DeFi Development Corp. has launched State of Solana, a public real-time research platform that tracks Solana market, network, staking, validator, yield and ecosystem data through a single dashboard.

According to a Wednesday press release from the Nasdaq-listed company, State of Solana was built to give investors, builders and ecosystem participants access to network-level data alongside SOL price information, with more datasets, visualizations and research tools planned over time.

The platform currently tracks SOL returns across several periods, including 24 hours, three months, year to date, one year and five years. It also provides interactive price history, daily and year-to-date network snapshots, cross-chain comparisons and yield opportunities available across Solana.

Live network information includes epoch progress, slot times, block height and throughput, while users can also monitor current and historical transactions per second. Staking yield, inflation, validator distribution, the Nakamoto coefficient, network uptime and upcoming Solana upgrades are included in the dashboard.

DeFi Development Chief Marketing Officer Pete Humiston said the company’s case for Solana goes beyond the market value of SOL.

“We have spent a lot of time explaining why we believe Solana is one of the most important networks in crypto, but that thesis extends far beyond the price of SOL,” Humiston said.

“State of Solana gives investors and ecosystem participants a way to see the underlying data for themselves,” he added.

State of Solana tracks network activity beyond SOL price

DeFi Development said the platform will continue to expand with more datasets, visualizations, research tools and ecosystem information.

Network activity is particularly relevant to the company because its Solana strategy covers more than holding the token on its balance sheet. DeFi Development also operates validator infrastructure, stakes SOL and deploys part of its treasury across onchain protocols.

Recent network data has provided additional context for that strategy. A May Solana network report covered by crypto.news showed that Solana generated $342.2 million in Chain GDP during the first quarter of 2026, according to Messari.

PumpFun remained the network’s largest revenue-generating application during the quarter with $124.7 million in revenue. Solana’s real-world asset market capitalization also increased 43% quarter over quarter to $2.01 billion.

Real economic value, a measure of transaction fees and maximum extractable value tips paid to validators, fell 1% during the quarter to $89.5 million. Messari ranked Solana second among blockchain networks by the metric, behind Hyperliquid.

Development work on Solana’s Alpenglow upgrade was also progressing during the period. In May, Anza said the new consensus system had entered community validator testing, with the proposed design targeting transaction finality of roughly 150 milliseconds.

DeFi Development holds more than 2.29 million SOL

DeFi Development held 2,294,576 SOL and SOL equivalents as of Aug. 10, according to company figures cited in the announcement. At current prices, the holdings are worth about $208 million.

The company has built the position since adopting a treasury strategy centered on accumulating and compounding SOL, while management has used SOL per share as one of its main measurements for assessing the program.

During a May financial update, DeFi Development reported fully converted SOL per share of 0.0670 as of May 13, up 108% from 0.0322 a year earlier.

Fully converted shares outstanding stood at about 34.2 million at the time, while the company kept its December 2028 target of reaching 1.0 SOL per fully converted share.

Validator operations also remain part of the treasury structure. DeFi Development said in May that its validators were producing about a 7.5% yield, compared with roughly 3.9% from staking SOL on Coinbase.

More than 25% of the company’s treasury had also been deployed across onchain protocols at the time.

Chief Executive Joseph Onorati said during the May update that the company did not view its strategy as a direct copy of the corporate Bitcoin treasury model.

“The MSTR playbook is a starting point, not a ceiling,” Onorati said, adding that “SOL is a different asset than BTC.”

Alongside its own validators, DeFi Development has used validator partnerships and its Treasury Accelerator program as part of its Solana strategy.

Equity sales have funded further SOL purchases

Capital raising has supported much of DeFi Development’s SOL accumulation.

The company established a $200 million equity program in May, giving it the ability to sell common shares through an at-the-market offering.

DeFi Development said proceeds from the program would primarily be used to support its Solana treasury strategy. Management also said it planned to issue shares when doing so increased SOL per share for existing shareholders.

The company has used that metric to assess whether equity financing improves the amount of SOL backing each fully converted share.

Its treasury growth has occurred while reported earnings remain heavily affected by changes in digital asset valuations.

