Just a Guru

The State of AI Training in 2026
As we navigate the first quarter of 2026, the artificial intelligence landscape has reached a critical inflection point. The era of 'more is better,' where simply scraping the entire internet was sufficient for model progress, has officially ended. We are now in the 'Quality Era,' where the performance of Large Language Models (LLMs) and autonomous agents is limited not by compute power, but by the scarcity of high quality, verifiable training data. Industry reports from early 2026 indicate that over 60% of enterprise AI initiatives failed in 2025 due to poor data quality, leading to rampant hallucinations and biased decision-making. In this environment, the decentralized approach pioneered by $PUNDIAI has moved from a niche concept to a fundamental necessity for the next generation of intelligence.
The 'Data Wall' and Why Quantity Failed
For years, the AI industry operated under the assumption that scale could compensate for noise. However, by early 2026, researchers confirmed the 'Data Wall' phenomenon: models trained on low quality, repetitive, or synthetic data actually begin to degenerate in reasoning capability. This 'Model Collapse' occurs when AI starts eating its own tail, training on AI-generated content instead of fresh, human verified information. Pundi AI identified this risk early on, positioning itself as a decentralized foundry that sources real-world, high-fidelity data from a global network of human contributors, effectively breaking through the data wall that has stalled many centralized competitors.
Decentralization: The Only Path to Verifiable AI
Transparency is the dominant theme of March 2026. Regulators and users alike are demanding to know what 'fuel' is being fed into the models that control financial markets and healthcare systems. Centralized data providers often operate in a black box, making it impossible to audit the provenance of training sets. Pundi AI solves this through blockchain integration, ensuring that every data point, label, and annotation is recorded on-chain. This creates a permanent, immutable record of data lineage, allowing developers to build 'Verifiable AI' that meets the strict compliance standards of the 2026 regulatory environment.
Pundi AI: The Foundry of the New Intelligence Economy
Pundi AI has evolved into more than just a data platform; it is the primary infrastructure for the decentralized AI economy. By integrating artificial intelligence with robust blockchain rails, Pundi AI enables a transparent management system for data from creation to utilization. It functions as a specialized 'foundry' where raw information is refined into high-grade training fuel. This strategy focuses on the foundational layer of AI, the data itself, rather than competing in the saturated market of general-purpose models, making Pundi AI the indispensable partner for every AI developer in 2026.
The 'Tag to Earn' Revolution and Global Data Labeling
At the heart of Pundi AI’s growth is the 'Tag to Earn' model. Unlike the 'Play to Earn' hype of previous years, 'Tag to Earn' provides a sustainable economic incentive for productive work. Participants globally are rewarded for annotating and tagging data tasks that are essential for refining AI models. By March 2026, this model has created thousands of jobs in emerging markets, allowing a diverse global population to contribute their unique perspectives to AI training, which significantly reduces the western-centric bias found in early AI models.
Scaling to 28 Billion Data Rows: Pundi AI’s Massive Footprint
The scale of Pundi AI’s operations is staggering. As of this month, the platform manages over 224,000 unique datasets and more than 28.6 billion rows of data. This vast repository covers everything from sentiment analysis of financial social media to complex image recognition sets for robotics. This massive footprint makes Pundi AI one of the largest decentralized data repositories in existence, providing the necessary volume to train even the most demanding multi-modal models expected to debut later this year.
The NVIDIA Inception Edge: Hardware Meets Decentralized Data
Pundi AI’s membership in the NVIDIA Inception program has been a critical catalyst for its technical success. In 2026, access to high-end compute (GPUs) is as competitive as access to data. Through this program, Pundi AI can scale its decentralized infrastructure without bottlenecks. Furthermore, it ensures that Pundi AI’s data labeling tools are optimized for the very hardware the models are being trained on.
Verifiable AI Assets: The Rise of Data NFTs
In the Pundi AI Data Marketplace, datasets are not just files; they are tokenized as Access NFTs. These digital assets provide verifiable rights to the data, ensuring that creators are fairly compensated and users have clear provenance. This tokenization allows for the creation of 'Dataset Tokens' (DTOKs) in the Data Pump, creating a secondary market for AI fuel. In 2026, these data assets have become a recognized asset class, with high-demand datasets reaching market caps in the millions.
Conclusion: Building a People-Powered AI Future
The events of early 2026 have made one thing clear: the future of AI belongs to the decentralized community. By solving the critical issues of data quality, transparency, and ownership, Pundi AI has positioned itself as the backbone of the next technological era. As we move forward, the alliance between human-labeled data and autonomous on-chain agents will redefine what is possible in the digital economy. Pundi AI isn't just feeding the models of today; it is building the foundation for the ethical, accurate, and decentralized intelligence of tomorrow.
Interested to learn more? Make sure to follow Pundi AI on X 👉 @ PundiAI

Il panorama tecnologico globale ha raggiunto un punto di ebollizione. Le recenti dichiarazioni di Elon Musk riguardo al ruolo di Tesla nello sviluppo dell'Intelligenza Generale Artificiale (AGI) hanno spostato l'attenzione dell'intero settore. Per anni, il dibattito si è concentrato sui modelli di linguaggio di grandi dimensioni (LLM) e sulla loro capacità di imitare il pensiero umano. Tuttavia, Musk ha identificato correttamente il collegamento mancante: l'interfaccia fisica. L'obiettivo di Tesla non è solo costruire un cervello, ma costruire un corpo capace di 'modellare gli atomi.' Questo termine si riferisce alla capacità di un'IA di muoversi, manipolare e riorganizzare il mondo fisico con la stessa fluidità con cui il software riorganizza i dati. Questa è l'alba della singolarità fisica, dove la barriera tra intelligenza digitale e azione fisica finalmente si dissolve.

If you want to understand how the Iranian government uses cryptocurrencies and the crypto industry to circumvent global scrutiny, how Iranian residents use crypto under heavy restrictions, where the 80 tons of imported gold went, and where massive amounts of capital are actually flowing, this article explains it all.
Nearly half a century ago, Iran experienced a massive transfer of wealth that shocked the global financial system. In early 1979, the Pahlavi dynasty, which had ruled Iran for 37 years, collapsed amid the fury of the Islamic Revolution and widespread social unrest.
This revolution not only ended Iran’s 2,500-year tradition of monarchy, but also triggered one of the largest and most violent class restructurings and capital flights in modern Middle Eastern history.
Now the clock turns to March 2026.
With the United States and Israel launching unprecedented joint military strikes against Iran, reportedly resulting in the death of top Iranian leadership and the destruction of key military infrastructure, a similar sense of apocalyptic panic has once again spread across the country.

Introduction: The Echo of History
In Tehran in early 1979, the air was filled with the smell of burning tires and an overwhelming sense of fear.
For families like Regine Monavar Tessone, who lived in one of Tehran’s wealthy neighborhoods, the revolution meant that generations of accumulated wealth vanished overnight.
In Regine’s memory, that morning was filled with chaos and despair. Her father, sweating profusely, crammed twelve large suitcases into the family car, even tying some to the roof.
When Regine’s mother tried to run back inside to grab a few more valuable silver utensils and copper plates, her father shouted in desperation that there was no time left.
On the way to Mehrabad Airport, their overloaded car suffered a blowout. In that life-or-death moment, Regine’s father offered everything he had to a passing stranger—just to ensure his family could reach the airport in time.
They were incredibly lucky.
They managed to board the last civilian flight to leave Iran before the airport closed.
As the plane struggled to lift off, the captain made an announcement that terrified the passengers:
“You are lucky. This is the last flight leaving Iran.
The airport is now closed. Khomeini has returned.”
Regine’s mother told the children never to look back, because they would never set foot in their homeland again.
The family’s real estate, businesses, and all physical assets they could not carry were ultimately confiscated by the new regime and disappeared into the dust of history.

The Fate of Those Who Stayed
For wealthy Iranians who failed—or refused—to flee in time, the consequences were often fatal.
One tragic example was Habib Elghanian, known as the “Tehran industrial magnate.”
He had played a major role in Iran’s modernization. His family built Iran’s first privately owned high-rise building, the iconic 17-story Plasco Building, and introduced large amounts of Western technology to the country.
Yet after the 1979 Islamic Revolution, he was quickly arrested.
He was charged with fabricated crimes such as:
espionagecorruption“friendship with the enemies of God”
He was sentenced to death by an Islamic Revolutionary Court and executed by firing squad, becoming the first major business leader executed by the new regime.

How Wealth Was Smuggled Out in the 1970s
In that era, wealth transfer was primitive, physical, and extremely dangerous.
To avoid confiscation by the new government, Iranian elites tried to miniaturize and conceal their wealth.
Examples included:
Smuggling Persian Carpets
Some wealthy families transported priceless Persian antique carpets from Tabriz to hidden ports in southwestern Iran using camels and trucks.
Under cover of night, the carpets were loaded onto small wooden boats and smuggled across the Persian Gulf to the UAE or African markets.
Gold and Jewelry Smuggling
Others sewed gold and jewelry into clothing linings, hid them in cut-open toothpaste tubes, or concealed them in hollow soap bars.
They then attempted to move the valuables across land routes through dangerous smuggling networks, risking robbery or murder by armed groups operating in the so-called “Golden Crescent” region.
The Legendary Smuggling Network
Stories circulated about a Polish smuggler named Jacek, based in Singapore, who ran a vast international courier network.
His couriers reportedly included:
Vietnam War veteransformer Israeli fighter pilotsFrench backpackers
They transported gold through human couriers, smuggling it into India and the Middle East and creating a secret route for wealthy elites fleeing unstable regions.

March 2026: History Repeats Itself
Now, almost half a century later, history seems to echo itself.
Following joint U.S.–Israeli military strikes on Iran, which reportedly killed senior leadership and destroyed critical infrastructure, a similar sense of panic has once again spread across the country.

Reading Guide
This article contains more than 12,000 words.
Take your time and read it patiently — it will be worth it.

Part I — The Macroeconomic Furnace
War Expectations, Systemic Imbalances, and the Collapse of the Rial
From 2024 to early 2026, Iran’s economy experienced a full-scale collapse driven by several overlapping forces:
long-standing structural imbalancessystemic corruption among political elitesmassive quasi-fiscal monetary expansioncrushing international sanctionssevere geopolitical shocks
In February 2025, the U.S. government issued National Security Presidential Memorandum-2 (NSPM-2), restarting the Maximum Pressure campaign against Iran.
Combined with Israel’s ongoing military threats, this move destroyed the last remaining public confidence in the Iranian rial.

The Result: Total Currency Collapse
Before the 12-day Iran–Israel conflict in June 2025, the open market exchange rate was roughly:
1 USD ≈ 800,000 rial
Within a few months, as political instability deepened and sanctions tightened, the rial entered a free-fall collapse.
By January 2026, the black-market exchange rate had reached:
1 USD ≈ 1,620,000 rial
This means that Iran’s national currency lost nearly half its purchasing power in only six months.

Everyday Life in a Dollarized Economy
As a result:
most commercial activity became anchored to black-market dollar pricespricing strategies and savings behavior shifted away from the rial
Because the physical purchasing power of banknotes collapsed, daily cash transactions became extremely difficult.
In February 2026, Iran’s central bank issued a new note:
5,000,000 rial “Iran-cheque”
Ironically, although it became the largest denomination banknote in Iranian history, its real purchasing power was only about $3.10.

The Root Cause: Iran’s Distorted Multi-Exchange-Rate System
In normal economies, currency depreciation helps restore balance by making exports cheaper.
But in Iran, this mechanism is completely broken.
The government created a complex multi-tiered foreign exchange system to:
conserve limited foreign reservesmaintain essential importscreate rent-seeking opportunities for elites
Between 2024 and 2025, Iran operated up to eight different exchange rates simultaneously.

Institutionalized Arbitrage
The gap between official and black-market rates created one of the largest institutionalized arbitrage opportunities in economic history.
For example:
Exporters forced to settle in the NIMA system lost more than 50% of their asset value.
Meanwhile, politically connected firms — often linked to the Islamic Revolutionary Guard Corps (IRGC) — could:
Falsely claim imports of medicine or machinery.Obtain dollars from the central bank at subsidized rates (~280,000 rial).Sell those dollars on the black market at ~1,600,000 rial.
This generated huge risk-free profits overnight.

The Scale of Capital Flight
According to Iranian parliamentary data:
From 2018 to mid-2025, approximately
$95 billion in non-oil export revenue never returned to Iran.
Central bank figures suggest about $80 billion left through trade channels between 2018–2024.
Given that the private sector accounts for only 15% of total trade, suspicion largely falls on state-connected elites.

Gold Becomes the Last Refuge
When dollars became impossible to obtain, gold became the population’s second choice.
Iran’s traditional inflation hedge is the Bahar Azadi (“Spring of Freedom”) gold coin.
However, by 2026 the gold market itself became severely distorted:
severe supply shortageslarge speculative premiumsrising political risks
Although Iran imported over 100 tons of gold worth $8 billion in 2024, customs data revealed a strange anomaly:
Out of 81 tons of imported gold:
only ~20 tons entered the consumer market~60 tons disappeared
The likely explanations:
seized directly by the central bankdiverted into black-market networksused in elite capital flight operations

When Traditional Escape Routes Close
By 2026, every traditional wealth-preservation route had effectively been blocked:
USD withdrawals heavily restrictedgold taxed and scarcephysical assets confiscated at borders
Under these conditions, Iran’s wealthy class, entrepreneurs, and desperate middle class turned toward the only remaining borderless asset:
cryptocurrency.

Part IV — Domestic Crypto Exchanges
Pressure Valves or Surveillance Traps?
Iran was actually one of the earliest countries to adopt cryptocurrency strategically.
In 2019, the government legalized Bitcoin mining to convert subsidized electricity into digital assets that could bypass sanctions.
At its peak, Iran controlled 2–5% of global Bitcoin hash power.
Reports also indicate the Iranian central bank accumulated over $507 million in USDT through complex wallet networks.

Iran’s Domestic Crypto Boom
Crypto adoption exploded domestically.
Major exchanges include:
Nobitex (dominant platform)WallexBitpinAban TetherRamzinex
Around 15 million Iranians have interacted with crypto in some form.
Nobitex alone handled over 87% of crypto inflows into Iran and processed roughly $3 billion in transactions in early 2025.
The most popular asset:
TRC-20 USDT — effectively a digital dollar for Iranians.

But Domestic Exchanges Are Not Escape Routes
For wealthy Iranians attempting to move large sums abroad, domestic exchanges are not safe exit channels.
They operate under strict surveillance by:
the Central Bank of Iranthe intelligence ministrythe IRGC
All exchanges must:
obtain government licensesenforce strict KYCshare full transaction data with authorities
If funds remain inside the system, the government tolerates it.
But once capital flight is suspected, authorities intervene immediately.

The 2025 Nobitex Hack
On June 18, 2025, the pro-Israel hacker group Predatory Sparrow attacked Nobitex and stole roughly:
$90–100 million in crypto assets.
The day before, the group also disabled Bank Sepah, causing nationwide ATM outages.

Iran’s Response: Crypto Curfews
After the attack, the central bank imposed severe restrictions:
Crypto Curfew
Trading hours limited to:
10 AM – 8 PM
Official reason: security.
Real reason: easier surveillance.
Purchase Limits
annual USDT purchase limit: $5,000 per persontotal stablecoin holdings: max $10,000
Emergency Shutdown
In March 2026, during military escalation, Iran ordered exchanges to suspend USDT/Rial trading entirely.
This cut off the main bridge between fiat and crypto.

Part V — The Hawala Network
Since domestic exchanges became dead ends, Iranians turned to Hawala, a traditional informal transfer system based on trust networks.
Typical process:
A client gives cash or gold to a broker in Tehran.The broker contacts a partner in Dubai or Istanbul via encrypted messaging.The client receives USDT or a secret code.The client or their relatives collect cash abroad using the code.
No money actually crosses borders.
Balances are settled later through:
trade invoice manipulationcommodity flowsor crypto transfers.

The Global Escape Corridor
Escaping capital eventually flows through a three-city corridor:
Dubai
A key node for shadow banking and real-estate investments.
Istanbul
A gateway for citizenship-by-investment programs and sanctions-evasion networks.
Toronto
The final destination for many elite families seeking stable Western assets.
Iranian crypto wealth is eventually converted into clean Canadian dollars and invested in luxury real estate.

The Ultimate Irony
Perhaps the most surreal discovery is this:
The same Iranian state apparatus that harshly suppresses civilian capital flight is itself one of the world’s largest users of cryptocurrency for sanctions evasion and financial operations.
Reports suggest that by late 2025, activities linked to the IRGC accounted for around 50% of Iran’s entire crypto ecosystem.
Source: https://x.com/agintender

Centralized exchanges’ derivatives risk controls are carrying out a sweeping crackdown—OI limits, account freezes, and broad risk-control sweeps are hitting everyone. Professional traders urgently need a new trench: a place resistant to random risk-control “bullets,” where they can set ambushes, hide their positions, and execute strategy.
Aster—the protocol many have high hopes for—may have arrived at exactly the right moment. With its permissionless design and strong backing from the BNB Chain ecosystem, could it become the new on-chain derivatives battlefield for large capital during this structural vacuum in the industry?
The sparks are lit, but the smoke of war has yet to rise. The question is: how will the players respond?
“Everyone goes through this phase. When you see a mountain, you want to know what lies beyond it.”

1. The Core Elements of a Derivatives Liquidation Scheme
A successful derivatives “harvesting strategy” requires two key elements:
Absolute control of the spot marketSufficient Open Interest (OI)

1.1 Spot Control: The Remote Control for Index Prices
Market makers manipulate circulating supply of a token, turning the spot market into a controllable “data board.”
Because derivatives contracts typically derive their Index Price from spot markets—and the Index Price feeds into the Mark Price—controlling spot prices effectively means controlling the mark price.
Once a market maker controls circulating supply, even a small amount of capital can significantly push prices up or down in thin spot markets.
This price movement is then transmitted to the derivatives market via oracles, immediately altering the PnL of contract holders.

1.2 Massive OI: The Foundation of Profit
In many cases, market makers cannot exit through spot markets:
Spot tokens may be lockedLiquidity is too thinSelling would crash the priceOn-chain transactions are traceable
Therefore, derivatives markets become the primary profit channel.
Example:
If a market maker deploys $10M, the spot side incurs rigid costs:
Trading feesFunding paymentsMarket impactPumping costs
If spot cannot be used to cash out, the derivatives side must generate at least $30M to cover costs and produce profit.
This explains why massive OI is necessary—small spot movements can then generate large derivatives profits.

2. The Tears of the Times: CEX Risk Controls Prevent Massive OI
Limitations of Centralized Exchanges
With increasing global regulatory pressure, exchanges like Binance have strengthened monitoring of abnormal trading behavior.
Large capital faces several barriers:
Account bans and asset freezes
AML compliance and monitoring systems flag:
large capital flowsabnormal trading frequency
This can lead to account suspension or long-term asset freezes.

OI limits
CEXs impose strict limits on Open Interest per account or per asset, making it extremely difficult for large players to build positions capable of influencing market expectations.

Position takeover risk
In extreme volatility, liquidation engines and insurance funds may:
force liquidationstrigger Auto-Deleveraging (ADL)
This can completely destroy a planned market-making strategy.

3. Aster: The On-Chain Derivatives Battlefield in the Binance Ecosystem
Backed by Yzi and CZ, and deeply integrated with the BNB Chain ecosystem, Aster shares strong overlap with Binance’s user base and liquidity providers.
Aster’s API is also almost identical to Binance’s, reducing migration costs for professional traders.
For operators, Aster offers advantages no CEX can provide:
Permissionless tradingWallet-based accessNo risk of account bansAbility to open extremely large positions
This environment enables a new narrative:
The “Derivatives Harvesting Market”
On a relatively illiquid PerpDEX, large players can exploit information asymmetry and capital advantage, turning derivatives markets into profit engines that spot markets cannot provide.

4. The Pippin Case: Abnormal OI Behavior
Pippin ($PIPPIN )—an AI-driven meme coin active in early 2026—shows many characteristics of this model.
On-chain data suggests that:
27 related wallets control ~80% of the supplyindicating extremely high supply concentration.
On Aster, Pippin displayed unusually large OI relative to trading activity.
Example metrics:
OI: $71M (actual effective OI ~ $35.5M)24h trading volume: $7.6MVolume/OI ratio: 0.214
This is highly unusual.

Why?
Market makers accumulate large derivatives positions without real trading turnover.
They then manipulate spot prices via wash trading or coordinated buying/selling.
When the Index Price moves, their derivatives positions generate massive floating profit.
Since there is no centralized oversight, this “self-directed performance” can continue until sufficient counterparties appear.

5. Turning Positions into Profit: Price Transmission and Market Makers
The biggest challenge on a PerpDEX is exiting positions smoothly.
On platforms like Aster, price discovery relies heavily on:
market makersarbitrage botscross-exchange price transmission.

5.1 Cross-Exchange Price Transmission
The strategy works like this:
Market maker accumulates large OI on Aster.Spot manipulation moves prices.Price changes propagate through:
Spot price change
→ Oracle update
→ Aster Index Price change
Meanwhile, volatility is also created on Binance Perps.
Market makers then control the spread between Aster and Binance.
Arbitrage bots detect the spread and attempt to capture it.

Example
If Aster’s price is higher than Binance’s:
Arbitrage bots will:
Short on AsterLong on Binance
The market maker can then transfer their positions to these arbitrage bots, effectively exiting without crashing the market.
Eventually, those short positions may get liquidated—becoming the fuel for further profits.

5.2 Price Transmission via Market-Making Bots
Because market-making algorithms track multiple exchanges, actions on Aster can influence global price feeds.
This creates a situation where:
A small, controllable battlefield (Aster)can pull liquidity from a larger one (Binance).

5.3 Data Board vs Real Activity
Analytics platforms like Coinglass have pointed out anomalies on Aster:
High OILow trading volumeVery low liquidation activity
These signals reinforce the idea that Aster may function more as a “data board” settlement platform than a fully organic trading market.
Market makers don’t need deep organic liquidity—they only need:
stable settlementhigh leverageno account bans.

6. Limitations and Operational Costs
Even with these advantages, the strategy carries major costs.

6.1 Funding Rate Costs
Large OI imbalances create extreme funding rates.
Annualized rates can exceed 200% in extreme cases.
This forces market makers to complete the full cycle quickly:
pumpattract arbitrageursexit
Otherwise, funding costs quickly eat into profits.
Example:
With $30M OI, Aster funding can cost ~$96k per day more than Binance.

6.2 Liquidity Friction
Even though Aster performs well among PerpDEXs, its liquidity depth is still far below Binance.
Large positions face:
significant slippagewide spreads.
Some trading pairs also use dynamic slippage models tied to OI.
Therefore, market makers typically exit positions via:
TWAP executionOTC dealsarbitrage-driven position transfer.

Future Direction for Aster
With the upcoming Aster Chain mainnet and ZK-based privacy technology, future trading strategies could become:
more hiddenless traceable.
Ironically, this may be the true meaning of “privacy” for the protocol.
Compared with trading subsidies or zero fees, this capability may represent real demand.
If Aster captures the window created by tightening CEX risk controls, it could establish itself as a new derivatives battlefield for strategic trading.

Postscript: The Brutal Second Phase of the Game
The story doesn’t end after the market maker exits.
Now the market looks like this:
Market maker exitsArbitrage bots hold massive short positionsPrice remains at a premium.
Two scenarios may unfold:

Scenario A: The Funding-Rate Trap
If prices remain high without crashing:
Arbitrageurs expect mean reversion.
But if prices stay elevated, funding costs and liquidity constraints can trap them.

Scenario B: The Short Squeeze Hunt
The market maker may return and push prices even higher.
Arbitrage bots’ short positions suffer massive losses.
Their stop-losses trigger market buys, pushing prices even higher.
This cascade becomes fuel for a second round of harvesting.

After all this back-and-forth…
How much profit do you think the Pippin operators ultimately made?

Source: https://x.com/agintender

If we compare the crypto industry to a set of teeth, then the path of token listings over the years resembles an industry-wide orthodontic process. From the chaos of 2017 to the industrialized assembly line of 2025, every shift in how tokens are distributed has essentially been a correction of structural deformities in the industry and a challenge to the concentration of token supply.
In this process, project teams' pursuit of top-tier liquidity has evolved from early "volume battles" into today's "astronomical bride-price model" — paying fortunes to win the hand of exchanges. And exchanges themselves, fighting for survival, traffic, and fees, have evolved from early listing logic to pricing logic.
How exchanges, project teams, VCs, and traders have torn each other apart and loved each other; slandered each other and built each other up.
For you, a thousand times over.

Introduction
Teeth are a remarkably "miraculous" organ of the human body — and here is why: teeth are the only organ in the adult human body that we are permitted to deeply customize, move, and reshape through physical and biological means.
This "plasticity" allows us to counter the misalignment brought by genetics and the wear and discomfort brought by time.
We typically think of bones as hard and fixed — teeth are rooted in the alveolar bone, so they should be immovable. Yet orthodontics (braces) exploits precisely the fact that bone is a "dynamically active tissue." When braces apply a constant, gentle force to teeth, the alveolar bone on the compressed side senses the pressure — the body dispatches "osteoclasts" to resorb the bone there, making way for the tooth. On the opposite side, where a gap opens as the tooth moves, the body dispatches "osteoblasts" to fill in new bone.
The tooth simultaneously "destroys" bone and "rebuilds" bone — achieving a slow migration through the skeletal structure.
No other hard organ in the human body can do this. Unless you are extraordinarily gifted, you cannot shorten your femur or relocate a rib by applying pressure — but teeth can move.
The rules and policies governing token listings work the same way.

Part One: Listing = The Contest and Transfer of Asset Pricing Power
This article divides the listing pathway into four stages: Baby Teeth → Growing Teeth → Malocclusion → Orthodontic Correction. The thread running through all four evolutionary stages is a single question: who controls the asset's pricing power.
[Image: four-stage evolution diagram]
Stage One (Community Pricing) Pricing power rests with "shillers" and grassroots communities. Traffic is king — whoever shouts loudest is right. The result is bad money driving out good, and the market flooded with noise.
Stage Two (Exchange Pricing) Exchanges reclaim pricing power through IEO/Launchpad, acting as "gatekeepers" and "investment banks." The exchange's credibility endorsement becomes the core support for asset prices.
Stage Three (The Collapse of VC Pricing) VCs accumulate excessive pricing power in the primary market, leaving the secondary market unprofitable. Exchanges are forced to intervene, attempting through coercive means (airdrops) to "rob the rich to feed the poor" — but this is only a painkiller, treating symptoms rather than root causes.
Stage Four (Market/Derivatives Pricing) Capital in the game is no longer in spot — so pricing power is handed to more mature financial mechanisms. Through "derivatives trading" and pre-market trading, the market forms a fair price through full-scale competition, no longer dependent on a single narrative or a VC's valuation report.

Part Two: The Historical Context, Logic, and Evolution of Token Listings
Stage One: 2017–2018 — The "Baby Teeth Era" — A Wild Age Where Volume Is Justice
Pathway core: Direct Listing, Community Voting
The industry at this time was in a state of "no dentists." Listing logic carried a strong flavor of founder and community sovereignty — if a project could mobilize fans, it could get in the door.
Historical Context
This was crypto's "Genesis" phase. The industry was still purely a trading platform era; users primarily cared about convenience, speed, and low cost of trading. The mainstream exchanges of that time were mostly slow and unstable. Newcomer platforms built reputations through "radical simplicity" — no complex educational systems or social features, interfaces designed entirely for experienced professional traders.
Causes
User acquisition anxiety: Early-stage platforms needed low-cost, high-efficiency means to attract traffic away from competitors. "Community voting" was not just about selecting coins — it was a contest for community belonging.Regulatory vacuum: Global regulation had not yet intervened. Exchanges had extremely high decision-making freedom, and the logic was brutally simple: whoever has more fans is the guarantee of liquidity.
The Play: Represented by Binance's "monthly community vote listing," users paid a tiny amount of tokens (e.g., 0.1 BNB) to cast a vote. Winning projects (such as Zilliqa, Pundi X) received top-tier traffic at almost no cost — but vote manipulation caused serious market misalignment, and the mechanism was ultimately abandoned.

