which facilitates the payments and controls the whole network.

Instead, this payment system should be governed by voluntary participants, who are willing to run the protocol’s software on their computers, thereby enforcing the network’s rules and keeping the network secure. To make sure that honesty pays off more than fraud and manipulation, honest network participants are rewarded with newly created Bitcoin for their service.

Besides that, the system leverages game theory to make rule-breaking as difficult and costly as possible.

In the years following Bitcoin's launch, developers refined the concept of decentralized systems, aiming to expand their use beyond financial transactions and native currency issuance.

But because of Bitcoin’s technical limitations, a new kind of network needed to be built.

Ethereum introduced the concept of expressiveness to blockchains, enabling developers to run arbitrary computations on its platform. This essentially created the idea of a decentralized app store, where developers can build and host decentralized applications (dApps) on top of Ethereum without any trust assumptions.

Central to this concept are smart contracts, self-executing agreements in which the terms are embedded directly into the code. These smart contracts automate and enforce agreements, reducing the need for intermediaries and increasing transparency and security in transactions and operations.

Notable examples of these decentralized applications include Uniswap, a decentralized exchange (DEX), and MakerDAO (now called Sky), a decentralized credit platform.

In short:

Crypto = the financial and technical infrastructure (blockchains, tokens, etc.)

Web3 = the user-facing vision of a new, more open internet

With this context established, we will examine blockchain technology - its core characteristics and its pivotal role in powering the Web3 paradigm.

3.2 Blockchains

Strictly speaking, a blockchain is a decentralized, distributed ledger that records transactions across multiple computers in a secure and immutable manner. Once recorded, data on a blockchain cannot be altered without consensus - making it a transparent and tamper-resistant foundation for digital ownership, money, and applications. However, it can be more intuitively understood as a shared, global virtual computer powered by a network of thousands of physical machines.

These machines collectively maintain the state of the global virtual computer and control its transition to new states. In the context of blockchains, "state" refers to the current condition or status of the network, including balances, data stored across all accounts, and - on smart contract platforms - the contracts themselves.

To achieve consensus on the correct state and valid state transitions, all the network participants (commonly referred to as "nodes") need to constantly check those transitions using the network’s software. When the majority of nodes agrees to a proposed state, it is immutably recorded as the network’s official state.

Each state within a blockchain is represented by a block, which is essentially a piece of data capturing all actions on the network, such as transfers and interactions with applications. As the term “blockchain” implies, these blocks are linked sequentially, forming a chain that represents the network’s entire transaction history.

To ensure that every node correctly verifies the network’s transactions and consistently behaves honestly, nodes are continually rewarded with the network’s native currency. Conversely, dishonest or malicious behavior results in penalties. This mechanism underpins the operation and security of most blockchains today. This short five-minute video provides a straightforward explanation of how a blockchain works.

Due to the inherently open nature of the blockchain network, developers can build and publish their applications without needing permission, making them accessible to anyone globally at any time.

This transparency ensures that every action on a blockchain network can be traced by anyone, making blockchains unsuitable for conducting illegal activities. Nonetheless, a common misconception persists that this technology is primarily used by criminals for such purposes. According to analytics firm Chainalysis, only 0.34% of total onchain transaction volume in 2023 was linked to illicit activities.

Another major advantage of blockchains is their robustness. Unlike traditional web infrastructure, where data is processed and stored on centralized servers - making it more susceptible to attacks by malicious actors - blockchains eliminate the risk of a 'single point of failure'. As outlined earlier, each node maintains a complete copy of the network’s historical data, greatly enhancing security and resilience.

To conclude, the main strengths of blockchain networks are as follows:

• Blockchains are democratic:
  Blockchain networks are open and accessible to anyone - developers and users alike - ensuring equal opportunity for participation. Moreover, the network treats all code and data equally. As long as participants adhere to the network’s rules, their transactions will be processed by the nodes.

• Blockchains are transparent:
  Anyone can review a blockchain's history and be confident that a legitimate process created the system’s current state. Even if one does not personally audit the code or data, they can trust that others have done so, fostering greater confidence in the system.

• Blockchains can make strong commitments about their future behavior:
  This is because, in blockchain networks, the software ultimately sets the rules and controls the network. Unlike traditional computer networks, where control lies with the hardware ownership and human oversight, blockchains are governed primarily by their underlying code. This means that any code executed on a blockchain will continue to operate as designed, ensuring consistent and predictable behavior. Traditional computer networks can’t make such commitments, as their operation can be altered by those who control the hardware and servers.

Since the launch of Ethereum and other smart contract platforms in the mid-to-late 2010s, the principles and features of blockchain networks driving the crypto and Web3 movements have gained significant attention. Along with this interest has come a substantial influx of capital, developers, and users.

Since 2014, total investment in the blockchain sector has surpassed $100 billion, with the majority occurring since 2018.

4. Web3’s Disruptive Potential

Blockchain technology has reached a stage of maturity that allows it to deliver meaningful, real-world value - far beyond the speculative hype of earlier years. While adoption in Western markets has been gradual due to established financial infrastructure and payment systems, its potential to transform efficiency, transparency, and ownership is becoming increasingly clear - especially in sectors such as finance, payments, infrastructure, and identity.

In contrast, emerging markets have showcased blockchain’s value as a safeguard against inflation, corruption, and exclusion from traditional banking. These regions have proven that blockchain-based tools can address structural shortcomings where legacy systems fail - offering early validation of the technology’s global relevance.

As developer ecosystems expanded, the evolution of blockchain networks made it possible to launch more powerful and user-friendly applications. These new systems leverage cryptoeconomic incentives, reduce reliance on intermediaries, simplify the complexity of blockchain technology, and deliver functionality that was previously unfeasible. As a result, Web3 is now laying the groundwork for disruptive innovation across multiple verticals, thereby delivering real value to users worldwide.

The following sections explore some of the verticals where blockchain-based applications are already challenging traditional players.

4.1 Finance

As of now, approximately $164 billion is deployed in DeFi (Decentralized Finance) applications. The revolution behind DeFi is simple: it enables anyone to access financial applications that replicate the functionality of various financial products previously restricted to a select group of individuals.

Decentralized exchanges (DEXes) represent a significant segment of DeFi infrastructure, enabling permissionless trading of digital assets. These protocols operate without intermediaries, allowing direct peer-to-peer transactions. Uniswap, the leading DEX platform, has facilitated over $2 trillion in trading volume since its 2018 launch, demonstrating the scale and adoption of decentralized trading infrastructure.

Lending protocols represent another fundamental component of DeFi. These platforms enable users to obtain loans against their cryptocurrency holdings without intermediaries, relying on automated smart contracts. Aave, the leading lending protocol, currently has ~$26 billion in total value locked (TVL).

Tokenization

Since early last year, tokenization has emerged as a significant trend within the DeFi ecosystem. While the concept of converting real-world assets, such as treasury bills or corporate bonds, into digital tokens on blockchain networks had been explored extensively in the past, recent macroeconomic conditions and endorsements from financial leaders like BlackRock CEO Larry Fink - who described tokenization as "the next generation of financial markets" - have reignited interest in the sector. In particular, the tokenization of U.S. treasury bills has experienced remarkable growth.

A recent example is BlackRock's tokenized money market fund, BUIDL. Since its launch at the end of March, BUIDL has attracted over $2.86 billion, making it the second largest product of its kind.

A notable player in the rapidly growing tokenized treasuries market is the French startup Spiko, a portfolio company of Blockwall. Since launch, the platform has attracted $115 million in U.S. treasury investments and €236 million in European bond allocations. With a 3.28% market share in tokenized T-bills, Spiko has established a strong foothold in this emerging market.

The success of such products lays the foundation for a substantial transformation in the digital assets markets, encouraging additional funds to follow suit and further accelerate the tokenization of the world's assets.

Benefits of Tokenization (for Traditional Financial Institutions)

Moreover, many financial institutions initiated various proof-of-concept projects using tokenization to enhance their internal processes. In doing so, they discovered that tokenization enables increased capital efficiency and cost savings, with figures ranging from 20% to 65% depending on the processes.

Traditional transactions often require up to two days for processing, leaving capital idle and reducing efficiency. In contrast, blockchain transactions settle within seconds, operate around the clock, and carry lower counterparty risk. This dramatically improves capital efficiency across major financial operations. Furthermore, cost savings are achieved by significantly reducing the reliance on intermediaries in these transactions.

Tokenization also enables fractional ownership of assets. This allows multiple investors to collectively hold shares in assets that were previously inaccessible for shared ownership.

One notable instance of tokenization is Picasso’s 'Fillette au béret,' which was tokenized in 2021 by the Swiss digital asset bank Sygnum.

As a result, multiple investors were able to acquire fractional shares in the artwork, collectively sharing ownership. Last year, the token holders participated in a vote to decide on accepting an offer for the sale of the artwork.

By facilitating broader participation, tokenization democratizes investment opportunities, opening up traditionally exclusive markets, such as fine art, to a wider range of investors.

Leading management consulting firms such as McKinsey & Company, Roland Berger, and Boston Consulting Group forecast that tokenization is poised to evolve into a $10 trillion market by 2030.

Prediction Markets

Prediction markets represent another area experiencing significant attention and adoption.

Polymarket currently leads this space, enabling users to speculate on diverse events from geopolitical elections and pop culture trends to the medal tally at the Olympics using stablecoins. This platform exemplifies the broader potential of prediction markets, which aggregate collective intelligence to forecast real-world outcomes with financial stakes.

Polymarket was launched in 2020 and experienced explosive growth in 2024: It now boasts over 290,000 monthly active users and reached $2.5 billion in trading volume in November 2024 alone, underscoring its dominance as the largest prediction market today.

To put these figures in perspective: During Q1 2024, the platform averaged a monthly volume of approximately $50 million USD, with active user numbers ranging from 2,000 to 4,000 per month.

This years growth was driven primarily by the prediction markets related to the U.S. presidential elections, which accounted for a majority of the platform's total trading volume this year.

With increasing volumes, Polymarket's media relevance has also risen. Its ability to capture real-time political sentiment, often more accurately than traditional polls, is leading more mainstream media outlets to use its data for reporting.

Among them are CNN, The Wall Street Journal, and Bloomberg, which has even integrated Polymarket's election data into the Bloomberg Terminal.

Furthermore, the platform accurately predicted Donald Trump's victory and, due to its ability to rapidly incorporate new information, became a preferred source for tracking swing state vote counts for many observers - including Donald Trump and his team.

As with many financial use cases, blockchains are an ideal infrastructure for prediction markets, enabling the efficient, low-cost, and rapid transfer of capital across borders.

4.2 Payments & Stablecoins

Stablecoins and blockchain-powered payment solutions are increasingly seen as one of the most impactful innovations in the cryptocurrency space, often cited as its flagship real-world application.

The two most widely used stablecoins are USDT (Tether) and USDC (USD Coin). In 2024, stablecoins processed over $27 trillion in transaction volume, and the total market capitalization of all stablecoins reached $238 billion. That’s more than Visa and Mastercard in terms of volume in 2024.