Unaudited first-quarter financial results released in May showed total revenue of $2.66 million, up from $287,000 during the same quarter a year earlier.

Digital asset treasury revenue accounted for $2.40 million of that total.

Net loss widened to $83.4 million from $778,000 a year earlier as lower digital asset valuations affected the company’s holdings. Diluted earnings per share came to negative $3.18, compared with negative $0.08 during the same period in 2025.

During the same update, DeFi Development said it had repurchased about $4.4 million of convertible notes due in July 2030 for approximately $2.6 million in cash, representing a 41% discount to par.

Solana treasury companies have continued accumulating SOL

Other publicly traded companies have also built large Solana positions, with Forward Industries holding one of the largest corporate SOL treasuries.

Forward Industries said in July that it had expanded its treasury by purchasing more than 500,000 SOL during its fiscal third quarter.

The purchases took its holdings to 7.55 million SOL as of June 30. Forward said the newly acquired tokens had been purchased at an average price of about $79 per SOL during the quarter.

SOL per fully diluted share increased to 0.0729 from 0.0669 at the end of the previous quarter, according to the company.

A month earlier, Forward had transferred 455,784 SOL worth about $31.9 million to Coinbase Prime after roughly one month of wallet inactivity.

Forward did not say the transfer represented a sale. Coinbase Prime can be used by institutional clients for custody, liquidity management, collateral and trading.

The company began its Solana treasury strategy in September 2025 after receiving backing from investors and partners including Galaxy Digital, Jump Crypto and Multicoin Capital.

Forward has also used staking and validator operations to generate income from its holdings. Its treasury strategy covers buying, holding, staking, trading and investing in SOL-related assets and projects.

DeFi Development shares currently trade near $4.50, giving the company a market capitalization of about $140 million. DFDV has fallen roughly 16% year to date and more than 70% over the past 12 months.

The U.S. Securities and Exchange Commission has sent a proposed overhaul of crypto custody rules for investment advisers and investment companies to the White House for review.

The White House Office of Management and Budget received the proposal on Aug. 25, placing the planned rule changes under executive review before the SEC can release the full text and seek a commission vote.

The proposal would clarify how investment advisers and investment companies can hold crypto assets for clients while complying with existing SEC custody requirements. The agency said firms have raised questions about how digital assets can be held under rules written before crypto became part of regulated investment products and advisory portfolios.

Alongside the provisions covering digital assets, the SEC is considering removing some existing custody requirements it considers outdated because of changes in financial markets and current trading and asset-holding practices.

Full details of the proposal will remain unavailable until the Office of Management and Budget completes its review. Once the proposal is returned to the SEC, potentially with revisions, the commission’s three current Republican members would vote on whether to publish it for public comment.

SEC crypto custody rule would modernize existing requirements

The proposed amendments would apply to rules under both the Investment Advisers Act of 1940 and the Investment Company Act of 1940, according to the SEC’s regulatory agenda.

Under the existing investment adviser custody framework, registered advisers with custody of client funds or securities generally must keep the assets with a qualified custodian unless an exception applies. Crypto has raised additional questions over how those requirements work when ownership and control can depend on private keys and blockchain-based custody systems.

The SEC said its planned rule would clarify the custody framework for crypto assets while making other changes to regulations covering advisory client and fund assets. Some existing requirements could also be eliminated where the agency determines that changes in markets and current asset-holding practices have made them unnecessary.

The commission has already considered a different approach to the issue. In June 2025, crypto.news reported that the SEC had withdrawn its safeguarding proposal introduced during former Chair Gary Gensler’s tenure.

First proposed in March 2023, the Safeguarding Advisory Client Assets rule would have expanded custody requirements for registered investment advisers to cover a larger range of client assets, including cryptocurrencies. It would also have required those assets to be maintained with qualified custodians in most circumstances.

Crypto custody providers faced uncertainty under the plan because many did not meet the proposed definition of a qualified custodian. Industry participants had warned that the requirements could leave investment advisers with fewer options for holding digital assets on behalf of clients.

When the SEC withdrew the safeguarding proposal and several other unfinished Biden-era rules in June 2025, the agency said any future regulatory action in the affected areas would require a new proposal.

