Threading on the Edge

How much would you spend on fees trading $1M in BTC across CEXs vs. Perp DEXs

https://x.com/muarmemuar/status/2086790859123495422

2 prediction market projects shut down today

Fireplace, a professional trading terminal that aggregated markets from Polymarket, and Trepa, a precision prediction platform where users earned based on how close their number guesses were, both announced they are shutting down (Trepa was due to a lack of PMF)

Source
Source 2

Right now the entire crypto AI stack is sprinting into pure inference businesses.

➥ New protocols launch weekly
➥ Existing DePIN networks flip GPU fleets overnight
➥ Subnets rebrand as inference providers
➥ Tokenized access claims, staking for credits and OpenRouter listings are already doing billions of tokens a day

This is the openweights moment for crypto. Execution is becoming free and abundant. The projects racing to sell cheaper FLOPs are building the commodity layer that labs and hyperscalers will undercut the second margins look attractive.

The only durable edge left is verification grade infra i.e the residual human judgment that still can’t be measured, captured onchain and fed back as proprietary data.

While everything else is temporary supply for the supercycle.


https://x.com/YashasEdu/status/2086321367943954735

7 GUD READS 📚 (Edition No. 101)

101 editions in and the pattern this week is uncomfortable: the safest-looking corner of finance is the one throwing off the loudest warning signs, and crypto keeps buying into it anyway.

Why the money is arriving instead of fleeing 👇

https://x.com/thelearningpill/status/2086090071971975365

THE LIST: 72 Crypto Research, Analytics, Trading, and Onchain Investigation Tools Worth Using

https://x.com/Flowslikeosmo/status/2086111856746234273

Crypto Watchlist for the week ahead:

https://x.com/TheDeFinvestor/status/2086421994405290120

I look at @Zcash and it does not feel like the usual privacy hype to me.

BTC fell ~44% over the last 10 months while ZEC roughly 2x, lifting the ratio from 0.45 to 7.68 milli-BTC for a 17 times relative gain and daily turnover collapsed from 22.5% of market cap down to ~2.4%.

Here's what the data says👇

➥ Roughly 30-35% of supply is now locked in the shielded pool (Grayscale trust, Cypherpunk holdings and the protocol lockbox)
➥ Sellable float got absorbed by holders who simply do not sell
➥ The June counterfeit risk caused a 50% drop yet price made a new local high eight weeks later

To me this is float destruction turning $ZEC into a partial bitcoin substitute at just 0.66% of BTC mcap so I remain long.

https://x.com/YashasEdu/status/2085248262697857323

i think we’re going to start talking about something called machine gdp

the invisible economy thesis is directionally right, but it conflates three separate claims:

1. ai agents will become economic actors
2. they will need machine-native financial infrastructure
3. therefore crypto captures the value

the first two are increasingly plausible

the third is where this analysis gets interesting

agents probably do create demand for infrastructure humans weren’t designed to need like continuous settlement, programmable payments, machine-readable ownership, micro transactions and autonomous coordination

crypto is the best use case suited for this

but if we say that machines can’t use banks, that is too strong. they can operate through apis, corporate accounts and existing payment infrastructure. the real question is whether those systems remain competitive once agents transact with other agents at machine scale

more importantly, machine activity does not automatically translate into token value accrual

if trillions of dollars eventually move between agents, i would find the largest rent seeker. think like what the situational awareness setup adopts.

it could be l1s. but it could equally be stablecoin issuers, agent platforms, compute providers, proprietary data owners, identity networks or applications

and if blockspace becomes abundant and chains become increasingly interchangeable, the machine economy could explode while settlement itself becomes commoditized

eventually, ai creates a new class of economic participant, and those participants will eventually demand infrastructure designed for machines rather than humans

crypto currently looks like one of the strongest candidates for part of that stack

but identifying the infrastructure is easier than identifying where the economics accrue

the machine economy can be a $100 trillion idea while most of the tokens supposedly representing that thesis still go to zero

that’s the distinction investors should probably spend more time thinking about.

https://x.com/arndxt_xo/status/2085564076332355686

The latest DeFi developments👇

https://x.com/TheDeFinvestor/status/2085370401408921751

soon I suspect we’ll be having much deeper conversations about Chinese semiconductors, AI infrastructure and how global investors actually access those markets.

most of the major HK names are already on @StableStock, including a growing number of companies sitting directly inside China’s AI and semiconductor supply chain.

the focus will be around which companies actually control the bottlenecks of the AI supply chain.

Innolight is a good example.

https://x.com/arndxt_xo/status/2085316207625069009?s=46&t=hr2fbvcHJGpvp_SbDstdzg

Crypto was the training ground

https://x.com/redphone/status/2085070966279884972

Uniswap generated nearly 2x more 30D fees than Hyperliquid.

• Uniswap: $99M fees
• Hyperliquid: $50M fees

Yet $HYPE trades at a ~16x higher FDV.

The difference comes down to value capture.

Most $UNI fees still flow to LPs, while Hyperliquid routes the vast majority of protocol revenue into continuous HYPE buybacks.

https://x.com/SachinHMx/status/2084961035556192293

I broadly agree with this framework, but I think there are a couple things worth adding.

The administration can want lower rates, expensive dollar, all time high assets. Warsh can eventually cut. Bessent can lean on whatever levers Treasury has available.

But if the bond market looks at the fiscal situation + inflation + oil + Treasury issuance and is still demanding 5% on the long end, then cutting Fed Funds doesn’t necessarily give Trump the easing cycle he wants.

You could actually get the annoying scenario where the Fed cuts 100bps and the 10Y barely moves because the term premium keeps expanding.

And this is also why the Japan/Yen situation is more important than people think.