Many people globally are using these dollar-pegged tokens to get access to the U.S. dollar - oftentimes in order to preserve their buying power and flee their depreciating national currencies (e.g. in Argentina or Turkey).

That said, the most common use for stablecoins is in cross-border payments, especially remittances. This is because stablecoins can cut transaction costs by as much as 80% compared to traditional payment systems. As a result, major players like Visa, Mastercard, Stripe, and PayPal are integrating crypto-payment infrastructure or launching their own stablecoin solutions.

Another great example of how this technology is applied today is Nilos, one of Blockwall’s portfolio companies, which is offering a Web3-native payment platform that reimagines how businesses move money globally.

Imagine a company based in Europe that needs to pay freelancers in Argentina, suppliers in India, and contractors in Kenya – in different currencies, across different banking systems, with different regulations. With traditional infrastructure, that means delays, high fees, and fragmented liquidity.

Nilos makes that seamless. Through their blockchain-based platform, businesses can send payments across 100+ countries, hold balances in multiple currencies, and convert FX in real-time – all from a single interface.

What’s unique: Nilos is fully licensed in the EU and Canada. It integrates both crypto and fiat payment rails, enabling compliant settlement on either side of the financial system.

They’re not replacing banks – they’re complementing them, bridging the gap between today's finance and tomorrow’s programmable money.

It’s these kinds of platforms that show Web3 isn’t just an idea. It’s infrastructure – ready to be used, today.

Yet, cost savings are not the only factor drawing established and emerging players into the stablecoin market.

Stablecoin Issuers’ Business Model

Stablecoin issuers arguably operate one of the most lucrative business models in the financial landscape today.

They accept fiat deposits from users and primarily invest these funds in short-term U.S. Treasury bills. The interest accrued from these investments is typically retained by the issuers, rather than being distributed to the stablecoin holders. For example, Tether, the issuer of USDT, the largest U.S. dollar-pegged stablecoin, generated over $1 billion in profits during the first quarter of 2024 by holding more than $90 billion in T-bills.

This figure is especially remarkable given that the company reportedly operates with a team of just around 100 employees.

Let’s compare the old to the new:

• Transaction fees: Remittances traditionally averaged around 6.4% – but in exotic corridors like Europe–Africa or Latin America–Europe, fees for remittances can reach 15–18%; with stablecoins, they drop to just a few cents

• Transaction times: From days to minutes

• Global payroll: Automated and instant

• Financial inclusion: No bank account needed – just a smartphone

• Inflation hedge: Stablecoins give people access to stable currencies, such as Dollar or Euro, in fragile economies

• Not issued or controlled by central banks: unlike CBDCs such as the digital Euro, stablecoins are issued by private entities and operate outside direct monetary policy controls – though their backing assets may still be influenced indirectly

Central Bank Digital Currencies (CBDC)

But stablecoins aren’t the only form of digital money today. As of mid-2024, over 130 countries are actively exploring the development of Central Bank Digital Currencies (CBDCs) at various stages, from research and development to pilot programs and even full implementations.

While a few countries, such as the Bahamas with its "Sand Dollar" and Nigeria, have fully launched CBDCs, many others are still testing and refining their approaches.

Countries such as Sweden, China, and several others are in advanced stages of piloting their CBDCs. Blockchain technology is being explored as the underlying infrastructure for some of these initiatives due to its transparency and security.

However, not all countries are adopting blockchain. Some are using more traditional digital infrastructures, depending on their regulatory and technical requirements.

4.3 Physical Infrastructure Networks

Decentralized Physical Infrastructure Networks (DePIN) represent one of the most rapidly expanding segments within the blockchain industry. These networks revolutionize many industries and change the way physical infrastructure is built by offering token rewards to participants who help expand the system.

Traditionally, building physical infrastructure, such as telecommunications networks, required decades of effort and significant resources from major providers. In contrast, DePIN networks like Helium leverage crowdsourcing to achieve rapid and cost-efficient network expansion.

The success of this model hinges on tokenized incentive structures. Rather than compensating participants in USD or Bitcoin - both of which would be prohibitively expensive - companies instead distribute their own tokens.

This approach allows them to finely tune the token’s issuance and distribution while ensuring it captures the value generated by the network’s usage and growth. By aligning the token’s value with network expansion, early participants benefit directly from the token's appreciation. This creates a 'positive flywheel' effect, where more participants are drawn to the network, accelerating growth even further.

Helium and Hivemapper are prime examples of how this incentive model has proven its effectiveness, driving rapid infrastructure build-out in record time.

Helium: The People’s Network

Helium is one of the most prominent DePIN networks to date.

Via Helium Mobile the company develops a decentralized network that incentivizes users to create mobile communication infrastructure for 5G coverage.

Users acquire Helium Hotspots (mini cell towers) and install them at their homes, providing 5G connectivity to Helium Mobile subscribers in their area. In return, they receive token rewards, significantly reducing the traditional costs of building a mobile network.

As described above, setting up legacy telecommunication infrastructure is a highly time-consuming and costly process, often requiring vast capital and long approval times to deploy traditional cell towers across a country. In contrast, Helium's crowd-sourced model expedites this process and drastically reduces costs.

By leveraging this more efficient system, Helium Mobile offers some of the cheapest unlimited data plans in the U.S. While still expanding, the network partners with T-Mobile to ensure nationwide coverage in areas where Helium's network remains sparse. This partnership allows Helium Mobile to deliver services in places where its own network has yet to reach full capacity.

Meanwhile, the company recently launched its "Carrier Offload Beta," allowing other mobile carriers to redirect part of their traffic to the Helium network during times of congestion or in areas where their infrastructure is underdeveloped. Since the program's launch in June, nearly one million users from other carriers have connected to the network, offloading 33 TB of data daily, equivalent to approximately 15,000 hours of video content.

Hivemapper

Another well established DePIN project is Hivemapper. The company is building a decentralized mapping network, where users contribute mapping data via dashcams and are rewarded with the platform’s native token.

Hivemapper monetizes this data by offering it to businesses and organizations that require high-quality, up-to-date geographic information, such as logistics companies, ride-hailing services, and other industries relying on mapping data. Compared to Google Maps, Hivemapper's approach allows it to provide more accurate data and significantly accelerates the mapping process.

Since Hivemapper’s launch two years ago, the company has recorded more than 19.42 million unique road kilometers, representing approximately 32% of the world's total road kilometers. In comparison, Google Maps took five years to capture just 10% of the world’s road network, underscoring the rapid execution and scalability advantages that decentralized networks like Hivemapper can offer.

4.4 Social

Crypto’s inherent programmability and composability make it a uniquely social technology. Social applications are emerging as a dynamic category, leveraging blockchain’s properties to reimagine community interaction and creator economies. Some platforms focus on financialization, enabling content creators to monetize their influence in novel ways. Others aim to leverage the composability of blockchain-based applications, providing developers with the opportunity to create entirely new types of social experiences.

Currently, the Farcaster protocol has gained the most traction in this area. Farcaster is a decentralized social network where users' social graphs and content are stored onchain, allowing developers to build various applications on top of it. This structure enables users to truly own their data, giving them the freedom to opt in and out of applications at any time while retaining their followers and content.

This approach contrasts sharply with the Web2 status quo, where users repeatedly spread their personal information across the servers of centralized companies, effectively relinquishing control over their data each time. In contrast, blockchains allow for the creation of protocols that store user data in one centralized place.

To illustrate, imagine a platform like X or LinkedIn operating on a decentralized protocol. If the algorithm or advertisements became undesirable, users could seamlessly switch to an alternative platform without losing their social graph or history. This represents a significant shift from today's centralized models, offering users greater flexibility and control.

Additionally, the integration of blockchain-based microtransactions into social platforms offers creators and artists new ways of monetization, including paid subscriptions and exclusive content access. Since user wallets are directly integrated with the platform, payment processes become significantly smoother, creating a more cost-efficient and user-friendly experience for both content creators and their audiences.

Going forward, decentralized social networks could also allow users to control the sharing of their personal data, giving them the option to share for more personalized ads or retain complete privacy while maintaining their social connections and content across platforms.

4.5 Digital Ownership

NFTs are foundational to establishing verifiable ownership and authenticity in the digital realm. By encoding unique, immutable proof of ownership on the blockchain, they enable individuals and communities to securely manage digital and physical assets - from art and music to real estate and intellectual property. This fosters a stronger sense of value and belonging within communities, allowing individuals to truly "own" their digital achievements or contributions.

Moreover, NFTs open up new monetization opportunities. Creators and brands can directly monetize their digital assets, earning revenue through initial sales and receiving ongoing royalties whenever the NFT is resold, thanks to the programmable nature of blockchain. This not only incentivizes quality content creation but also ensures a steady income stream for creators.

One company leveraging this technology is the French startup Zealy, a Blockwall portfolio company. Through their gamified engagement platform, Zealy fosters a more direct relationship between brands, content creators, and their fans, significantly enhancing engagement and loyalty.

Established brands like Michelin and FIAT have successfully used Zealy's platform, rewarding loyal users with NFTs and creating deeper emotional connections that drive lasting loyalty. For example, Michelin introduced the ‘Michelin Club’ on Zealy, engaging members through quests related to motorsports, gastronomy, and travel, resulting in over 100,000 completed quests and rewarding participants with NFT collectibles. Similarly, FIAT built a dynamic fan community with Zealy, attracting over 35,000 members who completed 530,000 quests, with exclusive rewards such as access to limited edition vehicles.

This comprehensive use of NFTs illustrates how digital ownership not only transforms engagement but also provides sustainable financial opportunities for brands, creators, and communities alike.

4.6 Privacy

Cryptography is the backbone of the blockchain space, as it eliminates many of the trust assumptions inherent to traditional systems and conventional digital environments.

As the crypto and Web3 sectors grew and attracted significant capital, more attention and funding flowed into cryptographic research, leading to breakthroughs once considered distant possibilities.

Let’s examine three of the most influential technologies poised to redefine our future online and blockchain interactions, with a focus on advancing privacy:

Zero-Knowledge-Proofs (ZKPs)

ZKPs allow one party to prove the validity of information to another without revealing the actual data. Simply put, it's like proving you know a password without sharing it. You can find an easy-to-understand explanation of ZKPs here.

In crypto, ZKPs are used by privacy-focused blockchains like Zcash to validate transactions without exposing details. Layer 2 scaling solutions like ZKSync leverage ZKPs to scale the Ethereum network efficiently.

In the future, ZKPs could enable private identity verification, allowing users to confirm they are over 18 without revealing their date of birth (see here for a quick demo). Additional use cases include secure voting systems and confidential blockchain transactions.

Fully Homomorphic Encryption (FHE)

FHE allows data to be processed and analyzed in its encrypted form, meaning you can perform calculations on encrypted data without decrypting it. This ensures privacy and security. While still in the early stages, FHE could revolutionize how sensitive data, such as financial records or health information, is handled in blockchain applications, making it possible to conduct complex computations without exposing the data.

Fully Homomorphic Encryption (FHE) is increasingly being tested in practical scenarios.