The custody amendments now moving through the White House review process constitute a separate rulemaking effort under Chair Paul Atkins. Specific requirements covering qualified custodians, custody arrangements and the treatment of crypto assets will not be known until the SEC publishes the proposal.

Atkins has put crypto rules on the SEC agenda

Custody is one of several digital asset issues the SEC has moved into formal rulemaking under Atkins.

In July, the commission placed three crypto rule proposals on its 2026 regulatory agenda, covering crypto assets, broker-dealers and market structure.

One proposal would consider exemptions and safe harbors for crypto assets, while another would examine how broker-dealer rules should apply to companies dealing with digital assets. A separate market structure proposal covers the trading of crypto assets through alternative trading systems and national securities exchanges.

The agenda placed the projects within a regulatory program running alongside congressional work on digital asset legislation. Atkins has said the SEC can address issues falling within its existing statutory powers while lawmakers work on legislation covering areas that require congressional action.

Crypto also received a dedicated place in the SEC’s 2026 to 2030 strategy released in June. The draft plan identified digital assets, blockchain infrastructure and tokenized financial products among areas the agency intends to address under its regulatory mandate.

The plan also called for clearer treatment of digital assets under federal securities laws and continued coordination between the SEC and Commodity Futures Trading Commission. Congress has separately been considering legislation that would formally divide responsibilities between the two regulators.

Regulatory work has already moved beyond planning in some areas. The SEC has issued guidance and pursued proposed rules covering crypto asset classifications and transactions while considering additional rules governing issuance, custody and trading.

Custody proposal moves forward as Congress debates market structure

The custody proposal reached the White House while the Senate continues work on the Digital Asset Market Clarity Act, legislation designed to establish a statutory structure for U.S. crypto markets.

The House passed its version of the CLARITY Act in 2025, while Senate lawmakers have spent 2026 negotiating their approach to issues including the division of authority between the SEC and CFTC.

Atkins has said the SEC does not need to stop all crypto rulemaking while the legislation remains unresolved. In July, the chairman said the commission was prepared to use its existing powers if Congress failed to finish the market structure bill.

As Atkins discussed the CLARITY Act, he said the SEC was “ready, willing and able” to act in areas under its authority while maintaining that legislation would provide a more durable framework for issues requiring action from Congress.

Certain parts of crypto regulation cannot be settled by the SEC alone. Giving the CFTC authority over digital commodity spot markets, for example, requires legislation because the SEC cannot grant another federal regulator jurisdiction through its own rules.

Rules covering registered investment advisers and investment companies fall directly within the SEC’s existing responsibilities. The custody proposal can therefore move through the agency’s rulemaking process separately from congressional negotiations over market structure legislation.

White House review comes before public comment

The Office of Management and Budget must complete its review before the custody proposal can return to the SEC for the next stage of the process.

Once returned, commissioners would vote on whether to issue the proposal. The SEC currently has three Republican commissioners, and approval would make the full text available to the public for the first time.

A proposed rule would then normally remain open for public comment for at least 60 days, allowing investment advisers, investment companies, custodians, crypto firms and other interested parties to submit responses.

SEC staff would review those comments and could change parts of the proposal before preparing a final version. Any completed rule would then have to return to the commission for another vote before it could take effect.

The process follows the commission’s decision to discard several unfinished crypto-related proposals inherited from the previous administration and restart rulemaking where it wants to pursue new requirements.

Among the measures withdrawn in 2025 was an attempt to expand the definition of securities exchanges, alongside the safeguarding proposal covering investment advisers. The SEC said at the time that new regulatory action in the abandoned areas would begin through fresh proposals instead of continuing the earlier proceedings.

The custody proposal is classified as economically significant on the federal regulatory agenda. The SEC said it would evaluate the expected costs, benefits, and other economic effects while developing the rule, with its provisions set to address both advisory client assets and assets held by investment companies.

Blockstream CEO Adam Back may have long played down the immediacy of quantum threats, but the company he leads is moving forward with concrete work on how Bitcoin could upgrade if sufficiently powerful quantum computers ever become a practical reality. That progress just received a fresh milestone: a Bitcoin Improvement Proposal (BIP) for the company’s experimental post-quantum signature scheme, SHRINCS, was published on the project’s GitHub repository.

