Hi all, and happy Tuesday. Weekend tariff headlines and renewed geopolitical tensions sparked another risk-off move, with equity futures and BTC trading lower to start the week as gold and silver pushed to fresh record highs. 

In today’s note, we break down the NYSE’s announcement of a tokenized securities platform enabling 24/7 trading, and what it could mean for both spot tokenized equities and equity perps. More broadly, the industry continues to grapple with regulatory uncertainty, compounded by the delay of the Market Structure bill.

BTC fell roughly 1.3% on Monday, extending losses after a sharp selloff late Sunday following Trump’s tariff announcement. Over the weekend, Trump escalated tensions by threatening new tariffs tied to Greenland, prompting emergency meetings across Europe, renewed talk of retaliation, and a rare show of unified condemnation. A flight to safety spilled across markets, with gold and silver surging to record highs on Monday, while US equity futures opened lower, signaling a shaky start to the week just ahead of earnings season.

Zooming out to weekly cross-sector performance, Gaming (+11.3%) was the top-performing index. Axie Infinity (AXS) led the rally with a whopping +90% week-over-week gain, while The Sandbox (SAND) and Decentraland (MANA) rose almost 20% each, evoking 2021 flashbacks. Axie’s move followed a Jan. 13 panel where its co-founder outlined plans to shift rewards toward an “app token version of AXS” (bAXS), as part of a broader tokenomics overhaul slated for 2026. Meanwhile, the rallies in SAND and MANA appear largely driven by beta-chasing. 

That said, all three gaming tokens remain more than 97% below their all-time highs, with the current move unlikely to be durable. Looking at CEX data, Upbit dominated spot volume for both AXS and SAND over the past 24 hours, suggesting the move has been led by South Korean traders. Of note, Hyperliquid listed AXS perps on Saturday, coinciding with what now appears to have been a local top.

— Carlos

Despite recent crypto sector outperformance fueled by speculative activity, real-world adoption continues to accelerate as traditional financial institutions move onchain.

Yesterday, the New York Stock Exchange announced plans to develop a tokenized securities platform that would combine its existing matching engine with blockchain-based infrastructure to enable 24/7 trading, instant onchain settlement, and stablecoin-based funding. Subject to regulatory approval, the platform will support both tokenized representations of traditional equities and natively-issued digital tokens that remain fully fungible with legacy shares, while preserving dividends and governance rights.

The second-order effects of this development appear particularly constructive for equity perpetuals. To date, weekend liquidity in equity perps has been thin and low-signal, forcing venues to rely on internal marks, bounds, and proxy pricing while the underlying market is closed. But if the underlying equity itself trades 24/7, this core constraint disappears. Continuous spot pricing would make equity perps simpler to hedge, mark and risk-manage, pushing the product closer to the reliability profile of BTC and ETH perps.

While the implications for equity perps are relatively clear, the potential impact on existing tokenized equity solutions is more nuanced. Consider xStocks, issued by Backed Finance (acquired by Kraken in December 2025). xStocks are structured as Swiss tracker certificates, meaning investors are creditors of the issuer rather than direct owners of the underlying shares. As a result, xStocks do not confer shareholder rights such as dividends or voting, unlike the NYSE-issued tokenized shares.

Consistent with this structure, Backed’s products are not registered with US securities regulators and are therefore unavailable to US investors. That said, this limitation may also help define xStocks’ distinct value proposition. If NYSE-issued tokenized equities are permissioned and limited to accredited investors, xStocks could serve as a permissionless equity access layer outside the US. Moreover, as with the advantage seen with equity perps, benchmarking against a continuously-traded underlying price could support improved liquidity outside traditional US trading hours and during weekends.

The chart below shows daily spot volume for tokenized equities on Solana. Excluding weekends, tokenized stocks have averaged $5.3 million in daily volume over the past 30 days. On weekends, average daily volume drops to $1.6 million, a 69% decline, reflecting the absence of a continuous reference price. If regulated 24/7 trading were available alongside xStocks, weekend volumes could remain elevated as arbitrage opportunities persist across venues.

More broadly, the most meaningful unlock from regulated equity tokenization may not be 24/7 trading alone (the NYSE could theoretically achieve this without blockchain infrastructure), but open access to DeFi. A continuously-traded benchmark price materially reduces gap risk from market closures, strengthening not only equity perps design but also the spot layer. For instance, this structure would make tokenized equity solutions such as xStocks more attractive as collateral in money markets, supporting higher leverage and improved capital efficiency, leading to increased usage across DeFi over time.

— Carlos

Lacking Clarity

The long-anticipated CLARITY Act, seeking to provide legislative structure on how a digital asset is classified and who regulates it, has stalled in the Senate. 

While the Senate Banking Committee markup and vote were expected for mid-January, forward progress was delayed amidst growing consternation amongst regulators and industry stakeholders. The draft’s most consequential sections remain unsettled, including provisions that shape how tokens transition from securities-like offerings into commodity-like “network tokens,” or how DeFi protocols and their operators might qualify for safe-harbor protections. 