For instance, IBM is working on integrating FHE into cloud services, allowing companies to analyze customer data securely without ever decrypting it, ensuring data privacy even in cloud environments.

Another example is in the healthcare sector, where FHE enables researchers to perform large-scale analytics on encrypted patient data, facilitating medical research without exposing sensitive personal information.

These cases illustrate how FHE can maintain privacy while allowing valuable insights to be drawn from encrypted datasets. In the context of crypto and Web3, there are some projects building out protocols or even whole blockchains that allow to develop FHE-based applications.

Multi-Party-Computation (MPC)

Multi-Party Computation (MPC) allows multiple parties to collaborate on a calculation without revealing their individual data inputs. Think of it like calculating the average salary of a group without anyone sharing their specific salary.

A concrete example in crypto is MPC's use in wallet management, like ZenGo's wallet, which ensures private key security by splitting it into multiple shares.

Another example is the infrastructure provider Fireblocks, which uses MPC to enable secure and seamless transactions for institutional investors by ensuring that no single party holds the entire key, enhancing security for digital asset transfers.

As this technology evolves, it will further enhance privacy and security across decentralized finance (DeFi) and digital asset management.

If you want to dive deeper into the different privacy enhancing technologies, feel free to take a look at the dedicated blog post by our Principal Syed Armani.

4.7 Gaming

The gaming industry has emerged as one of the most lucrative and rapidly expanding sectors in the entertainment world, with a global revenue of around $475 billion in 2024. Nearly every successful game today features its own in-game economy, where players spend substantial amounts of money on cosmetic items to customize their characters and gaming experiences. For instance, players of ‘League of Legends’ spent over $1 billion on in-game skins in 2020 alone.

However, these economies currently exist entirely on centralized servers controlled by game developers, meaning that these companies maintain full authority over the digital assets. This results in isolated, closed economies where players have no means of transferring or further utilizing their hard-earned or purchased items across different games.

Digital Ownership

Blockchain technology presents an opportunity to fundamentally alter this dynamic. By basing the games’ economies on decentralized networks, players can truly own their in-game assets.

Additionally, this opens up previously isolated economies, allowing for interoperability between different games. Players would have the ability to trade assets from one game with those from another, resulting in entirely new dynamics and possibilities.

Play-to-Earn

One of the earliest applications of blockchains in gaming is the ‘play-to-earn’ model, where players can earn real-world value through in-game engagement. Instead of playing solely for entertainment, players are rewarded with in-game assets (such as tokens or NFTs) that carry real monetary value outside the game. This model blurs the lines between gaming and earning, enabling players to transform their time and effort into potential income.

Among the most prominent examples of this model are Axie Infinity and STEPN.

Axie Infinity allows players to collect, breed, and battle virtual creatures known as ‘Axies’. In 2021, the game experienced immense popularity, reaching over 2 million monthly active users at its peak.

Fully Onchain Games

Beyond early blockchain games like Axie Infinity, often considered the first generation of onchain games, a new wave of more advanced projects is now in development.

Thanks to recent advancements in blockchain scalability, these upcoming games can be built almost entirely onchain, offering developers the opportunity to craft unique gameplay experiences that extend beyond purely economic aspects, such as the play-to-earn model.

EVE Frontier, an upcoming game developed by the creators of the popular online game EVE Online, exemplifies this shift. The game is designed to live entirely on the blockchain, granting players unprecedented control not only over their in-game assets, but also the game’s development. Players and developers will be able to create their own smart contracts, which allow for customization, trading, and even the creation of in-game currencies, establishing a truly player-driven and dynamic gaming ecosystem.

The future trajectory of onchain gaming and the innovative features it will introduce is yet to be fully defined. However, the inherently open and transparent nature of blockchain-based games is expected to drive these innovations, emerging from the broader developer community. This openness fosters a collaborative environment, enabling developers to experiment and build upon each other’s ideas, which will be crucial for shaping the future of novel gaming experiences and eventually outcompeting those created by centralized gaming studios.

5. Why Now is the Right Time to Invest?

As an investor, you might consider why this moment represents a strategic opportunity to engage and invest in crypto and Web3.

While crypto and Web3 have been in the spotlight for nearly a decade, their transformative potential is only now beginning to materialize in a way that directly impacts users' daily lives.

Alongside major technical advancements that significantly improve the user experience of blockchain-based applications, the approval of Bitcoin spot ETFs in the U.S. in 2024 has affirmed the legitimacy of the entire industry. After many years, crypto is finally being recognized as an asset class of its own.

In addition, the regulatory landscape for crypto and Web3 companies is improving steadily, as many jurisdictions are working on progressive regulatory frameworks to foster the growth of their digital asset and Web3 industries.

On the following pages, we will take a closer look at major developments of recent years, which lay out the case for why now is the perfect opportunity to get involved and invest in the space.

5.1 Scalability

Since the inception of blockchain networks, scalability has been a huge bottleneck hindering the technology’s adoption. While global payment networks like Visa, on average, process around 8,700 transactions per second (TPS) and can scale up to 65,000 transactions if necessary, Bitcoin and Ethereum are only able to handle around 8 and 119 TPS, respectively.

The numbers make it clear that neither network can support even a small fraction of the world's financial activity, let alone the vast amount of activity happening on the internet.

However, in recent years, the infrastructure has significantly matured. Next-generation smart contract platforms like Solana have optimized for scalability, processing around 1,000 transactions per second (with theoretically maximum 65,000 transactions per second) with transaction fees being a fraction of a cent.

Furthermore, plenty of so-called layer 2 networks have been launched on Ethereum since 2022. Layer 2s are separate blockchains that execute transactions on their networks and subsequently post the state changes on Ethereum.

This way, they can achieve way higher scalability than the Ethereum Mainnet without compromising security and decentralization. As of today, all layer 2 solutions combined process around 20 times more transactions per second than Ethereum, with transaction fees being as low as a few cents.

But the progress doesn’t stop there. For the next few years, further scalability unlocks for existing networks like Solana and Ethereum are planned. Furthermore, third generation platforms are likely to emerge, leveraging continuous improvements in both software and hardware.

5.2 Improved User Experience

Similar to the early internet era, where setting up a dial-up modem was required to go online, the user experience (UX) of early crypto is equally cumbersome, with processes that are anything but intuitive.

Initially, users are required to sign each onchain action with their Web3 wallet, adding extra steps and increasing complexity. Furthermore, most wallets are self-custodial by default, meaning users are solely responsible for securing their assets. If access is lost, their funds are irretrievable. While self-custody is a core principle of crypto, many users find this responsibility challenging.

In response, the industry has focused on enhancing Web3 wallet UX. New wallets now abstract the complexities of wallet management, allowing developers to cover transaction fees and offering improved security features like 'Social Recovery', where the user's friends, family members, or designated crypto custodians can help to regain access to lost wallets.

A major player pushing the boundaries at Web3’s UX is the crypto exchange Coinbase. The company launched their 'Smart Wallets' and drastically changed the way users will interact with blockchain-based applications going forward.

This wallet enables users to create wallets and sign transactions with their fingerprint or FaceID. Additionally, the private key is backed up in the cloud, allowing users to recover their wallets if they lose their device.

Another super interesting feature allows users to connect their smart wallets to their Coinbase accounts and use their exchange balance for onchain transactions. With this approach, transferring funds to a separate wallet to interact with Web3 applications is no longer required.

Thanks to such innovations, the next generation of Web3 users won't struggle using onchain applications. Instead, they will benefit from more intuitive, Web2-like onboarding and user flows.

5.3 Institutional Adoption

Apart from technical improvements, the sentiment surrounding crypto and Web3 among investors and regulators has become increasingly favorable.

Under the previous U.S. administration, which maintained a critical stance toward the crypto industry - particularly through the SEC led by Gary Gensler - financial institutions nevertheless began to recognize the potential of blockchain technology and the value of digital assets as an emerging asset class. A key catalyst for institutional adoption remains the approval of Bitcoin spot ETFs in 2024, which attracted significant inflows that surpassed expectations and marked one of the most successful ETF launches to date.

This milestone took the industry ten years to achieve, affirmed that Bitcoin and crypto more broadly are legitimate asset classes, and increased the interest of major financial players worldwide in crypto and Web3.

This legitimization reflects the maturity of a space that has historically only been associated with speculation. Moreover, the growing engagement of these institutions fosters the development of more rigorous auditing processes and compliance frameworks. Their interest and initiatives are also likely to play a pivotal role in driving more regulatory clarity around digital assets.

5.4 Regulation

On the regulatory front, many jurisdictions started to develop extensive regulatory frameworks that should provide crypto and Web3 companies with the necessary regulatory clarity to develop their products and tokens.

In Europe, the Markets in Crypto-Assets Regulation (MiCA) provides a unified framework for all EU member states, with certain provisions coming into force in June of this year.

Similarly, the U.S. has made significant progress in crypto policy. The current administration, under President Trump, has adopted a pro-crypto stance, exemplified by an executive order establishing a cryptocurrency working group to draft new digital asset regulations and explore a strategic national reserve for cryptocurrencies. These efforts, along with recent leadership changes in key regulatory roles, demonstrate a strong commitment to fostering innovation and advancing the digital assets sector.

After years of 'regulation by enforcement', where the SEC targeted some of the most compliant crypto companies with numerous questionable lawsuits while ignoring the truly malicious actors, lawmakers from both political parties are now pushing for clear rules on how crypto companies can operate in the U.S.

These political tailwinds had built up pressure on the SEC. Despite low initial probabilities assigned by ETF experts and the broader markets, the SEC approved the launch of Ethereum's Ether spot ETFs in July 2024. Subsequently, following the inauguration of President Donald Trump, SEC Chair Gary Gensler announced his resignation, effective January 20, 2025, and the incoming administration has appointed a more crypto-friendly successor.

In summary, major fundamental advancements are aligning to drive the next wave of blockchain innovation and adoption.

6. Outlook: Convergence of Technologies

At Blockwall, we believe that blockchain technology will not only serve as a crucial and necessary evolution of our financial system and the internet but also provide essential infrastructure for other emerging technologies. This 'Convergence of Technologies' is one central component to our investment strategy.

In the following section, we would like to provide more concrete examples and discuss how technologies like Artificial Intelligence (AI), the Internet of Things (IoT), and the Metaverse can unlock their full potential through the integration of blockchains.

6.1 Web3 x Artificial Intelligence

Artificial intelligence is adept at processing vast amounts of data, identifying patterns, and making predictions using complex algorithms. On the other hand, blockchains provide a secure, transparent, and immutable ledger for recording transactions and data. Integrating AI with blockchain technology can therefore enhance the trustworthiness and efficiency of both technologies.

Autonomous Agents

The rapid evolution of artificial intelligence is giving rise to autonomous agents, computer programs capable of independent decision-making and task execution. These entities may ultimately comprise the majority of blockchain's first billion users, redefining the interactions within digital ecosystems.

But what exactly makes these autonomous agents so important, and why is blockchain technology essential for them?

First, autonomous agents excel at handling complex, repetitive tasks with a high degree of precision, enabling continuous and efficient operations without human intervention.

