GM and happy Thursday! Equities outperformed crypto after Wednesday’s 0.1% CPI print, continuing a persistent trend, while ETF flows show tepid optimism. Below, we dive into tomorrow’s Nockchain Logos upgrade launch and the next evolution of proof-of-useful-work.

Wednesday’s CPI print came in at 0.1% month over month, in line with the median forecast and rebounding from the 0.4% decline the previous month. Shelter's 0.1% move accounted for roughly two-thirds of the monthly gain, while energy fell another 1.5%, driven by the 2.9% decrease in gasoline prices. Taken together, the print likely does little to alter the Fed’s rate path. Equities traded more favorably than crypto on the day, with the Nasdaq up 0.56% and the S&P 500 up 0.23%, while crypto equities outperformed, up 2.19%.

BTC lagged, down 0.25%, and the majority of crypto indices we track traded even worse. Equities outperforming tokens remains a persistent theme. Perps were the biggest winner, up 3% on the back of HYPE strength, while DEXs were the biggest loser, down 4.7% on UNI weakness, offering little signal in directional rotation. 

BTC ETF flows show a slight shift in trajectory. Periods of modest accumulation are interrupted by a day of outflows, mirroring the weakness in BTC's daily price action. Net flows have been positive since the beginning of July, revealing tepid optimism returning to the products and a notable shift from the strong declines of May and June. Should this trend persist, reaccumulation by these vehicles should support a floor in BTC.   

— Luke

Compute That Pays Twice

Making proof-of-work do something useful is not a new idea. Bitcoin miners burn hashes that do nothing else. Inference providers sell GPU time to customers. Tomorrow, at block 126000, Nockchain's Logos upgrade goes live and the separation collapses.

Logos adds a second mining puzzle beside the original ZK-proof-of-work: integer matrix multiplication, the core operation of AI inference, with its own difficulty target. At activation, the network splits block production 30% to the AI puzzle and 70% to ZK-PoW. A miner runs a matrix multiplication, and if the result clears the target, that miner wins the block. By running it for paying inference customers, the same computation becomes a lottery ticket on the block reward.

Nockchain's founder frames this as a security budget that grows with the AI economy: as inference demand rises, more GPUs point at the chain, and the cost to attack it climbs with them. The claim rests on demand that has not materialized at scale. Nockchain needs paying inference customers for the flywheel to turn, and its founder has spun up a separate company, National Compute, to supply the first of them. That company authored the Logos proposal and ran its internal audits, so the protocol's largest upgrade and its first anchor customer share an author.

The launch lands weeks after Zorp, the research company that built Nockchain, wound down and handed its trademark and code repositories to Nock Community Co., a non-stock entity that governs the 20% protocol fund. Logos is the first upgrade to run the process the new structure promises: public testnet, third-party cryptography audit, a bug bounty of up to 1M $NOCK, and an activation height with notice. The dual-puzzle code ran on a public testnet for 20 days before its merge this week.

Two things deserve a skeptical view. The activation height has moved more than once, from block 114,300 at the end of July to 122,000 after testnet to 126,000 for Friday, so the date carries the caveat every retargeted launch does. The security case turns on a puzzle with no track record. Nockchain closed a reused-trace mining exploit at height 119,400 with its Zoe upgrade in early August, a reminder that the proof machinery is nascent, though that fix did not change the ZK scheme and touched nothing beyond block-reward capture. The AI puzzle carries its own soundness question, which is the reason for the audit and the bounty.

$NOCK trades near $0.009 for a market cap around $22M against a fully diluted value near $41M, a fraction of the attention its fair launch drew last spring. For holders, Friday's mechanics matter less than whether National Compute can route enough paid inference through the fleet to turn the security-meets-revenue thesis into cash flow. Nockchain has shipped the harder engineering, and the market it needs remains unbuilt.

— Nick

Institutional-Grade Kalshi Market Data Now on DoubleZero Edge

DoubleZero brought Kalshi's live order book onto Edge, its multicast market-data transport layer, marking the first prediction-market venue on the network and the second overall after Solana. The launch carries full L2 depth plus top-of-book and trades for Kalshi's two most liquid categories, sports event contracts and crypto perps, delivered over dedicated fiber on the same publish-once multicast model NYSE and CME have run for decades, and normalizes Kalshi's separate Yes and No quotes into a single book. Edge moves data only and does not execute orders, and Kalshi is waiving its publisher revenue share for the first year, a discount aimed at seeding adoption among quant desks and market makers before the fee model tightens.

Build Against the Trend

1confirmation argues that timing, not idea quality, kills most crypto consumer apps, and treats the sector's decade of failed experiments as a roadmap rather than a graveyard. The firm revisits five dead categories it sees as ready for a second attempt: internet-native assets in the vein of Cent's tokenized tweets (Jack Dorsey's first post sold for $2.9M, or 1,630 ETH, in March 2021), X-to-earn models like STEPN and Axie Infinity, virtual worlds past Decentraland and Sandbox, consumer DAOs in the mold of ConstitutionDAO's ~$47M raise, and people-as-markets after Friend.tech and BitClout. The bet is that the next breakout app resurrects an idea that flamed out around 2021, once infrastructure and user behavior catch up to it.