Stage Two: 2019–2022 — The "Growing Teeth Era" — Ecosystem Walls and Premium Issuance
Pathway core: IEO (new issue subscription), Launchpad, Launchpool, Direct Listing
The industry began wearing braces labeled "ecosystem." Exchanges were no longer merely intermediaries — they became capable "dentists" with deep due diligence capabilities.
Historical Context
After the 2017 ICO bubble burst, fraud and technical exploits shattered the industry's credibility. The market needed a safer, endorsed method of fundraising. Simultaneously, the arrival of DeFi Summer (2020) made "liquidity mining" an industry consensus.
Causes
Credit repair: Exchanges introduced "bank-level" due diligence through Launchpad, acting as industry dentists — screening projects with real teams and technology, upgrading the ICO model into the more reliable IEO (Initial Exchange Offering).Ecosystem closed loop: To consolidate user stickiness, platforms used Launchpool to forcibly empower their native ecosystem tokens (like BNB), allowing users to obtain new tokens through "holding" rather than "rushing to buy" — reducing participation risk.
2019–2020 (New Issue Subscription Frenzy): Launchpad (e.g., BitTorrent) introduced a priced issuance model. Project teams had to pass technical review and accept the exchange's pricing "suggestions" to ensure a "wealth effect" after listing.
2021–2022 (Lock-Up Empowerment): Launchpool became mainstream, empowering platform tokens — marking a shift from "buying new coins" to "mining new coins." Users locked platform tokens to receive new token distributions, forcibly binding project interests to the platform ecosystem.

Stage Three: 2023–2024 — The "Malocclusion Era" — High-Valuation, Low-Float Battles and Mechanism Upgrades
Pathway core: HODLer Airdrop, Launchpool
Historical Context
Venture capital returned to the market at scale, spawning a large batch of projects with valuations in the hundreds of millions of dollars but extremely low circulating supply at launch (median of only 12.3%). This structure left secondary market retail investors with almost no profit space — only relentless, continuous unlock-driven selling pressure. Simultaneously, paying massive fines and CZ's imprisonment shifted the focus from "wild growth" to "global compliance and stability."
Causes
Pricing power conflict: VC-driven projects peaked at listing, stripping the market of price discovery function. Exchanges, to protect their ecosystems, had to intervene through coercive means to correct the imbalance — "returning the gains to the people."Compliance pressure: From May 2024 onward, rules explicitly tilted toward smaller projects with higher distribution ratios, requiring project teams to lower the locked-float portion — aimed at combating VC manipulation of pricing.
Corrective measures: HODLer Airdrops and Megadrops targeting long-term holders were introduced, forcibly distributing "bride-price" directly to retail investors.
This was the most painful "periodontitis" stage of the industry's orthodontic process. VCs spawned large numbers of "peak at listing" projects; the median token circulation rate fell to 12.3%. Binance's industry report showed that new projects from 2024 alone carried approximately $155 billion in potential selling pressure over the following 12–24 months.
Because VCs manipulated pricing and retail investors bought at peaks — with listing being the top — market confidence collapsed severely. Secondary market underperformance caused spot trading volume to shrink.
To maintain the attractiveness of platform tokens, traffic, and trading demand, platforms began aggressively rolling out HODLer Airdrops (airdrops targeting long-term holders) and Megadrops (distribution combined with Web3 tasks). Listing policies gradually tilted toward smaller projects with higher distribution ratios.
Beginning in the second half of 2024, exchange derivatives mechanisms underwent a major upgrade — supporting perpetual contracts for a wider range of small coins and new tokens, allowing risk hedging and early price discovery through derivatives before spot liquidity matured. Exchange traffic and revenue also shifted toward perpetual contract trading.

Stage Four: 2025 — The "Orthodontic Era" — Multi-Layer, Industrialized Compliance Matrix
Pathway core: Binance Alpha Airdrop, Pre-Market Trading, Web3 Wallet integration
Historical Context
2025 has been called the "inaugural year of crypto industrialization." Total digital asset market cap broke through $4 trillion; Bitcoin became a macro asset. Perpetual contracts had become the dominant instrument in the derivatives market, accounting for over 75% of global crypto derivatives volume.
Causes
Pricing power shift: The market is no longer driven by narrative and shilling — it is driven by ETF flows, corporate earnings, and protocol revenue.Efficiency optimization: Futures-first trading allows pricing through derivatives before new coins list on spot. 2025 data shows this pathway's conversion cycle shortened to 14 days — the fastest route into the mainstream.
Pre-market derivatives front-loading: This is the most important mechanism change of 2025. "Pre-Market Trading" was introduced, allowing users to trade perpetual contracts with up to 5x leverage based on external price feeds before tokens are officially listed on spot markets.
Small-cap deep liquidity: Because derivatives and pre-market trading attracted enormous traffic, attracting many small and mid-size market makers, the competitive and liquidity landscape for small-cap derivatives improved dramatically. This allowed new coins not yet listed on spot — like ESP, AZTEC, KITE — to quickly establish derivatives liquidity, with an average cycle from launch to official token issuance of approximately 14 days.
Binance Alpha (2.0): Functioning as a "pre-listing token selection pool," projects must first "grind through levels" here — proving their secondary market performance (including price trajectory and trading volume) — before progressively upgrading: derivatives → spot.

Part Three: The Power Shift from "Wild Frontier" to "Industrial Orthodontics"
[Image: power shift diagram]
Stage One: The Wild Frontier of "Volume Is Justice" (2017–2018)
This was the exchange's "primitive accumulation" period. They had almost no ability to evaluate project quality — and didn't need to. They only needed to answer one question: "How many new users will listing this coin bring me?"
This model cultivated the first generation of "purely mercenary" crypto users — with no loyalty to platforms or projects, going wherever there was meat to eat. This planted the seeds for the later liquidity mining tragedy.
Stage Two: The "Ecosystem Wall-Building" Era of Growing Teeth (2019–2022)
Exchanges reached the peak of their power, becoming the top of the food chain. They were no longer merely trading venues — they became super-nodes combining broker, investment bank, and regulator in one. IEO was the best tool for exchanges to monetize their brand premium.
The shift from "buying new coins" to "mining new coins" (Launchpool) was extremely clever. It successfully and forcibly channeled external project benefits to platform token holders, completing the value capture closed loop for platform tokens. This was the most critical step exchanges took in constructing their "moats."
Stage Three: The Growing Pains of the "Malocclusion Era" (2023–2024)
This was the blowback from VC over-expansion during the previous bull cycle. High FDV, low-float projects were essentially VCs using information asymmetry and capital advantage to systematically harvest retail investors.
The "$155 billion in potential selling pressure" mentioned above is a staggeringly large number. This explains why, even as Bitcoin hit new all-time highs, the altcoin market remained dead. Because the market was not only lacking fresh capital — it was continuously being bled dry by old project unlocks.
This illustrates the exchanges' helplessness: knowing everything is a trap, yet having to keep listing new projects to maintain competitiveness. Megadrop and HODLer Airdrop may look like innovations, but they are actually defensive measures — exchanges forced to "tax" VCs and redistribute to users in order to maintain ecosystem activity. This was a painful zero-sum game.
Stage Four: The Industrialized Future of the "Orthodontic Era" (2025 outlook)
In this stage, the industry finally recognized that spot markets alone, combined with simple IEOs, airdrops, and KOL rounds, could no longer accommodate the increasingly complex capital demands and community pressures.
In this stage, derivatives replace spot as the primary price discovery mechanism — alongside pre-market trading.
First, this is a massive paradigm shift. Previously: "first the asset exists, then the derivatives come." Going forward: "derivatives battle-price first, then spot asset delivery." This dramatically accelerates price discovery. How much a project is actually worth no longer needs to wait for the violent swings of listing day — it is settled in advance through the pre-market derivatives war between longs and shorts.
The emergence of Binance Alpha also provides an advance window for "industrialized listings." Alpha is effectively a "talent competition sandbox" or "decentralized curated market." It requires projects to prove their liquidity and resilience in the brutal real market before earning the right to "go official." This replaces the Stage Two manual due diligence with market mechanism.

Part Four: The Evolution of Listing Fees — From Listing Fee → Toll Fee → Share of the Dowry
This section does not target any individual exchange — it uses only publicly available information as the entry point.
[Image: listing fee evolution diagram]
The evolution of "listing fees" across these four stages is, in essence, a transfer of industry power: from the early "pay the platform for passage," to today's "give away your entire fortune to marry liquidity." We can trace this "bride-price" evolution to see clearly how the industry has been shaped step by step.
Stage One (2017–2018): From "Toll Money" to "Wedding Gift"
The early chaotic period was rife with rumors of enormous listing fees. Every exchange operated situationally, with an endless list of fee categories: listing fees, event fees, promotion fees, security deposits, and more.
Binance launched a transparency revolution in October 2018, announcing that 100% of all listing fees would be donated to a charitable foundation. Listing fees shifted from "direct platform revenue" to "brand credibility endorsement."
Stage Two (2019–2022): The Interest Exchange of "Ecosystem Dividends"
During this period, the model of directly collecting cash was abandoned. In its place came "ecosystem empowerment" — project teams were required to allocate tokens to the platform's users (primarily platform token holders).
Using Binance as an example: priced issuance through Launchpad, or liquidity mining through Launchpool.
Although there was nominally no "listing fee," project teams had to set aside a certain percentage of tokens (typically 2–3% or more of total supply) as distribution chips. This portion no longer flowed into the exchange's pocket — it flowed into the hands of "partners" capable of sustaining the platform ecosystem.
Stage Three (2023–2024): "Forced Quotas" Pushing Back Against VC Monopoly
As "high valuation, low float" tokens proliferated, exchanges began forcibly intervening in benefit distribution. This era saw the famous rumor of the "x% token listing fee," sparking a major industry debate. The official response clarified that the project tokens in question were not handed to the exchange — but were required to be used for user airdrops and community rewards.
HODLer Airdrops, Launchpool, and Megadrops were rolled out — forcing project teams to "dilute" VC pricing power at listing through large-scale token distributions.
Stage Four (2025–): The "Spend Everything on the Bride-Price" Value Inversion
By 2025, the "bride-price" for entering the spot main board had reached the apex of competitive escalation. The following phenomena have emerged:
Distribution ratio rising: Average distribution ratios have stabilized at 3–7% of total token supply (from Alpha through to spot listing).Security deposit mechanism: In addition to tokens, project teams typically need to deposit approximately $250,000 as a security deposit (refundable after 1–2 years) and prepare at least $500,000 worth of BNB for liquidity pools.Marketing package: Approximately 1% of supply for platform marketing.
From 2017 to 2025, the logic of listing costs has undergone three major leaps:
2017–2018: Platform collects money (toll).2019–2022: Ecosystem sharing (empowerment).2023–2025: Scatter wealth to save the market (correction).
Today's "listing fees" have fully evolved into a customer acquisition cost. To obtain top-platform liquidity, project teams pay token values that often exceed their total financing raised. This "bride-price model," while guaranteeing users' initial returns, also leaves many projects nearly emptied of their future growth chips on their "wedding day."

Part Five: As Industry Participants — What Should Be Said?
This text is not merely a historical review — it is an evolutionary report on the survival philosophy of exchanges and project teams.
It illustrates how exchange players represented by Binance have adjusted their positioning across different cycles: from the initial "traffic catcher," evolving into "ecosystem landlord," and after encountering the crisis of "VC harvesting," ultimately choosing to evolve into "industrialized financial infrastructure."
The listing of the future is no longer a simple "bell-ringing ceremony" — it is a complex, multi-layered financial engineering exercise. For project teams, the era of only knowing how to write white papers and raise VC funds is definitively over. For retail investors, the window of "mindlessly chasing new issues and getting rich" has also closed — what the future requires is more professional trading ability and a genuine understanding of derivatives instruments.
What? You say exchange listing rules are inflexible?
Aren't teeth pretty rigid too? 😂
Orthodontics takes time.
For you, a thousand times over.

Source: https://x.com/agintender

What Are We Really Seeing—Public Opinion, Foolish Opinion, or “Fishing” Opinion?
Over the past few days, I’ve been wondering: could the recent wave of public-opinion battles around exchanges actually have been orchestrated by a team from outside the Chinese (APAC) community?
Often, it’s not because you did something wrong. On the contrary, it’s because you did many things right that you end up being accused of “possessing a treasure and thus being guilty.” Or perhaps you did many things right, but suddenly made n mistakes, and people decide you are no longer the same person. Have you ever experienced the feeling of doing a hundred good deeds, only to have your reputation destroyed by a single mistake?

Introduction
In Peter Thiel’s book Zero to One, there is a view that once a business reaches a $1 billion valuation, it will inevitably become involved in politics.
The implicit meaning is that when the stakes become large enough, you will always need to seek a “protective umbrella.” Put bluntly, you must pay protection money.
This is even more true in the crypto industry. Every exchange is essentially a money-printing machine, which makes outsiders extremely envious.
A public-opinion war is an important component of business competition, and even more so an extension of political lobbying.
So-called “black PR” in the business world aims to manipulate information flows and the public opinion arena in order to:
damage competitors’ brand reputationsundermine market expectations for their core productsinterfere with their major business decisions (such as fundraising, IPO listings, or annual product launches)
By destroying the social trust foundation of an opponent, attackers can seize abnormal market share or pressure the targeted company into compromise—ultimately extracting excess economic benefits.

Reading Guide
Chapters 1–3: Theoretical foundations explaining why “black PR” requires so many participants.Chapter 4: Examines whether Binance is currently under attack from black PR.Chapters 5–6: Attempts to speculate on who might be behind it.

1. The Theoretical and Psychological Foundations of “Black PR”
The reason black PR can repeatedly tear apart the reputation defenses of mature companies and trigger massive waves of public opinion is that it weaponizes weaknesses in human group psychology and information asymmetry.
Common tactics such as astroturfing armies (“water armies”) and opinion dominance rely on three classic psychological principles.

1. The Digital Version of The Crowd: Intelligence Declines in Groups
In Gustave Le Bon’s The Crowd: A Study of the Popular Mind, he explains that once individuals form a crowd, they display completely different psychological traits.
Deindividuation
When people gather in large numbers, individuals feel an “irresistible power.” This sense of power frees them from moral constraints and responsibility.
Black PR exploits this by encouraging:
online abusedoxxingmoral judgment mobs
Intellectual Degradation
Regardless of how rational or elite individuals are in real life, once absorbed into a crowd, their intelligence often drops dramatically, and they become slaves to instinct and emotion.
Black PR messaging avoids complex reasoning and instead uses short, provocative slogans, such as:
“the ugly face of capitalists”“the real culprit of 1011”
These slogans appeal directly to the crowd’s primal instincts.

2. Reverse Manipulation of the Agenda-Setting Function
The agenda-setting theory suggests that media may not control how people think, but it strongly influences what people think about.
Black PR actors exploit this by flooding platforms with massive volumes of content to force a negative narrative agendainto public view.
This agenda is often framed as a major issue concerning:
public safetyconsumer rightsbusiness ethics
Once implanted, public attention becomes locked within this negative framework—even if the company later produces evidence proving the allegations false. By then, public cognitive energy has already been exhausted by suspicion, verification, and debate.

3. The “Spiral of Silence” and Manufactured False Consensus
The Spiral of Silence theory, proposed in 1972, suggests that people fear social isolation and therefore align themselves with what appears to be the dominant opinion.
When black PR groups create hundreds or thousands of accounts posting malicious comments simultaneously, they manufacture the illusion of overwhelming public consensus.
Imagine logging onto a platform and immediately being surrounded by a flood of accusations, insults, and alleged “evidence.”
Under such hostile pressure, individuals who hold neutral views—or who might defend the company—often remain silent to avoid:
moral condemnationonline harassmentsocial isolation
Thus the illusion of consensus grows stronger.
This is why one of the core tactics of black PR is controlling both the volume and frequency of public opinion output.
When people gather in groups, intelligence decreases. And once intelligence drops, individuals become more susceptible to manipulation—and less willing to express dissenting views.

2. Strategic Goals and Evolution Model of Black PR
From the theoretical discussion above, it is clear that black PR operations represent a carefully engineered form of social manipulation.
After years of evolution, the process has become a structured, multi-node industrial workflow, typically progressing through five stages:
Stage 1: Intelligence Gathering and Narrative Design
Investigate the target company’s product flaws, executive statements, or historical controversies.
If no real issues exist, attackers may fabricate false allegations or distort minor facts.
Stage 2: Matrix Infiltration and Seeding
Anonymous accounts or niche communities release “insider information” or mysterious leaks to test platform algorithms and moderation boundaries.
Stage 3: Influencer Detonation and Agenda Setting
Large influencer accounts amplify the narrative through retweets, comments, and posts—often pushing topics into trending lists.
Stage 4: Bot Swarms and Public Opinion Fermentation
Large numbers of fake accounts swarm the conversation, triggering platform algorithms and creating viral momentum.
Real users then follow the crowd in panic or anger.
Stage 5: Profit Extraction and Silent Exit
Once the target’s reputation is damaged—impacting stock price or business performance—the attackers delete accounts or go silent to avoid forensic tracing.
Because these activities are criminal in nature, teams often rely on covert communication and cryptocurrency payments to avoid detection.

3. Identifying Features of Black PR
The article summarizes several detection indicators that can be used to build an analytical identification framework.

4. Is Binance Currently in the Eye of a Black PR Storm?
4.1 “Zero-Hour Action”
Analysis of negative tweets about Binance on X revealed synchronized posting patterns.
At specific times—often during low liquidity periods such as weekends or late Asian hours—hundreds of accounts post identical content within seconds.
Common keywords include:
“Insolvent”“Withdraw”“Run”
Even punctuation and emojis are identical.
This strongly suggests script-driven bot networks designed to fabricate the illusion that “everyone is talking about Binance collapsing.”

4.2 Trojan-Horse Account Strategy
Many accounts follow the same naming pattern:
Chinese surname + “BNB” suffix
Examples: Li_BNB, Zhang_BNB
Their bios claim they are long-time Chinese Binance users, creating a narrative that loyal users are turning against the platform.
Interestingly, many of these accounts were inactive during the real market crash in October 2025 and were even promoting competing projects like Solana or Hyperliquid.
But in late January 2026, they suddenly “woke up,” deleted previous content, and focused exclusively on attacking Binance.
This resembles classic bot-net activation tactics.

4.3 Homogeneous Content Materials
Many circulating screenshots of alleged:
internal chatslegal noticeswithdrawal screenshots
appear to be AI-generated.
Across different accounts, the screenshots share identical:
resolutioncropping ratiostimestampsphone battery levels
This indicates they likely come from a centralized propaganda material database.

4.4 Similar Attacker Profiles
An analysis of 92 anti-Binance accounts found that 71 were high-risk bot accounts.
While some tweets may still come from real users or opportunistic influencers seeking attention, the patterns strongly resemble a coordinated black PR campaign.

5. The Industrial Chain Behind Black PR
Modern black PR has evolved into a full underground industry with clear division of labor.
Upstream: Sponsors
Usually competitors or counterparties who secretly fund the campaign.
Midstream: Agencies / PR Firms
Strategists who coordinate KOL resources and design the narrative framework.
Downstream: Execution Layer
Silicon-based bot armies
Automated accounts controlled by device farmsUsed for likes, reposts, and volume
Carbon-based “human bots”
Real people recruited via online gig groupsPaid to write emotional comments or negative reviews.

6. Investigation: Who Is Behind It?
The most intriguing question remains: who is orchestrating this?
While we cannot identify the major influencers leading the narrative, black PR operations require not only leaders but also large bot supply networks.
Therefore the investigation turned to the supply chain of bot services.
Researchers identified seven SMM platforms offering services such as:
custom commentsbot engagementcryptocurrency payment options
By testing these services with scripts and controlled purchases, they found that some of the same bot accounts appeared across multiple platforms, suggesting a shared infrastructure.

Further blockchain analysis revealed numerous payments of tens to hundreds of USDT, along with one large 4999 USDT transfer on January 31—exactly when Binance-related narratives peaked on X.
Interestingly, that transfer originated from a Binance hot wallet.
Even more surprisingly, during a similar attack period against OKX, there were also transfers from OKX hot wallets to the same SMM platform.
This raises the possibility that the situation may be more complex than it appears.

Conclusion
The author ultimately chooses not to publish the wallet addresses or share the collected information.
Regardless of who is behind the attacks, the author hopes such meaningless tactics will stop.
Exchanges like Binance and OKX are not perfect, but they remain critical pillars of the crypto industry. They should not be destroyed by coordinated misinformation.
For the Chinese crypto community, establishing itself in global markets is already difficult—especially when Western narratives dominate the industry.
Why should innovative industry narratives always originate in the West and eventually be paid for by the East?
Perhaps it is time to change that order and those rules.
But first, we must set aside our prejudices.

Source: https://x.com/agintender

I wrote my first line of smart contract code during the ICO frenzy of 2017.
As an old Builder who has survived into 2026—having lived through the China “9.4” ban, DeFi Summer, the NFT mania, the FTX collapse, and countless proclamations that “crypto is dead”—I’ve seen project teams discover a thousand different ways to destroy themselves.
Over all these years in crypto, I’ve realized something:
“Winning” was never defined by how high your FDV went on TGE day.
It was never about whether you hit a grand slam.
Winning is simply this:
Are you still here, fighting the world for your sovereignty?
Any team with a bit of technical ability or some resources can launch a token at least once.
Even if the code is forked.
Even if the whitepaper is written by GPT.
If the timing aligns with a bull market narrative, or you lean on someone powerful, or your last name happens to be Trump, anyone can briefly become a “unicorn.”
So what does “winning” actually mean for a project?
Is it launching a token and still having your protocol running years later?
Contracts still executing real interactions?
Or is it something else you managed to resist?
In the end, the real obstacle to building a great protocol is your “token-launch mindset”—that desire to make quick money (as @0xPickleCati described).
Tokens are not what make decentralization necessary.
Resistance is what makes tokens necessary.
(PS: The cover of this article is the song “Faith” by Jeff Chang. I listened to it on repeat while writing this piece.)

1. When We Say “Crypto Is Dead,” What Do We Mean?
Every bear market, when you attend a dinner or go home for the holidays, you’ll hear the same questions:
“Isn’t your industry basically dead?”“US stocks are at all-time highs—why are you still down?”“Isn’t crypto only used in scam compounds?”“Gold is exploding. Why are you still stuck?”
If, as a Builder, hearing these questions makes you feel ashamed—or you try to respond with something like:
“Actually we’re building Layer 3 to increase TPS...”
Then you might as well leave.
You never understood why you were here in the first place.
Are we competing to see whose asset grows faster than gold, oil, Nvidia, or Google?
If maximizing asset returns is the goal, you should just buy Nasdaq ETFs or the Magnificent Seven. They’re more stable and legally protected.
Are we competing on database speed?
Don’t be ridiculous.
Centralized systems crush blockchain on efficiency.
Alipay’s TPS is 10,000× Ethereum’s.AWS storage costs millions of times less than on-chain storage.
Even today, much of Web3 infrastructure still depends on AWS.
If your original motivation for Web3 was to build a more efficient internet or simply bring traditional liquidity on-chain, you already lost from day one.
Crypto was never about faster or cheaper.
From the moment Satoshi Nakamoto wrote the Genesis Block, it was about something else:
Resistance.
Resistance against:
growing inequalityinstitutions that can freeze your bank accounttech giants that monetize your data without paying youcentral banks that print money and dilute your labor
What people call “inefficiencies” in crypto—gas fees, private keys, block confirmations—are simply the tax we pay for fairness and sovereignty.
As a project founder, you must understand one thing clearly:
Your product must provide something centralized giants can never offer:
Censorship resistance and user sovereignty.
Ask yourself a simple question:
If regulators pressured you tomorrow, could your protocol still run?
If the answer is no, your users are just speculators and you built a weak substitute.
If the answer is yes, you’re building a real decentralized path.
Because:
Tencent can’t promise to never ban your account.Banks can’t promise instant cross-border transfers that can’t be blocked.Game studios can modify drop rates anytime.
But smart contracts cannot.
So builders: stop worrying about TPS.
Focus on returning power to users and encoding anti-monopoly principles in open-source code.
That is the only battlefield where Web3 can beat Web2 giants.
If you’re not fighting for freedom, what battlefield are you even on?

2. True Death Isn’t Price Collapse — It’s When You Stop Resisting
When your token drops 95% in a bear market and your Discord is filled with angry investors and spam bots, it feels like death.
But that’s not real death.
Real death happens during apparent prosperity, when you quietly sell your soul.
When the Dragon Slayer Becomes a Cheap Web2 Clone
Projects obsess over vanity metrics:
TVLtrading volumedaily active users
Why?
Because optimizing these metrics is the safest path—the one that requires the least resistance.
Death begins disguised as:
“Compliance”“Pragmatism”“Better UX”
Examples:
Giving user tokens to exchanges as listing feesStoring data on centralized servers “temporarily”Paying for fake volume and PR attacks
One compromise leads to another.
Eventually you create Web2.5:
A system that inherits blockchain’s disadvantages—slow, expensive, complex—
while losing its only advantage:
permissionlessness and censorship resistance.
At that point, your protocol becomes a cheap imitation of the system you once tried to overthrow.
Google’s motto is:
“Don’t be evil.”
Bitcoin’s philosophy is different:
“Can’t be evil.”
When you abandon adversarial design—systems that survive even when the world tries to shut them down—your protocol loses its reason to exist.
Why would users pay gas fees and manage private keys just to use your centralized service?
Wake up.
You once held a wooden sword and dared to fight dragons.

3. The Alchemist’s Manual: Turning Mercenaries Into Missionaries
Every founder thinks the same thing:
“I understand ideology—but without incentives, no one comes.”
This is the fundamental problem of Web3 startups.
Your early capital usually comes from mercenaries (speculators).
But your long-term survival requires missionaries (believers).
Projects fail when founders become schizophrenic:
reject speculators and starveor worship them and get drained
You must transform Mercenary Capital → Missionary Consensus.
Two Types of “M”
Mercenaries
large capitalscript traderszero loyalty
They mine your incentives.
Never fall in love with them.
Missionaries
may not have much capitalbelieve in your narrativedefend your project onlinehelp newcomers
They are your moat.

The E-N-L-C Conversion Spiral
Emotion → Narrative → Liquidity → Consensus
Emotion
ignite greed or angerNarrative
frame the missionLiquidity
buy time with incentivesConsensus
habits remain after incentives disappear
If people still use your product after incentives stop, the alchemy worked.

4. Founders Who Survive Cycles Share These Traits
1. First-Principles Thinking
Don’t chase every trend.
Ask:
What irreplaceable problem does my protocol solve?
2. Transparency Over Price Promises
Never promise price.
Promise:
transparencycode deliveryprotocol security
Trust is more valuable than liquidity.
3. Embrace Boring Bear Markets
Bull markets are noisy.
Bear markets are gifts.
You can experiment cheaply and hire people who love technology rather than token speculation.
4. Discipline
Founders who survive cycles tend to have strong discipline.
Not yachts, not Ferraris.
Just persistence.

5. Conclusion: To the “Fools” Still Sitting at the Table
This journey is painful.
You will face:
ridiculebetrayalshacksregulatory threats
But if you survive, you gain something bigger than money:
the power to define new systems of cooperation.
Your code may become the law of the digital world.
Crypto never lacked intelligent people.
What it lacks are fools—
The kind who know the road is long and hard,
who know speculation is easier than building,
yet still stay at the table for the chance to change the world.
That’s why we’re here.
While smart people chase AI, SaaS, or quant trading for efficiency…
We stubborn fools keep working on inefficient distributed ledgers.
But this rejection of efficiency, this obsession with fairness—
that is the spark that keeps crypto alive.
If you are such a builder, welcome to the marathon.
Even in darkness, keep your torch lit.
We’ll meet again at the next true consensus upgrade.
Source: https://x.com/agintender

(Also a Survival Guide for Market Crashes)
On days when the market is crashing, three things become extremely cheap: predictions, emotions, and certainty.
When everyone is asking the same question—
“Is this the bottom?”—
then it is almost certainly not the bottom.
In front of an AI prompt, there is nothing new under the sun. Any “bottom-buying strategy” that can be formalized, scaled, and learned by AI will become useless the moment humans start asking about it.
In the AI era, the most important human ability is not creativity, nor predicting trends.
It is taste.