Japan is one of the biggest holders of Treasuries. You absolutely do not want a situation where defending the Yen forces Japan to become a seller of USTs at exactly the same time America is issuing enormous amounts of debt.

Bessent seems very aware of this.

The recent US/Japan intervention therefore wasn’t just about saving the Yen IMO. It was partly about protecting the global dollar system.

Basically:

Weak Yen → Japan needs dollars → potential Treasury selling → UST yields higher → US financial conditions tighten → housing/economy gets smoked.

And that’s probably the biggest risk to the bullish thesis IMO.

I agree that other energy resources will eventually replace oil, I’m also bearish oil longer term, but oil isn’t one market.

Transportation, petrochemicals, aviation and industrial demand are different from electricity generation. LNG can destroy gas/coal economics in certain places without necessarily destroying crude demand at the same speed.

And supply matters just as much.

https://x.com/arndxt_xo/status/2085169395001913519

value accrual is not the same as token value

i think crypto has gotten slightly too comfortable with the idea that adding buybacks, burns or fee sharing suddenly fixes token economics.

value accrual is a filter, NOT an investment thesis.

once you remove governance-only tokens and projects with no meaningful economics, the more interesting question is what separates the remaining tokens that actually preserve value from those that keep bleeding despite having “good tokenomics.”

i increasingly think it comes down to three things:

1. cash-flow persistence
not how much revenue a protocol generates today, but how much survives when volumes fall, incentives disappear or a cheaper competitor arrives.

2. net dilution
buybacks mean very little if emissions + unlocks are simultaneously expanding circulating supply faster than the protocol can absorb it. i’d rather look at the net change in supply than the headline buyback number.

3. competitive capture
even if a protocol creates substantial economic value, how much of that value actually reaches the token? LPs, users, validators, developers and tokenholders are all competing for the same economics.

this is why @HyperliquidX is both interesting and slightly dangerous as a benchmark. its performance can make buyback/burn models look superior when a meaningful part of the result may simply be an exceptional underlying business feeding the mechanism. this is why $HYPE works.

@dYdX illustrates the opposite side, you can build a reasonable accrual mechanism, but if the underlying revenue base deteriorates, token dead.

accrual sits downstream of product-market fit and unit economics.

a mediocre protocol with excellent tokenomics is still a mediocre protocol.

and a great protocol with terrible dilution can still be a terrible token.

durable cash flow → net dilution → competitive capture → valuation.

mechanism comes after economics.

maybe that’s ultimately where crypto valuation is heading

https://x.com/arndxt_xo/status/2085049666715168811

🇺🇸⚡️- Telegram has said their application has been restored on the app store, and will soon become available to all users again. They did not provide any explanation as to why it was removed.

APPLE REMOVES TELEGRAM FROM APP STORE WORLDWIDE ...

coldcard, what actually happened

- ~1,367 BTC was swept from 4,585 addresses, worth roughly $89m at the time.

- this was not AI or brute force. the affected seeds were generated with weak, predictable randomness.

- the bug came from a 2021 firmware path. @COLDCARDwallet intended to use hardware randomness, but a configuration check routed seed generation through a non-cryptographic PRNG instead.

- that means attackers could recreate candidate seeds, rather than guess a true 128/256-bit BIP-39 seed.

- Mk2/Mk3 were most exposed. Mk4/Mk5/Q were also affected, although researchers disagree on exactly how much entropy remained.

- firmware updates alone are not enough. if your seed was generated under affected firmware, you need a new seed and must move funds.

- the key lesson here is that air-gapped ≠ trustless. keeping a wallet offline does nothing if the key was weak from the moment it was created.

- open source also did not save users. the bug sat publicly visible for years without being caught.

https://x.com/arndxt_xo/status/2084212758544089258

1> On Aave’s H1 Structural Reset

H1 2026 was different for @aave. Three structural decisions landed that permanently change how the protocol captures value, who it serves, and how capital flows through it

⇲ Economics & governance (Aave Will Win)
⇲ V4 Architecture
⇲ Token value accrual (Aavenomics 3.0)

This is the reset that actually matters 🧵

https://x.com/0xspicexr/status/2081010384920850739

in the coming week, we will see huge volatility for the yen, as the states buys more yen.

for decades, usd/jpy largely followed the us–japan yield gap.

that relationship weakened after april 2025 as trade-war volatility made carry trades less attractive even with wide rate differentials.

japan is now being priced through a more complicated mix of fiscal credibility, boj normalization, inflation and capital flows.

- japanese yields are rising as inflation, wages and expectations normalize.
- the boj still owns roughly half of outstanding jgbs, while its purchases are slowing.
- that means higher rates increasingly translate into a real fiscal cost rather than just monetary-policy normalization.

at the same time, corporate japan looks structurally healthier than sovereign japan.

profits are strong, shareholder activism has surged, foreign ownership is around one-third of the equity market, and large caps have materially rerated.

that creates a divergence: bullish corporate japan, more cautious on the yen and japanese duration.

there is also an important counterpoint to the fiscal-bear case.

japan still has the world’s largest positive net international investment position and enormous foreign asset holdings. so this is not a conventional external funding crisis.

https://x.com/arndxt_xo/status/2083937243778154750

1> Asides the recent drama around phantom wallet leaving @monad, I think there's just another thing worth paying attention to on monad right now

Capital isn't just flowing into isolated protocols. It's flowing through a shared stablecoin layer that connects @aave's credit market and @pendle_fi's yield market into one composable stack

Monad just crossed ATH in tvl and yes the infrastructure is forming faster than anything I've tracked recently on a new L1

https://x.com/0xspicexr/status/2082452432215568479

🧵