This capability is especially valuable in environments where speed, real-time decision-making, and adaptability are crucial. These agents act as independent digital workers, optimizing processes and executing tasks more effectively than any manual system.

To illustrate this, consider the example of Fetch.ai, a portfolio company of Blockwall. In collaboration with Cambridge University, Fetch.ai developed an Autonomous Agent-Based Supply Chain System (A2SC). This system employs Fetch.ai's autonomous economic agents (AEAs) to manage intricate supply chain processes, such as optimizing the logistics for perishable goods.

Traditionally, supply chains require a great deal of manual coordination, but these agents can communicate, negotiate, and make real-time decisions autonomously. This reduces inefficiencies, minimizes human error, and adapts swiftly to changes, thereby making the process far more efficient.

Now, why will autonomous agents utilize blockchain infrastructure going forward?

Blockchains are essential to autonomous agents because they are permissionless, allowing anyone, including AI agents, to transact and operate without needing prior approval. This is critical because autonomous agents cannot fulfill the requirements to open or maintain traditional bank accounts, yet.

Second, the immutability of smart contracts compared to conventional Web2 APIs ensures that these agents can operate without interruption, as the rules governing their interactions remain reliable and tamper-proof.

Lastly, the transparency of all transactions on the blockchain ensures that the activities of these AI agents can be easily monitored, providing accountability and building trust in their autonomous actions.

By leveraging blockchains and cryptocurrencies, autonomous agents not only reduce inefficiencies but also establish a system that is secure, transparent, and exceptionally responsive, surpassing what traditional methods can achieve.

This combination of AI and blockchain presents a transformative opportunity for industries that require complex, real-time coordination.

Decentralized AI training & Data Marketplaces

Blockchain technology can greatly enhance AI by providing secure and transparent data sharing while incentivizing contributors.

For example, Ocean Protocol, a Blockwall portfolio company, leverages blockchains to create a decentralized marketplace where AI developers can safely access and trade a wide variety of datasets.

Similarly, startups like SingularityNET and Fetch.ai, use blockchains to build decentralized AI marketplaces, allowing developers to share and monetize their AI models and services.

Proof of Personhood & Content Authenticity

Users on social networks like X already find it challenging to distinguish between bots and real people.

Similarly, it is becoming increasingly difficult to identify fake or AI-generated content. Both problems stem from a lack of tools which allow for proper verification, something blockchains were literally made for.

Blockchain-based Proof of Personhood protocols like Worldcoin aim to tackle the problems associated with the growing number of bots on the internet. They provide anyone who scans their iris using their specialized hardware with a unique ID proving their humanity.

Meanwhile, Fox Corporation leverages blockchain technology to verify the authenticity of media content. In the future, as AI becomes more ubiquitous, we believe that such tools will gain even greater significance.

6.2 Web3 x The Internet of Things (IoT)

Blockchains offer a unified infrastructure that facilitates the seamless exchange of both monetary value and data. This integration unlocks a wide array of potential use cases.

A good example of this is supply chain management. By combining blockchains with IoT sensors, goods can be transparently and immutably tracked from production to delivery, thereby significantly reducing fraud and ensuring authenticity.

In addition, Smart Cities also stand to benefit from blockchain integration. IoT devices that collect data on traffic, pollution, and energy consumption can leverage blockchain for secure, decentralized data storage, which allows for efficient management and optimization of city infrastructure.

The emerging ‘Economy of Things’ is another area where blockchain proves invaluable. Smart contracts enable automated and secure payments between IoT devices, supporting innovative business models such as pay-per-use services or machine-to-machine transactions.

A practical demonstration of this potential is seen in a joint proof-of-concept by Bosch, the layer 1 network peaq, and Fetch.ai. They developed an all-in-one sensor that captures valuable data, publishes it on a blockchain, and exchanges it for token rewards. Moreover, AI agents are employed to enhance the rewards received by the device owner.

6.3 Web3 x Metaverse

Finally, there is the convergence between Web3 and the metaverse. To clarify, it is important to first define the term 'metaverse.'

If the metaverse should ever become an integral part of our everyday life, which we anticipate, relying on centralized companies when it comes to storing all of our data, digital belongings, and assets becomes highly risky. This is where true digital ownership, provided by blockchain technology, becomes even more important than it already is today.

Platforms like Decentraland and The Sandbox give us a glimpse of how the future might look like. There, NFTs represent things such as digital real estate, art, and other assets, allowing users to buy, sell, and trade them securely and transparently.

Beyond digital assets, users going forward should also fully own and control their personal data and identity. This would allow them to maintain a consistent identity across multiple virtual worlds without being tied to any single platform.

The Industrial Metaverse

Siemens is at the forefront of the industrial metaverse, creating more efficient and collaborative factory environments.

Through their Tecnomatix software, they enable the creation of digital twins - precise virtual models of production lines. This technology allows factory engineers and suppliers to collaborate seamlessly within a shared digital space, making real-time adjustments and optimizations to production processes.

For instance, Siemens successfully applied this system to a modular electronic assembly line, facilitating quicker and more effective decision-making among all parties involved.

Likewise, Bosch is leveraging the industrial metaverse to enhance manufacturing efficiency by implementing digital twins of their machinery. These virtual models enable Bosch to anticipate maintenance requirements, streamline workflows, and simulate various scenarios before implementing changes in the real world.

This proactive approach leads to reduced costs, minimized downtime, and improved overall operational efficiency.

Blockchains play a critical role in the industrial metaverse by ensuring secure, transparent, and decentralized management of data and assets.

For example, blockchains can provide a tamper-proof record of all activities within the industrial metaverse, ensuring data integrity and trust among stakeholders. Smart contracts enable automation and enforce agreements between different parties in the metaverse, such as between manufacturers and suppliers. Additionally, blockchain can facilitate seamless data sharing and interoperability, which is crucial for the collaborative and real-time nature of the industrial metaverse.

Clearly, leveraging blockchains as the underlying infrastructure can significantly enhance the utility and safety of other emerging technologies. Thus, we believe that the potential of investing in companies working at those intersections, especially at such an early stage, is immense.

7. Our Vision for 2035

By 2035, blockchain and Web3 technologies will seamlessly integrate into the very fabric of everyday life, much like the internet itself has become invisible in our daily routines.

The term ‘blockchain’ might fade into the background, just as we no longer emphasize ‘HTML’ when discussing the web. Instead, users will engage with a decentralized digital ecosystem, unaware of the protocols powering it but reaping the benefits of its transformation.

Ultimately, the divide between Web2 and Web3 will dissolve.

At the heart of this evolution lies a financial revolution, a reimagining of how value moves across the globe. Blockchain will serve as the invisible backbone of financial systems, enabling instant, secure, and cost-effective transactions on decentralized rails - Blockchains and Crypto will become the economic layer of our future internet.

Money will flow as seamlessly as information does today, eliminating the need for traditional intermediaries and creating a faster, more efficient financial landscape. Digital currencies and tokenized assets will become the norm, introducing new forms of interaction and automation possibilities such as instant micropayments, automated insurance payouts, and innovative investment opportunities.

Users will experience a simpler, more direct financial system without the complexities of traditional banking. Banks as we know them will need to adapt, evolving from gatekeepers of capital to service providers offering user-friendly interfaces and advisory services in a decentralized financial system.

Beyond finance, the concept of ownership will be fundamentally reshaped, with individuals gaining complete sovereignty over their digital identities and data.

In this envisioned future, users will have granular control, deciding what data to share, for how long, and with whom. Interactions will be framed around "permissioned sharing", allowing users to retract access at will. This will extend to digital agents, our virtual co-workers and collaborators, who will rely on deeply personal data to optimize their functionality.

These 'onchain AI agents' will play an increasingly important role in our daily lives by autonomously managing a variety of tasks.

For example, they could oversee their owner's investments, automatically rebalancing portfolios based on market trends. These agents might also handle travel logistics by booking flights, accommodations, and transportation in sync with a user’s schedule, or optimize energy usage in smart homes by dynamically adjusting settings to reduce costs. The intersection between Web3 and AI will become the autonomous intelligence layer of our future internet.

By streamlining such activities, onchain AI agents will free up human capital for more creative and fulfilling endeavors.

Web3 will also drive a cultural shift in how industries operate and value exchange is understood.

Peer-to-peer interactions will dominate, reducing reliance on intermediaries. Subscriptions, contracts, and agreements will be directly negotiated between users and service providers, shifting power dynamics. Augmented and wearable devices will redefine how we interact with commerce, presenting products and comparisons directly in our field of view.

Instant settlements through pre-configured wallets will become the norm, enabling transactions with minimal friction.

However, this vision does not come without challenges. Ensuring interoperability between platforms, improving cryptographic methods for privacy, and establishing standardized protocols for communication between blockchains will be crucial. These innovations will address critical issues and ensure that blockchain technology remains secure, inclusive, and user-centric.

Our vision for 2035 is undeniably ambitious. While many of the ideas and technologies we propose are still in their early stages, we are confident they will empower individuals, transform entire industries, and give rise to entirely new ones in an increasingly digital society. This is the opportunity we want to capitalize on.

Web3 will not replace the internet. It will become the internet – more open, more secure, and more aligned with the values of a digital, global society.

This is not a crypto story. It’s an infrastructure story.

And the opportunity to shape it – is now.

This is why we at Blockwall are so committed to Web3 and why we want to use our funds to contribute to a transparent and secure digital future for all generations - and by partnering with us, so will you.

8. Bonus: Investing in Traditional Firms vs. Web3

With a deeper understanding of the principles, value proposition, and current state of crypto and Web3, it is appropriate to address two important questions investors often consider: how investing in this industry differs from traditional ventures and how to evaluate the value of companies within this sector.

Before addressing these questions, it is important to gain a deeper understanding of ‘tokens’ as both a concept and a technology.

8.1 A Brief Introduction to Tokens

Tokens are one of the most fundamental and widely used ‘programs’ on blockchain networks. Essentially, they represent units of ownership over assets like money, art, music, and even physical items such as real estate or bank account holdings. However, in most instances, tokens represent ownership of digitally-native assets or currencies.

The innovation behind tokens is simple: For the first time ever, we have the ability to take any item that can be theoretically represented in code, encapsulate it within a token, and then buy, sell, and use it. This flexibility is why tokens are used to represent shares of ownership over blockchain networks or the different protocols living on top of them.

Tokens also play a pivotal role in reviving the original vision of the internet, which was meant to be decentralized, open, and user-centric.

As discussed at the beginning of this handbook, the internet increasingly became dominated by centralized companies that control user data and extract value from user participation. Tokens counteract this trend by shifting ownership and control back to the users, enabling them to have a genuine stake in the platforms and networks they engage with.

Furthermore, tokens align incentives across participants, allowing users, developers, and creators to share in the success of a network, which was previously impossible in the Web2 model dominated by large corporations.

Tokens, therefore, not only represent ownership but also enable more democratic decision-making through governance rights and incentivize active participation, ensuring that platforms are built and shaped by their communities.

This is why tokens are not just an innovative financial instrument but a crucial tool for bringing back the decentralized, participatory ethos of the internet.