Its outcomes will determine who can list assets, how decentralized software is treated under US law, whether stablecoins can compete with bank deposits, and how real-world assets integrate into regulated token markets.

The bill, as drafted, has several key provisions with significant implications for the industry:

1. A ban on issuer-paid yield for payment stablecoins

2. Tokenizing an RWA (stock, bond, fund) does not change the underlying asset’s security classification

3. CFTC maintains oversight of spot markets for “commodity-like” tokens

4. SEC maintains oversight of primary issuance and capital formation

5. SEC maintains control over which tokens can qualify as commodities

6. Tokens can launch as securities and graduate to commodity classifications

7. DeFi protocols are eligible for exclusion if they execute via predetermined, non-discretionary rules and users retain asset control

8. Protects publishing interfaces and maintaining protocol software only if operators can’t custody, reroute or execute on users’ behalf

9. Creates safe harbors for infrastructure activities like validating/sequencing transactions, node operation, and oracle services

10. Fraud and manipulation enforcement remain fully applicable to DeFi and onchain activity 

Notably, Coinbase’s Brian Armstrong withdrew the company’s support for the drafted bill in recent weeks, citing that the current draft “would be materially worse than the current status quo. We’d rather have no bill than a bad bill.” 

One area of the bill causing much disagreement revolves around yield on stablecoins. The GENIUS Act, passed in July 2025, banned yield on stablecoins as a concession to move the bill over the finish line. This particular issue, however, is being revisited in this new legislation. Industry natives advocate for yield-bearing stables, offering more attractive financial products for users and lowering the opportunity cost for onchain participation with one of crypto’s best examples of product-market fit. Legacy banking institutions, however, are lobbying aggressively against this. 

Another area of discourse revolves around the SEC retaining gatekeeping authority over what is classified as a security or a commodity, or the exact criteria that must be met to qualify. While graduation sounds nice, the exact details of implementation matter.

Depending on revisions, and ultimately passage, the bill will have significant implications for the industry for perhaps decades to come. The bill could offer a significant catalyst, with the exact nature of the revisions determining whether it is bullish or bearish. While no bill may be better than a bad bill, the unregistered securities may in fact remain unregistered and securities. 

The market wants closure on this pending regulation; however, Polymarket odds for this bill passing in 2026 fell from 80% a few weeks ago to just 40% now.   

— Luke

1. 1 Year After Leaving Ethereum For Solana

Max Resnick, Lead Economist at Anza, joins Gwart to talk about optimizing Solana for financial markets. He discusses the shift from Ethereum, the mechanics of MCP to stop censorship, and how "ACE" (Application-Controlled Execution) empowers apps. 

Max discusses dominance of Prop AMMs, the controversy around block packing, and how Solana plans to compete with Hyperliquid in the perp market. He also explains ACE as a standardized way for apps to control execution (e.g., taker speed bumps), tying it to the rise of prop AMMs with tighter spreads but new routing/“best execution” concerns. 

They close on current block-packing/auction debates (Jito/BAM) and why improved landing reliability is key for Solana perps to compete with Hyperliquid.

2. Prediction Markets’ Next Frontier: Impact and Decision Markets

Zak Porkorny from Galaxy Research published a piece arguing that prediction markets have had their “zero-to-one” moment, and the next frontier is moving from “will X happen?” to “what does X mean economically and what should we do about it?”

He introduces “Impact Markets,” where traders directly price assets conditional on events (e.g., BTC if the Fed cuts 75 bps), collapsing today’s two-step process of inferring asset impacts from separate event odds and spot markets into explicit conditional valuations. Building on that, “Decision Markets” use these conditional prices as a binding governance primitive (futarchy-style), letting markets choose between actions (e.g., token price if proposal passes vs. fails) so organizations can automate decisions that maximize expected economic value. 

The article stresses that this only works if the objective function is valid (i.e., the token actually represents ownership rights over the project) making retrofits hard for most existing DAOs whose tokens don’t capture application value.

3. Under the Hood: Universal Commerce Protocol (UCP)

Google engineers Amit Handa and Ashish Gupta introduced the Universal Commerce Protocol (UCP), an open-source standard designed to be the common “language” for agentic commerce by connecting AI surfaces (like Gemini or AI mode in Search), merchant backends, and payment providers through a single, secure abstraction layer. 

UCP standardizes the full commerce journey, collapsing today’s “N x N” bespoke integrations into one unified integration point, with capabilities (e.g., checkout, discounts) exposed via APIs, MCP or A2A, and a payments model that separates instruments from payment handlers while providing cryptographic proof of user consent. Built with partners like Shopify, Etsy, Walmart, Target, Visa, Mastercard, Stripe, and others, UCP aims to let merchants keep control (remain merchant of record, own business logic and UX) while making it easy for AI agents and platforms to onboard thousands of merchants and payment methods.