A Story About Video Games
At a family gathering during the Lunar New Year, several older relatives were complaining about their kids being addicted to video games and how it was affecting their schoolwork.
I was sitting quietly nearby thinking:
As if not playing games automatically means you’ll get good grades…
At some point the conversation turned to me, because apparently I used to be a serious gaming addict as a kid. They asked what they should do.
🤣 This was a question I knew very well.
Back in the day my Warcraft, Dota, Red Alert, and Counter-Strike skills were legendary in my grade. When I played, it was basically “if Buddha blocks me, I slay Buddha; if gods block me, I slay gods.” Sometimes I was so ruthless I even wiped out my own teammates.
So I told them directly:
There’s nothing wrong with playing games (other than being bad for your eyes).
I’m actually someone who benefited from gaming.
Games taught me many things that textbooks never did.
For example:
My earliest exposure to game theory came from games.I even studied Heavenly Stems, Earthly Branches, Yin-Yang, and the Eight Trigrams just to understand certain game mechanics.I learned about historical landmarks, traditional Chinese medicine points, tactics and battles, historical stories, and even random survival skills.
I also made many good friends.
Other than costing some pocket money and sitting too long, it was basically all upside.
But how does this relate to addiction?

The Real Reason for Addiction
Addiction happens because you’ve never tasted something truly good.
You’ve never played high-quality games. Your taste buds haven’t been developed.
There’s a Chinese saying:
“Once you’ve tasted luxury, it’s hard to return to simplicity.”
If someone feeds you fine cuisine for years and then suddenly gives you coarse grain, your body will instinctively reject it.
The same applies to games.
The best thing you can do is introduce kids to the true masterpieces—games that represent the pinnacle of human creativity, where code and art were refined to the deepest level.
Let them experience:
the compassion within grand narrativesthe inevitability within elegant logicthe full range of human emotionsthe calculations hidden behind human brilliance
Once someone has seen real mountains and real blue skies, once they’ve felt genuine brotherhood in battle, those plastic, number-driven mobile games filled with red notification dots will never satisfy them again.

Why This Actually Solves Addiction
You might ask:
“But that still doesn’t solve the addiction problem.”
Here’s the reality:
Across decades of gaming history, true masterpieces are actually very few—especially ones that match your personal taste.
There simply aren’t enough to be addicted to.
And once you start consuming the best works, you develop standards:
you want ritual and immersionyou pursue perfectionyou start studying background loreyou practice skillsyou think more deeply
This is a brutal transformation:
Once you’ve experienced the best, you can’t go back.
Your senses grow a protective layer called taste.
Only then do you realize:
Most things in the world are mediocre.
Instead of restricting or controlling people, the real solution is simple:
Make them picky.
Once someone becomes picky, they no longer need to resist temptation.
They simply follow their aesthetic instinct.
Follow your taste.
This principle also applies to crypto trading:
Once you’ve seen truly interesting, culturally rich memes, other memes feel empty.Once you’ve seen $1,000 Bitcoin, everything else feels trivial.

Taste in the Age of AI
In the summer of 2026, with AI algorithms roaring everywhere, this “pickiness” becomes the very thing that distinguishes humans from AI.
We live in a world of endless information abundance.
Schopenhauer once said that life swings like a pendulum between pain and boredom.
Algorithms have become the cheapest weapon against boredom.
They precisely calculate your emptiness and feed you endless bite-sized content that can be consumed in 0.1 seconds.
Like feeding crumbs to chicks who have never seen the world.
Our attention becomes a fragile currency, consumed endlessly through scrolling, until we fall into the black hole of attention fatigue.
The more information we receive, the hungrier our souls become, because we are losing the ability to gaze deeply and think for long periods of time.

What Is Taste?
In simple terms:
Taste is intuition.
You may not be able to explain exactly why something is good, but you instantly know it cannot be replaced.
In crypto, taste allows you to immediately distinguish:
narratives built purely on hypestructures that are actually soundtemporary price dropsgenuine “iPhone moments”or “Nokia moments”
Others might need long research to realize something is low quality.
But you can see it in a single glance.
Why?
Because you’ve already encountered so many similar things before.
Your previous logic, calculations, and reasoning have transformed into intuition.
Readers of “Thinking, Fast and Slow” would call this System 1 thinking.

Taste Is Not Style
Taste is not style.
It is not preference.
It is a long-trained intuitive judgment ability.
It comes from:
what you have readwhat you have analyzedwhat you have experienced
It comes from understanding:
“Why should this thing exist in the first place?”
In the AI era, taste becomes a tool for attention management.
It is a cold ruler that instinctively tells you:
which shiny things are merely algorithmic wasteand which obscure works are actually masterpieces

The Danger of AI Convenience
Today we are overly obsessed with conclusions and analogies.
We imitate AI’s style of:
“Not this… but that…”
And in doing so, we miss countless insights and poetic moments.
AI is becoming the navigation system of this era.
Press a button and everything appears:
the paththe timethe destination
Images are generated instantly.
Logic may be fabricated.
Conclusions are improvised.
Yet humans accept them without question.
When you order food delivery, you check the reviews.
But when AI gives you answers, you say nothing.
Did you suddenly become enlightened?
Or have you been domesticated by AI?
If you accept AI’s conclusions without understanding the reasoning behind them, then—according to a friend of mine who runs a restaurant—you are basically just a food runner.
A very junior one.
In a palace drama like Empresses in the Palace, you’d probably survive three minutes.

Becoming the Master of AI
Only when we go against the current—
studying reasoning processesdissecting formulasdeeply examining algorithmic logic
—do we train ourselves to become masters of AI, rather than drowning in its whirlpool.
Beauty is never just surface appearance.
It is the sense of order hidden deep inside logic
(like the 0.618 golden ratio).
Improving intellectual taste means rejecting a low-resolution life.
If you constantly consume AI-generated summaries and conclusions, your cognitive taste buds will slowly degrade.
Just like surviving on tasteless meal replacements, you eventually forget the flavor of a perfectly cooked wok-fried rice noodle.
Eventually, you lose the ability to appreciate real food.

Why You Must Study the Hard Stuff
You must read:
hardcore academic papersold, yellowed bookspainfully difficult formulas and algorithms
Because classics contain extremely high information density.
They include not only structured reasoning, but also the author’s struggle at the edge of truth.
Once you get used to searching for that weightless feeling within fundamental logic, you will construct a panoramic map in your mind.
Others see trees.
You see mountains.
Someone who only reads conclusions is like a driver relying entirely on GPS.
Once the signal disappears, they cannot even find the road home.

The Beauty of Slowness
In this battle between technology and humanity:
Speed is the instinct of machines.
But the beauty of humanity lies in slowness—
eleganceemotional depthtime-accumulated wisdomimperfect yet meaningful logic
When technology becomes cheap, taste becomes the only thing that defines you.
You must learn to appreciate the vitality when code and art merge, and feel the warmth of civilization behind great games and distinctive works.
Do not let your soul be worn down by mediocrity.
Do not only look at the destination.
Look at the mountains, mud, ravines, and cliffs along the way.
Because in an age where everything can be generated instantly, the only territory humans still possess is the ability to see through mediocrity and perceive essence at a glance.

Postscript
Some friends recently noticed that I’ve been spending a lot of money “training” my robot, and they couldn’t stand watching me struggle anymore.
So over the weekend they built a lazy version of the Clawbot Telegram bot:
👉 https://t.me/AnyaEasyBot
It’s basically a beginner-friendly environment setup where you can configure everything with just a few clicks, and the models are already optimized.
I’ll randomly pick two people who repost and comment on this article to receive experience invitation codes.
Source: https://x.com/agintender

1990s Shanghai, Huanghe Road. Once night fell, gold dust filled the air. Neon light fell like heavy brushstrokes across every face — half wild abandon, half quiet sorrow.
On the day Zhi Zhen Yuan opened, the firecrackers nearly shattered every pane of glass on the street. Li Li stood at the top-floor window, looking down at the boiling crowd below. Back then, everyone believed that as long as the lights burned bright enough and the scene was grand enough, this flowing banquet could last until the end of time — the hall was full of voices, full of life.
Uncle said: "After the great heat, there is always a great cold."
[Image]
Zhi Zhen Yuan's dominance made the whole of Huanghe Road tremble. So it came: one night the power was cut, the ingredients ran short, the chefs were poached, the other proprietresses blockaded the entrance, and Lu Meilin even dragged in her old flame to stage a palace coup…
And now, Binance finds itself caught in the middle of that famous "siege of Zhi Zhen Yuan." Is this a battle of commerce? Or the birth pangs of an era settling its accounts?

I. The Art of the Cut and the Fury of the Bill
"The mind is thinking about business; the eyes are calculating."
The essence of the exchange business is, in truth, the same as "taking a cut" on Huanghe Road. Whether it's king cobra or dry-fried beef ho fun, the guests at the table are negotiating million-dollar deals — the restaurant takes its table service and beverage fees, just as the exchange takes its unyielding commission. No matter how large or small the trade, the meal must be eaten.
When markets were good, everyone was a "Boss Zong" — free-handed, treating the table fees and drink money as tips thrown with a flourish. The louder the laughter inside Zhi Zhen Yuan, the thicker the tally of cuts taken. In those days, nobody thought there was anything wrong with the cut. Everyone was dreaming inside the bubble.
But when the thunderclap of "10/11" fell in 2025 — twenty billion dollars evaporating in a few hours, the Fed's rate storm and global geopolitical black swans converging into one — Huanghe Road changed.
When the guests' pockets held only a few coins, that previously invisible, taken-for-granted "cut" became the most conspicuous evidence of guilt. People began settling accounts, searching for "the one who made off with the money." Just as Zhi Zhen Yuan was targeted en masse — not entirely because Li Li had done anything wrong, but because on this street that had grown cold, her lights still burned the brightest and her table of cuts was still the largest.
In times like these, denouncing Zhi Zhen Yuan becomes a visceral instinct and a kind of political correctness. Retail investors need an outlet for their anger; competitors need a crack to pick through for scraps; regulators need a sacrifice they can hold up and show.

II. Politics Is the Face; Business Is the Core
"Outsiders see the front door. Insiders know the back door."
Some say this is a political necessity — that someone has to be found to carry the blame for the wreckage left after "10/11." That is both right and wrong.
On Huanghe Road, politics was never a cloud floating overhead — it was mud on the ground. When the macro environment deteriorates and every restaurant on the street is losing money, order must be redistributed. Zhi Zhen Yuan was targeted because it was the "one look and you understand it" target. Did Hong Lu earn less? No. But Zhi Zhen Yuan was too conspicuous — conspicuous enough to unsettle the rules of the old world. It was too profitable — profitable enough to inspire envy, jealousy, and hatred.
[Image]
"On Huanghe Road, everyone is waiting for someone else to stumble — so they can take their place."
The siege by competitors, the abuse in Chinese and English CT, are all waiting to hear the sound of that stumble. Nobody is pursuing justice — they are pursuing survival space. But if Zhi Zhen Yuan were torn down, would the customers, the ingredients, and the capital that once flowed there really flow to Jin Meilin? Or to Hong Lu next door? Honestly, hard to say.
What they forgot is this: the reason Zhi Zhen Yuan became Zhi Zhen Yuan is because it held up the entire atmosphere of Huanghe Road.
Whether whoever takes Zhi Zhen Yuan's place could become the next Zhi Zhen Yuan — hard to say. But it certainly won't be Hong Lu or Jin Meilin, still standing where they are.

III. Zhi Zhen Yuan Is Not Only Binance — It Is Every One of Us
"I am my own harbor."
You ask where Binance's "Boss Zong" is?
In the drama, when Zhi Zhen Yuan was besieged by all the other proprietors, Uncle summoned the Hong Kong chef, Boss Zong delivered the king cobra, and together they held the fort. But in the barren wilderness of reality, nobody can save Binance — unless it can do as Li Li did: in the deep of a powerless night, grind out a kind of composure that speaks through silence.
But the deeper truth is this: Zhi Zhen Yuan is not just about Binance alone — it speaks to our entire crypto industry.
The chefs who were poached are the elites bleeding out of this industry. The supply lines cut off are the global liquidity that has run dry. The filth thrown at Li Li is the decade-long prejudice and fear that the mainstream world has directed at this "wild child."
[Image]
If we only know how to undercut each other when we're losing money, and search for scapegoats when the bill comes — then this industry of ours will forever remain a nouveau riche operation on Huanghe Road, never becoming something that endures. When Zhi Zhen Yuan is besieged, the entire street is slowly committing suicide. Because once the highest neon light goes dark, this street reverts to the gray, dusty old days it came from.
Who still remembers how long it took the industry — after FTX collapsed — to undo the equation: blockchain = fraud in the world's eyes?

IV. When the Blossoms Fall, Only One Remains
"You know the Empire State Building in New York? Running from the bottom to the roof takes an hour. Jumping from the roof takes eight point eight seconds."
We are all living through those eight-point-eight seconds right now.
The voices screaming on Chinese and English social media, the cold glint flickering in regulatory documents — all of it will eventually fall silent as time moves on. Zhi Zhen Yuan finally closed. Li Li entered the monastery. Boss Zong returned to the fields. The splendor of Huanghe Road was, in the end, nothing more than a rehearsal for desire.
This siege of the crypto industry is actually a painful shedding of the old skin. It forces us to ask: if there were no splendor of "the cut," no towering standard-bearer to shelter us from the wind and rain — what would we have left?
"Most of life is illusion. The other half — impossible to tell real from false."
The isolation that Binance faces now is a long corridor it must walk alone. But for our industry, the true "Boss Zong" is not any single person — it is every believer who, having seen clearly that the blossoms have all fallen, still chooses to hold fast to the conviction of "one person, one Bitcoin."
If we cannot bind ourselves into one rope, then when the last neon light finally goes dark, there will be no more legends on Huanghe Road — only scraps of paper scattered in the cold wind.
"At the time I could not see her face clearly. Ten years later, I still could not see her face clearly. But I had seen myself clearly."
[Image]

Afterword
Those who know me well know I have never been interested in chasing algorithmic traffic — so an article is whatever it needs to be. Some have said this is an affectation of false modesty, and they're not entirely wrong. To be blunt: even if I put up a full Bitcoin for promotion, I probably still couldn't reach the heights of other voices in this space — influence is what it is.
And then the clever ones among you start thinking: so does that mean this time it's different?
🤣 Rest easy — it's the same as always.
I too have a dream of achieving a single article with 1 million views, to impress people a little. But the algorithm has its season, and human effort has its limits. In the moments when I occasionally flash with something — when I can combine and record emotion, the roads I've walked, the books and films I've absorbed, my practice and my observations — that is enough.
A tribute to every lone brave soul who, even in their most frightened moments, still chose to speak up for this industry.
What is "great cold"? The coldest is when no one asks.

Source: https://x.com/agintender

Who could have imagined that the modern cross-border tax information system was triggered by a tube of toothpaste? A UBS banker smuggled diamonds inside a toothpaste tube across borders — a scene straight out of Hollywood — and inadvertently sounded the death knell for Swiss banking secrecy. Today, the wheels of history are grinding mercilessly toward the crypto world. That once-hidden "tax haven" is about to meet its day of reckoning.
This article lifts the veil on CARF: a global tax hunt closing its net. From Binance's strategic "relocation" to the UAE — trading space for time — to the brutal reality that "crypto-to-crypto trades" are no longer tax-free; from Hong Kong's compliance countdown to the shattering of mainland Chinese investors' wishful thinking.
This is not just a reshaping of the industry landscape — it is a survival guide that every crypto asset holder must confront. Because in this cage woven by algorithms, nobody can keep burying their head in the sand.

Preface: What Is CARF?
CARF stands for Crypto-Asset Reporting Framework. Its core operating mechanism works as follows: Reporting Crypto-Asset Service Providers (RCASPs) collect tax-relevant information about their customers and related transactions, submit it to the tax authority in their jurisdiction, and tax authorities then automatically exchange this intelligence internationally. This is similar to CRS in traditional finance — but CARF specifically focuses on the buying, selling, exchanging, custody, and transfer of crypto assets.
In simple terms: previously, when users traded crypto on exchanges, the tax authority in their country of residence had difficulty obtaining comprehensive information. Now, CARF connects a user's tax residency jurisdiction with the exchange's jurisdiction — once they establish a CARF cooperation relationship, the user's home tax authority can obtain detailed information about their country's tax residents trading crypto abroad and conduct tax enforcement accordingly.
As of the end of 2025, over 75 jurisdictions have committed to implementing CARF in 2027 or 2028, with more than half having signed relevant Competent Authority Agreements. Starting January 1, 2026, the CARF framework takes effect in the first batch of 48 jurisdictions — covering the UK, EU, Japan, South Korea, Singapore, and others.
[Image: CARF implementation timeline map]

Chapter One: Diamonds in the Toothpaste, the End of Secrecy, and the Arrival of CRS
To understand CARF — this "new sickle" — we must first look at the "old fishing net": CRS (Common Reporting Standard).
The protagonist of the story is Bradley Birkenfeld, formerly a senior relationship manager at UBS. To bring his client's — American real estate magnate Igor Olenicoff's — $200 million in untaxed assets at UBS back into the United States without leaving a trace, Birkenfeld devised a scheme that only a Hollywood screenwriter would dare use: he purchased diamonds, stuffed them into an ordinary toothpaste tube, slipped past customs X-ray machines, and casually flew across the Atlantic to hand the diamonds to Olenicoff for liquidation.
In 2007, when Birkenfeld discovered through an internal bank report that he might be made the fall guy in an internal compliance cleanup, he made a decision that betrayed the Swiss banking industry's most sacred tradition: he flipped. He walked into the U.S. Department of Justice carrying a trove of top-secret internal emails and client lists.
Birkenfeld's testimony directly led to UBS paying an unprecedented $780 million fine in 2009 and — for the first time in history — handing over a list of more than 4,000 American clients. This marked the death of Swiss banking secrecy. (Interestingly, Birkenfeld ultimately walked away with $104 million in whistleblower rewards.)
The U.S. Congress recognized that relying on informants like Birkenfeld was far from sufficient — an automated monitoring mechanism had to be built. So in 2010, the most aggressive piece of tax legislation in history emerged: the Foreign Account Tax Compliance Act (FATCA). Its logic was blunt: "Every bank in the world that wants to do business with America must report American account balances to us annually."
The OECD, seeing how effective America's approach was, began replicating it one-for-one. In 2014, the global version modeled on FATCA — the Common Reporting Standard (CRS) — was formally born.
This is why CRS's underlying logic resembles reviewing bank statements: it assumes wealth ultimately settles in bank accounts, generating interest and forming balances. It is a surveillance system tailor-made for the "fiat currency era" — using an annual "balance snapshot" to ensure invisible billionaires have nowhere to hide.
Just as everything seemed to be heading in the direction regulators hoped, a new phenomenon called Bitcoin was quietly growing. This CRS system based on "balance monitoring" was about to encounter an adversary it had never imagined.

Chapter Two: The Holes in the Old Net — Why Was CARF Needed When CRS Already Existed?
Using an AI analogy: CARF is a high-definition camera installed at the door of every compliant exchange, running 24 hours a day.
The biggest difference from CRS: CRS asks "how much money do you have," while CARF asks "where did your money flow."
2.1. CARF's Origins and Strategic Intent
CARF was born from G20 nations' fear of tax base erosion. Although traditional CRS has been notably effective in combating offshore tax evasion, it primarily targets traditional bank accounts and custodial accounts. Crypto assets — due to their decentralized, peer-to-peer transferability requiring no intermediary — became a blind spot in CRS.
The OECD explicitly stated that CARF's goal is to eliminate this blind spot by bringing Crypto-Asset Service Providers (CASPs) into the same information reporting obligations as banks. As of end-2025, over 50 jurisdictions (including the UK, Canada, France, Germany, Japan, the Cayman Islands, and others) have committed to implementing CARF. The framework quietly began data collection in the Cayman Islands and other locations on January 1, 2026, with the first information exchange scheduled for 2027.
2.2. CARF vs. CRS 2.0: From "Stock" to "Flow"
CRS's core logic monitors stock wealth; CARF's core logic monitors the flow of wealth.
Under the CRS framework, beyond the year-end balance, tax authorities can see almost nothing of the intermediate process. But under CARF, if an investor exchanges Bitcoin for USDT, transfers USDT to their cold wallet, or even uses crypto to purchase more than $50,000 worth of $PUNDIAI (a retail payment transaction) — every single action generates a reporting record. CARF effectively elevates the surveillance dimension from a "static balance sheet" to a "dynamic cash flow statement."
[Image: CRS vs. CARF comparison diagram]
2.3. The Scope of "Relevant Crypto-Assets"
CARF's definition of "relevant crypto-assets" covers the vast majority of crypto assets:
Stablecoins: Although many stablecoins claim to be substitutes for fiat currency, under CARF they are explicitly treated as crypto assets. This means exchanging USDT for USD may no longer be a "currency conversion" — it is a transaction, and transactions are taxable events.NFTs: While CARF primarily focuses on assets used for payment or investment, most high-value NFTs will very likely be included in reporting scope due to their secondary market trading characteristics.Tokenized securities: Even tokenized stocks or bonds already regulated in traditional financial markets — once on-chain — may be subject to dual coverage under both CRS and CARF (although the OECD has attempted to avoid duplicate reporting through CRS amendments, the tax administration principle of "better safe than sorry" makes such overlap difficult to avoid).

Chapter Three: Retail Investors' Illusions, Wishful Thinking, and Rude Awakening
3.1. Crypto-to-Crypto Trades: The Mandatory "Fair Value" Mechanism
CARF stipulates that for all exchanges between crypto assets, the fair market value denominated in fiat currency must be recorded at the instant the transaction occurs.
In the eyes of tax authorities, a "crypto-to-crypto trade" equals "sell first, then buy."
A common misconception: "I'm exchanging Bitcoin for Ethereum — as long as I haven't converted to fiat (USD/RMB), it doesn't count as a sale, and I don't owe tax." This is wishful thinking.
CARF requires exchanges to record: "On such-and-such date, Zhang San exchanged 1 Bitcoin for 20 Ethereum; at the time that 1 Bitcoin was worth $50,000." In the tax authority's eyes, this is a taxable event of "selling Bitcoin for $50,000." You may not have cash in hand — but your tax bill has already been generated.
CARF definitively ends the tax avoidance strategy of "compound growth through crypto-cycling." After 2026 (2027 in some regions), every crypto-to-crypto swap will be recorded as an asset disposal event, leaving a definitive "fiat profit record" in your tax file — regardless of whether you ever convert to fiat or stablecoins.
3.2. Piercing the Wallet: Transaction Hashes and Address Tracking
In CARF's XML Schema, RCASPs are required to report specific transaction types and values. Although the final rules — under heavy industry lobbying — removed the mandatory requirement to report all receiving-end non-custodial wallet addresses, the internal systems must collect and retain these addresses along with associated beneficiary information for at least 5 years (the "retention rule").
This means tax authorities have the right to retrieve this data at any time. If a tax authority finds that a taxpayer has large "withdrawal" records in 2026 but has not declared subsequent gains, they can send bulk information requests to the exchange and precisely obtain these external wallet addresses.
When you transfer crypto from an exchange to your wallet plugin or cold wallet, the exchange must record (and report if requested) "which address it was sent to." This is like withdrawing cash from a bank — the bank not only records how much you withdrew, but sends someone to follow you and note which safe in your home you stuffed the money into. Once your wallet address is linked to your real identity in the tax authority's database, all your DeFi operations on-chain are effectively "running naked."
3.3. Standardization of Valuation Anchoring
What if two extremely obscure tokens are being traded — say, exchanging "Air Coin A" for "Air Coin B" — and there is no fiat trading pair? CARF stipulates a "cascading valuation method": if Asset A has no fiat price, reference Asset B's fiat price; if neither has one, service providers must use a reasonable valuation methodology to forcibly price it. In any case, the system must generate a fiat value figure to submit to the tax authority. This eliminates the space for users to submit vague declarations by exploiting price volatility.
3.4. The Mandatory Nature of Taxpayer Identification Numbers (TINs)
CARF requires RCASPs to collect users' tax residency status and corresponding Taxpayer Identification Numbers (TINs). However, if a user declares only a low-tax jurisdiction (such as Dubai) while the exchange detects through IP addresses, phone area codes, or login logs that the user is frequently active in a higher-tax jurisdiction (such as France), the exchange has an obligation to question the reasonableness of that self-certification.

Chapter Four: The Retroactive Trap: 2026 as the "Year of Exposure"
Many seasoned OGs believe that as long as they tidy up their assets before the first information exchange in 2027, everything will be fine. This is incorrect — because everyone has overlooked CARF's "retroactive effect." The 2027 information exchange means submitting information from 2026.
4.1. "Opening Balances" and Historical Audits
When tax authorities receive full-year 2026 CARF data in 2027, they will first focus on "opening balances" or "total annual transaction volumes."
Scenario simulation:
Suppose a Chinese national investor, Mr. Nakamoto, sells $10 million worth of $PUNDIAI tokens through a compliant Hong Kong platform in 2026. The platform reports the data to the tax authority per CARF. The tax authority's AI system immediately cross-references Mr. Nakamoto's personal tax filings for 2025 and prior years. If Mr. Nakamoto had never previously declared holding overseas crypto assets, the origin of this $10 million becomes a major question mark.
The tax authority uses the transaction hash to trace backward and establish when these $PUNDIAI tokens were originally purchased. If they were bought in 2024, all undeclared appreciation from 2024 to 2026 is exposed in full.
It is worth noting that many countries' tax authorities have already deployed AI-based big data analysis systems specifically designed to identify anomalies where asset holdings are inconsistent with declared income. We anticipate 2026 will bring a wave of "tax collection reckoning" for crypto high-net-worth individuals.
4.2. The 2026 Compliance Window
For investors not yet in compliance, 2026 is effectively the last window of opportunity. Before the data gates close, investors face difficult choices:
Proactively declare historical assets to the tax authority — this typically allows negotiation for penalty reductions.Reorganize asset holding structures under compliant frameworks (such as family trusts or offshore companies), or seek assistance from professional tax and financial institutions for reasonable crypto asset planning. (Advertising space available here — inquire within.)

Chapter Five: Behind Binance's Relocation — Trading Space for Time
Among a range of regulatory-friendly jurisdictions, why did Binance ultimately choose Abu Dhabi? Beyond local policy support and capital channel advantages, there is one important factor: the regulatory timing differential.
Binance's previous domicile — the Cayman Islands — belongs to the first batch of jurisdictions committed to CARF implementation, with first information exchange expected in 2027. This means Reporting Crypto-Asset Service Providers (RCASPs) need to begin collecting and preserving information for reporting from 2026 onward. Had Binance remained in the Caymans, it would have needed to immediately launch comprehensive CARF compliance system construction.
By contrast, the UAE, according to the CARF implementation schedule, is listed among the second batch of implementing jurisdictions — planning to initiate information exchange in 2028.
[Image: CARF jurisdiction timeline]
By moving from the Caymans to the UAE, Binance secured a one-year strategic buffer. For Binance, serving over 300 million users, this time carries significant meaning:
Avoiding first-mover risks. It can observe how the UK, Cayman Islands, and other first-batch jurisdictions handle implementation — learning from other exchanges' experiences and mistakes to optimize its own compliance approach.Participating in rule-making. The UAE's domestic CARF legislation and implementation rules are still being drafted. As a leading exchange with meaningful influence, Binance has the opportunity to voice opinions, consult with authorities, and exert favorable influence on the shape of local rules as they take form.Completing system upgrades. This year provides ample time for Binance to deploy and debug a data reporting and management system meeting CARF's complex requirements.
This is what is meant by "trading space for time."