8.2 Traditional vs. Crypto Businesses

Next, we will briefly examine how crypto companies (can) differ from traditional businesses.

Many crypto ventures are structured as decentralized protocols which are governed by self-executing code, overseen by a foundation or Decentralized Autonomous Organization (DAO). Such 'companies' therefore mostly rely on an engaged community, often consisting of the protocol’s token holders, rather than a dedicated management team.

In addition to their operation on a transparent infrastructure (i.e. blockchains), another key feature can be their commitment to the open-source ethos. This approach significantly influences the protocols' business strategy, as it represents a notable departure from traditional businesses, which own their code, extract value from proprietary processes, and use their transactional and customer data to generate advertising revenue and other sources of income.

While a traditional company's equity shares often directly reflect its value, this is not always the case with tokens of crypto and Web3 protocols. For example, a token may only function as a so-called utility token, used for payments for the provided service. As a result, the demand for the service is reflected in the token's price, rather than the company's overall value.

Nevertheless, many processes and value-capture mechanisms are similar to those from the traditional financial realm. In crypto and Web3, those mechanisms are referred to as ‘tokenomics’.

8.3 Tokenomics

Tokenomics refers to the economic principles and mechanisms surrounding a token. Beyond the token's supply dynamics, which include the total supply, inflation schedule, and initial allocations between the team, investors, and the public, tokenomics describes how a token is used and how it captures the value generated within a network or app.

In order to support a token’s value, some protocols employ a sort of dividend payment or token-buybacks. Coming from the traditional financial world, the value capture mechanisms employed by the decentralized credit protocol MakerDAO may be the most comprehensible.

8.4 MakerDAO as an Example of Effective Tokenomics

MakerDAO, which has rebranded as 'Sky', is one of the oldest and with $15 billion in Total Value Locked (TVL) one of the biggest protocols in the decentralized finance (DeFi) industry.

The platform leverages smart contracts to enable users to deposit crypto assets, such as ETH or USDC, as collateral. These smart contracts, known as vaults, are at the core of Sky's functionality, allowing users to mint a corresponding amount of the protocol’s USDS stablecoin (formerly DAI) securely and transparently.

The business model behind the protocol is simple: Every debt position accrues interest, which is influenced by the federal funds rate but can also be adjusted by a majority vote of the token holders of SKY (formerly MKR), the protocol's governance token. Important to note here is that the interest rate generally falls within a range close to the federal funds rate, though it doesn't need to be exactly the same. Ultimately, the interest needs to be paid every time a user closes his position.

In recent years, primarily due to the sharp interest rate hikes by the Fed, the initial MakerDAO protocol began using a portion of its users’ collateral to acquire short-term U.S. Treasuries, significantly boosting their revenues through the earned interest. MakerDAO was not the only stablecoin issuer who tapped into T-bills to diversify its reserves and revenues. As of today, issuers cumulatively hold more than $120 billion in U.S. Treasury notes, making them the world's 18th largest holders of U.S. debt, ahead of whole nation-states like Germany and South Korea.

But Sky is one of the few, if not the only, protocol that uses these revenues to support the value of its native token, whereas privately held companies like Tether are simply keeping the profits generated.

Through a mechanism called the 'Smart Burn Engine', which functions similarly to a stock buyback, the protocol uses a portion of its revenues to purchase SKY on the open market. These tokens are then provided as liquidity on the decentralized exchange (DEX) Uniswap.

This mechanism not only creates buy pressure in the short term but also reduces sell pressure in the long run while simultaneously building deep liquidity for the token. For illustration and historical comparison, the chart below highlights the correlation between MakerDAO’s revenues and MKR, the token used prior to MakerDAO’s rebranding:

Although it is obviously naive to attribute the token’s performance solely to the protocol’s revenues, it is evident that the price of MKR is closely tied to Maker’s earnings.

This correlation makes it easier for traditional investors to evaluate the value and future potential of the protocol.

8.5 Final Considerations

There is a clear rationale behind Blockwall’s decision to structure its new fund as a pre-seed and seed-stage, Web3-focused venture capital fund with a hybrid approach, designed to capture both equity-only and token-exposed illiquid investments.

We believe that investing across both types of instruments is essential to comprehensively cover the entire Crypto and Web3 landscape. The equity-only model allows for long-term alignment with founders and traditional exit optionality, while token-exposed structures provide a mechanism to participate in native Web3 value creation, offering liquidity profiles and exit timelines not available in conventional venture capital.

This hybrid model also improves our ability to optimize fund performance. Token-exposed investments typically unlock earlier liquidity through vesting schedules following a Token Generation Event (TGE), allowing distributions to investors long before an M&A or IPO scenario would be feasible. At the same time, equity-only positions preserve exposure to foundational businesses where token models may not be relevant.

That said, we are mindful of the risks. Encouraging startups to issue tokens prematurely can cause misalignment between founders, users, and investors. It can distract from core product development or achieving product-market fit, similar to a company going public too early. We believe tokens are powerful tools when executed thoughtfully: they enable user participation, create new monetization pathways, and align incentives between teams, communities, and early backers. But they must serve the company’s mission, not the other way around.

Our responsibility as investors is to help founders balance short-term liquidity considerations with long-term strategic success. With close to a decade of experience navigating token models, venture scaling, and regulatory complexity, we are well-positioned to support this balance.

Disclaimer

To avoid any misinterpretation, nothing in this document should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – NoDerivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

In the fast-paced world of Web3, where innovation is constant, some challenges remain stubborn. At Blockwall, we are always on the lookout for founders that not only push the boundaries of technology but also address real user problems in elegant ways. Our recent investment in Rebind.co is a testament to this philosophy, driven by a strong conviction that decentralized finance (DeFi) needs a 'Jony Ive Moment': A period where design, user experience, and accessibility become paramount, transforming complex technology into intuitive tools for everyone.

Just like Jony Ive’s design philosophy at Apple revolutionized personal computing by making powerful technology approachable and beautiful, supporting Rebind is how we contribute to bringing the same shift to decentralized finance. We've observed firsthand that despite the immense potential of DeFi, many protocols, dapps and apps remain clunky, overcomplicated, and far from user-friendly. This lack of intuitive usability, driven by poor design, has been a core blocker to mainstream adoption in self-sovereign finance.

State of Current Crypto Tools

Our recent deep dive into over 50 well known DeFi solutions, and my personal passion for DeFi, has shown that, in terms of usability, not much has changed since 2018/19 and the DeFi Summer. Many are still overly complicated, tough to understand and hard to access. The jargon is dense, the steps are confusing, and the overall experience is often intimidating for anyone outside of a niche group of crypto-native experts. In other words, the level of user-friendliness one could expect after six years of development is still missing. Or put simply: our parents wouldn’t understand it.

This complexity isn't just an aesthetic issue; it’s a significant impediment to mass adoption. The promise often pitched by Web3 evangelists that self-sovereign finance, true ownership, and full control over your wealth remains unfulfilled for the average user. Legacy barriers such as complex wallet setups, the daunting responsibility of managing seed phrases, and convoluted transaction processes continue to alienate potential users. While the underlying technology of DeFi has matured, the user-facing applications have largely failed to evolve at the same pace.

That said, there are exceptions. Apps I personally enjoy using: Family Wallet (AVARA), MEW Wallet (despite limited features), Uniswap Wallet, dYdX, and Coinbase. They prove that great user experience in crypto is possible.

In essence, DeFi needs to shed its intimidating complexity and embrace simplicity, intuitiveness, and user-first design.

Rebind on a Mission to Radically Simplify DeFi

Rebind’s mission is clear: to simplify decentralized finance to the point that millions of new users can access it. The result is a beautifully simple, mobile-first application designed for real financial growth. With Rebind, you can effortlessly earn passive yield, trade any digital asset, and grow wealth in real-time, all without friction or fear of loss of funds. Designed to support a range of use cases, from everyday savings to future-oriented asset management.

Rebind offers:

• Passive Yield: Generate passive yield on idle digital assets such as stablecoins with no lock-ups and always-liquid access.

• Self-Custody & Control: Rebind is self-custodial, meaning you retain full control over your digital assets. Funds cannot be touched or locked out by any third party, embodying the true benefit of decentralized finance.

• Reduced Fees: Rebind significantly reduces costs, offering up to 70% lower fees than centralized platforms.

• Personal IBAN: Want to spend a bit of your savings? Rebind provides a personal IBAN allowing deposits and withdrawals at 0% fees.

• Access to Any Asset: Instant access to over 2,500+ digital assets.

• Native Mobile User Experience: A product you recognize, and know how to use.

In sum, this is what DeFi should look like in 2025: no jargon, just private wealth building.

Why Now

The cryptocurrency landscape is undergoing significant shifts: regulatory clarity, rising demand for crypto products and stablecoins, maturing infrastructure, and new user expectations in personal wealth management.

Why not have a savings account in USDC that earns 5% interest and lets you withdraw at any time?

While the capital locked in DeFi (Total Value Locked) experienced a dip in Q1 2025, mainly due to price depreciation, DeFi remains a dominant vertical within crypto. More importantly, the market is maturing beyond its experimental phase, with key metrics showing steady growth despite cyclical swings. The core innovation of DeFi, combined with on-chain transparency, continues to make it an attractive alternative to traditional finance.

The market is ripe for a product that bridges the gap between DeFi’s power and the growing demand to manage wealth independently.

Our Conviction

Blockwall’s decision to invest in Rebind stems from a strong conviction aligned with our Web3 investment thesis: Rebind is not just building a product; they are building the future of self-sovereign, mobile-first wealth management.

Private Wealth Management’s Future is Self-Sovereign and Mobile-First

With easier access to technology and capital markets, financial products once reserved for a select few are now opening up to broader audiences. The success of platforms like eToro, Trade Republic, and Robinhood shows a clear appetite for managing one’s own capital, ideally via smartphone. Rebind meets this need, offering full ownership and 24/7 access to financial growth.

DeFi Is Here to Stay and Poised to Grow

Despite volatility and cyclical downturns, DeFi has matured. While challenges like chain interoperability and liquidity fragmentation remain, its core advantages, such as openness, transparency, and efficiency, make it a sustainable alternative to traditional finance. Rebind closes the accessibility gap with a simplified, MiCA-compliant, non-custodial access point.

Simplified User Experience as Catalyst for Adoption

The biggest hurdle for crypto adoption is still user experience. Rebind removes those legacy obstacles, replacing them with familiar technologies like social logins and passkeys, making DeFi investments as smooth as Robinhood made stock investing.

The Magicians Behind Rebind

Ultimately, it’s about the team. David and Steven combine deep Web3 experience with strong entrepreneurial backgrounds. They’ve led the development of complex DeFi strategies and tech teams, and they design with the end-user in mind. A philosophy we believe creates real long-term advantage.

We backed Rebind because they know how to orchestrate the world of decentralized finance into a single, smooth experience.

What the Future Might Bring

Our vision for Rebind goes far beyond its current feature set. We believe Rebind can become the default interface for tokenized finance, a true crypto neobroker. Just like Robinhood made stock investing accessible, Rebind aims to remove all friction from DeFi.