The development matters because Bitcoin’s current elliptic-curve signature system (used for spending authorization) is widely understood to be vulnerable to the key-recovery capabilities of future quantum machines. While the exact timeline remains debated, cryptographers agree the worst-case scenario would allow attackers to derive private keys from public keys and steal funds—making migration planning an industry priority rather than a reactive scramble.

Key takeaways

• Blockstream published a BIP for SHRINCS, positioning it as an actionable candidate for Bitcoin’s post-quantum signature upgrade path.
• SHRINCS is designed to be “Bitcoin-native” and smaller than many NIST-aligned post-quantum signature alternatives, helping it fit Bitcoin’s block and witness constraints.
• The proposal’s approach is more “stateful,” which can reduce on-chain size but introduces wallet/device recovery and interoperability risks.
• Blockstream’s ongoing research explores complementary ideas—like signature-size reduction and potential ZK proof aggregation—while keeping governance and deployment decisions separate.

From quantum skepticism to BIP-level implementation

Adam Back has been associated with a cautious stance toward quantum timelines—arguing in earlier comments that the threat may not materialize for decades. Yet, Blockstream’s work shows how even a “farther away” threat can justify engineering now: building, testing, and documenting cryptographic changes before the political and technical window closes.

Blockstream Research has previously demonstrated SHRINCS as an experimental post-quantum signature scheme operating in production on Liquid, a Bitcoin sidechain. The new BIP—published earlier today in the SHRINCS repository—takes that experimental work and frames it explicitly for Bitcoin improvement discussions.

Jonas Nick, a Blockstream Research researcher, characterized the BIP as “the first concrete proposal” for a post-quantum signature scheme built specifically around Bitcoin’s needs. He also cautioned that SHRINCS is not presented as Bitcoin’s “final” signature design and is not optimal on every dimension—an important distinction for investors and builders trying to evaluate how close a proposal is to consensus-level readiness.

Why signature size is the core Bitcoin constraint

In most post-quantum signature designs, public parameters and signature payloads are substantially larger than Bitcoin’s current elliptic-curve signatures. According to the article’s cited comparison, NIST-endorsed post-quantum hash- and lattice-based signature schemes are between 38 and 123 times larger than Bitcoin’s ECDSA and Schnorr signatures. The practical consequence is straightforward: larger signatures mean more data per transaction, which can reduce throughput.

The same reporting notes that deploying those larger NIST-style signatures directly in Bitcoin could push performance down to a fraction of a transaction per second. Ethereum’s post-quantum team, as referenced in the article, has discussed addressing the blockspace problem by aggregating signatures using a small zero-knowledge proof per block—an approach that, if feasible, can reduce on-chain footprint. Bitcoin, however, would face a different social and technical hurdle: adding ZK proof aggregation would represent a major change to the system’s validation and activation politics.

Blockstream’s alternative is to shrink the signature payload itself. The approach discussed here aims to reduce Bitcoin-relevant signature sizes by about 13.23 times compared with baseline NIST-aligned hash-based post-quantum signatures, while retaining enough compatibility with Bitcoin’s operational constraints to keep the upgrade conversation realistic.

What SHRINCS targets—and what trade-offs it makes

The SHRINCS design was unveiled by Blockstream researchers in December 2025, with an opcode proposal published in May. It is a hash-based post-quantum signature scheme built to work within Bitcoin’s signature-size realities. The scheme is reported as having a minimum size of 548 bytes plus a 48-byte public key, with maximum sizes that can reach 4,619 bytes.

A key selling point is “Bitcoin-native” construction: one cited explainer describes the scheme as real code signing real transactions on Liquid mainnet and as an attempt to address post-quantum migration without breaking Bitcoin’s block economics. That said, it remains early-stage research. The article references a warning embedded in the BIP text that a formal security proof is “TODO,” indicating the cryptography is promising but not yet fully validated at the level Bitcoin-style upgrades normally demand.

