The latest trend in crypto: Speculation is out, fundamentals are in. Who’s ready for boring discounted cashflow valuations?

— Donovan

Permissionless IV is hitting Brooklyn on June 24-26. Tix are $499 — but refer 5 friends to the 0xResearch newsletter and score a free Permissionless ticket. Scroll down to grab your code.

Safe Labs targets institutional adoption:

Self-custody protocol Safe has launched a new commercial Safe Labs subsidiary in Germany to accelerate institutional adoption of its infrastructure. The move comes as Safe’s total value locked (TVL) stands just shy of $60 billion, down about 50% from its recent peak in December 2024. About $50 billion of that sum is secured on Ethereum mainnet. However, L2 ecosystems like Base and Arbitrum now account for around half of the volume processed by Safe.

Safe Labs will focus on building enterprise-grade, self-custodial products — including Safe Pro (a tiered institutional offering), Safe API and Safe Mobile, a secure signing companion app designed for operational security.

“Enterprises and institutions are already using us,” Safe Labs CEO Rahul Rumalla told Blockworks. “We want to build a more opinionated product for them.”

The spin-out gives Safe Labs operational speed, regulatory flexibility and clearer incentive alignment as a 100% subsidiary of the Safe Ecosystem Foundation. “We need to operate at startup level speed” as opposed to a DAO consensus speed, Rumalla explained.

Safe believes the timing is right to meet growing demand from professional operators. “Ethereum is a place where $1 trillion onchain economies thrive, and it will be powered by Safe,” Rumalla said.

— Macauley Peterson

Blockchain is shaping a radically different economy, with 10% of global GDP predicted to be tokenized onchain by 2027. The technology is disrupting key industries worldwide — upending the conventional way of doing business while transforming customer experiences.

How might this evolution play out over the next quarter century? A new special report from Blockworks Research and OKX answers this question, drawing from interviews and research conducted across the leaders of finance, technology, retail, and entertainment. 

From speculation to fundamentals

Since its genesis, crypto has been a wildly speculative market where excellence in storytelling commands a price premium.

Crypto’s average daily volatility is several times higher compared to traditional assets like gold or equities.

Storytelling pervades all capital markets, but why is it especially pervasive and magnified in crypto? 

I can think of two reasons. 

The most obvious: its permissionless nature. Anyone can buy a token (no KYC), and anyone can launch a token (see pump.fun’s success).

A second and more subtle reason: weak legal protections for token holders.

As a professional investor, these are all questions you have to reckon with:

• Will your DAO launch a second token?

• Do protocol revenues accrete to private equity, rather than the token?

• What do your token’s market-making agreements look like?

• Will founders sell their allocations on the private OTC market quietly?

All of these questions (with no answers) create uncertainty for investors, which shrinks the available market pie to the most degenerate gamblers.

That in turn produces incentives for companies to ignore the laws of profit and loss and rather play the narrative game, or what Theia Research’s Felipe Montealegre termed “narrative Stalinism” in a recent talk.

“Whoever decides what the narrative is decides what tokens do well regardless of product-market fit and customers, and decides who gets more capital or less capital to invest. It’s a perverse equilibrium.”

To be sure, storytelling is and has always been part of investing. 

Investing is fundamentally a social, not natural, science.

And the social sciences will always contain elements of subjectivity — contrary to mainstream economics, where the economy can be neatly modulated on a supply and demand graph with perfect causal explanations.

F. Ross Johnson, the CEO of the great American food and tobacco conglomerate RJR Nabisco in the 1980s, often lamented the poor market valuation of his shares despite its great cash flows.

In the revered business book Barbarians at the Gate, Johnson famously complained: 

“It’s plain as the nose on your face that this company is wildly undervalued…we tried to put food and tobacco businesses together, and it hasn’t worked. Diversification is not working. We are sitting on food assets that are worth 25x earnings and we trade at 9x earnings, because we’re still seen as a tobacco company.”

Negative cultural perceptions of tobacco soiled RJR Nabisco’s prospects.

But in the case of crypto, the problem is even more fundamental.

Fundamental property rights suck.

As Montealegre argued, most companies play the game of “narrative Stalinism” because weak token holder protections raise the cost of capital and entry barriers for more risk-averse institutional investors.

From the viewpoint of a fundamentals investor, wishing for an alt season so “number goes up” is pure hopium. You’re better off betting on a token with real revenue flows, but first: Fix the property rights problem.

Fundamental companies

Despite the prevailing problems in crypto capital markets, however, a handful of companies have punched up against their weight. Revenue-generating companies are scarce, but they exist.

Within finance, Jupiter, Raydium and Ethena are all million dollar generating businesses. The Hyperliquid perps DEX stands out at the top, with $1-2m in daily revenues.

If you prefer businesses not tethered to the “circular” economy of DeFi, there is the onchain private credit Maple Finance, which hit a monthly high in $1m revenue in May. Or Shuffle, a gambling app generating an annualized $100m+ in “net gaming revenue.”

Even the nascent DePIN sector has a few breakouts of its own, namely the data-scraping Grass (allegedly generating eight figure annualized revenues) and the real-time kinematic network Geodnet, making sub $2-3 million in annual recurring revenues (ARR). 

Debate around the right ways to value tokens is also notably louder, as seen in recent talk around real economic value (REV). This suggests a growing class of investors moving away from speculation, and toward more rigorous approaches to valuations.

— Donovan Choy

The decentralized compute landscape is rich with projects, each with different philosophies and technical approaches. DePIN’s compute subsector stands at the intersection of an AI revolution and the decentralization movement, two of the most powerful trends of our time. Our continued coverage showcases the narrative progressing from vision to early reality.

Botanix forms decentralized federation

Botanix Labs has formally launched the founding federation behind its EVM-compatible Bitcoin-based blockchain, onboarding 16 independent node operators including Galaxy, Fireblocks, Antpool, and ChorusOne. This federation replaces Botanix Labs as the sole operator, marking a shift toward decentralized governance and operational control.

This move is critical to Botanix’s hybrid security model. While Spiderchain uses BTC-staked Orchestrators and PoS-like randomness for consensus and custody management, the formation of a geographically distributed federation mitigates risks like orchestrator collusion or stake centralization.

The system also anchors chain state directly to Bitcoin using inscriptions, echoing the “proof-of-proof” approach that reinforces auditability and finality and is used by peers like Hemi.

By decentralizing from the outset, Botanix eliminates single points of failure and enhances credible neutrality — core to attracting institutional and user trust. “This federation is just the first step,” said CEO Willem Schroé. “Botanix isn’t just infrastructure. It’s a commitment to the principles that make Bitcoin worth building on in the first place.”

Mainnet is set to launch later this quarter. Botanix plans to evolve this 16-node federation into a permissionless, dynamic set, allowing anyone to run a node. For Bitcoin-native DeFi, this launch represents a fresh architectural option for users primarily focused on Bitcoin’s foundational ethos.

— Macauley Peterson

How do we make markets safer — without killing permissionless design?

Join a stacked Roundtable with voices from legal, research, and protocol teams breaking down:

• Transparent infra that actually defends

• Legal frameworks that don’t break composability

• How investor protection can be opt-in, not bolted on

📆 June 3 | 12 pm ET