We see a clear path for Rebind to evolve into the platform of choice for tokenized assets: from money markets and equities to real-world assets (RWAs). It starts with one thing done well: a clean, intuitive implementation of where crypto user experience needs to go.

P.S. As with any early-stage product, feedback is invaluable. If you have suggestions, feature requests, or ideas for improvement, feel free to share them with us or to hello@rebind.co.

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

Dear Founders, Investors, and Friends,

In May, stablecoins gained further ground across payment rails, with Visa, Stripe, and Worldpay announcing major integrations.

Robinhood revealed plans for a blockchain-based trading platform in Europe. And tokenization efforts received fresh momentum, with major players signaling what’s next on both the infrastructure and regulatory front.

Without further ado — and with a slight delay we apologize for — let’s dive into last month’s key developments.

Stablecoin Adoption Accelerates

Stablecoins continued to dominate the headlines. This month, Worldpay — one of the world’s largest payment processors — partnered with BVNK to enable B2B stablecoin payouts. This means merchants can fund accounts in fiat (USD, EUR, GBP), which BVNK then converts into USDC or USDT and sends globally — without requiring users to interact with wallets or exchanges.

Visa is also expanding its stablecoin footprint. In partnership with Bridge, a Stripe subsidiary, the payments giant has launched a new card solution that allows users in Latin America to spend their stablecoins in everyday transactions. The rollout will initially cover Argentina, Mexico, Peru, Colombia, Ecuador, and Chile — a region where stablecoins are increasingly being used as a hedge against currency volatility.

Stripe, too, is further doubling down. The company unveiled a new product called “Stablecoin Financial Accounts”, enabling businesses around the world to manage their operations directly in stablecoins. In parallel, Stripe announced another stablecoin-based debit card in partnership with fintech firm Ramp, which will also launch in Latin America.

First it was Visa and Mastercard. Then PayPal followed by Stripe. Now Wordpay. The trend is clear: everyone is integrating stablecoin functionality. According to some reports B2B stablecoin payments are already annualizing at $36 billion — covering supplier payments, global payroll, and treasury flows. With embedded APIs, abstracted custody, and growing integrations by infrastructure providers and enterprises, these figures will only continue to rise — with stablecoins increasingly becoming the invisible infrastructure powering the next iteration of finance.

U.S. Senate Advances the GENIUS Act

Washington is taking notice. In May, the U.S. Senate advanced the GENIUS Act, a bipartisan bill creating the first federal framework for payment stablecoins.

The bill mandates full reserve backing (cash, Treasuries, repos), issuer registration with the Fed or OCC, and introduces a threshold system: firms with under $10 billion in circulation may operate under qualifying state regimes, while larger players fall under federal oversight. It also prohibits stablecoins from sharing yield with retail users — a clause critics argue protects banks, not consumers.

It also includes a controversial carve-out: the bill exempts the sitting President and Vice President from the issuer restrictions — a provision that effectively allows politically affiliated initiatives, such as Liberty Financial’s USD1, which is linked to the Trump family, to proceed without constraint.

Now, how does GENIUS differ from the EU's MiCA? Mainly by being more issuer-friendly. Under MiCA, "significant" stablecoin issuers must keep up to 60% of reserves in commercial bank deposits, restricting access to higher-yielding assets like Treasuries and cutting into their revenues. Further, some argue this approach concentrates run risks on commercial banks during periods of large-scale redemptions.

Still, the GENIUS Act isn’t final. Further revisions are expected, and it must be reconciled with the House’s Stable Act before reaching the President’s desk and ultimately become law.

Circle’s IPO Sends a Signal

One could argue that the regulatory momentum around stablecoins set the stage for more.

Right at the turn of the month, Circle — issuer of USDC — made its long-awaited public debut (technically a June event, but too important to push to the next edition). Shares surged from a $31 IPO price to a $97 high before closing at $82.80, valuing the company at over $16 billion — the second-strongest first-day performance of any U.S. IPO this year. Since then, the stock has continued to climb and now trades at around $160.

The blockbuster debut not only confirmed that investor appetite for stablecoin exposure runs deeper than many assumed, it also signaled that the IPO window for crypto firms might just be reopening.

The key question for Circle now: how will the company grow — or rather defend? — its revenue base in an environment of falling rates and intensifying competition?

The Race to Tokenize Equities Is On

Beyond stablecoins, real-world assets (RWAs) continued their march onchain. Kraken revealed xStocks, their tokenized stocks offering on Solana. RWA protocol Superstate unveiled “Opening Bell”, a platform to issue SEC-registered equities natively onchain. And Robinhood urged the SEC to enable token issuance for public companies.

At the SEC’s recent Digital Assets Roundtable, that momentum was on full display. Commissioner Hester Peirce expressed openness to regulatory experimentation, while financial industry giants — including BlackRock, Nasdaq, Circle, DTCC, and Franklin Templeton — underscored tokenization’s potential to unlock illiquid markets, embed compliance directly into assets, and streamline legacy infrastructure. The mood was clear: innovation is welcome, but it needs regulatory clarity to scale.

From Wall Street to DeFi: Apollo and Securitize Bring Private Credit Onchain

Meanwhile, tokenization is also reaching deeper into capital markets. Apollo Global Management, tokenization firm Securitize, lending platform Morpho, and risk firm Gauntlet launched a pilot that brings a multi-billion-dollar private credit strategy onchain.

Their new fund, ACRED, offers tokenized exposure to Apollo’s credit portfolio via sACRED tokens. These can be deposited into the Morpho protocol, where users can execute a leveraged strategy to generate higher yield. Gauntlet dynamically manages leverage parameters, and compliance is enforced directly in the token via built-in KYC — without breaking DeFi’s composability.

It’s a new type of capital stack: institutionally structured, but natively programmable. If successful, it could push tokenized credit beyond simple wrappers and into innovative DeFi products.

Coinbase: Between Innovation, Major Milestones, and Exploits

It was a tough month for Coinbase.

Things kicked off with a new release: the company introduced x402, a new payments protocol designed to enable machine-to-machine transactions. In essence, the protocol allows AI agents and bots to pay for things like API access using stablecoins from a Web3 wallet, with early partners — and adopters — including AWS, Chainlink, and Anthropic.

Shortly after, the company hit a major milestone: Coinbase was added to the S&P 500 index — a symbolic victory for the company and for crypto’s broader institutional acceptance. The stock initially rallied on the news, gaining over 12% in a single day.

But the celebration didn’t last. Just days later, Coinbase confirmed a major data breach affecting over 80,000 users. According to Coinbase, the breach stemmed from a social engineering attack targeting outsourced support staff in India, who were reportedly bribed to hand over access credentials. These credentials were then used to retrieve sensitive customer data — including names, addresses, masked banking details, and even ID documents.

What followed was a wave of criticism. While Coinbase emphasized that no private keys or passwords were compromised, it acknowledged potential remediation costs of up to $400 million. Even more damaging: reports surfaced that the company may have known about the breach as early as December. Some onchain investigators had publicly flagged suspicious activity months ago, and Bloomberg later revealed that attackers may have accessed internal systems as far back as January.

To make matters worse, the SEC reportedly re-opened an investigation into Coinbase’s 2021 IPO filings, questioning whether user metrics may have been overstated.

Let’s see how Coinbase handles the situation in the coming months. One thing is certain, though: with competition heating up — especially from players like Robinhood — the timing couldn’t have been worse.

Public Companies Rewire Their Balance Sheets

As regulators debate and builders build, a growing number of public companies are rewriting their treasury strategy using crypto.

The original playbook, pioneered by Michael Saylor’s MicroStrategy, involves issuing debt and equity to accumulate Bitcoin, effectively turning the company into a leveraged Bitcoin holding entity. This approach has positioned MicroStrategy as a proxy for Bitcoin exposure in the public markets.

Now, the approach is gaining traction.

A new vehicle named Nakamoto, led by Bitcoin Magazine CEO David Bailey, is aiming to replicate and globalize the strategy. The firm recently merged with KindlyMD, a U.S. healthcare company, to form a publicly listed entity that will hold and manage Bitcoin on its balance sheet. Backed by over $710 million in committed capital, including a $200 million BTC-backed convertible bond, Nakamoto that there’s demand for institutionalized BTC accumulation.

But the trend isn’t stopping at Bitcoin.

In May, SharpLink, a publicly traded gaming company, announced a $425 million ETH treasury strategy, led by Consensys, the Ethereum software company. The move is backed by prominent crypto venture capital firms and infrastructure providers, including ParaFi Capital, Electric Capital, Pantera Capital, and Galaxy Digital. SharpLink plans to accumulate ETH as a long-term strategic asset, effectively becoming one of the first public vehicles to mirror the MicroStrategy model for Ethereum.

The same idea is now also accelerating around Solana. SOL Strategies, a Canada-listed firm, filed to raise $1 billion for a Solana-focused treasury and staking strategy. Unlike the BTC model, SOL Strategies isn’t just passively holding its assets; it aims to build operational exposure through staking and participation in Solana-based financial infrastructure.

Together, these moves point to a broader shift: public companies aren’t just exploring crypto infrastructure, they’re starting to compete on asset exposure. What began as a Bitcoin-specific thesis is evolving into a multi-asset treasury paradigm — one that may completely reshape balance sheet compositions in the digital age.

Key Events of the Last Few Weeks

1. Robinhood doubles down on crypto. The U.S. fintech is acquiring Canadian crypto firm WonderFi for $179 million in an all-cash deal — expanding its regulated exchange footprint. At the same time, Bloomberg reports that Robinhood is exploring a blockchain-based trading platform in Europe to enable tokenized trading of U.S. equities. While still unconfirmed, the rumored move would signal a major step toward onchain retail investing. (Sources: Bloomberg, WonderFi)

2. MiCA momentum builds across the EU. BitGo, Trade Republic, and Bitstamp all received their MiCA licences, allowing them to offer crypto custody, trading, and transfers across the EU. (Sources: BitGo, WiWo, Bitstamp)

3. Ethereum’s Pectra upgrade goes live. The upgrade improved Layer‑2 scalability and enabled major UX improvements. (Source: CoinDesk)

4. Morgan Stanley plans crypto trading on E*Trade. The U.S. bank is exploring the launch of spot crypto trading on its retail brokerage platform, which serves over 5 million users, starting in 2026. (Source: Bloomberg)

5. JP Morgan to enable client BTC purchases. CEO Jamie Dimon confirmed the bank will soon allow clients to buy Bitcoin — though the bank won’t custody the assets. (Source: Ondo)

6. FIFA develops its own blockchain. Built on the Avalanche network, this new blockchain should primarily support the trading and collecting of digital collectibles and global fan engagement. (Source: Avalanche)

7. Solana R&D firm Anza reveals Alpenglow. Introduced at the Accelerate conference in NYC, this new consensus protocol aims to make Solana 100x faster. (Source: TheBlock)

8. Deutsche Börse votes to digitize share registration. According to the announcement, the shareholder vote enables Clearstream to digitally register shares, replacing the traditional paper-based global note with a digital counterpart. The system will be live on the company's private D7 network starting in 2026. (Source: Blockstories)

What We’ve Been Reading

1. The Future of Stablecoins (M0 & Artemis) – A comprehensive overview of current stablecoin architectures, including design trade-offs, adoption dynamics, and key use cases.