Chapter Six: CARF in China — Impact and Trends
As one of the world's largest crypto asset user markets, China's situation is somewhat special.
Some say: since mainland China is not on the OECD's first CARF signatory list, domestic tax authorities cannot see crypto trading conducted in Hong Kong. This is actually a misconception.
Mainland China has not joined or committed to implementing CARF — so mainland tax authorities will not obtain Chinese tax residents' crypto transaction data through the CARF mechanism. But this does not mean crypto wealthy individuals in the mainland can rest easy.
Mainland China is already an active participant in CRS. Although CARF targets crypto assets specifically, if those assets are converted to fiat and deposited in banks, or held in financial asset form (such as ETFs), they are already within CRS's monitoring network. Additionally, consultation documents mention that CARF information will be exchanged with "partner jurisdictions."
Attentive readers will notice that Hong Kong is listed in the second tier of CARF implementation — it has already initiated legislative consultation on CARF and CRS amendments, with a clear implementation roadmap: completing legislative preparations in 2027 and conducting information exchange in 2028.
Against the backdrop of China's "dual-track" crypto regulation, the impact of CARF's implementation must be assessed separately:
For Hong Kong-resident crypto users: Under the CARF framework, users have an obligation to submit self-certification materials to exchanges. Subsequently, their crypto asset transaction data at overseas exchanges will be reported and exchanged to Hong Kong tax authorities through the automatic exchange mechanism. This means asset and transaction transparency increases — users will find it difficult to escape tax obligations by relying on the decentralized and pseudonymous characteristics of crypto trading.
For Hong Kong crypto exchanges as RCASPs: They must strengthen KYC requirements and build data collection and reporting systems per CARF. Failure to register, report, fulfill due diligence obligations, or submitting inaccurate information can all trigger legal liability — with fines potentially reaching HK$1 million.
By comparison, mainland China's short-term exposure to CARF impact is more limited — not unrelated to the mainland's characterization of crypto assets as "illegal." However, the trend toward crypto tax transparency is inevitable, and mainland Chinese tax residents will find it difficult to remain complacent. As Hong Kong connects to CARF's global information exchange network, it cannot be ruled out that mainland China could obtain relevant crypto transaction data from Hong Kong through other channels — or join CARF in the future.
For mainland Chinese investors, the era of relying on Hong Kong as a "safe harbor" is over. Although automatic exchange may have a few years' delay, the "on-demand exchange" channel is open — and the data retention rules ensure historical records can be retrieved at any time.

Chapter Seven: Survival Guide — Don't Be an Ostrich with Your Head in the Sand
If you ask a Korean friend what three things in this world are unavoidable, the answer is: death, Samsung, and taxes.
As individuals caught in the current of this era — what should we do?
Take the tax implications of crypto-to-crypto trades seriously. Stop naively believing that not converting to fiat means not paying taxes. From now on, every click of "buy/sell" carries potential tax consequences. (In countries with capital gains tax.)
Organize your accounts. Those "zombie accounts" on obscure small exchanges — registered with random identities — need to be cleaned up now. Either deregister them or withdraw the funds. Once CARF's net falls, these accounts will be the first targets for risk control.
Understand cold wallets. Cold wallets remain your last data fortress — but the bridge in and out is already being monitored. When you transfer funds from Binance to a cold wallet, that operation itself is a record. Tax authorities may not be able to see everything inside the cold wallet, but they know: "This address belongs to Mr. Nakamoto, and he transferred 10 Bitcoin into it in 2027."
Pay attention to the UAE and Hong Kong timelines. Both the UAE and Hong Kong are second-batch jurisdictions (exchange in 2028). This means you have roughly one to two years of window time to adapt and plan. Use this period to learn how to achieve compliance — or find a professional tax advisor. That is far more practical than searching for the next "tax haven."

Afterword
This article acknowledges the professional tax regulatory analysis and jurisdictional observation provided by @FinTax_Official, which enriched this piece with a practical operational perspective.

Source: https://x.com/agintender

True liquidity has never been the depth of Uniswap pools or order books, nor the digital balances in wallets.
Real liquidity is the ability to move purchasing power from point A to point B anywhere in the world instantly and without loss—without the permission of the SWIFT system.
In Web3, we like to talk about TPS and scaling solutions. But off-chain, in the gray zone forgotten by SWIFT, the real “scaling solution” was already completed a century ago.
This article strips away the shiny algorithmic shell of DeFi and looks instead at the true skeletal structure that supports global crypto capital flows—the final settlement layer built from blood ties, clan networks, and underground contracts.
It explores how the ancient network known as “Qiaopi” (侨批) parasitized, absorbed, and ultimately became the real Layer 0 of modern crypto finance.
Who would have thought that a thousand-year-old shadow liquidity network would one day embrace blockchain?

Chapter 1: Is the Ghost in the Machine — or in the Tea Money?
1.1 The Invisible Hand and the Disappearing Counterparty
Modern crypto analysts love to talk about “liquidity” as if it were a measurable DeFi metric like TVL.
This is naive.
Real liquidity is the ability to move purchasing power from A to B globally without SWIFT permission.
When you see USDT premiums suddenly spike in OTC markets, or notice a massive buy wall disappear in the middle of the night, it's usually not because market sentiment changed.
It's because the “family heads” of the Chaoshan underground banks decided to go to sleep.
This is a story about shadow liquidity—how the ancient Qiaopi network parasitized, devoured, and eventually dominated the settlement layer of modern crypto finance.
The Chaoshan underground banks are not the suitcase-carrying criminals portrayed in movies.
They are financial architects who solved the double-spend problem a thousand years before Satoshi Nakamoto.
They don’t need blockchain to reach consensus.
They have credit—a social consensus mechanism far more nuanced and difficult to tamper with than SHA-256.

1.2 “Tea Money” as a Macro Signal
When you see a crypto KOL on Twitter shouting “the bull market is here!”, you might want to first ask around a tea house in Luohu, Shenzhen what the current “tea money” (茶钱) rate is.
In underground banking slang, tea money is more than a broker commission.
It is the pressure gauge of global capital controls.
If tea money rises from 0.3% to 2%, it means:
underground liquidity pipes are tighteningregulators are closing inor a major whale is draining liquidity through the system
These underground micro-signals often predict market collapses a week earlier than anything on a Bloomberg Terminal.
If you cannot read the fluctuations of tea money, you are not qualified to talk about alpha in the crypto market.

Chapter 2: The Source Code of the Ancestors (Layer 0)
2.1 Qiaopi: The First Decentralized Ledger
180 years before the Bitcoin whitepaper, Chaoshan merchants had already invented their Layer 0 protocol: Qiaopi.
To understand how a modern junket operator can move 50 million USDT from Macau to Las Vegas instantly, we must first understand that yellowed sheet of paper.
Qiaopi literally means “letters from overseas Chinese”, but in reality it was one of the most efficient money-information hybrid systems in human history.
In the 19th century, thousands of Chinese laborers in Southeast Asia needed to send money home.
Official postal systems were slow and corrupt.
So couriers (“shuike”) emerged.
In crypto terms, they were the first network nodes.
They traveled between Singapore, Thailand, and Chaoshan villages carrying letters and silver coins, but more importantly the livelihood of entire clans.
There were no centralized servers.
Only “batch offices” (批局) — the predecessors of today’s OTC desks.
These offices bundled hundreds of remittance letters into a single package, much like Ethereum rollups, reducing transmission costs through batch processing.

2.2 Credit Consensus
Why could a courier carry the equivalent of millions of dollars across pirate-infested seas without running away with the money?
Western economists would call it repeated games.
Chaoshan society calls it credit.
Every person’s identity in Chaoshan villages is tied to ancestral records in clan temples.
If a courier stole money:
he might escape physicallybut socially he would be destroyed
His clan could be expelled, ancestral graves desecrated, descendants forbidden to marry.
This was a consensus mechanism more expensive than Proof-of-Work.
Instead of staking 32 ETH, the collateral was centuries of family reputation.
This Proof of Family produced a system with 99.99% uptime, even during World War II.

2.3 The Alchemy of Flying Money
Eventually couriers realized carrying silver was inefficient.
So they reinvented the Tang dynasty concept of “flying money”, known today as mirror settlement.
The elegance lies in non-movement.
Example:
Node A (Singapore):
Mr. Li deposits 1000 silver taels.
Node B (Shantou):
A partner office receives a message.
Settlement:
The Shantou office pays Mr. Li’s family from its own reserves.
No silver crossed the sea.
Value moved, but money stayed in place.
This is exactly how modern crypto cross-border transfers work.
When USDT moves on-chain, the underlying dollar collateral stays in a bank account.
Chaoshan bankers mastered this 150 years ago.
Crypto finance simply gave the system a cyberpunk interface.

Chapter 3: The Alchemy of Settlement
3.1 Mirror Network Architecture
Modern Chaoshan underground banking is a distributed network of thousands of loosely connected nodes.
No CEO.
No headquarters.
Only mirrored ledgers.
Example:
A Chinese investor wants to move 200 million RMB to Vancouver.
Instead of a bank, he contacts a trusted intermediary.
He sends RMB to dozens of proxy bank accounts (“human accounts”) controlled by underground operators.
Once funds arrive:
Shanghai sends a signal via TelegramVancouver pays the equivalent USD locally
No cross-border transfer occurred.
RMB stays in China.
USD leaves the overseas liquidity pool.

3.2 Settlement via Trade and Crime
But inventory imbalances appear.
If Vancouver always pays USD and Shanghai always collects RMB, eventually USD runs out.
Underground banks solve this through Trade-Based Money Laundering (TBML).
At the darkest edge, this intersects with global drug trafficking.
Example triangle:
Chinese wealthy → want USD
Drug cartels → have USD cash
Chemical factories → sell fentanyl precursors
The system works like this:
Chinese RMB pays chemical factoriesCartel USD pays Chinese investors abroadchemicals → fentanyl → US drug market → new USD
No funds cross borders.
But capital flight, drug trade, and money laundering are completed simultaneously.
This is why the system is an ecosystem, not a pipeline.

3.3 Tea Money as Risk Pricing
Tea money is not just profit.
It is risk pricing.
The spread between underground exchange rates and official FX rates represents the true credit default swap of a country’s currency.
Example:
Official rate: 7.1
Underground rate: 7.4
The difference includes:
regulatory riskliquidity scarcitythe price of avoiding KYC
When tea money spikes, it means fiat on-ramps are blocked and crypto purchasing power is drying up.
Market crashes often follow.

Chapter 4: Digital Mutation
4.1 TRC-20 — SWIFT for the Poor
If:
Qiaopi = Layer 0mirror settlement = Layer 1
Then USDT is the most successful DApp on this system.
Especially TRON USDT.
Crypto users say they use Tron because it's cheap and fast.
Chaoshan operators say:
Ethereum is too expensiveBitcoin is too slowSolana is too traceable
For networks handling thousands of small transfers daily, TRC-20 became the preferred settlement rail.
USDT turned underground banking into instant settlement (T+0).

4.2 Industrialized “Human APIs”
A new profession emerged: “running points” (跑分).
Thousands of phones in racks:
each logged into a bank accounteach connected to a crypto wallet
Scripts run 24/7 converting:
fiat → USDT → fiat
These phone farms act as human APIs.
They process:
fraud moneygambling fundscapital flight
When a police raid shuts one down, operators simply replace the node.

4.3 Exchanges as Shadow Banks
Many mid-tier crypto exchanges function as digital batch offices (批局).
Their liquidity often originates from underground banking flows.
Some exchanges even lend user deposits to underground operators for high-interest liquidity provision.
When markets are calm, profits are huge.
But when liquidity is suddenly withdrawn, reserve holes appear.

Chapter 5: The Dark Web of Liquidity Exchange
5.1 The Vancouver Model
Vancouver became the Western capital of Chaoshan underground banking.
The system integrates:
casinosreal estatecapital laundering
Process:
buy casino chips with cashhedge bets to circulate chipsredeem chips for clean checksbuy luxury real estate
Property becomes Bitcoin-like value storage.

5.2 North Korea’s Alchemists
One of the most ironic participants is North Korea.
The Lazarus Group steals billions in crypto but cannot cash out on compliant exchanges.
Who helps them?
Underground banks.
They buy blacklisted crypto at deep discounts, wash it through countless nodes, and resell it to Chinese capital flight buyers.
Everyone benefits:
North Korea → foreign currencyunderground banks → arbitrageChinese middle class → offshore assets
In this dark forest, ideology disappears — only liquidity remains.

5.3 Dubai — The New Hub
As Vancouver and Singapore tighten regulation, Dubai is emerging as the new node.
Web3 conferences, luxury real estate deals, and USDT settlements coexist openly.
The Chaoshan “family heads” are moving their servers into the desert.

Chapter 6: The Future Ledger
Underground banks will never disappear.
As long as there are:
capital controlsgreeddemand for money laundering
the system will evolve.
In this market, liquidity is the only reality.
Everything else is narrative.
The story of Chaoshan underground banks is not just about crime.
It is about market efficiency.
A story of how people built their own financial system between empires, oceans, and algorithms.
And in that story, we are all just minor characters.

Disclaimer
This article is written for entertainment purposes only.
Any resemblance to real situations is purely coincidental.
Some scenarios may be exaggerated for storytelling effect.
Source: https://x.com/agintender

In the eyes of most people, meme coins are irrational hype — a greater-fool casino.
But from a mathematical perspective, every 10,000× legend was not born by accident. In fact, it resembles a middle-school geometry problem about spatial evolution.
This article proposes a disruptive perspective:
The market cap of a meme coin is not something that “rises” — it is something that gets “supported.”
The value of a meme coin can actually be calculated.
We are used to watching the Z-axis (price height) fluctuate, while ignoring the true determinant of survival:
the base radius, formed jointly by X (narrative density) and Y (distribution nodes).
A meme that has height but no base is merely a thin needle — it collapses with the slightest wind.
Only an ever-expanding radius of consensus can support a stable cone of wealth, allowing market value to grow geometrically under the gravity of capital.
Note: This article is a popular explanation of “financial physics,” not a rigorous econometric paper. It simply provides a new perspective for understanding meme coins.

1. The Beginning of the Theory: The 3-Dimensional Coordinate System of Meme Coins
In today’s crypto market, meme coins are often seen as irrational speculation.
But is that really true?
If we strip away emotional noise, influencer shilling, and community hype, we find that every viral meme coin follows a strict mathematical logic in both birth and death.
The essence of meme coins is the tokenization of the attention economy.
Their market cap is not determined by discounted cash flow (DCF) like traditional assets, but rather by:
narrative breadthcommunity resonanceexplosive capital flows
To analyze this more clearly, we define these factors as the XYZ Three-Dimensional Growth Spiral Model.
These axes are not independent variables — they possess strong reflexivity.
Changes in one variable reinforce the others, forming a positive feedback loop.
Let’s define each axis.

X Axis: Narrative Density and Cultural Memetics
Definition:
The “genetic code” of the meme.
This includes:
the core joke or symbol (e.g., Doge)the origin story (e.g., CZ’s pet name)cultural symbols (e.g., Pepe the Frog)community-generated derivative content
Key metrics
originality of the narrativereplicabilityemotional resonance

Y Axis: Distribution Momentum and Network Nodes
Definition:
The channels through which information spreads.
This includes nodes ranging from:
top-tier nodes (CZ, Elon Musk)mid-tier nodes (alpha callers, influencers)end nodes (retail traders)
Key metrics
node influence weightdistribution coveragefrequency of mentions

Z Axis: Capital Flow and Liquidity Carriers
Definition:
The monetization of attention.
This includes:
on-chain capital inflowsliquidity depththe amount of value capable of absorbing sell pressure
Key metrics
market captrading volumeturnover rateliquidity (the most important metric)

2. The Growth Curve of the XYZ Axes
If we plot these three axes in 3D space, the trajectory of a successful meme coin usually appears as a spiraling upward path.
Start
X, Y, Z are all near zero.
Ignition
Y spikes (influencer promotion), driving Z upward (price).
The trajectory tilts toward the YZ plane.
Spin
Z growth attracts more Y (discussion).
Y stimulates new X (community-generated narratives).
The trajectory begins rotating around the XYZ axes.
Ascension
When X evolves into X′ (an upgraded narrative), the cone’s base area expands — consensus grows wider — allowing Z (market cap) to reach new heights.
Failed Meme (Rug Pull)
Often shows:
a spike in Ya short Z price pumpbut no narrative upgrade (X stagnates)
Result:
Z collapses quickly, producing an inverted-V trajectory.

3. The Evolution of the Growth Curve: Four Stages of the Meme Spiral
The meme lifecycle is not linear.
Instead, it is a vortex expanding around the Z-axis (capital flow).
We can divide it into four stages.

Stage 1: Ignition
X + Y → ΔZ
A strong narrative combined with a high-influence distribution node instantly ignites capital.
Example: Broccoli
Narrative (X)
On Feb 13, 2025, CZ revealed the name of his pet dog: Broccoli.
This wasn’t just a pet name. It carried symbolic meaning:
CZ’s comebackrevival of the BNB ecosystemthe color green symbolizing price growth
Distribution (Y)
CZ himself is a maximum-weight node.
One tweet from him carries more distribution power than a Super Bowl advertisement.
Result (Z)
Capital floods in instantly.
Hundreds of tokens named Broccoli appeared on Solana and BNB Chain, with the largest reaching $1.5B market cap within hours.
Early snipers made millions in minutes.
At this stage, Z growth is pulse-driven, entirely dependent on the Y-axis explosion.

Stage 2: Reflexivity Loop
Z ↑ → Y ↑
Price becomes the best marketing tool.
Once Z rises sharply, creating “100× meme legends,” the price itself feeds back into Y.
This produces:
Passive distribution
Influencers who previously ignored the meme begin discussing it to capture attention.
FOMO diffusion
“Top Gainers” lists become powerful distribution nodes.
Media stories such as “one wallet made $6M” further expand reach.
BNB Chain even artificially supported this stage with:
meme competitionsdaily airdropsbuying 33 BNB worth of tokens per day
These actions inject energy into Z to maintain Y activity.

Stage 3: Narrative Upgrade
Y expansion → X′
As the network expands, the narrative must evolve.
“CZ’s dog” alone cannot sustain a long-term market cap.
With hundreds of thousands of holders, the community begins creating secondary narratives (X′).
Examples
From meme to culture
The community builds memes, symbols, even “Broccoli cults.”
Tool-based narrative
Projects like FLOKI evolved from memes into ecosystems including:
gamesDeFi protocols
This represents X → X′ evolution.

Stage 4: Value Black Hole
X′ → Zmax
Once narrative upgrades occur, the meme can support larger capital flows.
At this stage:
Capital composition changes
Early “smart money” is replaced by:
diamond-hand communitiesinstitutional allocation attempts
Infrastructure absorption
The meme begins feeding value back into the ecosystem.
Example:
massive trading volume burns BNBgenerates feessupplies liquidity for other protocols like PancakeSwap

4. The Cone Volume Formula Hypothesis
Observant readers might notice something.
The 3D growth model resembles a cone.
Cone volume formula:
V = 1/3 × Base Area × Height
We can map this formula to meme coin growth.

4.1 Variable Mapping
Cone radius
r = x × y
Represents the boundary of social consensus.
x = narrative quality
y = distribution nodes
A larger radius means more people know and believe the story.
Height
h = z
Represents capital intensity and emotional leverage.
Volume
V = Market Cap

Why r = x × y Is Quadratic
Narratives and distribution create network effects.
If narrative quality is poor, more nodes cannot expand consensus.
But when a powerful narrative meets strong distribution, consensus expands exponentially.
A small increase in base radius can support quadratic growth in market cap.

Why Capital (z) Is Linear
Capital determines how high price can rise.
But without base support (x and y), capital alone creates an unstable structure.
A whale pump without community consensus forms a needle-like cone that collapses easily.
Blue-chip memes like DOGE and PEPE have massive base diameters, allowing price volatility without collapse.

The Meaning of the 1/3 Coefficient
Scientists discovered that the volume of a cone is only 1/3 of a cylinder with the same base and height.
In meme markets, this represents attention friction.
Not everyone who hears the narrative buys.
Not every dollar entering becomes long-term market cap.
In reality the coefficient may be closer to 1/300.
This reminds us that meme market caps never fully convert all attention into value.

5. Healthy vs Deformed Growth Structures
This model helps classify failure patterns.
The “Telephone Pole” Model
High Z, extremely low r.
Only whales trading against themselves.
No community or narrative.
Collapse occurs immediately once capital leaves.

The “Pancake” Model
Large r, tiny Z.
Great community and narrative, but no money.
Large attention but little capital.
A “popular but poor” meme.

Model Limitations
Three major distortions exist in reality.
Reflexivity
Price increases reinforce narrative and distribution.
The famous “price convinces people” effect.
Dynamic coefficient
In euphoric bull markets, the coefficient approaches 1.
In bear markets, it may fall to 1/1000.
Missing time dimension
The cone is static, but memes decay.
Narratives shrink as audiences become fatigued.

6. Broccoli Case Study
Broccoli variables:
Narrative (X)
“CZ’s confirmed pet name.”
Distribution (Y)
CZ’s millions of followersBNB Chain accountsmeme platformscrypto traders
Capital (Z)
Liquidity on BNB Chain and cross-chain inflows.

Four Stage Reconstruction
Start
Before CZ’s announcement, speculation filled the market.
Many incorrect meme tokens appeared.
Ignition
CZ posts the tweet.
Distribution explodes.
Capital floods in.
Thousands of tokens launch instantly.
Spin
For 2–12 hours the market becomes a battlefield.
Thousands of Broccoli tokens compete.
Communities attempt to upgrade narratives.
Most fail.
Ascension
Only one or two dominant tokens survive.
Their narrative evolves into:
“BNB Chain mascot.”
A stable consensus base forms.

Warning: The Fate of Most Broccolis
99.99% collapsed.
They pumped Z through fake hype but ignored X and Y.
Their cone structure was a needle.
Once capital peaked, the base radius approached zero and price collapsed vertically.
The Broccoli event proved:
The ultimate battle of meme coins is not who launches first, but who expands the largest consensus radius.

7. PNUT Case Study
X Axis
Narrative of justice and revenge.
A squirrel becomes:
a victim of authoritya heroeventually a political symbol.
Y Axis
Massive distribution nodes:
Elon MuskJoe Roganpolitical commentators
Z Axis
Fast liquidity on Solana and rapid listings on major exchanges.

Four Stage Evolution
Stage 1 – Ignition
The tragic story injects powerful narrative genes.
Stage 2 – Spin
Elon Musk’s tweets trigger massive distribution expansion.
Stage 3 – Narrative Upgrade
The meme evolves into a political symbol.
Stage 4 – Value Black Hole
Listings on Binance attract maximum capital.
The meme begins absorbing liquidity across the Solana ecosystem.

Final Thoughts
After all this theory, you might ask:
As a normal user, how can I identify meme opportunities on chains like BNB, Solana, Base, or XLayer?
How can you capture the next big opportunity?
How can you achieve huge returns?
To find out what happens next…
Stay tuned for the next chapter.

Source: https://x.com/agintender

High-end stumbling blocks often appear disguised as stepping stones. Some call it a gift of the times, yet few realize that the cost has long been etched behind the noise—in the empty mirage that remains afterward.
How did the scenes of the crypto industry in 2025 become a mirage jointly created by project teams, venture capital, and airdrop farmers?
Around the winter of 2020, the objective of many crypto projects gradually shifted from “creating value and serving users” to “getting listed on exchanges and serving farming studios.”
The core driver behind this phenomenon lies in the contradiction between exchanges’ rigid demand for data and the cold-start problem faced by early-stage projects.
Because new projects lack real users and organic data at the beginning—while exchanges require precisely those metrics—project teams are effectively forced to collude with farming studios, manufacturing artificial prosperity through fake volume to satisfy market expectations.
This model has led to projects essentially “building for exchanges” (To Exchange) and “building for airdrop hunters” (To Airdrop Hunter).
Under this environment, the industry has begun to display the classic phenomenon of “bad money driving out good.”
Fraudulent interactions aimed purely at arbitrage (bad money) consume network resources and dilute rewards, while pushing out genuine users who interact with the network for real utility (good money).
Originally designed as a marketing mechanism to attract new users, airdrops have now completely lost their original purpose. Instead, they have become a blood-transfusion system feeding farming studios and bots.
Project teams and exchanges have become intoxicated by the illusion created by these script-generated data points. This not only wastes enormous resources, but fundamentally misguides the development direction of the entire industry.
This article explores the root causes, mechanisms, and long-term implications of this phenomenon.
We will examine how major exchanges such as Binance and OKX, through their listing criteria, unintentionally became the baton directing this distorted incentive system.
We will also analyze how venture capital firms—through tokenomics designs featuring high FDV (Fully Diluted Valuation) and low circulating supply—form a hidden symbiotic relationship with airdrop farming studios, jointly staging a grand performance of artificial prosperity.

1. The Incentive Structure of the “Fake Economy”
From Value Creation to Listing-Only Projects
The proliferation of farming studios is not random chaos—it is a rational economic response to the incentive structure of today’s crypto market.
To understand why projects even tolerate or tacitly accept these studios, we must first analyze the gatekeepers of the industry: centralized exchanges (CEXs), venture capital (VCs), and key opinion leaders (KOLs).

1.1 The Exchange Gatekeeper Effect: Data as the Ticket to Entry
In today’s token economy, for most infrastructure and middleware protocols, achieving a “grand slam listing” on major exchanges (such as Binance, OKX, and Coinbase) is considered the definition of project success.
This is not only the liquidity event needed for early investors to exit, but also a signal of mainstream market validation.
However, the listing standards of exchanges objectively create demand for fake data.
Exchange due diligence heavily relies on quantitative metrics.
For example:
Binance, despite publicly emphasizing community support and sustainable business models, still heavily considers metrics such as:trading volumedaily active addresseson-chain transactionstotal value locked (TVL)OKX similarly focuses on:adoption metricsmarket positioning
This leads to a classic cold-start paradox.
A new Layer 2 or DeFi protocol needs real users to qualify for listing.
But without the liquidity and token incentives that come from listing, it is extremely difficult to attract real users.
Farming studios conveniently fill this vacuum.
They offer “Growth-as-a-Service.”
Using automated scripts, studios can generate:
hundreds of thousands of daily active addressesmillions of transactions
in a short period of time, creating a perfect growth curve that satisfies exchange due diligence teams.

1.2 VC Pressure: Vanity Metrics and Exit Liquidity
Venture capital firms play a major role in amplifying this system.
Over the last cycle, tens of billions of dollars flowed into crypto infrastructure.
VC business models require exit liquidity, and the typical lifecycle of a crypto project is:
Seed → Private rounds → TGE → Exchange listing.
At the TGE stage, valuations depend heavily on market hype and metrics, since traditional valuation models like P/E ratios or discounted cash flows are largely absent in crypto.
Instead, proxy metrics are used:
Active addresses → interpreted as user numbersTransaction count → interpreted as user activityTVL → interpreted as trusted capital
Because the crypto market attracts many short-attention speculative participants, these superficial metrics often matter more than actual product value.
VCs know they are competing with retail investors for liquidity, so they pressure portfolio companies to maximize these metrics before TGE.
This creates serious moral hazard.
VCs have incentives to ignore or even encourage Sybil activity, since the data generated by farming studios supports higher valuations at exit.
Thus we see projects with:
nearly 1 million Twitter followershundreds of millions of interaction addressesbillions of transactions
—numbers that are often largely artificial.

