Today we look at RAILGUN, the onchain privacy protocol whose DAO just doubled staker payouts to a 21.2% yield and opened voting on a Base deployment, its first new source of fee revenue since Arbitrum. In markets, Solana Eco led yesterday’s board as SOL crossed $100 intraday for the first time since February. Meanwhile, the debasement trade rolls into Kevin Warsh’s first Jackson Hole keynote this Friday. 

Macro set the tone this week: the Treasury moved to calm a bond selloff, the dollar index (DXY) hit its lowest since May, and gold (+14.9% on the month) is on pace for one of its strongest months on record. The debasement bid now runs into Kevin Warsh's first Jackson Hole keynote as Fed chair on Friday, with September hike odds still near 40%.

Yesterday we saw rotation in the market. Solana Eco (10.8%) ran away from the field, followed by crypto equities (5.0%) and Launchpad (4.1%). The majors were largely flat, with BTC down 0.1% and the S&P 500 up 0.2%, while the far end bled: Modular (-5.6%), Privacy (-5.2%) and Ethereum Eco (-4.2%). SOL itself crossed $100 intraday for the first time since February before settling at $97.2. 

Zoom out a week and most sectors are green with Solana Eco’s 31.5% against BTC's 22.0%. Inside the Solana basket, the move came down to two main names: META (+47.3%) and PUMP (+45.6%). The rest clustered between 10% and 33%, except JITO (-6.4%). PUMP notably has significant cash flow behind it, as it made over $10M in revenue this past week, with half of it recycled into buybacks. 

There are real flows behind the move too. US spot Solana ETFs took in $33.5M on Monday, the largest single day since December, pushing cumulative inflows to a record $1.2B. On the DAT side, Forward Industries (FWDI), the largest of the Solana treasury companies, added over 500,000 SOL last quarter to bring its holdings above 7.5M SOL, and its market cap, now near $490M, is the highest it has been since May. Hence, the Solana bid looks increasingly institutional.

— Sam

Crypto traders are no longer limiting themselves to crypto.

MEXC’s survey found that 87.2% plan to increase their TradFi trading, while futures tied to RWAs, forex and tokenized stocks reached nearly $400B in July.

Read the full report by Blockworks Research to unpack why Asia is well positioned for this shift and what CEXs still need to build, from deeper spot markets to better pricing, custody and settlement.

Railgun’s Yield Boost and Base Expansion

RAIL is one of the few DeFi tokens with a mechanical claim on protocol fees. Two DAO proposals in the past six weeks have targeted both staker payouts and RAILGUN’s future fee base. Those changes make more sense in the context of how the protocol works. 

RAILGUN is an onchain zero-knowledge privacy system for EVM networks. Users shield ERC-20 balances into a shared private pool, transact from inside it without revealing wallet identity or balances, and pay 0.25% on the way in and out. Fees accrue to a DAO treasury that distributes a fixed share to RAIL stakers every two weeks. The privacy pool holds $88.8 million, 94.7% of it on Ethereum, and has never held much more than $135 million. No mainstream wallet uses RAILGUN technology, so reaching the pool means using a dedicated frontend like Railway Wallet and managing a separate 0zk address alongside a normal one.

Kohaku is the Ethereum Foundation’s attempt to put shielded balances inside wallets people already use, though it’s still early. RAILGUN was among the first protocols integrated when the alpha shipped in May, but no production wallet has exposed it to users yet. Against that backdrop, the DAO passed one proposal in July and opened voting on a second today.

The first proposal doubled the biweekly staker payout from 2.00% to 4.20% of treasury balances. Rewards went from roughly $50,000 to roughly $250,000, and the staking yield is now 21.2%. The higher yield is being funded by treasury reserves rather than higher protocol income. Stakers now receive that capital faster, and the same proposal minted 2.5 million RAIL to refill the treasury, diluting every holder 4.3%. Expect yield to settle closer to 11% as the balance normalizes.

The second proposal would deploy RAILGUN to Base, with Ethereum mainnet stakers controlling the Base proxy and collecting its fees. Polygon and BNB Chain run on separate governance tokens, so RAIL holders never captured fees there, making Base only the second expansion, after Arbitrum, where fees would accrue to RAIL holders. However, Arbitrum has been live for years and still holds only 3.6% of shielded balances. Base brings more stablecoin liquidity, roughly four times Arbitrum’s DeFi TVL, and nearly three times as many daily active users.

The July proposal changed how quickly RAIL holders receive existing value, while Base could expand the value available to distribute. RAILGUN’s history on Arbitrum suggests that a new deployment alone is unlikely to materially expand revenue. The upside case depends on distribution, especially wallet-native access, converting Base’s liquidity and users into shielded balances and recurring fees.

— Jake Koch-Gallup

Scoring SIMD 553: The Law of Demand

Anza lead economist Max Resnick published an article scoring SIMD 553; his validator voted yes, but he argues burn projections ignore the law of demand: an estimated -0.6 to -0.8 elasticity implies a 10% fee increase cuts demand 6% to 8%, leaving revenue forecasts dramatically overstated.

The estimate comes from Ethereum's pre-merge EIP 1559 pricing, using random block times as the instrument; on Solana, a 10,000-transaction sample shows that most compute traces to thin-margin bots that shut off once fees turn them unprofitable. He also rejects netting burns against inflation (the frame behind 1.05% net supply growth by 2029) as incoherent.

The Financial Container

Aleks Larsen of Blockchain Capital argues tokenization will reorganize capital markets the way containerization reorganized trade. Before standardized boxes, cargo was loaded piece by piece by hand. In 1956, a converted tanker called the Ideal-X carried 58 detachable truck trailers from New Jersey to Houston, cutting loading costs to $0.16 per ton, roughly 36 times cheaper than loading cargo by hand. 

Stablecoins are his proof of concept, with $300B circulating at Visa-scale volume and velocity roughly 10 times that of M1 and M2. Tokenized real-world assets followed that liquidity to nearly $40B, up tenfold in two years. Larsen’s claim is that financial capability attaches to the asset rather than the owner’s institutional relationships, citing asset-level collateral eligibility on Aave.