2. Stablecoins and the Future of Onchain Finance (Visa) – Visa outlines its vision for stablecoins in the global financial system. It examines use cases for financial institutions and offers a practical framework for adoption.

3. Five Countries Leading the Digital Asset Shift (WisdomTree) – A global snapshot of crypto momentum. The post highlights how Nigeria, Brazil, South Korea, the UAE, and the U.S. are shaping digital asset regulation and adoption.

4. Crypto VC in Q1 2025 (Galaxy) – Galaxy’s quarterly VC report tracks funding trends, sector allocation, and investor sentiment across early-stage crypto deals. See Dominic’s LinkedIn post for the key insights.

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

Dear Founders, Investors, and Friends,

In April – and the first weeks of May – the market rebounded strongly.

The S&P 500 recovered by 20%, BTC climbed 40%, and altcoins like SOL surged as much as 80% from their lows.

This was largely due to increased clarity around the ongoing trade war, particularly the 90-day suspension of mutual tariffs agreed upon by the U.S. and China.

Meanwhile, crypto M&A is heating up, with billion-dollar deals and high-profile acquisition offers continuing to make headlines.

So without further ado, here’s a look at what shaped the past month.

DTCC Dives Into Tokenization

The Depository Trust & Clearing Corporation (DTCC) – the financial infrastructure giant responsible for clearing over $3 quadrillion in annual transactions and servicing roughly 90% of the U.S. securities market – announced the launch of its new blockchain-based platform for tokenized collateral management.

The initiative is built on DTCC’s AppChain, a private instance of Ethereum, specifically tailored to meet institutional demands for compliance and control. While the platform is currently permissioned, the long-term vision includes interoperability with public chains, opening the door for broader asset mobility across ecosystems.

Now, why are they doing this? Because tokenization allows them to mobilize collateral in seconds, instead of waiting an entire trading day for settlement. Whether it’s treasuries, equities, or other assets, institutions can now put them to work almost instantly.

That’s a big deal. It frees up capital that’s otherwise stuck as an expensive buffer, improves liquidity, and adds resilience to the system – especially in times of stress, when moving collateral quickly can make all the difference.

Looking ahead, as the platform begins to interact with permissionless networks, DTCC is well-positioned to become a key gateway between traditional capital markets and the emerging “onchain economy”. But the DTCC isn’t the only one who would love to fullfill that role.

Securitize and Ethena Publish Details on “Converge” Network

One month after announcing their partnership, Ethena and Securitize have revealed the technical foundation of their new blockchain initiative: Converge. Together, they want to combine tokenized real-world assets and DeFi innovation – on a single, purpose-built chain that meets the demands of institutional players.

At its core, Converge is permissionless. Anyone can deploy smart contracts, transfer assets, or bring new tokens onto the chain.

But – and this is where things get interesting – individual applications and issuers can define their own access rules. That means a firm like BlackRock could gate access to its tokenized funds. The result is a flexible architecture that combines DeFi’s composability with TradFi-grade control mechanisms.

From a technical standpoint, Converge runs as a Layer-2 on Ethereum. It’s designed for performance, targeting 100-millisecond block times and a throughput of 30,000 transactions per second.

Security is handled by a new validator set, backed by staked ENA tokens. This group acts as a kind of governance and emergency response council, with the authority to pause the chain in case of critical bugs, exploits, or systemic threats.

Importantly, there will be no new token. Transaction fees will be paid in USDe and USDtb, the stablecoin products issued by Ethena. The mainnet launch is planned for later this quarter and launch partners already include major DeFi protocols like Aave, Pendle, and Morpho.

Launching a purpose-built blockchain used to be a multi-year undertaking. Today, thanks to modular infrastructure, teams can spin up specialized rollups in a matter of months.

This shift is a huge unlock. Faster time to market. Lower infrastructure costs. And far greater room to tailor the stack to specific use cases or compliance needs. That’s exactly what Converge represents. And if it works, it might just become a blueprint for the next wave of institutional DeFi.

Crypto’s M&A Frenzy Continues

In another headline, Securitize acquired the U.S. fund administrator MG Stover. The terms of the deal remain undisclosed, but the message is clear: Securitize is doubling down on becoming the infrastructure backbone for tokenized assets.

Founded in 2007, MG Stover is one of the leading fund administrators for digital assets, serving a broad client base that includes names like Polychain Capital. Its core business is handling the operational heavy lifting for investment funds like NAV calculations, investor reporting, compliance, and KYC/AML processes – across hedge funds, private equity, venture capital, and digital assets.

Now, its infrastructure and operational expertise will be folded into Securitize Fund Services (SFS), the fund administration arm of Securitize – which adds both depth and distribution to Securitize’s existing stack.

It’s a natural next step. Securitize has already tokenized over $3.3 billion in assets, including funds from BlackRock (BUIDL), Hamilton Lane, and Apollo Global. With MG Stover onboard, Securitize gains not only regulatory know-how and back-office infrastructure, but also direct access to hundreds of fund managers.

The strategy is becoming clear: unify issuance, trading, and administration under one roof – and soon, on its own blockchain.

Ripple’s War Chest Seeks Deployment

Securitize isn’t the only company who wants to establish itself as a “one stop shop”. Ripple wants to do the same, only in their case, for digital assets services.

In a major move, Ripple has announced its acquisition of prime broker Hidden Road, marking the second-largest acquisition in crypto history – just behind Kraken’s recent takeover of futures platform NinjaTrader. The $1.25 billion deal is expected to close in Q3.

Hidden Road acts as a one-stop-shop for institutional market access, providing over 300 clients – including banks, hedge funds, and trading firms – with prime brokerage services such as trade financing, clearing, settlement, and custody across FX and digital assets.

In essence, prime brokerages allow institutions to access credit intermediation, risk management, and trading services across multiple service providers and banks – all through a single counterparty.

According to Ripple, its recently launched stablecoin RLUSD will be integrated into Hidden Road’s infrastructure as eligible collateral. Additionally, a portion of Hidden Road’s post-trade workflows – like clearing and settlement – will migrate to the XRP Ledger. For context: Hidden Road processes over $3 trillion in annual volume.

For Ripple, the acquisition is all about distribution. Hidden Road gives Ripple direct access to hundreds of institutional relationships. It’s a move to consolidate and accelerate growth across its product verticals: infrastructure (XRP Ledger), stablecoin (RLUSD), and custody (Metaco).

And if you wondered how Ripple financed a deal of that size: By the end of 2024, the company controlled around 42% of the total XRP supply, currently valued at around $80 billion. Roughly $8 billion of that is liquid, with the rest unlocking gradually over the next 38 months.

By the way: Hidden Road wasn’t the only company on Ripple’s radar. According to Bloomberg, Ripple even made an offer to acquire the stablecoin issuer Circle, for $4 to $5 billion. Reportedly, the latter declined.

Circle Announces “Circle Payment Network”

Speaking about Circle: This month, the company introduced its new Circle Payments Network (CPN) – a stablecoin-based infrastructure designed to streamline cross-border payments for banks, fintechs, and payment service providers.

Instead of routing payments through multiple intermediaries – like the case for today’s payment infrastructure – CPN enables direct settlement in stablecoins (like USDC) between participating financial institutions, via a standardized API and smart contracts.

The ambition? To replace legacy rails like SWIFT and the global web of correspondent banks with something faster, cheaper, and – above all – programmable.

For example, CPN could automate payments in ways today’s rails simply can’t – like releasing funds the moment goods are scanned at a warehouse.

To get this off the ground, Circle is working with major global banks like Deutsche Bank, Santander, Société Générale, and Standard Chartered.

For Circle, CPN might matter more than many think. Why? Because its core business is under pressure. As a stablecoin issuer, Circle relies almost entirely on interest income from reserves – revenue that’s shrinking as rates fall, with a large share flowing directly to distribution partners like Coinbase.

And by launching CPN, Circle wants to change this and target a new revenue stream: Network fees.

Portfolio Update

Last month, one of our portfolio companies celebrated a significant milestone: Spiko has secured Bpifrance as a direct subscriber to its tokenized Euro Money Market Fund, meaning the institution will invest part of its balance sheet into a product fully backed by French Treasury Bills.

It’s a powerful signal – one of confidence in the technology and institutional trust.

Spiko is already delivering at scale:

• Over €250 million in assets under management

• 6% share of the tokenized public securities market, making them a top 7 issuer globally

All while being live for just one year.

Now, this new partnership could unlock the next leg of growth. Bpifrance has tens of billions of euros on its balance sheet. Even a modest reallocation could massively boost Spiko’s market share.

More importantly, it sets a precedent for other institutions across Europe to follow suit. Because if a state-backed investor trusts a crypto-native product to manage public debt instruments, others will take note.

We don’t want to sound like a broken record, but this is exactly the kind of institutional support that makes France one of the most attractive places for crypto founders – not just in Europe, but globally.

And we hope Germany and other European countries will follow suit to help flourish our Web3 and crypto startup ecosystem.

We’re incredibly proud to back the team and are even more excited about what’s next.

Blockwall at Paris Blockchain Week

In early April, we attended this year’s Paris Blockchain Week, once again as an official sponsor. As part of our involvement, we supported the organizers in screening over 500 startups for the event’s Startup Challenge. This time, our GP Dominic also invited a select group of family offices to experience the conference first-hand. For more impressions from the week – and insights from his conversations with the family offices – take a look at his LinkedIn posts here and here.

Key Events of the Last Few Weeks

1. BNY Mellon to publish fund data onchain. With its new product “Digital Asset Data Insights,” the bank plans to publish selected offchain data on public blockchains. First up: fund accounting data for BlackRock’s BUIDL, where BNY Mellon serves as custodian. (Source: BNY)

2. Pakistan eyes Bitcoin mining and AI infrastructure. According to a government document, Pakistan plans to use surplus electricity to power both Bitcoin mining and AI data centers. The proposal comes from the country’s “Crypto Council,” whose newest member is Binance founder CZ. (Source: Reuters)

3. Russia to launch state-backed crypto exchange. The Russian central bank is developing a crypto trading platform in partnership with the finance ministry. The exchange will target “qualified investors”, like those holding over $1 million in securities. (Source: Interfax)

4. Helium partners with AT&T. The U.S. telecom giant will begin using Helium’s decentralized mobile network, giving its customers access to the DePIN protocol’s wireless infrastructure. (Source: X)

5. France and Italy push for DLT pilot reform. Financial regulators from both countries have proposed a more flexible and simplified version of the EU’s DLT Pilot Regime, aiming to accelerate tokenization and reduce barriers to blockchain innovation in capital markets. (Source: Press release)

6. Mastercard adds full-range support for stablecoin payments. Through a partnership with Nuvei, one of the world’s largest acquirers, merchants can now accept stablecoins like USDC via Mastercard’s network, even when customers pay in fiat. (Source: Mastercard)

7. Arizona governor vetoes Bitcoin reserve bill. The state’s House of Representatives had approved a proposal to allocate 10% of public funds into digital assets like BTC, but the bill was blocked by Arizona’s governor. (Source: X)

8. Tether and SoftBank launch ‘Twenty One Capital’. The new investment vehicle will use capital markets instruments like convertible bonds and equity sales to raise funds for purchasing Bitcoin. (Source: Press release)

9. Coinbase unveils Bitcoin Yield Fund. Targeting institutional investors outside the U.S., the Coinbase Bitcoin Yield Fund (CBYF) aims to deliver annual returns between 4% and 8%, backed by Bitcoin exposure. (Source: Coinbase)

What We’ve Been Reading

1. Galaxy Digital: The State of Crypto Lending. This report offers a comprehensive overview of the crypto lending landscape, detailing the evolution of CeFi and DeFi lending post-2022, current market dynamics, risk models, and the role of crypto-backed credit in shaping institutional finance going forward.