1.3 The Mutation of Marketing: From User Acquisition to Bot Feeding
Airdrops were originally designed as a decentralized marketing mechanism to distribute tokens to real users and bootstrap network effects.
However, under the current incentive system, the nature of airdrops has fundamentally changed.
Instead of investing in real user education (which is slow and expensive), projects now hint at future airdrops to attract farming studios.
These point systems or task systems are essentially transactions for buying data.
Projects promise tokens.
Studios deliver:
on-chain interactionsgas feestransaction activity
In the short term, both sides benefit.
Projects obtain impressive metrics to present to exchanges and VCs.
Studios receive expected token rewards.
But the real victims are:
product culturegenuine users
Because studios only meet minimum interaction thresholds (for example, one weekly transaction above $10), products are increasingly designed for bots rather than humans.
The result is the creation of “zombie protocols” whose only purpose is generating fake activity.
After all, no real user would bridge assets across chains just to swap $10 worth of tokens.

2. The Industrial Operation of Farming Studios
The term “airdrop farming studio” might sound grassroots or humorous, but in the 2024-2025 context it refers to a highly professionalized, capitalized, and technologically sophisticated industry.
These entities operate with the efficiency of software companies.

2.1 Industrial Infrastructure and Automation
The barrier to conducting Sybil attacks has dropped significantly thanks to professional tools such as:
AdsPowerMultilogin
These fingerprint browsers allow operators to manage thousands of isolated browser environments on a single computer, each with unique fingerprints and proxy IP addresses.
A typical farming studio workflow includes:
Identity masking
Thousands of wallets operate in isolated environments that appear as unrelated users globally.
Mass wallet generation
Using hierarchical deterministic wallets and CEX sub-accounts to break on-chain traceability.
Scripted interactions
Automated scripts perform swaps, bridges, and lending activities continuously, with random delays and values to mimic human behavior.
KYC supply chains
Underground markets sell real identity documents and biometric data, sometimes enhanced with AI to bypass liveness detection.

2.2 Task Platforms: Training Grounds for Bots
Task platforms such as:
GalxeLayer3ZealyKaito
were designed to educate users and grow communities.
But they have unintentionally become training camps for bots.
Layer3 essentially operates a Growth-as-a-Service marketplace, where protocols pay for traffic and tasks are distributed to users.
For studios, these tasks provide clear interaction blueprints.
Scripts can simply follow them.
Meanwhile platforms like Kaito amplify media noise through AI-generated content, flooding social media with low-quality posts.
Ironically, by simplifying complex interactions into linear tasks, these platforms have made it easier for scripts to automate everything.
The result is a large population of mercenary users who complete tasks purely for rewards and disappear afterward.

2.3 The Economics of Farming
At its core, farming is simply capital allocation.
Studios calculate ROI.
Gas fees, slippage, and capital costs are treated as customer acquisition costs.
For example:
Spend $100 on gas across 50 wallets → receive $5,000 in airdrops → 4,900% ROI.
Historical examples include:
Starknet
A single GitHub developer account could receive ~1,800 STRK tokens.
At $2 per token, that’s $3,600 per account.
With 100 accounts → $360,000 profit.
Arbitrum
Even minimal activity wallets received thousands of dollars in ARB tokens.
These successes created a positive feedback loop.
Profits from one airdrop fund better infrastructure for the next one.

3. The Ruins Behind the Data
The victory of farming studios is visible in the post-airdrop collapse of many protocols.

3.1 Starknet
After the STRK airdrop, only 1.1% of addresses remained active.
This means 98.9% were mercenary users.
Starknet effectively spent $100 million to acquire 500k users, but with retention considered, the cost per retained user exceeded $1,300.

3.2 zkSync Era
Before its airdrop snapshot, zkSync saw explosive growth.
But once the snapshot was taken:
active addresses dropped 52%transactions collapsed dramatically
This confirmed the previous growth was purely incentive-driven.

3.3 LayerZero
LayerZero attempted a radical strategy:
Users could self-report as Sybils, keep 15% of rewards, or risk receiving nothing if caught.
Over 800,000 addresses were flagged.
But the policy triggered community infighting, damaging trust and brand reputation.

4. Bad Money Driving Out Good
In crypto user acquisition, the principle manifests as:
Fake users driving out real users.
Mechanisms include:
reward dilutionnetwork congestionrising gas feesoverly complex participation mechanisms
Eventually the ecosystem becomes dominated by bots, since bots can amortize costs with expected rewards while real users cannot.

5. Conclusion
Today’s industry resembles an athlete overdosed on stimulants.
Short-term metrics—TVL, user numbers—are inflated, while the internal organs of the ecosystem—real revenue and genuine communities—are weakening.
Crypto was supposed to be a cyberpunk revolution.
Instead, it risks becoming a performative economy, where projects pay studios to manufacture data that satisfies exchanges and VCs.
The issue is not that studios are doing something wrong—they are simply responding to market demand.
But when the entire market becomes dominated by this behavior, the system becomes a negative-sum game.
Studios may have won the airdrop battles, but their victory could cause the crypto industry to lose the war for mass adoption.
Only when using products becomes more profitable than faking usage will real users return.
And perhaps in this “data-is-king” era, the best thing we can do is remain clumsy players who still believe in building real products.

Source: https://x.com/agintender

As crypto policy gradually clarifies and mainstream capital floods into the crypto market, the valuation logic for industry leader Binance and BNB has undergone a structural transformation. BNB is no longer simply a functional exchange token — it has matured into a complex, multi-dimensional, composite asset that requires a multi-dimensional valuation framework to measure.
This article proposes a "Three-Phase Growth Model" to assess its fair market value. This model isolates and analyzes three distinct but mutually converging economic engines: the Exchange Curve (driven by shadow dividends and structural deflation), the Public Chain Curve (driven by on-chain commodity demand, liquidity, and staking), and the emerging Digital Asset Treasury (DAT) Curve (driven by institutional capital access and arbitrage).
This article takes no directional stance (bullish or bearish) — it aims to discuss the valuation model for this type of multi-dimensional, composite cryptocurrency.

Introduction
1873. The darkest hour following the end of the Selangor Civil War on the Malay Peninsula — the Klang War (now Kuala Lumpur, which was not yet a city but a muddy tin mining field).
The Klang Valley region at that time was a genuine "dead city." After years of blood feuds between the Hai San and Ghee Hin gangs, the mines were flooded, the houses burned to ash, and plague ran rampant. Tin prices had collapsed, and every merchant believed the place was finished — they packed their bags and fled back to Malacca and Singapore.
Yap Ah Loy himself had reached the end of his rope. His savings had been exhausted in the war, and his miners, with nothing to eat, were on the verge of mutiny.
His companions all urged him: "Leave. There is no hope here. As long as the green hills remain, there will always be firewood."
That moment of "riding in on horseback": Yap Ah Loy did not leave.
According to historical records, this powerfully built, fiercely temperamental godfather of Southeast Asia rode his horse and surveyed the devastated ruins. He reined in, looked at his fellow countrymen preparing to flee, and made a decision that defied business logic.
He shouted at his men: "As long as the tin is still underground, Kuala Lumpur cannot die! Those who leave now — don't even think about coming back for a share!"
This was not merely a rallying cry — it was an enormous gamble. Yap Ah Loy rode through the night toward Malacca. Not to flee — but to borrow money. Using his own life and reputation as collateral, he borrowed from an old friend (some accounts say a British merchant, others a wealthy Malacca businessman) enough money to buy rice and tools. Single-handedly, he maintained order across the entire city — distributing rice to miners, repairing roads, and even opening gambling dens and opium houses to collect tax revenue in order to pay the British their "protection fees."
In 1879, just as Yap Ah Loy was nearly at breaking point, global tin prices suddenly surged.
Even God seemed to be on his side. Because of his earlier perseverance, Kuala Lumpur's mines were the only ones ready to operate at any moment. Wealth poured in like a flood; Yap Ah Loy instantly became the wealthiest man in the Nanyang, and Kuala Lumpur laid its foundation as a great metropolis.
"There is no sky you cannot ascend to, no mountain you cannot endure through."

I. Macro-Financial Context: The 2025 Crypto Asset Landscape
The 2025 macroeconomic environment represents a transition from speculative frenzy to institutional consolidation.
1.1. The Post-GENIUS Act Era
The 2025 financial landscape was fundamentally altered by the enactment of the GENIUS Act — a legislative framework establishing clear regulatory standards for digital assets and stablecoin issuance. This regulatory certainty became a catalyst for institutional participation, allowing corporate treasuries to hold tokenized assets with legal protection.
The clarity provided by the Act drove a surge in M&A activity, rising from $1.3 billion in 2024 to $17.7 billion in 2025. This environment of consolidation and legitimization paved the way for listed companies to adopt aggressive digital asset treasury strategies, removing the fear of regulatory retaliation.
1.2. Binance's Growth Velocity
User adoption metrics in 2025 indicate a structural shift in how crypto assets are being used. Binance's user base expanded to over 300 million, with significantly increased activity in the payment layer and wealth management products.
Binance's cumulative spot and derivatives trading volume surpassed $64 trillion — a figure exceeding the GDP of most major nations, underscoring Binance's dominant liquidity position.
User growth: The user base broke through 300 million registered accounts. This metric is critical for the "network effects" component of valuation (Metcalfe's Law) — indicating that the utility value of holding BNB (for fee discounts and access) grows quadratically with the user base.
Beyond impressive trading performance, multiple other verticals also flourished:
Binance Pay: This vertical processed $121 billion in transaction volume across 1.36 billion transactions. Integration with over 20 million merchants indicates BNB is being used as a medium of exchange — not merely a speculative asset. This "monetary velocity" supports the token's monetary premium.Binance Earn: Approximately 14.9 million users utilized wealth management products, generating over $1.2 billion in rewards. This capital lockup reduces effective circulation velocity, acting as a soft staking mechanism that removes supply from the order book.Web3 Wallet: With 13.2 million users and $546.7 billion in transaction volume, the Web3 Wallet serves as a critical bridge between the centralized exchange and the decentralized chain (BNB Chain). This integration reduces friction for users moving liquidity on-chain, thereby supporting BNB Chain's TVL.
This backdrop of high-turnover capital flows and regulatory security lays fertile ground for BNB's three growth curves. Unlike the 2021 bull market driven by retail speculation, the 2025 valuation expansion is supported simultaneously by exchange business expansion, the organic integration of on-chain and off-chain resources, and real-economy yields.

II. First Growth Curve: The Exchange Ecosystem — Shadow Yield and Deflationary Alpha
The first growth curve is the Exchange Curve. This curve values BNB as a "quasi-equity" instrument of the Binance ecosystem. Although BNB is not equity, it captures the platform's economic surplus through two powerful mechanisms: shadow dividends (via Launchpool, HODLer airdrops, etc.) and equity-like deflation (via Auto-Burn).
2.1. The Shadow Dividend Theory
In traditional finance, companies distribute profits to shareholders through cash dividends. In the crypto economy, regulatory restrictions typically prevent direct cash distributions. Binance works around this by creating a "shadow dividend" model — value is not transferred to holders in cash, but in the form of equity in new ventures (Launchpool tokens).
This mechanism serves simultaneously as a customer acquisition tool for new projects and a yield generation tool for BNB holders. The value flow operates as follows:
Project demand: New projects covet Binance's liquidity and user base.Project contribution: Projects allocate a portion of their total token supply (typically 2–7%) to Launchpool.Distribution: This supply is distributed proportionally to users staking BNB.Realized yield: BNB holders receive these tokens with immediate market value — effectively realizing a "dividend."
2.1.1. Annualized Yield Quantification
The velocity of these dividends accelerated dramatically during 2024–2025. In 2024, the total value of token rewards distributed through Launchpool exceeded $1.75 billion — nearly 4x the $370 million figure of 2023.
Although the Launchpool listing rate declined significantly in 2025, Launchpool remains a heavy-caliber yield generation weapon. High-profile project launches still require staking BNB to receive corresponding airdrop yields.
Typically, 85% of Launchpool rewards are allocated to BNB stakers (as opposed to FDUSD). This compels users seeking exposure to hot new tokens to buy or borrow BNB.
The rising prominence of HODLer Airdrops in 2025: The "shadow dividend"
Binance introduced "HODLer Airdrops" to reward loyalty. This mechanism retroactively distributes tokens to users holding BNB in Simple Earn products. Users deposit through Simple Earn (flexible or fixed-term), Binance takes a snapshot, and partner project tokens are airdropped.
Statistics show that 57 HODLer Airdrops were distributed throughout 2025.
User analysis indicates that holding 100 BNB in 2025 generated approximately $7,160 in cumulative yield.
Yield calculation: $7,160 / (100 × $850) = ~8.4% (Note: some users report yields exceeding 10.29%)
Think of this yield as a "shadow dividend." It is not paid in BNB but in external assets (such as APRO, BANANA, LISTA, etc.). Yet this is direct cash flow attributable to the asset. A ~10% yield on a "blue-chip" crypto asset is significantly higher than the risk-free rate (4–5%) or the S&P 500 dividend yield (~1.5%), justifying a valuation premium.
2.2. Auto-Burn: Structural Deflation
The second component of the Exchange Curve is BNB Auto-Burn, which divides into the quarterly Exchange Curve burn and the BNB Chain real-time burn. This burn mechanism functions more like a circulating share buyback-plus-incineration deflationary mechanism — with greater transparency and immutability in execution.
2.2.1. Exchange Curve Quarterly Burns
Each quarter, Binance burns a corresponding number of BNB based on trading performance and fees.
2025 Burn Data:
Q1 2025 (30th Burn): 1,580,000 BNB burned, worth approximately $1.115 billionQ2 2025 (31st Burn): 1,579,207 BNB burned, worth approximately $916 millionQ3 2025 (32nd Burn): 1,595,599 BNB burned, worth approximately $1.024 billionQ4 2025 (33rd Burn): 1,441,281 BNB burned, worth approximately $1.21 billion
Full-year 2025: 6,196,087 BNB burned, worth approximately $5 billion — representing 4.2% of circulating supply.
Notably, the October 2025 burn removed 1,441,281.413 BNB from circulation, valued at approximately $1.208 billion at the time. This single burn alone represented approximately a 1% reduction in BNB's supply within a single quarter.
2.2.2. BNB Real-Time Burn (BEP-95)
Unlike a corporate board deciding to repurchase shares, BNB Auto-Burn (on-chain) is algorithmic — determined by a formula based on BNB's price (P) and the number of blocks generated on BSC.
This automated burn mechanism was designed to replace the original transaction volume-based burn, creating objective, verifiable, and predictable supply contraction. The formula used in 2025 is:
B = N × K / P
Where:
B = Amount of BNB to be burnedN = Total blocks generated on BNB Smart Chain (BSC) during the quarterP = Average price of BNB in USDK = Price anchor constant (initially 1,000; adjusted through BEP updates to ~465)
When BNB's price (P) falls, the denominator shrinks, causing the burn amount (B) to increase. Conversely, as BNB's price rose to ~$850 at year-end 2025, the raw number of tokens burned decreased — but the dollar value burned remained elevated. This protects the ecosystem from over-burning during bull markets while accelerating deflation during bear markets.
By end-2025, this mechanism had cumulatively removed an additional approximately 279,736 BNB. While small compared to the Exchange Curve burns, it provides continuous, transaction-driven deflationary pressure that scales linearly with network utilization.
The formula ensures burns are counter-cyclical in token quantity (more tokens burned when prices are low) yet consistent in dollar value.
2.2.3. The Supply Shock from Deflation
BNB's protocol ultimate goal is to reduce total supply to 100 million tokens. As of December 2025, circulating supply is approximately 137.7 million BNB.
Remaining to burn: ~37.7 million BNBCurrent burn rate: ~1.5 million BNB per quarterEstimated timeline: 37.7 / 1.5 = 25.1 quarters = approximately 6.25 years
This places the target completion date at around mid-2032.
For 2025 investors, holding BNB means owning a piece of a pie whose total size is guaranteed to shrink by approximately 27% over the investment horizon. In financial modeling terms, this is equivalent to a company retiring 27% of its outstanding shares. If BNB's market cap remains unchanged over the next 7 years, token price would mathematically appreciate approximately 37% from supply reduction alone. This provides powerful "deflationary alpha" independent of market sentiment.
In traditional equity valuation, a company repurchasing $4 billion in shares in a single year (approximately 3–4% of market cap) would be seen as an extremely aggressive bullish signal. For BNB, this happens automatically. Deflationary pressure acts as a constant upward force on price (P), assuming demand (D) remains stable or grows.
Some analysts argue the burn mechanism creates a "soft floor" — if BNB's price falls sharply, the burn formula dictates that the number of tokens burned will increase, accelerating the deflation rate and correcting the supply-demand imbalance. This view is open to interpretation.

III. Second Growth Curve: The BNB Chain Economic Engine
The second growth curve moves away from the centralized exchange and focuses on BNB as a decentralized computing resource. In this context, BNB is the raw material (Gas) needed to power a decentralized global computer — think of BNB here through the logic of a commodity. This curve is driven by BNB Chain's technical performance, on-chain transaction activity, and DeFi protocol "lockup" demand.
(For the BNB Chain ecosystem overview, see: https://x.com/agintender/status/1976134073522565579?s=20)
3.1. The Overall Market Environment
2025 was a year of "stratification solidification" in on-chain activity: Solana won the "casino" (Meme/high-frequency trading) battle; BNB Chain held its base with a strong retail user base and "zero-fee" strategy; while Base became the fastest-growing L2 through Coinbase's capital infusion.
[Images: on-chain comparison charts]
User scale (DAU): BNB Chain maintained first place by leveraging its existing retail base and "zero gas" strategy; Solana followed closely.Capital velocity (DEX Volume): Solana led by a wide margin in capital turnover rate, driven by Meme coins and high-frequency trading.Asset sedimentation (TVL): Ethereum remains the place where whales and institutions park "old money," leading all other chains by a wide margin.
3.2. Technical Architecture and Capacity
By 2025, BNB Chain had evolved into a multi-layer ecosystem comprising BNB Smart Chain (BSC), opBNB (Layer 2), and BNB Greenfield (storage) — though the latter two have yet to gain meaningful traction.
BNB Chain processes 12–17 million transactions per day, with throughput second only to Solana. BNB Chain is the chain with the highest concentration of retail users globally, with over 2 million daily active users.
In 2025, BNB Chain implemented an aggressive "gas subsidy" strategy — even achieving "0 gas" for stablecoin transfers. This maintained its absolute advantage in stablecoin payments and small-denomination high-frequency transfers. Notably, BNB Chain processed DEX trading volume equivalent to Italy's GDP for the full year (approximately $2 trillion).
3.3. BEP-95: Real-Time Scarcity
While Auto-Burn (Exchange Curve) is a quarterly event, the BEP-95 mechanism is real-time, per-transaction burning. A portion of every gas fee paid on BSC is permanently destroyed. (For details, refer to Chapter Two.)
Burn volume: As of December 2025, approximately 279,736 BNB had been burned through this mechanism.
This mechanism makes BNB "ultrasound money" during high-utilization periods. When network activity surges — as during the late-2025 Meme coin frenzy — the burn rate accelerates.
With the emergence of "Yellow Season" and the rise of Meme coin trading on BNB Chain — daily active users exceeding 2.37 million and DEX volume occasionally surpassing Solana (reaching $1.3 billion per day) — gas burning has become a meaningful contributor to scarcity.
3.4. DeFi and Liquid Staking Derivatives (LSD)
The most significant development in the on-chain curve in 2025 was the explosion of the Liquid Staking Derivatives (LSD) market. Historically, BNB holders had to choose between staking (~2–3% yield) or deploying capital in DeFi.
Lista DAO and slisBNB: The emergence of Lista DAO changed this calculus. By year-end 2025, Lista DAO's TVL exceeded $2.85 billion. It introduced slisBNB — a liquid staking token allowing users to earn staking rewards while simultaneously using the token as collateral.
Integration with Launchpool/soft staking: A key 2025 innovation was integrating DeFi assets (such as slisBNB) into Binance Launchpool. Users can now stake BNB on Lista DAO to earn on-chain yield, receive slisBNB, then stake that slisBNB on Binance Launchpool to earn airdrops. This "double yield" increases BNB's stickiness. It eliminates the opportunity cost of DeFi participation, locking more supply into smart contracts.
3.5. The Binance Alpha Phenomenon: PancakeSwap's Comeback
Binance Alpha's 2025 performance can be described as a "concubine ascending to the Eastern Palace." It successfully connected Binance's enormous CEX user base with DeFi liquidity, creating a massive "overflow effect."
It seamlessly funneled hundreds of millions of Binance App users on-chain through a "One-Click" interface. Data shows its monthly active users (MAU) once broke through 100 million, with large numbers of CEX users completing their first on-chain interactions through the Alpha interface. On May 20, 2025, Binance Alpha set a single-day record of $2 billionin trading volume — a stunning figure for a "primary-plus market" that isn't listed on the main board.
Binance Alpha's explosion simultaneously brought PancakeSwap back to the throne, reclaiming the top position in DEX trading volume (even briefly surpassing Uniswap in Q2). On-chain estimates indicate that Binance's "one-click DEX" entry contributed approximately 12% of PancakeSwap's new users; and because Alpha provided a zero-fee/low-slippage arbitrage channel between CEX and DEX, as much as 18% of PancakeSwap's trading volume came from arbitrage activity related to Binance Alpha.
In essence, Binance Alpha was "feeding" PancakeSwap with Binance's enormous traffic (users) and capital (liquidity). For PancakeSwap, it was no longer merely a DEX — it had become Binance exchange's "on-chain extension" and "new asset proving ground." However, as time passed, market liquidity dried up and studios cornered the activity — Binance Alpha's glory has gradually faded.
3.6. The BNB Chain "Aster" Phenomenon: Brute Force Delivers Miracles
Aster was the biggest dark horse of 2025 — and one of the most controversial protocols. Relying on extremely aggressive trading incentives and endorsement from the industry's biggest player, Aster's daily trading volume on some days exceeded $20 billion — briefly surpassing industry leader Hyperliquid — forcibly dragging BNB Chain back to center stage in DeFi. (Though if you look at open interest, Aster may be at only about ⅕ of its rival's level.)
(For Aster's positioning, see: https://x.com/agintender/status/1972549024856318180?s=20)
Despite the stunning numbers, the market broadly believes there is extensive wash trading involved. This makes BNB Chain's perpetuals data look very pretty, but real user stickiness may not match Solana or Hyperliquid.
Despite widespread criticism of "data fabrication," Aster was "a shot of adrenaline" for BNB Chain.
In 2025, Solana's meme coin carnival drained most of the active capital. BNB Chain's spot activity (Alpha and PancakeSwap) was stable but lacked explosive power; with Hyperliquid eyeing it hungrily, Aster provided a reason for capital to "start moving" — high-yield farming.
The administrators are well aware of the harm of wash trading. But from a holistic perspective: every single transaction consumes BNB as gas — and suddenly it all makes sense. Aster contributed 15–20% of BNB Chain's on-chain gas consumption in 2025, directly driving BNB's deflation and supporting its price.
In crypto, TVL and volume are advertising in themselves. Aster's impressive trading data made institutions and retail investors feel "BNB Chain can still fight," thereby retaining some existing capital that might otherwise have flowed to competitors.
Unlike Hyperliquid (where users are trading for a living, building real strategies) or Jupiter (where retail is betting on meme price moves), the vast majority of Aster's trading volume has no genuine counterparty demand. The moment token prices fall and the arbitrage spread disappears (i.e., rewards returned < fees paid), trading volume collapses to zero instantly. To sustain high trading volume, Aster must continuously inflate its token supply to reward traders — trapped in a passive, time-for-space spiral. Data also shows that Aster's trading volume and fee capture capability are entering a downward trend.
[Image: Aster metrics chart]
What comes next may depend on the prediction markets relay.

IV. Third Growth Curve: Digital Asset Treasury (DAT) Arbitrage
The third growth curve is a new product of 2025: the altcoin Digital Asset Treasury (DAT). This phenomenon represents the financialization of BNB as a corporate reserve asset — hoping to replicate Bitcoin's "MicroStrategy playbook," though unlike Bitcoin, BNB is a yield-bearing asset.
4.1. The DAT Thesis: Why Listed Companies Buy BNB
Listed companies in U.S. and international markets have begun adopting BNB as a primary treasury asset. The logic contains three dimensions:
Inflation resistance: BNB has structural deflationary characteristics (due to burns).Yield generation: Unlike idle Bitcoin, BNB generates approximately 2–5% native yield through staking, HODLer airdrops, and Launchpool.Token-equity arbitrage: Companies may trade at a premium to Net Asset Value (NAV), allowing them to raise cheap capital to buy more BNB.
4.2. CEA Industries (Nasdaq: BNC)
CEA Industries — formerly a vaping technology company on the verge of delisting — became "the MicroStrategy of BNB." The company explicitly stated its goal of acquiring 1% of BNB's total supply (approximately 1.3–1.4 million tokens).
CEA used an "At-The-Market (ATM)" equity issuance model, selling shares when the stock traded at a premium. They sold 856,275 shares at an average price of $15.09 to purchase BNB. As of November 18, 2025, CEA Industries reported holding 515,054 BNB, worth approximately $481 million.
Notably, the company reported achieving approximately 1.5% yield over several months (August–November), implying an annualized yield exceeding 5%. This yield set a positive precedent — it covered the cost of capital (such as convertible note interest) — showing other treasury companies the playbook.
The company's cost basis is approximately $851.29/BNB. By year-end 2025, with BNB trading around this level, the portfolio sat at break-even/barely profitable. However, its enormous position size (0.37% of total supply) means CEA Industries has effectively removed substantial spot liquidity from the market, further reducing float.
CEA's current NAV premium (mNAV) is approximately 2.1x — meaning investors are willing to pay $2.10 to gain exposure to $1.00 worth of BNB held by the company. Some analysts attribute this to it being the only institutional channel for buying BNB on Nasdaq. This article's view is that it primarily reflects BNB's leverage effect: during Q4 2025's BNB upswing (BNB breaking its all-time high of $1,200), BNC's stock price appreciation was typically 1.5x–2xthat of BNB spot. But when BNB pulls back 5%, BNC typically falls 10–15% — because once market sentiment cools, its 2x NAV premium rapidly compresses (multiple contraction).
4.3. Nano Labs (Nasdaq: NA)
Nano Labs — a Hong Kong chip design company listed on Nasdaq — followed suit.
$45 million ATM: Nano Labs entered an agreement to raise $45 million through equity specifically to fund its "BNB and crypto asset reserve strategy."Nano Labs integrated this treasury with its business operations, launching the "NBNB Plan" to build Real World Asset (RWA) infrastructure on BNB Chain.It also issued $500 million in convertible notes to aggressively acquire BNB. The company had accumulated approximately 128,000 BNB by mid-2025.
By year-end 2025, its publicly disclosed holdings were valued at approximately $112–160 million (including BNB and a small amount of BTC). While far from $1 billion, for a small-cap stock with a market cap of only tens of millions of dollars, this was effectively "all-in."
Combining just CEA and Nano Labs, over 643,000 BNB was locked in corporate treasuries in 2025 — representing nearly 0.5% of circulating supply. As this trend matures, BNB's "free float" decreases, increasing volatility and upward price pressure when demand surges.
4.4. The Premium/Discount Arbitrage Loop
The engine of the DAT Curve is the NAV premium — as long as a trading premium exists, the listed company can continuously raise capital to buy more of the token, further pushing up the company's trading premium. (See: https://x.com/agintender/status/1963168013256942078?s=20)
The loop works as follows: if CEA Industries' stock ($BNC) trades at a $600 million market cap while its underlying BNB is worth $481 million, it trades at approximately a 25% premium → the company issues new shares at this inflated valuation → investors buy shares for BNB exposure (possibly because regulatory restrictions prevent direct token holding) → the company uses cash to buy more BNB → this buying pressure pushes BNB's price up → BNB's price rise increases the company's NAV → if the premium holds, the stock price rises further.
But the question is: in the current market environment, are institutions still willing to pay up for DATs?
There is actually a Fourth Growth Curve — but it is too early to discuss it at this stage.

As an aside: Can Abu Dhabi — just announced as Binance's global headquarters — maintain a long and fruitful relationship with this industry juggernaut? Can these lovers, past their honeymoon phase, make it to the altar? Let us wait and see.
Disclosure: The author holds $BNB .

Afterword
The traditional crypto valuation model (MV = PQ) cannot capture BNB's complexity. Therefore, a Sum-of-the-Parts (SOTP) model is recommended to aggregate the value of the three curves:
BNB = V_Yield + V_Commodity + V_MonetaryPremium
Component A: V_Yield (Exchange Curve)
We can benchmark $BNB valuation against its closest public market peer, Coinbase (COIN).
Coinbase metrics (2025): P/E ratio approximately 20.51; P/S ratio 10.34; 2024 revenue approximately $6.2 billion.
For Binance's metrics, readers can substitute their own estimates.
Component B: V_Commodity (Public Chain Curve)
This is the value derived from gas demand and TVL.
BNB Chain processes approximately 17 million transactions daily. Using a "Network Value to Transactions (NVT)" ratio comparable to high-speed L1s, benchmarked against ETH and SOL.
Component C: V_MonetaryPremium (DAT Curve)
This is the speculative premium added by institutional accumulation.
As DATs lock up supply, the marginal price of available BNB rises. "Tradable Supply" (free float) decreases.
Historically, assets that become institutional reserves (such as gold or Bitcoin) carry a premium above their industrial use value — a "shell value" for liquidity access.

Source: https://x.com/agintender

2025 is destined to leave an indelible mark in global financial history — dubbed the "inaugural year of sovereign integration" for the crypto asset industry. If 2024 was Bitcoin's "Wall Street moment" brought about by the ETF, then 2025 marks the point at which digital assets officially leaped from pure financial speculation instruments to geopolitical strategic chips and national-level reserve assets. The core driving force behind this transformation originated from a dramatic pivot by the U.S. executive branch — after the Trump administration took office and established the "Bitcoin Strategic Reserve," a historic move that fundamentally rewrote the underlying logic of the global monetary game.
This year, watershed regulatory events proliferated: the signing of the GENIUS Act conferred legal dollar status upon stablecoins; the World Liberty Financial (WLFI) project — in which the Trump family directly participated — shattered the boundary between politics and DeFi; and the pardons of Ross Ulbricht and CZ signaled the settling of old scores from crypto's "wild frontier era" and the opening of a new order.
This article reviews the 10 events that this author personally considers to have landmark significance for the crypto industry in 2025. These events constitute the "points of no return" in the industry's 2025 development — those decisive moments that fundamentally altered market structure, the regulatory environment, or the technological paradigm.

1. The Geopolitical Pivot: The Establishment of the U.S. Bitcoin Strategic Reserve
The most sweeping and far-reaching event of 2025 is, without question, the U.S. government's formal establishment of the "Strategic Bitcoin Reserve." This policy is not merely the fulfillment of President Trump's campaign promise to "make America the world's crypto capital" — it fundamentally reversed the suppressive policies the U.S. had maintained toward crypto assets for years, elevating Bitcoin to the status of a national strategic resource on par with gold and oil.
1.1. Policy Origins and Execution Mechanism
President Trump signed an executive order from the very start of his term, formally signing the reserve establishment directive on March 6th. The core logic of this directive rests on acknowledging that Bitcoin may play the role of "digital gold" in the future global financial system.
At the execution level, the authorities adopted a "seize and hold" strategy — halting the auction of approximately 200,000 Bitcoin previously seized through judicial processes (such as the "Silk Road" case and the Bitfinex case) and transferring them to a newly established "Digital Asset Stockpile" for permanent holding. The executive order also directed the Treasury and Commerce Departments to formulate "budget-neutral" accumulation strategies — meaning the U.S. government effectively transformed from the largest potential seller of this asset class into a long-term holder.
1.2. The "Lummis Plan" and Legislative Battles
Senator Cynthia Lummis reintroduced the Bitcoin Strategic Reserve Act, proposing the use of Federal Reserve surplus funds over five years to purchase 1 million Bitcoin (approximately 5% of total supply), to be held for at least 20 years. While somewhat fantastical and sparking fierce congressional debate, the prior landing of the executive order at least set a positive precedent.
1.3. The State-Level Domino Effect
The federal government's attitude shift triggered a "digital arms race" among states. By December 2025, 16 states had placed related legislation on their agendas or entered discussion phases.
Texas: Led the way with a "exploratory" $5 million purchase through the Comptroller's office.New Hampshire: Passed HB 302, authorizing the state treasury to invest reserve funds in digital assets — marking a significant breakthrough in state government treasury management philosophy.

2. The Regulatory Endgame: The GENIUS Act and the "Dollarization" of Stablecoins; the Arrival of MiCA
The GENIUS Act, signed into effect on July 18, 2025, is the concrete embodiment of dollar extension. This legislation marks stablecoins being formally incorporated into the federal banking regulatory framework, ending the "wild wild west era" led by USDT.
2.1. Ending the Regulatory Vacuum
The GENIUS Act essentially established a unified federal-level regulatory framework:
100% reserve requirement: Mandating issuers to hold 100% "high-quality liquid assets" (cash, short-term U.S. Treasuries) as reserves, directly excluding commercial paper and raising credit quality.The end of algorithmic stablecoins: Effectively prohibiting the issuance of algorithmic stablecoins incapable of achieving 1:1 physical collateralization.
2.2. The Full Entry of the Banking System
The Act allows banks and their subsidiaries to issue stablecoins, triggering a Wall Street rush.
Visa's strategic move: Visa swiftly announced the launch of USDC settlement services on Solana in the U.S., leveraging the legal certainty provided by the Act to integrate stablecoin settlement at scale.JPMorgan's on-chain fund: Launched a tokenized money market fund (MONY) based on Ethereum, as a preview of banks exploring compliant stablecoin issuance.
2.3. Europe's MiCA Finally Arrives
The EU's Markets in Crypto-Assets Regulation (MiCA) fully came into force in early 2025, becoming the world's first comprehensive regulatory framework covering 27 countries with unified standards. Through a "passport" system, it eliminated regulatory fragmentation within the region, forced non-compliant stablecoins to exit European markets, and established a new global benchmark for compliant operations.

3. The President's Token: TRUMP and the Rise of World Liberty Financial (WLFI)
Three days before Trump was sworn in as U.S. President, on January 17th, Trump launched his own memecoin $TRUMP. Setting aside how much the Trump family profited from this, the move — beyond plunging the already-fragile Solana meme liquidity into further distress — directly ignited the "celebrity coin" effect. The private dinner in April pushed this circus to its zenith.
But it didn't stop there. World Liberty Financial (WLFI) was another major weapon in the Trump family's arsenal. Carried by the "presidential halo," it was not merely a DeFi protocol — it became a symbol of the deep binding between the Trump political brand and crypto capital.
Led by the Trump family with the stated aim of "democratizing finance," WLFI underwent multiple funding rounds and even set up a corresponding DAT before its listing. On September 1, 2025, WLFI officially listed.
At opening, the FDV briefly surged above $30 billion before sharply retreating. Beyond the public outrage triggered by the price collapse, the project generated enormous controversy — particularly regarding suspicions that foreign capital (such as Justin Sun and Aqua 1) may have been using token purchases as a form of disguised political donations. Some argued that the emergence of WLFI marked the complete de-stigmatization of cryptocurrency and introduced millions of MAGA supporters to DeFi wallets for the first time; others contended that this approach made the supposedly decentralized crypto industry even more "centralized" — dragging the entire market backward.

4. The Institutional Eruption: Approval of Solana and XRP ETFs, and the Proliferation of Altcoin DATs
2025 was a year of altcoin ETFs blooming across the board — even if altcoin performance itself was "mixed." As the SEC adopted a more pragmatic "general listing standard," Solana and Ripple finally crossed the regulatory divide. The SEC passed new standard listing rules, compressing the crypto ETF approval window from the previous 240–270 days to just 75 days. This institutional shift directly opened the "altcoin ETF era" — spot ETFs for Solana, XRP, Litecoin, and other assets were swiftly approved, marking crypto's institutional evolution from a single-asset class to a diversified portfolio.
4.1. Solana ETF: Establishing the "Third Pole"
Solana ETF applications saw light in the second half of 2025, with market expectations of approval running extremely high. This became the core driver of SOL's strong price performance throughout 2025, as institutional investors began treating it as the only "investment-grade" public chain asset beyond BTC and ETH.
4.2. Ripple ETF: From "Security" to "Commodity"
With the dust settling on Ripple's lawsuit with the SEC, the listing of the XRP ETF became 2025's greatest reversal. The REX-Osprey XRP ETF (XRPR) listed on September 18th. This symbolized a regulatory "amnesty" for historical legacy issues, pushed XRP's price above $2, and sent the market a signal that assets completing compliance remediation can enter the mainstream.
4.3. The Altcoin DAT Frenzy
Strategy's spectacular performance in the first half of the year showed the market another possibility — and imitators followed in droves. From well-known names like ETH, HYPE, BNB, and AVAX to smaller-cap altcoins, everyone was desperate to board this train. Their motivations varied: some sought larger capital inflows, others merely for marketing effect. In today's environment where NAV < 1, one wonders whether this might eventually trigger their own liquidation. But this undeniably entered traditional capital's radar and — for the first time — normalized the "token-equity linkage" as a standard operation.
This opens up far greater possibilities for tokens and their extensions in DeFi, NFTs, ve-tokenomics, staking, and buybacks.

5. The Rapid Evolution of Infrastructure: Firedancer, Pectra, and the Fusaka Upgrade
5.1. Solana Firedancer
In December 2025, the Firedancer validator client developed by Jump Crypto went live on the Solana mainnet. This is the first validator node software rewritten from scratch in C++ by a third party, with test environment TPS breaking through 1 million. It brought Solana critical client diversity, eliminating single-point-of-failure risk and laying the groundwork for the entry of giants like Visa.
5.2. Ethereum's Pectra and Fusaka Upgrades
The Pectra upgrade executed in May 2025 significantly improved Ethereum's usability:
Staking threshold optimization: Raised the maximum effective staking balance per validator to 2,048 ETH, reducing operating costs for large institutions.Account abstraction: Introduced "programmable wallet" functionality, allowing ordinary accounts to have smart contract capabilities — dramatically lowering user entry barriers.
The Fusaka upgrade executed in December 2025 primarily "repaired" the value capture chain between L1 and L2 — put plainly, L2s must now pay tribute to L1. EIP-7918 introduced a "floor price" mechanism, stipulating that the Blob base fee is no longer permitted to fall without limit to 1 wei; instead, the minimum Blob price is linked to the L1 execution layer gas price. If executed as planned, this will bring substantial revenue to ETH.

6. The Maturation of Corporate Equity: Circle, Kraken, and HashKey IPOs
2025 saw crypto companies' performance in capital markets prove the industry's maturity, establishing a three-pole listing landscape spanning the U.S., Hong Kong, and South Korea.
6.1. Circle IPO: The First Stablecoin Stock
USDC issuer Circle successfully IPO'd on the NYSE on June 5, 2025 under the ticker CRCL. It raised over $1 billion with a valuation of approximately $8 billion. Its success proved that Wall Street recognizes the long-term value of "stablecoins as payment networks" — the most important industry IPO since Coinbase. (This article skips Bullish.)
6.2. Kraken: Valuation Recovery and Transformation
Although Kraken did not complete its IPO in 2025, it completed an $800 million Pre-IPO financing round at a $20 billion valuation. After reaching a settlement with the SEC, Kraken successfully transformed into a full-service institutional broker, planning to list in 2026 and challenge Coinbase's position.
6.3. HashKey Group IPO: Asia's First Compliant Exchange Listing
In the East, HashKey Group officially listed on the main board of the Hong Kong Stock Exchange (HKEX) on December 17, 2025. HashKey raised approximately HK$1.67 billion (approximately $215 million) in this IPO, reaching a market cap of approximately $2.5 billion.
Landmark significance: This is the first licensed crypto asset exchange group to list in Hong Kong and indeed in Asia. HashKey's successful listing validated the effectiveness of Hong Kong's "digital asset hub" policy and blazed a trail for Asian crypto enterprises to raise capital in local capital markets.
6.4. Bithumb Seeking U.S. IPO; Upbit Fully Acquired by Naver
The Korean crypto market also experienced its own capital exit moment, with both top-2 exchanges announcing their listing plans this year.

7. The Settlement Layer Revolution: Visa, USDC, and the Explosion of RWA
2025 saw RWA tokenization and on-chain payment settlement enter a phase of large-scale implementation.
7.1. Visa Chooses Solana
In December 2025, Visa announced the official launch of USDC settlement services based on the Solana blockchain in the U.S. This move signaled Visa's recognition of high-performance public chains as capable global clearing layers, integrating blockchain into the core global payment network.
7.2. The Scaling of Tokenized U.S. Treasuries
Tokenized U.S. Treasuries driven by giants like BlackRock (such as the BUIDL fund) exploded in 2025, gradually becoming collateral for DeFi protocols. This connected TradFi interest rates with DeFi markets, dramatically improving capital efficiency.

8. The Security Wake-Up Call: The Bybit $1.5 Billion Hack
On February 21, 2025, Bybit exchange suffered the largest hack in history, losing ETH worth $1.5 billion.
The Lazarus Group penetrated the computer of a developer at multi-signature service provider Safe, implanting malicious code that tampered with the front-end UI. The Bybit team, unaware, signed transactions that transferred funds to the hackers.
The event shocked the entire industry, driving a shift from single multi-signature setups toward MPC and hardware-level policy engines — and became an important catalyst for the anti-money-laundering provisions in the U.S. GENIUS Act.
This hack also revealed to the industry the invisible hand operating between exchange "alliances" — the surface-level competitive relationships were just a misunderstanding.

9. The Extremes of the Market Cycle: The "10.11 Event" and the Great Leverage Purge
The 2025 market experienced a roller coaster from extreme euphoria to brutal liquidation — with the "10.11 Event" becoming the year's market inflection point.
Driven by the Trump victory effect and the establishment of the strategic reserve, Bitcoin touched an all-time high of approximately $126,000 on October 6th. The market then experienced a violent reversal.
October 11th became the most terrifying day in the 2025 secondary market. On that day, BTC and ETH pulled back 10%, some altcoins fell nearly to zero, the entire market turned red — the market was bloodbathed, and Binance subsequently carried out the largest-ever compensation payout in history.
As "smart money" got buried, market maker "explosion news" spread widely, and order books held only a trickle of buy orders, panic spread rapidly. Within the following days, a total of approximately $150 billion in cascading liquidations erupted across the network, with Bitcoin rapidly retreating to the $85,000 range. The "10.11 Event" is viewed as the starting point of a "cooling period" in the second half of the 2025 bull market — it purged the speculative capital that had relied excessively on leverage. The situation was utterly brutal.

10. The Pardon of the Century: The Return of Ross Ulbricht and CZ
2025 saw two iconic figures experience dramatic reversals of fortune — viewed as a symbol of the U.S. government reaching some form of "reconciliation" with crypto fundamentalism and the early exchange era.
10.1. Ross Ulbricht Receives a Pardon
On January 21, 2025, the day after his inauguration, President Trump signed a pardon order announcing the unconditional release of Silk Road founder Ross Ulbricht. Ross Ulbricht had been sentenced to double life imprisonment for creating the dark web marketplace Silk Road and had served 12 years. In the eyes of the crypto community, he was viewed as a libertarian martyr.
This pardon fulfilled Trump's campaign promise and was hailed as a tremendous victory by libertarians and early Bitcoin adopters — symbolizing the government's abandonment of treating code writers as "drug lords" and its acknowledgment of the historical limitations and contributions of early internet explorers.
10.2. CZ's Liberation
In October 2025, CZ also arrived at his pardon moment. The return of CZ (though likely no longer as CEO) and Ross's freedom mark the complete turning of the page on crypto's "wild frontier era."
These two pardons are not merely changes in individual fates — they also hint that, under the new geopolitical and capital landscape, those who were once "outlaws" can be reintegrated into "mainstream" society through the operation of capital, public opinion, and political maneuvering.

Conclusion: From Speculation to Cornerstone
Looking back on 2025 — from Bitcoin becoming a (prospective) national reserve, to the listings of HashKey and Circle, to the pardons of Ross and CZ — every event points in the same direction: the comprehensive institutionalization of crypto assets.
Yesterday's rebels have been brought into the fold; yesterday's fringe assets have become national wealth. 2025 is not the end of the cycle — it is the starting point of "crypto realism." In this new era, code is still law, but the law has finally learned how to coexist with code — and even leverage it.

Afterword
If there is one thing that genuinely excites the heart, it is probably this:
11. The Global Corporate Balance Sheet "Bitcoinization" Trend Confirmed
By the end of 2025, over 200 publicly listed companies and funds held approximately 5.1% of Bitcoin's total supply. Beyond MicroStrategy (holding over 670,000 BTC), "Digital Asset Treasury (DAT)" companies — including multiple fintech firms — cumulatively attracted $92 billion in capital inflows. Bitcoin has evolved from the lonely bet of individual companies into a standardized allocation tool for corporations seeking to hedge inflation and optimize capital structure.

Source: https://x.com/agintender

What drives protocols and exchanges that claim to be "fair" to flip the table? When we talk about ADL, we cannot only talk about ADL. ADL is the final step of the entire liquidation mechanism. What we need to examine is the complete liquidation mechanism — including liquidation price, bankruptcy price, order book liquidation, insurance fund, and other mechanisms. ADL is merely the final "socialized" outcome. The core is the liquidation mechanism itself — and it is the devastation left after the liquidation mechanism is exhausted that brings us to this moment. (You and I are both responsible.)
As for why ADL is a Greedy Queue — you cannot understand it standing here in the present, amid ample liquidity and calm seas. You need to place yourself in the context of the moment ADL actually occurs, and then you will understand why CEXs design it this way. Because it is the solution with the least risk, the lowest cost, and the smallest psychological burden.
Reading Guide: This article is 7,000+ words and extremely technical. Readers who are unfamiliar with contract liquidation rules are advised to first supplement with some background knowledge before returning:https://x.com/agintender/status/1949790325373026575?s=20
Those who understand the exchange liquidation process can start directly from Chapter Three.
Those only interested in the HLP mechanism are advised to skip directly to Chapter Five.

I. ADL Is the Exchange's Life Preserver — Not a Counterweight for Fairness
ADL (Auto-Deleveraging) is a system-level risk backstop mechanism in perpetual contract markets. When markets experience violent swings, some accounts become insolvent, and the exchange's insurance fund is insufficient to cover these losses — the system activates ADL, forcibly closing a portion of profitable accounts' positions to fill the gap, thereby preventing the entire liquidation system from failing. It is important to note that ADL is not normal operation — it is a "last resort" deployed only in extreme circumstances.
After ADL is triggered, the system reduces positions according to a set of clear but not fully public priority rules. Generally speaking, positions with higher leverage and larger floating profit ratios are more likely to be placed at the front of the ADL queue for "position optimization."
On the core of ADL, here is a passage directly from Binance's own discussion:
[Image: Binance ADL description]
Key points:
The current derivatives mechanism is already prepared for "insolvency."ADL is the final step of the forced liquidation process.It only occurs when the contract risk protection fund cannot absorb the losses.The larger the risk protection fund, the less frequently ADL is triggered.Activating ADL has a bad impact on the market — it is equivalent to using profitable traders' money to subsidize loss-makers' mistakes (especially since the profitable traders are usually large players, and reducing their profits means offending them).We cannot prevent ADL, but we will try every possible way to minimize it.
For an exchange or protocol, if the purpose of the liquidation mechanism is to ensure fairness, then ADL is to ensure survival.

II. The Liquidation Waterfall: From Market Execution to ADL Trigger
Since ADL is a component of the liquidation mechanism, to understand the details of ADL triggering, we must start from the source.
Generally speaking, exchanges follow a "waterfall" sequence for liquidations:
Phase One: Order Book Liquidation When a user's maintenance margin is insufficient, the liquidation engine first attempts to place the position as a market order — or split it into multiple smaller limit orders — into the order book.
Ideally, market depth is sufficient: the long close order is absorbed by short limit orders, the position closes, and the remaining margin is returned to the user. But in a crash like 10/11, buy orders dry up and the massive liquidation order directly blows through the order book, causing uncontrollable price slippage and direct insolvency — which triggers the second step.
Phase Two: Risk Protection Fund Takes Over When the order book cannot absorb the order, or the user's position is approaching the Bankruptcy Price, to prevent further price collapse, the exchange's insurance fund intervenes.
The risk protection fund acts as the "buyer of last resort," taking over the position at a price near (or in some exchanges, better than) the bankruptcy price. The fund then attempts to slowly unwind this position in the market. At this point the fund holds a massive losing position (inventory risk). If prices continue to fall, the fund itself incurs losses.
Phase Three: ADL Triggered This is the most critical step. When the risk protection fund is exhausted or reaches a threshold — or when the fund's risk assessment determines that taking over the position would cause its own insolvency — the system refuses to take over and directly triggers ADL.
The system identifies "sacrifices" among the counterparty (i.e., traders who got the direction right and are currently profitable), forcibly closing their positions at the current mark price to offset the imminently insolvent losing position.
Underline this: ADL actually has a very important function here that almost nobody mentions — which is that in conditions of insufficient market liquidity, it uses winners' money to stop the price decline.
Think about it: without ADL, the insurance fund — in order to survive — would keep executing orders in the order book, which would continuously push prices up or down, triggering more and more cascading liquidations.

III. The Transmission Effect of Two Liquidation Modes on ADL
Many people know about ADL, but few probably understand the liquidation modes that precede it. Generally speaking, there are two primary modes — and most of the more innovative liquidation modes today are improvements built on top of these two.
Liquidation is the prelude to ADL. Different liquidation approaches directly determine the frequency, depth, and market impact of ADL triggers. Talking about ADL without discussing liquidation modes is just misleading people.
3.1 Mode A: Order Book Liquidation (Dump Mode)
Mechanism: When a user triggers the liquidation line, the liquidation engine directly throws the position as a market order into the order book for execution.
Role of the insurance fund: Used only to cover "insolvency losses." That is, if the market order hammers the price below the Bankruptcy Price, the gap is covered by the insurance fund.
ADL trigger logic: ADL is only triggered when the risk protection fund goes to zero, or the order book is completely exhausted (no buyers at all). However, most exchanges have now changed their algorithms so that ADL triggers when the risk protection fund falls below a certain threshold (generally when the fund balance has fallen x% from its recent peak over some time period) — not only after the fund hits zero. (Therefore, trigger frequency is increasing.)
Market impact:
Advantage: Respects market pricing as much as possible; does not interfere with profitable users.Disadvantage: In extreme conditions like 10/11, a massive liquidation order instantly blows through liquidity, causing cascading liquidations. Prices crash because of the liquidation orders themselves, causing more liquidations — rapidly exhausting the risk protection fund.
3.2 Mode B: Backstop / Absorption Mode
Mechanism: When a user triggers the liquidation line, the system does not immediately dump into the order book. Instead, a liquidity provider / insurance fund directly takes over the position.
Role of the risk protection fund: It "buys" the user's liquidated position at the bankruptcy price. After absorbing it, the fund attempts to sell the position in the market at an opportune time. If the execution price is better than the position price, the profit is credited to the insurance fund; otherwise, the loss is borne by the insurance fund.
ADL trigger logic: This is the most critical distinction between the modes.
In Mode A, ADL is triggered when market liquidity is exhausted and the insurance fund runs out of money to cover losses.In Mode B, ADL is triggered by the risk control thresholds of the risk protection fund.

IV. Deep Validation and Simulation of Both Liquidation Modes
To answer "how do different liquidation mechanisms affect ADL," let us first establish a mathematical model to simulate the behavior of Mode A and Mode B in extreme market conditions.
4.1 Scenario Assumptions
Market environment: ETH price crashes instantaneously. Current market depth is extremely poor; buy orders are scarce.
Defaulting account (Alice):
Position: Long 10,000 ETHLiquidation trigger price: $2,000Bankruptcy price: $1,980
Current order book:
Best bid: $1,990 (only 100 ETH)Second bid: $1,900 (only 5,000 ETH) — cliff-like depth gapThird bid: $1,800 (10,000 ETH)
4.2 Mode A: Order Book Dump Mode
Mechanism: The liquidation engine, without any buffer, directly throws Alice's 10,000 ETH as a market sell order into the order book.
Simulation: (simplified calculation — just follow the big picture)
Execution:
100 ETH @ $1,9905,000 ETH @ $1,9004,900 ETH @ $1,800
Volume-Weighted Average Price (VWAP):
[(100 × 1,990) + (5,000 × 1,900) + (4,900 × 1,800)] / 10,000 = $1,852
Insolvency loss:
Alice's bankruptcy price is $1,980.Loss per ETH: $1,980 − $1,852 = $128Total insolvency loss: $128 × 10,000 = $1,280,000
ADL trigger:
If insurance fund balance < $1.28M → system must immediately trigger ADL.The system finds Bob, a large profitable short, and force-closes him at $1,980 (even though the current market price is already $1,800 — Bob could have earned much more).
Mode A causes the price to instantly crater to $1,800, creating enormous slippage losses, directly blowing through the insurance fund and causing ADL to trigger immediately and at scale.
4.3 Mode B: Backstop / Absorption Mode
Mechanism: The liquidation engine does not dump into the order book. The insurance fund (or HLP pool) directly takes over Alice's position at the liquidation price ($2,000) or slightly better than the bankruptcy price ($1,990).
Simulation:
Takeover: The risk protection fund pool instantaneously holds a long position of 10,000 ETH, with an entry cost recorded at $1,990.Market reaction: Order book price remains at $1,990 (because there is no sell pressure dumping). The market looks "calm."Inventory risk: One minute later, the external market (e.g., Coinbase) drops to $1,850. The fund pool's 10,000 ETH now has a floating loss:
($1,990 − $1,850) × 10,000 = $1,400,000
ADL trigger assessment:
The system does not trigger ADL because of "no money to pay" (since it hasn't sold yet). But it conducts a risk check:If HLP's total capital is $100M → absorbing a $1.4M loss is manageable → ADL not triggered.If HLP's capital is only $5M → a $1.4M loss is too large a proportion → to protect LPs, the system decides to throw away this hot potato → ADL triggered.
Mode B protects the order book price from being instantly crushed in the first second of the crash, preventing cascading liquidations. But it concentrates risk inside the insurance fund's belly. If subsequent prices fail to recover, the insurance fund's losses keep growing — ultimately potentially leading to an even more violent ADL (or, as with Hyperliquid on 10/11, aggressively triggering ADL to prevent HLP from being wiped out).
One more note: the reason Hyperliquid triggered ADL on a large scale on 10/11 was not because the system ran out of money — it was because the HLP Vault, to protect itself, proactively transferred risk to profitable users. This was to prevent a repeat of the earlier "Whale Slap" incident (where a whale exploited insufficient liquidity to harm HLP).
Mode B protects the order book price from being instantly crushed, but it concentrates "inventory risk" onto HLP. Once HLP becomes frightened (reaching its risk control threshold), it will extremely aggressively "kill" profitable users' positions via ADL to balance its books and ensure its own survival. Imagine if HLP experienced a 30% drawdown in a single day — what would most people do? They would immediately withdraw funds, causing a bank run.
One additional note: long-time followers know I have repeatedly said that the current generation of Perp DEXs copied the CEX liquidation mechanism wholesale — and that sooner or later this would cause serious problems. I think you can all start to understand what I meant now. Hahaha.