2. Citi: Blockchain and the Digital Dollar. This in-depth report from Citi explores the transformative potential of blockchain-based digital dollars, analyzing use cases across wholesale and retail finance, the regulatory outlook, and how programmable money could reshape monetary policy and financial infrastructure.

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons

Dear Founders, Investors, and Friends,

Much like in February, public markets remain marked by uncertainty – risk assets continue to struggle, while gold trades at new all-time highs.

Yet beyond the markets, sentiment in traditional finance appears more bullish on crypto than ever, especially when it comes to stablecoins.

In the U.S., regulators are actively working toward comprehensive frameworks for the industry. Meanwhile, Europe has taken a different tone: the ECB is pushing ahead with plans to launch a digital euro (CBDC) later this year, while national regulators have cracked down on prominent stablecoin issuer Ethena Labs.

Bitcoin Becomes a Strategic Reserve Asset

After weeks and months of speculation and rumors whether the U.S. will see a Bitcoin Reserve, President Trump in March signed an Executive Order establishing a "Strategic Bitcoin Reserve" within the U.S. Treasury Department.
While the U.S. government has often times auctioned off Bitcoin it seized from illicit actors, this policy reverses course:

• All Bitcoin permanently confiscated by federal agencies will now be held, not sold.

• The Treasury is instructed to explore ways to accumulate Bitcoin, provided it can be done budget-neutral and without additional cost to taxpayers.

• Other digital assets (altcoins), seized or obtained otherwise, should be placed in a newly created “Digital Asset Stockpile” instead, which allows custody but prohibits new purchases.

While the short-term market impact was muted, mainly because it already was priced in by many market participants, the long-term and structural implications shouldn’t be underestimated. It’s the first time a Western government – and probably the most powerful one as well – has formally classified Bitcoin as a strategic asset, forcing any other nation to question their approach to Bitcoin, digital assets, and blockchain technology in general.

OCC and FDIC: Banks Are Coming For Crypto

At the same time, U.S. banking regulators have executed one of the most consequential regulatory pivots in years.

A new statement from the Office of the Comptroller of the Currency (OCC) now allows federally chartered banks – like JPMorgan, Citibank, and Bank of America – to engage in a broad suite of crypto activities without needing explicit case-by-case approval.

These activities include:

• Custody of crypto assets (e.g., BTC, ETH)

• Stablecoin issuance and management

• Operating nodes and validating transactions on public blockchains

• Crypto-fiat conversion and OTC settlement services

Shortly after, the FDIC echoed this sentiment, allowing crypto activities as long as risk frameworks are sound. This effectively reverses the agency’s 2022 guidance, which had required pre-approval for any crypto-related bank activity.

Taken together, these moves are a massive unlock for institutional crypto and blockchain adoption, as institutions now have the regulatory clarity they were waiting for.

Stablecoins: March’s Hottest Narrative

Stablecoins were arguably the most discussed topic in March. Before we dive into the stablecoin-related announcements of major financial players, let’s take a brief look at how things evolved on the regulatory side in the U.S.

The U.S. House of Representatives introduced the STABLE Act, which complements the Senate’s GENIUS Act. Together, they lay the groundwork for comprehensive U.S. stablecoin regulation. Key provisions include:

• Stablecoin issuers are prohibited from passing on any form of yield to their users.

• Issuance is limited to licensed entities (banks and certified non-banks).

• Two-year ban on new algorithmic stablecoins (existing projects are not affected)

• Stablecoins need to be backed 100% with cash or short-dates U.S. Treasuries

While the STABLE Act still awaits a full vote in the House and the GENIUS Act continues to evolve in the Senate, one thing is already clear: the U.S. is moving toward a consolidated regulatory framework for stablecoins – fast.

In that context, one provision in particular stands out: the ban on passing yield through to stablecoin users. While this measure aims to protect both consumers and the traditional deposit-based banking model, it also benefits banks issuing their own stablecoins, as well as established players like USDC and USDT.

It will be interesting to observe how this impacts the competitive landscape going forward.

Major Stablecoin Announcements

Without going into too much detail, here is a brief overview of the most important stablecoin announcement made this month:

• Wyoming's State-Issued Stablecoin (WYST): The U.S. state of Wyoming plans to launch its own stablecoin, "WYST," with testing set for Q2 and a potential official release in July. This multichain stablecoin aims for over-collateralization with U.S. Treasuries and cash. The plan has faced criticism with some observers comparing it to a central bank digital currency (CBDC).

• Fidelity's Stablecoin Initiative: Fidelity Investments is developing a stablecoin to integrate into its financial services ecosystem. With over $4.5 trillion in assets under management, Fidelity is the third-largest asset manager in the world, after BlackRock and Vanguard.

• Custodia Bank's Stablecoin Launch: Custodia Bank has also announced plans to issue its own stablecoin on the Ethereum network.

• World Liberty Financial's USD1 Stablecoin: World Liberty Financial, associated with the Trump family, introduced their new "USD1" stablecoin.

With competition in the stablecoin space growing fiercer by the day, the challenge for new market entrants will lie in building a robust ecosystem around their tokens, establishing deep liquidity, and generating sustainable demand.

ECB Gives Update on Digital Euro (CBDC)

Meanwhile in Europe, central bankers are pushing for a release of its CBDC. At a recent press conference, ECB President Christine Lagarde confirmed that the preparatory phase for the digital euro is on track to conclude by October 2025.

Beyond that, what was even more interesting, is that the tone around the actual framing of the initiative changed quite substantially. Up until recently, the digital euro was framed as a modern complement to cash: a neutral, innovation-driven initiative meant to expand consumer choice. Now, the project is increasingly portrayed as a defensive response to the rise of U.S. dollar-denominated stablecoins, which are gaining traction globally while euro-backed alternatives remain marginal:

In order for the digital euro to become reality anytime soon, it needs approval by the European Parliament and its member states, though.

At the same time, banks are raising concerns. Many fear deposit outflows if customers begin shifting funds directly to ECB-issued digital wallets.

And behind the scenes, there is growing debate about whether the ECB should enter a space traditionally left to the private sector.

But regardless of one’s stance on the utility or necessity of a digital euro, one thing is clear: stablecoins have become a geopolitical issue. Policymakers are beginning to understand their potential to influence currency demand – and as of now, only the U.S. dollar is reaping the benefits.

BaFin Cracks Down on Ethena’s USDe

Meanwhile in Europe (Germany, more specifically) the BaFin issued a rare and severe statement on Ethena Labs: It has banned the German arm of the company from offering the synthetic stablecoin USDe in Germany.

The rationale? Ethena’s delta-neutral strategy (long ETH, short ETH futures) does not meet MiCAR’s standards for stable reserves. Further, the staking token sUSDe was likely marketed as a security without a prospectus.

BaFin ordered a shutdown of the website, a freeze on reserves, and a stop to all new business. The case is now pending final review.

In response to BaFin’s action, Ethena expressed surprise, noting that previous communications with the regulator had been constructive from their perspective and that the announcement came without prior warning. Nevertheless, Ethena’s global operations remain unaffected, as the issuance of USDe is managed through its entity in the British Virgin Islands.

From a regulatory perspective, this incident doesn’t reflect well on Germany, or on European oversight more broadly. The communication from BaFin could have been handled way better.

That said, products like USDe represent entirely new territory for regulators, and crafting appropriate frameworks for such innovations is inherently challenging. Still, we hope incidents like this will remain just that – accidents – and we remain optimistic that the resulting European rules will foster innovation within the EU, rather than driving it elsewhere.

Key Events of the Last Few Weeks

1. BBVA receives green light for crypto trading. Spain’s second-largest bank will soon be able to offer its clients trading and custody services for BTC and ETH. (Source: Reuters)

2. Trump family enters Bitcoin mining. In partnership with publicly traded mining firm Hut 8, Eric Trump and Donald Trump Jr. are launching a joint venture called "American Bitcoin", with mining proceeds intended to help establish a Strategic Bitcoin Reserve. (Source: Hut 8)

3. Kraken acquires U.S. futures platform NinjaTrader. Valued at $1.5 billion, it marks the largest acquisition by a crypto company to date. (Source: Kraken)

4. Coinbase reportedly working on acquisition of Deribit. According to Bloomberg, Coinbase is in talks to acquire Deribit, the world’s largest crypto derivatives exchange, valued between $4-5 billion. If completed, it would become the largest crypto acquisition to date. (Source: Bloomberg)

5. Fidelity files application for onchain U.S. money market fund. With over $4.5 trillion in assets under management, Fidelity ranks among the top three global asset managers, alongside BlackRock and Vanguard. (Source: CoinDesk)

6. Google and CME Group announce tokenization initiative. The world’s largest derivatives exchange has begun testing applications on Google Cloud’s new Universal Ledger (GCUL), a DLT-based infrastructure for asset management and payments. According to the announcement, the solution is expected to go live next year following further testing with market participants. (Source: CME Group)

   What We’ve Been Reading

1. 2025 Solana Stablecoin Report. This report provides insights into how the stablecoin market has grown on Solana in recent years, how the network is establishing itself as the go-to platform for payment use cases, and what startups, enterprises, and institutions are already working on their stablecoin and digital asset strategies on Solana.

2. a16z: Defining Tokens. This report provides a comprehensive framework for understanding the seven primary categories of blockchain tokens, detailing their unique characteristics, functions, and the implications for builders, consumers, and policymakers in the evolving digital asset landscape.

Disclaimer

To avoid any misinterpretation, nothing in this blog should be considered as an offer to sell or a solicitation of interest to purchase any securities advised by Blockwall, its affiliates or its representatives. Under no circumstances should anything herein be interpreted as fund marketing materials for prospective investors considering an investment in any Blockwall fund. None of the data and information constitutes general or personalized investment advice and only represents the personal opinion of the author. The author and/or Blockwall may directly or indirectly be exposed to the mentioned assets/investments. For further information please view the full Disclaimer by clicking the button below.

Disclaimer

This work is licensed under the Creative Commons Attribution – No Derivatives 4.0 International License. CC BY-ND 4.0 Legal Code | Creative Commons