V. Hyperliquid's Special Architecture: HLP and ADL Sensitivity
Hyperliquid's distinctive characteristic is that it does not have an opaque, enormous insurance fund cushioned by years of accumulated exchange profits like Binance or OKX. Its insurance function is borne by the HLP Vault.
5.1 HLP: Both Market Maker and Insurance Fund
HLP is a capital pool composed of USDC deposited by community users. It has a dual personality:
Market Maker: It provides liquidity on the order book, earning the bid-ask spread.Liquidation Backstop: When the above "Phase Two" occurs, HLP is responsible for taking over users' liquidated positions.
This structure causes Hyperliquid's ADL trigger mechanism to differ fundamentally from that of centralized exchanges:
Binance model: The insurance fund is the exchange's "private savings" — typically having accumulated billions of dollars (presumably — I'm speculating here, no hard evidence). Therefore Binance can tolerate enormous drawdowns and avoids triggering ADL as much as possible to preserve the large-player experience.
Hyperliquid model: HLP is users' money. If HLP loses too much by absorbing a massive toxic position, it will cause LPs (liquidity providers) to panic and withdraw, triggering a "bank run" and killing the exchange. (The Jelly incident already gave HLP a taste of what drawdowns feel like.)
Therefore, Hyperliquid's risk control engine is designed to be extremely sensitive. The moment the system detects that the risk of HLP absorbing a particular position is too high, it immediately skips Phase Two and directly activates ADL. This is why on October 11th, Hyperliquid triggered ADL over 40 times in 10 minutes — while some CEXs, even where they were likely already technically insolvent internally, chose to absorb losses with their own capital.
5.2 Deep Dive: The Liquidator Vault Mechanism
The Liquidator Vault is a sub-strategy within HLP. It is not a separate capital pool but a distinct "liquidation" logic layer.
[Image: Hyperliquid liquidation sequence]
When a trader is liquidated and the market cannot absorb the order (Layer 1 fails), the Liquidator Vault "buys" the defaulted position.
Example: A trader is long 1,000 SOL at $100. Price drops to $90 (liquidation price). Order book buy side is thin. The Liquidator Vault takes over the 1,000 SOL long at $90.
Immediate PnL recognition: The user's remaining margin is confiscated. If the margin covers the difference between the entry price and the current mark price, HLP immediately records a "liquidation fee" profit.
Inventory unwinding: HLP now holds a long position of 1,000 SOL in a crashing market. It must sell these SOL to neutralize the risk. But if these positions cannot be cleared in time and reach the threshold, ADL will be triggered.

VI. Revisiting the 10/11 Event: The Algorithm Game
Now let us return to the core of the controversy: on October 11th, 2025, Hyperliquid processed over $10 billion in liquidations — triggering ADL over 40 times within 10 minutes. Some say this was a complete overreaction. Was it really?
6.1 The Core Controversy: Greedy Queue vs. Pro-Rata
Gauntlet CEO Tarun Chitra pointed out that the ADL algorithm used by Hyperliquid caused approximately $653 million in "unnecessary losses" (opportunity cost).
The focal point of the controversy is the ADL sorting algorithm.
Hyperliquid's algorithm: The Greedy Queue
This is the classic algorithm inherited from the BitMEX era. The system ranks all profitable users by profitability and leverage ratio:
Ranking Score = Profit / Principal × Leverage Multiple
Execution: The system starts from the top-ranked user and completely closes their position until the loss gap is filled.
Result: The "best-performing traders" ranked at the top are "killed." Their positions are gone — while their profits at the time are preserved, they lose the enormous potential gains from the market continuing to fall afterward.
Tarun Chitra's proposed algorithm: Risk-Aware Pro-Rata
Execution: Rather than completely killing the top-ranked user, a partial position reduction (a "haircut") is applied to the top 20% of profitable users — for example, closing 10% of each person's position.
Advantage: Preserves users' partial positions, allowing them to continue benefiting from subsequent market moves. Tarun Chitra's back-testing shows this approach retains more Open Interest (OI) and reduces harm to users.
6.2 Why Does Hyperliquid Persist with the "Greedy Queue"?
Despite Gauntlet's algorithm being theoretically fairer, Hyperliquid founder Jeff Yan's rebuttal articulates the real-world constraints:
Speed and certainty: On an L1 chain, computational resources are expensive. Pro-rata reductions across thousands of users require enormous computation and state updates, potentially causing block delays. The Greedy Queue only needs to sort and cut the top — low computational complexity, extremely fast execution (millisecond-level). In a market crash, speed is life.
HLP's fragility: As discussed above, HLP's capital is limited. Pro-rata ADL means HLP needs to hold partial toxic positions for a longer duration (waiting for the system to slowly compute and execute reductions across all users). For Hyperliquid, rapidly severing risk (by completely closing large players' positions) is more important than so-called "fairness."

VII. What Is the Truth About the Greedy Queue?
If you've read all the way through, you will know that 40+ ADL triggers in 10 minutes is the very essence of HLP's mechanism design. In the face of large traders, the HLP contributors are the true foundation of Hyperliquid.
The Greedy Queue was not invented by Hyperliquid — in fact, it has existed since many years back and is still widely used by major CEXs today. Did they not consider capital pool safety when choosing the Greedy Queue? Did they not face the constraints of computational load and speed? And through all the ADL events in history, did none of the affected large players seek redress? Storm the offices? Obviously not.
The real reason is: for centralized exchanges (CEXs), the Greedy Queue is a solution that, within the existing mechanism, is simultaneously reasonable, relatively fair, and controllable in cost.
Returning to the earlier discussion of liquidation Modes A and B — the conditions for ADL to trigger are:
Violent market swingsMarket liquidity essentially in "vacuum" stateThe risk protection fund has suffered severe losses
For the large players affected by ADL, they are also aware that at that particular moment, there is insufficient market liquidity to absorb their profitable positions. In earlier years, due to certain technical reasons, during violent market swings people couldn't even log into their exchange accounts — so ADL effectively became a function where the exchange helped them "take profit," since many of those profits at that critical juncture might have been impossible to execute anyway.
Furthermore, psychologically speaking, making less profit is easier to accept than taking a loss — especially when you learn that the exchange itself also took a significant hit. This comparative consolation makes people feel somewhat more at peace.
As for why it must specifically be the Greedy Queue: beyond the slightly strange but intuitive logic of "the more you profit, the more responsibility you bear" — the more primary reason is actually this: fewer people are affected.
What does a CEX fear most? Not insolvency? Not losses? Public opinion. Rather than having a crowd of people suffer losses, they much prefer seeing only a small number of people affected — because then they can resolve it privately, one-on-one or a few-on-one, through back-channel communication. Everyone should understand: the game in the market doesn't end with the liquidation or ADL. There's still the subsequent disputes, complaints, and threats — and many grievances are resolved below the surface.

VIII. Is There a Better Algorithm?
Yes — but not a better ADL algorithm. At this stage, the focus should be on how to prevent ADL from occurring in the first place.
Since this is not the main focus of this article, here is a simple table to cover it briefly. For exchange practitioners, the hints in the chart should be sufficient.
[Image: Prevention framework table]
Of course, if any exchanges have the "courage" to implement a circuit breaker system, that would genuinely stop a lot of unnecessary harm: https://x.com/agintender/status/1990373165957091590?s=20

Know not just the what, but the why.
May we always carry in our hearts a reverence for the market.

Source: https://x.com/agintender

In 2023, the Los Angeles Times once again ranked Indomie instant noodles as the best instant noodles in the world. This Indonesian product has conquered taste buds from South Africa to London and has become part of global pop culture.
Yet behind every packet of noodles that costs only a few cents lies a dramatic history of primitive capital accumulation—and a modern business fable about power, capital, and monopoly.

Introduction: Starting From the World’s Best Instant Noodles
Indomie’s parent company, Indofood, belongs to the Salim Group. Its founder, Liem Sioe Liong (Lin Shaoliang), was once the richest man in Asia.
Liem was born in Fuqing, Fujian, China, in 1916. In 1938 he arrived in Java, Indonesia, essentially as an indentured migrant. Early on he worked in his uncle’s grocery shop. After accumulating some initial capital, he began trading cloves and cigarettes.
(Note: Indomie was actually later acquired by Indofood rather than originally created by Liem.)
In Indonesia there is a special term: Cukong.
It refers to ethnic Chinese businessmen who provide funding to political or military patrons in exchange for protection and monopoly privileges.
Liem’s “guardian” was Colonel Suharto.
During the Indonesian War of Independence and subsequent military campaigns, Liem risked his life smuggling food, medicine, and clothing to Suharto’s Fourth Military Region. This built a literal life-and-death friendship, creating trust that transcended race and religion.
When Suharto seized power in 1966 and established the “New Order”, Liem naturally became the regime’s economic engine—or more precisely, one of the president’s trusted confidants.
Soon after taking power, Suharto sought to solve Indonesia’s food crisis. He wanted to shift national dietary habits from rice toward wheat-based foods. However, Indonesia lacked processing equipment, import channels, and U.S. dollars.
The difficult mission was handed to Liem Sioe Liong.
Suharto granted Liem the exclusive monopoly on flour processing in western Indonesia.
This decree was immensely valuable—it was essentially a license to print money.
However, despite having a political license to build a monopoly, Liem lacked two crucial things:
Industrial manufacturing expertiseMassive capital needed for heavy industry
This gap set the stage for his encounter with Chin Sophonpanich.

The Moment of Chin Sophonpanich
Building a modern flour mill—later known as PT Bogasari Flour Mills—required tens of millions of dollars.
Even with presidential backing, Liem approached banks across Jakarta and the West but was repeatedly rejected.
To bankers in suits, Liem was simply a speculative trader with:
no industrial experienceno collateralno credible balance sheet
Indonesia itself was seen as a poor and unstable country.
Just as the Bogasari project was about to collapse, Chin Sophonpanich, founder of Bangkok Bank, appeared.
Chin was the godfather of Southeast Asia’s “Bamboo Network” capital. He had a different perspective from Western bankers.
Instead of examining financial statements, he saw the real essence of the deal:
Suharto’s political backing was the strongest collateral possible.
Chin not only provided the startup capital for the factory but also used Bangkok Bank’s international credit to issue letters of credit for wheat imports.
This is what the article calls the “Chin Sophonpanich Moment.”
A moment when capital stops paying for the past—
(balance sheets, founder resumes, sector narratives)—
and instead bets on monopoly structures and political access.
With capital and technology secured, Bogasari quickly monopolized Indonesia’s flour market.
The continuous cash flow that followed not only incubated multiple major companies but eventually brought Indomie, the national noodle brand, under Salim Group control—creating Liem’s business empire.

The Web3 Parallel: The “Chin Sophonpanich Moment” in 2026
If we translate this model into Web3 in 2026, what does it represent?
Commodity
What the commodity is doesn’t matter. What matters is who believes it matters.
1970s: flour2026: blockspace, stablecoin liquidity, privacy, AI efficiency, RWA, etc.

Political Franchise
In 1960s Indonesia, this meant Suharto’s administrative decree.
In Web3 it becomes:
regulatory licensesinstitutional endorsements
Examples:
the U.S. GENIUS Actthe EU MiCA regulationYZi incubation agreementsCoinbase Ventures investmentsBlackRock backing
These become the new licenses of privilege.

The Financier
Today’s Chin Sophonpanich is not a bank.
Instead it is institutions like:
BlackRockCoinbaseBinancea16z

The Operator
Today’s Liem Sioe Liong is the crypto-native operator who has already aligned with:
regulatorsinstitutionsventure fundsinfluential industry figures

By 2026, successful Web3 projects are no longer merely decentralized protocols.
They are sovereign economic systems serving the interests of powerful institutions.
Competition is no longer primarily about technology.
It is about:
capital efficiencypolitical resources
Projects that help large institutions expand influence become the new political correctness of the market.

Macro Environment of 2026
The Web3 industry in 2026 is shaped by three major forces:
1. Global Rate Cuts
Lower interest rates push capital toward high-beta assets, including crypto.
But unlike the retail-driven 2021 bull market, liquidity now enters through regulated channels:
spot ETFscompliant stablecoins (USDC, PYUSD)tokenized funds (BUIDL)

2. Mature Regulation
Regulation has become a protective moat rather than a threat.
Examples:
The GENIUS Act establishes federal oversight for payment stablecoins.MiCA imposes strict licensing requirements in Europe.
This creates oligopolies such as:
CirclePaxos

3. State–Corporate Integration
In 2026, Web3 is part of geopolitical competition.
Circle and USDC increasingly resemble a digital shadow bank of the Federal Reserve.
USDC is not merely a commercial product—it is an extension of national credit power.

2026: The First Year of Web3 Monopolies
If Bogasari was the physical foundation of Liem’s empire, Web3 is now searching for its “digital flour mills.”
The core logic of business has returned to its essence:
Acquire monopoly. Control pricing power.

The “Late Mover Advantage” of Giants
For companies like:
BinanceCoinbaseBlackRock
There is no need to innovate first.
Just as Liem did not invent flour processing, these giants do not need to invent new DeFi protocols.
Instead they:
Wait for the market to validate winnersAcquire, copy, or incubate themUse their massive liquidity and user bases to dominate instantly
Crypto M&A activity surged between 2025–2026, representing a large-scale industry consolidation.

Ecosystem Control
Binance
Binance uses a proxy strategy through YZi Labs and projects like Aster to dominate decentralized derivatives.

Coinbase + Circle
Coinbase holds equity in Circle and shares revenue from USDC reserves.
This effectively forms a joint “digital Federal Reserve.”

The Reality: Opportunities Are Increasingly Monopolized
Exchange Chains
Examples:
Base (Coinbase)BNB Chain (Binance)
These function as digital walled gardens.
Projects within these ecosystems gain preferential treatment.

Stablecoin Wars
Stablecoins are the “flour” of the digital economy.
By 2026 the market has consolidated into two major forces:
USDC — regulatory dominanceUSDT (Tether) — offshore financial power
Tether has even accumulated $12.9B in gold reserves, effectively acting as a shadow Bretton Woods system on blockchain.

Institutional RWA Expansion
BlackRock’s BUIDL fund tokenizes U.S. Treasuries, enabling investors to hold yield-bearing assets onchain.
This changes token economics fundamentally:
2020: governance tokens2026: yield-bearing real-world asset tokens

Conclusion: The Rise of the “New Web3 Oligarchs”
Liem Sioe Liong rose from a clove trader to Asia’s richest man because he understood the structure of his era.
Suharto needed an economic pillar.
That pillar required monopoly and financial leverage.
The Web3 industry in 2026 stands at a similar moment.
The crypto punks who challenge regulation alone will gradually be marginalized.
The center stage belongs to the new oligarchs—those who:
cooperate with regulatorsleverage institutional capitalbuild alliances with giants like BlackRock, Binance, and Coinbase
Business models are evolving from selling products to selling sovereignty.
Projects now aim to:
build digital city-states (Base, BNB Chain)issue digital currencies (stablecoins)control infrastructurecapture monopoly profits
This is a new era of digital mercantilism, driven by code, capital, and institutional backing.
The story of Liem Sioe Liong and Chin Sophonpanich has not disappeared.
It has simply taken on new forms.
Exchange insiders are the new Liem Sioe Liongs.Binance, Coinbase, and BlackRock are the new Chin Sophonpanichs.Blockchains are the digital land on which the new flour mills are built.
Web3 still has narratives.
But the narrative has shifted—from chronicles of technology to biographies of power.
Source: https://x.com/agintender

Why is 2025 the year of "list to dump"? Because in the business plans of top-tier projects, there has never been a line item called "profit through technical services." Selling tokens is the only business model.
When Token = Product = Only Revenue, the industry is destined to be a game of hot potato — not a value-creating BUIDL.
2023 to 2025 represents a structural transformation period in crypto history worth remembering, marking the fundamental decoupling between protocol utility and asset valuation. Any traditional Fujian merchant who saw this would immediately cry out: "Jia lat" (this is painful/hopeless).

Introduction: The Ruins of Ukraine and the Fujian Merchant's Abacus
In the business world, the Fujian merchant community ("Minshang") is renowned for their razor-sharp commercial instincts: wherever there is a price gap, there is a business; wherever there is chaos, there is arbitrage. Even amid the fires of war in Ukraine, there are Fujian merchants seeking fortune in danger.
The Fujian merchant community understands one fundamental truth: in a gold rush, the most certain path to wealth is not speculative gold-panning, but supplying the prospectors with the necessary production tools (shovels) and logistical services.
In the context of the crypto economy, "selling shovels" theoretically corresponds to providing blockchain infrastructure (L1, L2, cross-chain bridges), with revenue derived from gas fees and transaction throughput ("toll fees"). However, from 2023 to 2025, with technical upgrades like EIP-4844 and the oversupply of L2/L3 infrastructure, the commercial viability narrative of "selling shovels" as a standalone revenue source began to collapse.
As a result, the industry pivoted to a distorted "global arbitrage" model. Project teams stopped striving to sell infrastructure services to users and instead began selling the financialized equity of the infrastructure (Tokens) as the core commodity to retail investors. The "shovel" was thus reduced to a traffic acquisition tool and marketing vehicle — existing for the sole purpose of justifying a high-valuation token issuance.
This article will dissect the mechanisms of this transformation in detail — particularly the "low float, high FDV" phenomenon, the predatory market maker structure, and the industrialization of airdrops — and arrive at a conclusion: the primary commercial output of the 2023–2025 infrastructure cycle was not technical utility, but the systematic exit of venture capital into retail liquidity.

Chapter One: The Fujian Merchant Archetype — Commercial Pragmatism and the Global Arbitrage Network
1.1. The Wisdom of Secondary Markets: From California to the World
The maxim "sell shovels in a gold rush" is typically attributed to the California Gold Rush of 1849. At that time, merchants like Samuel Brannan grew wealthy not by panning for gold in riverbeds, but by monopolizing the supply chain of tools that miners needed. In the Chinese business context — and for the Fujian merchant community in particular — this philosophy extends beyond simple supply and demand into a complex "global arbitrage" system.
Fujian, as a mountainous, ocean-facing province with limited arable land, historically forced its merchant class to look outward to the sea. This geographic environment cultivated a distinctive commercial DNA built on two core beliefs:
Risk Transfer: The prospector bears the entire risk of "finding no gold," while the merchant pre-locks profit through selling tools. Regardless of whether the prospector succeeds, the shovel's value is realized the moment of the transaction.
Networked Arbitrage: Using tight clan and kinship networks to move capital and goods between jurisdictions with different levels of economic development — for example, sourcing goods from low-cost Chinese coastal production centers and selling them in higher-margin African or South American markets, profiting from information asymmetry and regulatory gaps.
This Fujian merchant spirit — daring to take risks, "love to fight and you'll win," and skilled at exploiting regulatory arbitrage — has found its perfect modern manifestation in cryptocurrency: a borderless, still-imperfectly-regulated digital ocean.
1.2. The Parallel Mapping to the Crypto World: From Gas to Governance Rights
In the early days of the crypto industry (2017–2021), the "sell shovels" metaphor largely held. Exchanges (like Binance, Coinbase), mining hardware manufacturers (like Bitmain), and Ethereum miners all earned enormous cash flows by servicing retail speculation. They strictly followed the merchant model: extracting a commission from every transaction (gas fees or trading fees).
However, entering the 2023–2025 cycle, the market underwent a fundamental bifurcation.
The impoverishment of the "prospectors": Retail investors doing on-chain transactions became capital-constrained and more sophisticated, no longer willing to pay high toll fees.
The inflation of "shovel sellers": Infrastructure projects grew exponentially. Layer 2, Layer 3, modular blockchains, and cross-chain bridges — the supply of "shovels" far exceeded actual "gold-panning" demand (real transactions).
Faced with compressed margins on their core service (block space), infrastructure projects began emulating the Fujian merchant's "intertemporal arbitrage" strategy — but with a financial engineering twist: rather than exchanging goods on this shore for currency on that shore, they began exchanging "expectations" (narrative) on this shore for "liquidity" (dollars/stablecoins) on that shore.
Crypto VCs and market makers industrialized the Fujian merchant's arbitrage concept:
Regulatory arbitrage: Foundations registered in the Cayman Islands or Panama, development teams in Silicon Valley or Europe, marketing targets being retail investors in Asia and Eastern Europe.Liquidity arbitrage: Acquiring tokens at extremely low valuations in the primary market (seed rounds), then dumping at extremely high valuations (high FDV) via market makers in the secondary market.Information arbitrage: Profiting from the enormous information gap between the public narrative of "community governance" and the private terms of "insider unlock schedules."

Chapter Two: The Mutation of the Business Model — Infrastructure as a "Loss-Leader"
2.1. The Collapse of Protocol Revenue and the Technology Paradox
By 2025, the traditional "sell shovels" revenue model for Layer 2 scaling solutions faced an existential crisis. The technical success of Ethereum's scaling roadmap — particularly the implementation of EIP-4844 (Proto-Danksharding) — introduced "Blob" data storage, dramatically reducing the cost for L2s to submit data to L1.
From a technical perspective, this was a tremendous victory — user transaction costs fell by over 90%. But from a commercial perspective, it destroyed L2 profit margins. Previously, L2s could earn high margins by reselling expensive Ethereum block space. Now, with data costs approaching zero, L2s were forced into a "race to the bottom" on fees.
According to reports from 1kx and Token Terminal, despite daily transaction volumes in the first half of 2025 growing 2.7x compared to 2021, total gas fee revenue across blockchain networks fell 86%. This means the "shovel" has become so cheap it can no longer support the valuation of the factory making it — the miners can no longer afford to keep the lights on.
2.2. ZkSync Era: The Illusion of Revenue Shattered
ZkSync Era provides the most brutal case study on the nature of revenue. Before its Token Generation Event (TGE) in June 2024, the ZkSync network generated enormous sequencer revenue daily, peaking at over $740,000 per day. On the surface, this looked like a thriving "shovel shop."
However, this was actually a false prosperity driven by "airdrop expectations." Users were paying gas fees not to use the network (mining utility) — but to buy a lottery ticket that might pay out (the airdrop).
What happened next is well known. After the lottery was drawn (the airdrop landed) in June 2024, ZkSync's daily revenue immediately plummeted to approximately $6,800 — a decline of 99%.
If a physical store's foot traffic instantly drops to zero after stopping the issuance of discount coupons, it means there is zero genuine demand for its core product.
2.3. Starknet: The Extreme Mismatch Between Valuation and Revenue
Starknet equally demonstrates the absurdity of this valuation logic. Despite being at the frontier of zero-knowledge proof technology, its financial data cannot support its primary market pricing.
In early 2024, Starknet's (STRK) fully diluted valuation (FDV) once exceeded $7 billion, even reaching $20 billion in the OTC futures market.
Meanwhile, its annualized protocol revenue after EIP-4844 was only in the tens of millions of dollars. This implies a Price-to-Sales ratio of 500x to 700x. By comparison, the true "shovel seller" of the AI era — NVIDIA — typically trades at a P/S ratio of 30–40x.
Investors buying STRK were not doing so based on discounted future cash flows (traditional equity investment logic) — they were operating on a game-theoretic logic: believing that there would be buyers "even more convinced of the narrative" to take the bag at higher prices.
The traditional Fujian merchant model of "thin margins, high volume, steady cash flow" has been abandoned in crypto, replaced by a financial alchemy model: manufacturing technical barriers and narrative to conjure a high-valuation financial asset from thin air and sell it to retail investors who lack the means to distinguish quality.

Chapter Three: The Mechanism of Financialization — The "Low Float, High FDV" Trap
To sustain the "sell tokens" business model in the absence of real revenue, the industry normalized a specific market structure between 2023 and 2025: "Low Float, High Fully Diluted Valuation."
3.1. Binance Research's Warning
In May 2024, Binance Research published a landmark report titled "Low Float & High FDV: How Did We Get Here?"providing a systematic critique of this phenomenon. The report identified this distorted circulating supply structure as having become the industry standard for infrastructure token launches. (https://www.binance.com/en/research/analysis/low-float-and-high-fdv-how-did-we-get-here)
The Operating Mechanism:
Primary market pricing: VC institutions enter seed rounds at valuations of $50–100 million.Artificial scarcity: When listing on exchanges, only 5–10% of total supply is released. Market makers exploit this razor-thin liquidity, needing only modest capital to push the token's unit price up dramatically.Market cap illusion: A token with 100 million circulating supply at $1 per token has a "circulating market cap" of $100 million — looking cheap (small cap). However, if total supply is 10 billion, its FDV is $10 billion.Systematic dumping: Over the subsequent 3–5 years, the remaining 95% of tokens will continuously unlock. To maintain the $1 price, the market needs to absorb $9.5 billion in new capital. In a zero-sum market, this is mathematically near-impossible — the price must collapse.
3.2. Psychological Anchoring Against Retail Investors
This structure precisely exploits the cognitive biases of retail investors. Retail investors tend to focus only on "unit price" (Unit Bias — feeling that $0.10 is cheaper than $100) or "circulating market cap," ignoring the inflationary pressure represented by FDV.
For VCs and project teams as shrewd as Fujian merchants, this is a perfect intertemporal arbitrage:
a. They lock in enormous paper returns (100x gains from seed round to FDV). b. They use retail investors' chasing of short-term price rises caused by "low float" as the liquidity source for their exit. c. Through years-long linear unlock schedules, they disperse selling pressure — harvesting market liquidity like the proverbial frog being slowly boiled.
3.3. Data Comparison: The 2025 Valuation Chasm
By 2025, this valuation bubble had become grotesquely distorted. According to the 1kx report, the median Price-to-Fees (P/F) ratio for Layer 1 blockchains was a staggering 7,300x — while DeFi protocols generating actual cash flows traded at just 17x. (https://1kx.network/writing/2025-onchain-revenue-report)
This enormous valuation gulf reveals an obvious market truth: the valuation logic for infrastructure projects is not based on their profitability as "shovels" — it is based on their ability to sell themselves as "financial assets." Project teams are essentially operating a money-printing factory, not a technology company.

Chapter Four: The Evolution of Crypto Through the Fujian Merchant Lens — From "Selling Services" to "Selling Goods"
4.1. The Traditional "Sell Shovels" Logic (2017–2021)
In the early ICO era or DeFi Summer, the logic closely resembled the traditional Fujian business playbook:
Scenario: Retail investors want to pan for gold (trade/speculate).Shovel: Exchanges, on-chain gas, lending protocols.Logic: You use my shovel to dig gold, I charge you rent (transaction fees).Token: Similar to a "pre-sale service voucher" or "membership card" — representing future rights to use the shovel or share in dividends.
4.2. The Alienation of 2023–2025: "Token Is the Product"
By 2025, with infrastructure oversupply (the L2 flood), "collecting toll fees" was no longer profitable (gas fees reduced to negligible). Project teams and capital discovered that rather than painstakingly building a good shovel to earn thin rent, it was far easier to directly sell "shares in the shovel company" (Tokens) as goods to retail investors.
In this new model:
The actual product: is the Token. It is the only product capable of generating sales revenue (USDT/USDC).The marketing material: is the public chain, the game, the tooling. Their only purpose is to provide narrative context for the Token, adding credibility to the "goods."Business model: Selling Tokens = Sales Revenue.
This is a profoundly sad regression — the industry is no longer pursuing profitability through technical services but is instead using financial engineering to price and sell "air."
4.3. Production and Packaging: The High-Valuation Endorsement and the "Credibility" Game
If Token is the goods, then selling it at a high price (dumping it) requires top-tier packaging.
Institutional Endorsement: Not for Investment — for the Brand Label
In the 2023–2025 cycle, the VC's role shifted from "risk investor" to "brand franchisor."
The truth behind massive fundraises: Starknet raised at an $8 billion valuation; LayerZero at $3 billion. These astronomical figures are not based on future fee revenue (Starknet's annual revenue doesn't even cover team salaries) — they're based on "how many tokens can be sold to retail in the future."
The names of top VCs like a16z and Paradigm are like the "Nike" label stuck on a Fujian shoe factory. Their function is to tell retail investors: "This goods (Token) is the real deal — worth paying a premium for."
Interestingly, why can VCs post such high valuations? Because retail investors believe their entry price is on par with — or even lower than — the top VCs. Little do they know, valuations only go lower and lower before anyone gets there.
4.4. KOL Shilling: Not Promotion — "Distributors"
KOLs in this chain are no longer providing value analysis — they are distributors at various levels of the supply chain.
Shilling is dumping: Project teams or market makers give KOLs low-cost tokens or "rebates." The KOL's job is to manufacture FOMO, maintain the hype of the "goods," and ensure there is sufficient retail liquidity to absorb the selling pressure during the VC unlock period.

Chapter Five: The Market Maker Industrial Complex — The Invisible Middleman
If tokens are the commodity, then market makers (a.k.a. "wild operators") are the distributors. Between 2023 and 2025, the relationship between project teams and market makers mutated from service provision into predatory collusion — echoing the Fujian merchant strategy of using clan networks to control distribution channels, but now with the purpose of harvesting the counterparty rather than circulating goods.
5.1. The Loan + Call Option Model
The standard contract form between project teams and market makers during this period was the "token loan + call option" model.
Transaction Structure: The project team lends the market maker tens of millions of tokens (for example, 2–5% of circulating supply) interest-free as "inventory." Simultaneously, they grant the market maker a call option, with an exercise price typically set at or slightly above the listing price.
Incentive Misalignment:
If the token price rises above the exercise price, the market maker exercises the option, buys tokens at the low price, then dumps them on retail investors in the market at the high price, pocketing the spread.If the token price falls, the market maker simply returns the borrowed tokens to the project team, bearing zero capital loss. In even more extreme cases, they flood "deserving recipients" with tokens as early as the listing day.
Market makers are no longer neutral liquidity providers — they have become volatility speculators with long-call exposure. They have enormous incentives to manufacture violent price swings, pushing prices above the exercise price to complete their dump. This model mathematically guarantees that market makers must act as adversaries to retail investors.
For details, see: https://x.com/agintender/status/1946429507046645988?s=20
5.2. Derivatives Short Squeeze: The Most Efficient Way to "Find a Bag Holder"
"The derivatives mechanism is the distribution vehicle" — this is the most ruthless operational technique of the current cycle, spawning derivative narratives like "the delisting coin narrative" and "the pre-market trading kills the hedge narrative."
When no one in spot is buying (retail won't take the bag), what do you do? You manufacture people who have no choice but to buy.
Setup and supply control: On the eve of negative news or an unlock, the market is broadly bearish, funding rates are negative.Pump: Market makers use their concentrated spot holdings (low float), needing only modest capital to launch the price skyward.Short squeeze: Short positions in the derivatives market are force-liquidated, compelled to buy back at market price.Distribution: Project teams and market makers ride the enormous passive buying pressure generated by the short liquidations to sell their spot holdings at high prices to these "forced bag holders."
Specific case studies:
https://x.com/agintender/status/1954160744678699396?s=20https://x.com/agintender/status/1960713257225785516?s=20
This is like the Fujian merchant leaking word around the market that "shovels are going to get cheaper" — waiting for everyone to short shovels — then suddenly monopolizing the supply and jacking up the price, forcing the short-sellers to buy shovels at a premium to cover their losses.
5.3. The Movement Labs Scandal: "Price Manipulation" Written Into the Contract
The Movement Labs (MOVE) scandal that erupted in 2025 ripped the fig leaf off this entire gray industry chain.
A Coindesk investigation revealed that Movement Labs signed a secret agreement with a mysterious intermediary called Rentech (alleged to be linked to market maker Web3Port), ceding control of approximately 10% of the token supply (66 million tokens).
The contract astonishingly included clauses incentivizing the market maker to push the FDV to $5 billion — after which both parties would split the profits from token sales.
When Rentech began large-scale dumping in the market, Binance detected anomalies and suspended the relevant market maker accounts; Coinbase subsequently suspended MOVE trading. This event proved that so-called "market value management" is, in many cases, simply "pump and dump" written into legal contracts.
This mirrors the early operations of Fujian merchants in the gray zones of global trade — using complex intermediary networks and multi-layered shell companies to evade regulation and control pricing power — but in crypto, this operation directly plunders retail investors' principal.
Conclusion:
If these projects were truly in the "shovel business," they would be obsessively optimizing gas revenue and daily active users. But they appear indifferent — endlessly building castles in the air.
Because their actual business model is: produce tokens at minimal cost → price at extreme valuation → dump in the secondary market via derivatives and market makers → convert to USDT/USDC (real money).
This is why crypto in 2025 looks like a casino — because nobody is running a business. Everyone is just doing trades.

Chapter Six: The New Market Landscape of 2025 — The Application Layer Strikes Back
As time moved into 2025, market fatigue with the "infrastructure casino" model reached a breaking point. Data shows that capital and attention are flowing away from the "sell shovels" infrastructure layer and toward the application layer — where gold can actually be mined.
6.1. The Shift from Public Chain Narrative to DApp Cash Flow
The On-Chain Revenue Report published by venture firm 1kx in late 2025 (https://1kx.network/writing/2025-onchain-revenue-report) illustrates this phenomenon.
Revenue reversal: In the first half of 2025, DeFi, consumer applications, and wallet applications contributed 63% of total on-chain fees — while Layer 1 and Layer 2 infrastructure fees shrank to just 22%.
Growth comparison: Application layer revenue grew 126% year-over-year, while infrastructure layer revenue stagnated or declined.
Business logic restored: This data marks the end of the era of "shovel seller" monopoly profits. As infrastructure becomes extremely cheap (and commoditized), value capture has migrated upward to user-facing applications. DApps that can genuinely generate user stickiness and cash flows — such as Hyperliquid and Pump.fun — are beginning to replace L2 public chains as the market's darlings.
6.2. The Revaluation of Token as Customer Acquisition Cost
The industry has begun reexamining the economic nature of "airdrops." In 2025, tokens are no longer viewed as symbols of governance rights, dividend rights, or identity — they are viewed as Customer Acquisition Cost (CAC) and bearish news signaling sell pressure.
Data from Blockchain Ads shows that Web3 projects' cost of acquiring one genuine user through token incentives is as high as $85–100 or more — far exceeding Web2 industry standards. This is the result of path dependency. (https://www.blockchain-ads.com/post/user-acquisition-trends-report)
Projects like ZkSync that spent hundreds of millions of dollars (denominated in tokens) on incentives discovered that these users were "mercenaries" — the moment incentives stopped, liquidity withdrew. This forced project teams away from the crude "money-scattering" model toward more refined "points systems" and "real yield sharing" models.

Chapter Seven: Conclusion — The Merchant's Festival Is Over
The crypto market from 2023 to 2025 staged a grand drama of primitive capital accumulation dressed in the costume of "technological innovation." The ancient Fujian merchant wisdom — "sell shovels in a gold rush" — was twisted to its absolute extreme:
Shovel commoditization: To attract traffic, real shovels (block space) were continuously discounted — even supplied below cost (subsidized by token issuance).Factory securitization: Merchants no longer profit from selling shovels; instead, they profit from selling "shares in the shovel factory" (high FDV tokens) to retail investors who believe the factory monopolizes the gold mine.Arbitrage institutionalization: Market makers, VCs, and exchanges formed a tight-knit interest community, completing the transfer of retail wealth through complex financial instruments (options, lending, derivatives).
If we re-examine 2025 crypto through the eyes of a Fujian businessman, we see the following scene:
These people (project teams + VCs) claimed to be building houses (Web3 ecosystems) in Ukraine (high-risk new territory). In reality, they never cared whether the houses would be habitable. What they actually did was:
Plant a sign on the land, then use that as justification to print a pile of "brick tickets" (Tokens).Bring in Wall Street big shots (VC institutions) to endorse them, saying the brick tickets could be exchanged for gold in the future.Bring in the village megaphone (KOLs) to shout that brick ticket prices are going up.Finally, use derivatives mechanisms to blow up anyone who tried to short the brick tickets, and in the chaos, convert their worthless paper (Tokens) into real gold.
This is why "listing means dumping." Because in their business plans, there has never been a line item for "profit through technical services." Selling tokens is the only business model.
When Token = Product, this industry is destined to be a game of hot potato — not a value-creating business. This may be the greatest tragedy of 2025 crypto.
It's not that altcoins have no bull market. It's that the bull market has no room for altcoins with no cash flow.

Finally, we must ask: who exactly enabled today's high FDV, low float reality? Who turned tokens into the ultimate commodity/service?
Was it the launchpads? The memes? The exchanges? The VCs? The media? The traders? The analysts? The project teams? — Or all of us?

Source: https://x.com/agintender

Nvidia released its Q3 earnings report on November 19th. While not exactly stellar, the results could be described as exceeding expectations. The problem is that despite such a scorecard, the market wasn't buying it — after an initial 5% rise, the stock began to plunge sharply. Many folks in the crypto world were left completely baffled. This article attempts to compile, interpret, and analyze, from the perspective of the bears, what unspeakable truths lie beneath this seemingly "too good to be true" earnings report.
Additionally, there are already far too many bullish articles out there — I won't bother rehashing those here.
This article is approximately 4,000 words. If you can't be bothered to read the full thing, here are the core bearish points — take them and go 🤣:
Circular financing manufacturing revenue: Nvidia has constructed a capital reflux closed loop by investing in customers like xAI, converting investment funds into its own reported income — lacking substantive cash delivery.Abnormal surge in accounts receivable: The accounts receivable balance reached $33.4 billion, growing far faster than revenue, with suspicions of obfuscation in the days-outstanding calculation — suggesting serious "channel stuffing" and back-end loading phenomena.Inventory narrative divergence: Under the narrative of "demand exceeding supply," finished goods inventory unexpectedly doubled — signaling potential risks of customers deferring pickup or product stagnation.Cash flow inversion: Operating cash flow is significantly below net income, proving that the company's profits are primarily sitting on paper and have not been converted into real cash.
Disclaimer: This article does not constitute any investment advice. This is purely a compilation of perspectives.

1. Circular Revenue and the Vendor Financing Model
1.1. The Closed-Loop Mechanism of Capital Flow
Background: In November 2025, Elon Musk's xAI completed a $20 billion funding round, in which Nvidia directly participated with approximately $2 billion in equity investment. But this is not a simple "investment action." Follow the logic step by step:
Capital Outflow (Investment Side): Nvidia allocates cash (approximately $2 billion) from its balance sheet, recorded under "Purchases of non-marketable equity securities," as an equity injection into xAI or related SPVs. This capital outflow appears under the "investment activities" section of the cash flow statement.
Capital Conversion (Customer Side): xAI receives these funds and uses them as a down payment or capital expenditure budget for purchasing GPU clusters (the Colossus 2 project, involving 100,000 H100/H200 and Blackwell chips).
Capital Reflux (Revenue Side): xAI then issues a purchase order to Nvidia. Nvidia ships the goods and recognizes "Data Center Revenue."
Financial Result: Nvidia has effectively converted the "cash" asset on its own balance sheet into "revenue" and "net income" on its income statement — using xAI as the intermediary.
While this type of operation is generally permissible under GAAP accounting standards (as long as properly assessed), it constitutes a form of "Low-Quality Revenue." (IFRS would like to have a word here 🤣)
This is also what short sellers like Michael Burry criticize — because the pattern of "almost all customers being funded by their own supplier" is a classic hallmark of the late stages of a bubble. When a company's revenue growth depends on its own balance sheet expansion, the moment it stops investing externally, its revenue growth will dry up alongside it. (Does this feel a little like the recursive token structures in crypto?)
1.2. The Leverage Effect and Risk Isolation of SPVs
If the circular revenue model sounds impressive, the Special Purpose Vehicle (SPV) structure involved in the transaction may open your eyes even wider.
According to news reports, xAI's financing included both equity and debt, with the debt portion structured through an SPV whose primary purpose was to purchase Nvidia processors and lease them to xAI.
SPV Operating Logic: The SPV, as a legally independent entity, holds the GPU assets. Nvidia is not only the GPU seller but also the equity investor in the SPV (first-loss capital provider). This means Nvidia plays a dual role in the transaction: supplier and underwriter.
Circular Arbitrage in Revenue Recognition: By selling hardware to the SPV, Nvidia can immediately recognize the full hardware sales revenue. However, from the end user xAI's perspective, this is essentially a long-term operating lease, with cash outflows made in installments (for example, over a 5-year term).
Hidden Risk: This structure converts long-term credit risk (whether xAI can pay rent in the future) into immediate revenue recognition. If AI compute prices collapse in the future, or if xAI fails to generate sufficient cash flow to service the lease, the SPV will face default — and Nvidia, as an SPV equity holder, will face asset write-down risk. But during the current earnings season, all of this manifests as dazzling "genesis-level revenue."
1.3. The Shadow of Vendor Financing from the Internet Bubble Era
The current business model bears some resemblance to the 2000 internet bubble. At that time, Lucent lent billions of dollars to customers to purchase its own equipment. When internet traffic growth fell short of expectations, those startups defaulted, Lucent was forced to write off massive bad debts, and its stock price collapsed 99%.
Nvidia's current risk exposure (direct investment + SPV debt support) is estimated to have already exceeded $110 billion — a significant proportion of its annual revenue. While Nvidia does not currently directly list this as "customer loans" on its balance sheet, through holding customer equity and SPV interests, the substantive risk exposure is effectively identical.

2. The Accounts Receivable Mystery
2.1. Accounts Receivable Growth "Velocity"
According to the Q3 FY2026 earnings report, Nvidia's accounts receivable balance reached $33.4 billion.
The year-over-year growth rate of accounts receivable (224%) is 3.6 times the revenue growth rate (62%). Under normal business logic, accounts receivable should grow in sync with revenue — especially for a company as "dominant" as Nvidia. When accounts receivable grows far faster than revenue, this typically points to two possibilities:
a. Declining revenue quality: The company has relaxed credit terms, allowing customers to defer payment in order to stimulate sales.
b. Channel stuffing: The company rushes shipments to channel partners at the end of the quarter to recognize revenue, but this inventory has not actually been absorbed by the end market. (More on this below.)
2.2. The DSO (Days Sales Outstanding) Calculation
The DSO for this quarter is reported as 53 days, a slight decline from 54 days last quarter. So what does the actual picture look like?
First, the standard DSO formula: DSO = (Accounts Receivable / Total Credit Sales) × Period Days
Beginning AR (end of Q2): $23.065 billionEnding AR (end of Q3): $33.391 billionAverage AR: $28.228 billion ((Q2 + Q3) / 2)Quarterly revenue: $57.006 billionDays: 90
Standard DSO ≈ 28.228 / 57.006 × 90 = 44.57 days
Yet the reported DSO is 53 days. Logically speaking, from a "window dressing" perspective, one would typically report a more "aggressive" (lower) number — so why is this one conservative? This suggests Nvidia may be using ending accounts receivable as the numerator, or that its calculation logic leans toward reflecting end-of-period capital occupation.
Using the ending balance for calculation: 33.391 / 57.006 × 90 = 52.72 days — which aligns with the reported figure.
But what does this mean? It means the end-of-quarter accounts receivable balance is extremely high relative to the entire quarter's sales. This implies a Back-End Loading phenomenon — a large proportion of sales activity is concentrated in the final month or even the final week of the quarter.
If sales were evenly distributed, the ending accounts receivable should only contain approximately the last month's sales (roughly $19 billion). But the current balance is $33.4 billion — meaning nearly 58% of the quarter's revenue has not yet been collected in cash.
In the so-called "seller's market" and "demand exceeding supply" narrative, Nvidia should theoretically possess extremely strong bargaining power — potentially even requiring prepayments. Yet the reality is that Nvidia has not only failed to collect prepayments but has instead extended customers nearly two months of credit terms?! This seems rather inconsistent with the "fighting to get their hands on chips" narrative.

3. The Inventory Puzzle: The Paradox of Demand Exceeding Supply While Inventory Accumulates
While Jensen Huang proclaims "Blackwell demand is off the charts," Nvidia's inventory data appears to be telling a rather different story.
3.1. Why Inventory Has Doubled
Total inventory for Q3 FY2026 reached $19.8 billion — nearly double the $10.0 billion at the beginning of the year, and up 32% from $15.0 billion last quarter.
Even more telling is the inventory composition:
Raw Materials: $4.2 billionWork in Process (WIP): $8.7 billionFinished Goods: $6.8 billion
In a word: finished goods inventory has surged dramatically. At the beginning of 2025, finished goods inventory was only $3.2 billion. It has now surged to $6.8 billion. Particularly when Jensen is shouting about explosively off-the-charts demand, under the assumption of chip shortages and customers lining up waiting for orders, finished goods should be "shipped the moment they're produced" — with inventory levels maintained at extremely low levels.
Why, then, is this happening? Waiting until after the New Year to collect payment?
3.2. The $50 Billion Purchase Commitment
Beyond the on-balance-sheet inventory, Nvidia has also disclosed a staggering $50.3 billion in supply-related Purchase Commitments — the amount Nvidia has committed to pay to suppliers like TSMC and Micron for future purchases.
This is a massive hidden liability. If AI demand experiences any slowdown or weakening in coming quarters, Nvidia will face a double blow:
Inventory impairment: The existing $19.8 billion in inventory may depreciate in value.Default or forced purchasing: The $50 billion in purchase contracts could force even more inventory accumulation, or require enormous penalty payments.
The emergence of this "heavy asset" characteristic signals that Nvidia is no longer the light-asset chip designer it once was — it increasingly resembles a hardware manufacturer burdened with a heavy supply chain.
Production capacity running ahead, inventory chasing from behind — has the soul left the body?

4. Profits Rising, But Cash Flow Declining?
4.1. The Inversion of Operating Cash Flow (OCF) and Net Income
Under normal circumstances, a healthy tech company's operating cash flow should exceed net income (because depreciation, amortization, and stock-based compensation are non-cash expenses that get added back). However, Nvidia's data shows the opposite trend.
Q3 Net Income: $31.9 billionWorking Capital Changes:Increase in accounts receivable (cash outflow): −$5.58 billionIncrease in inventory (cash outflow): −$4.82 billionQ3 Operating Cash Flow (OCF): approximately $23.75 billion
Conclusion: Q3 operating cash flow is significantly below net income. For every dollar of profit, only approximately $0.74 has actually converted into cash inflow — the rest has become chips in a warehouse (inventory) and customer IOUs (accounts receivable).
Of course, this OCF < Net Income phenomenon is open to interpretation. It can mean the company's profits are being recognized by accounting standards rather than supported by real cash in bank accounts — or it can mean the company is growing at high speed.
4.2. The Cash Hemorrhage in Investment Activities
Purchases of non-marketable equity securities — colloquially, "investments": $3.7 billion flowed out this quarter.
This $3.7 billion is precisely what flowed to "ecosystem partners" like xAI, CoreWeave, and Hugging Face. By comparison, the same figure a year ago was only $473 million. Nvidia is increasing its buyout of ecosystem participants at SpaceX-like velocity.
Based on the xAI model, the investment flow may look like this:
Nvidia accumulates cash through bond issuance or previous profits.Cash is invested into startups (cash outflow).Startups use the money to buy chips (recognized as Nvidia revenue).Nvidia's paper profits increase, stock price rises, talent is attracted via stock-based compensation, further financing via bond issuance or share offerings.
(Does this feel a bit like the recursive token structures in crypto?)
If this is truly the model, it has a bit of a musical chairs quality to it. As long as the music doesn't stop, the game can continue indefinitely. But once the financing environment tightens (such as rising interest rates or an AI bubble bursting), this game could freeze instantaneously.

5. Nvidia's Dominance Is Not Sacred and Inviolable
In its 10-Q filing, Nvidia disclosed an extremely high customer concentration, with "Customer A" accounting for 22% of revenue. While unnamed, there are only so many companies on this planet with the financial firepower to qualify — it is almost certainly, definitively, 100% Microsoft.
There is another layer of related-party transaction risk hidden here. Microsoft is OpenAI's largest backer, and Nvidia has also invested in OpenAI. A significant portion of Microsoft's GPU purchases from Nvidia are presumably provided for OpenAI's use. Both are shareholders of OpenAI — the revenue-sharing arrangements within that structure are unknown. Who knows whether there are any special clauses involved?
And what if Microsoft were to walk away from purchases tomorrow?
Furthermore, the existence of Customer B (15%), Customer C (13%), and Customer D (11%) means that the top four customers collectively hold Nvidia's lifeline. This level of concentration means Nvidia does not possess the absolute dominant pricing power that the outside world imagines. On the contrary, these giants are leveraging their enormous purchase volumes to force concessions from Nvidia on supply chain allocation and custom chip design — and are accelerating development of in-house chips (such as Google TPU, AWS Trainium, and Meta MTIA) to reduce their dependence on Nvidia. This is also faintly visible in the rising accounts receivable figures.
The diagram below gives you a visual sense of the complex structure of the OpenAI cluster — just ask yourself: can you even make sense of all these accounts?

Afterword
Why write this article? First, it's been a long time since I wrote this type of long-form financial statement analysis, and I wanted to revisit the feeling of poring over a balance sheet.
Second, there is currently a voice — or a logic — in the market: the crypto market watches the US stock market, the US stock market watches the AI revolution, and AI watches Nvidia's performance. Although Nvidia's earnings exceeded expectations, there are still quite a few bearish views circulating.
Compared to other vague and ambiguous bearish arguments, honestly digging through the financial statements for clues is the only approach with real evidentiary discussion value.
It's been a long time since I wrote a similar financial statement analysis. Consider this an offering of an alternative perspective for viewing the current market environment.

Source: https://x.com/agintender

With the launch of a new generation of cryptocurrencies like Monad, MMT, and MegaETH, large numbers of retail investors who participated in new token launches face a common dilemma: how to convert enormous paper profits into real, secured gains?
The general hedging strategy is to open an equivalent short position in the derivatives market after receiving spot tokens, thereby locking in profits. However, this strategy frequently becomes a "trap" for retail investors on new tokens. Due to poor derivatives liquidity in new tokens and large amounts of supply awaiting unlock, "insiders" can use high leverage, high funding rates, and precisely timed pumps to force-close retail investors' short positions — bringing their profits to zero. For retail investors who lack bargaining power and OTC channels, this is nearly an unsolvable game.
Faced with being sniped by market controllers, retail investors must abandon the traditional 100% precise hedge and instead adopt diversified, low-leverage defensive strategies — shifting from a mindset of managing returns to a mindset of managing risk:
Cross-exchange hedging: Open a short position on an exchange with good liquidity (as the primary profit-locking position), while simultaneously opening a long position on an exchange with poor liquidity (as a liquidation buffer). This "cross-market hedge" dramatically increases the cost and difficulty of market controller sniping, while also allowing arbitrage of funding rate differences between exchanges.
In the extremely high-volatility environment of new tokens, any strategy involving leverage carries risk. The retail investor's ultimate victory lies in adopting multiple defensive measures to transform liquidation risk from a "certainty event" into a "cost event" — until safely exiting the market.

I. The Real Predicament of Retail Airdrop Participants — No Hedge Means No Gains; Hedge Means Getting Sniped
In real airdrop scenarios, retail investors face two primary "timing" dilemmas:
Pre-Launch Hedging via Futures: The retail investor receives futures tokens or locked position certificates before trading opens — not spot tokens. At this point, the market already has derivatives (or IOU certificates), but spot has not yet begun circulating.
Post-Launch Restricted Hedging: Spot has already entered the wallet, but due to withdrawal/transfer time restrictions, extremely poor spot market liquidity, or exchange system congestion, it cannot be sold immediately or efficiently.
A bit of archaeology for context: as early as October 2023, Binance had a similar spot pre-market product designed to facilitate pre-launch spot hedging. But it was likely suspended due to launchpool requirements or poor data (the first target at the time was Scroll). That product could have done a great job solving the pre-launch hedging problem — pity it was shelved.
So this market dynamic gives rise to the pre-launch futures hedging strategy — the trader anticipates receiving spot tokens they expect to get, and opens a short position in the derivatives market at a price higher than expected to lock in profits.
Remember: the purpose of hedging is to lock in gains, but the key is managing risk. When necessary, sacrifice part of the return to ensure position safety.
The key point of hedging: only open short positions at prices with high returns.
For example, if your ICO price is $0.10 and the current derivatives market price is $1.00 — a 10x — then the cost-benefit of "taking the risk" to open a short position is relatively high: first, it locks in a 9x return; second, the cost of the manipulator pumping it even higher is also relatively high.
But in practice, many people blindly open short hedges without regard to entry price (if the expected return is only 20%, there's really no compelling reason to bother).
Pumping a token from a $1B to $1.5B FDV is far more difficult than pumping it from $500M to $1B — even though both represent a $500M increase in absolute terms.
Now here's the problem: because current market liquidity is poor, even opening a short hedge can still get sniped. So what do we do?

II. The Upgraded Hedging Strategy — The Chain Hedge
Setting aside the more complex calculation of a target's beta and alpha, and correlation hedging against other major tokens, here I propose a relatively easy-to-understand "hedge-on-top-of-the-hedge" (chain hedge?!) strategy.
In a nutshell: add an additional layer of protection on top of the hedged position — that is, when opening the short hedge, also opportunistically open a long position to protect the primary short from forced liquidation. Sacrifice some return in exchange for a safety margin.
Note: It cannot 100% solve the liquidation problem, but it can reduce the risk of being sniped by market controllers on a specific exchange — while also allowing funding rate arbitrage. (Prerequisites: 1. Set proper stop-loss and take-profit levels; 2. The entry price must be cost-effective; 3. Hedging is a strategy, not a religion — there's no need to follow it until the seas run dry.)
So specifically — where do you open the short? And where do you open the long?

III. Re-Hedging Strategy Based on Liquidity Differentials
Core idea: use liquidity differentials to construct position hedges.
Open the short position on an exchange with good liquidity and more stable pre-market mechanisms. Its deep order book means the market controller needs to deploy far more capital to force-close the short. This dramatically raises the cost of sniping and serves as the primary profit-locking position.
Open the long position on an exchange with poor liquidity and high volatility, to hedge the short on Exchange A. If A is violently pumped, B's long position will follow the move upward, compensating for A's loss. Exchanges with poor liquidity are more prone to large sudden pumps. If the prices on A and B move in sync, B's long position will quickly turn profitable — offsetting any potential losses from A's short position.

IV. Working Through the Re-Hedge Strategy
Assume 10,000 ABC in spot holdings. Assume ABC is worth $1 per token.
Short position: Exchange A (stable) — $10,000Long position: Exchange B (poor liquidity) — $3,300 (for example, ⅓ of the short; this value can be back-calculated from expected returns)Spot holdings: 10,000 ABC worth $10,000
Scenario A: Price Surges (Market Controller Pumps)
ABC spot: value rises.Exchange A short: floating loss increases, but due to good liquidity, forced liquidation is far more difficult than in previous approaches.Exchange B long: value surges, compensating for Exchange A's floating loss, keeping the overall position relatively stable. (Ensure take-profit and stop-loss levels are set properly.)
Scenario B: Price Crashes (Market Sell Pressure)
ABC spot: value drops.Exchange A short: floating profit increases.Exchange B long: floating loss increases.
Since Exchange A's short exposure of $10,000 is greater than Exchange B's long exposure of $3,300, when the market falls, A's profit exceeds B's loss — net profit. The spot value decline is offset by the short's profit. (The prerequisite for this strategy is that the hedged return must be sufficiently high.)

V. The Core of the Strategy: Sacrifice Returns, Reduce Risk
The elegance of this strategy lies in: placing the most dangerous position (the long) on the exchange with poor liquidity, while placing the most important position to protect (the short) on the relatively safer exchange.
If a market controller wants to force-close the short on Exchange A, they must:
Deploy enormous capital to overcome Exchange A's deep liquidity.The price they pump up simultaneously causes the long position on Exchange B to profit.
The difficulty and cost of sniping are elevated geometrically — making the attack uneconomical for the market controller.
The strategy leverages market structure (liquidity differentials) to build the defense, and uses funding rate differentials to generate additional returns (when available).

Finally, if there are any "seriously absurd" takeaways:
If the expected return isn't attractive, you might as well wash up and go to sleep — do nothing at all.If after reading this you feel the mechanics are very complicated — that's exactly right. Then don't blindly participate.The clever among you may notice that the one short and one long combination is essentially a "synthetic position." Understanding this principle matters more than executing any specific trade.The main purpose of this article is to tell you: don't operate blindly, don't participate blindly, reading is fine. Genuinely don't know what to do? Buy some BTC.
Source: https://x.com/agintender