Even with SHRINCS’s improvements, the scheme is still described as significantly larger than current Bitcoin signatures—about nine times larger than Schnorr signatures (64 bytes). The report also emphasizes that the impact is not as simple as a “9x blocksize increase,” because Bitcoin’s Segregated Witness changes how signature bytes are accounted for in block weight.

Where SHRINCS makes a more controversial engineering choice is in its state management. Traditional stateless designs can store everything required to verify and update signatures in the public structure, but they often require large signature artifacts. The article describes SHRINCS as intentionally reducing those artifacts by using one-time keys and keeping track of “used keys” on the device—meaning the scheme behaves in a stateful way.

This can affect users in concrete ways. Each time a signature is used, it adds roughly 16 bytes to the signature. More importantly, if a device is lost, the fallback mechanism can require a very large transaction (the article cites about 5,777 bytes) to recover. Additionally, the BIP warning cited in the article notes that different SHRINCS implementations may not interoperate safely if they use incompatible stateless-component settings—raising the risk of lost funds during key import.

That tension—smaller signatures in exchange for operational fragility—is likely to shape governance debates more than raw cryptographic novelty. Bitcoin’s consensus rules are permanent maintenance obligations, and wallet-side assumptions can become user failure modes.

Iterating for deployment: hardware wallets, SHRIMPS, and options for aggregation

Blockstream says it has continued refining SHRINCS through 2026 and recently demonstrated that SHRINCS and other post-quantum signature schemes can run on common hardware wallets. That is not a trivial detail: even well-designed cryptography can stall adoption if it cannot fit the performance and memory constraints of real wallet environments.

The article also references work on a companion backup/derivation concept. Earlier in March, Blockstream introduced “SHRIMPS” to support signing by backup devices initialized from the same seed in a way that aligns with SHRINCS signing behavior. In the BIP update described here, the SHRIMPS naming is dropped and the scheme is incorporated as a built-in stateless path under the same 48-byte public key, optimized with a non-standard parameter set to be about 26% smaller.

Beyond hash-based signatures, Blockstream’s research also experiments with lattice-based signature approaches, which are often smaller but described as less proven and less reliable than hash-based designs in the current literature. The article further notes Blockstream’s consideration of zero-knowledge proof aggregation. According to its estimates, pairing ZK aggregation with SHRINCS could potentially double Bitcoin’s speed in this modeled scenario.

Notably, Blockstream is reported to have separated signature-choice work from the separate, more contentious questions of block size increases and ZK aggregation. That decision reflects a pragmatic recognition: pairing multiple disruptive changes at once can make it harder to build consensus. If Bitcoin is to migrate to post-quantum security, the pathway likely needs modular governance milestones rather than one all-at-once overhaul.

As one explained perspective cited here puts it, the “binding constraint” may not be cryptography alone but governance—how Bitcoin chooses among a growing menu of engineering options (including references to other proposals like BIP-360, BIP-361, and STARKs) before an upgrade clock runs out.

For readers, the next signal to watch is whether the SHRINCS BIP gains traction in the broader Bitcoin development and review ecosystem—particularly around its stateful design risks, key recovery/fallback behavior, and interoperability guarantees between wallet implementations. The proposal’s publication is a meaningful step from experimentation toward deployment planning, but the hard part will be convincing the network that the trade-offs are acceptable and the security path is complete enough for consensus.

Pump.fun has added trading for any HyperEVM token through USDC as Hyperliquid L1 records about $503 million in decentralized exchange volume over 24 hours.

Pump.fun said on Aug. 26 that its application now supports tokens issued on HyperEVM, giving users a new route to buy and sell the assets with USDC.

The company described itself as the first application to introduce HyperEVM assets into this type of trading interface. Pump.fun did not provide independent evidence supporting the claim, which could not be verified at the time of publication.

Alongside token swaps, users can earn rewards when people trade through their referral links. Pump.fun also described transaction costs as close to zero, although its announcement did not publish an exact fee schedule or explain whether network gas charges are included.

At least one HyperEVM asset is already visible through the application. Pump.fun’s market page for EGG states that users can trade the token on Hyperliquid through Pump, confirming that the service was active when the page was checked.

Pump.fun has expanded beyond its Solana token market

Created as a Solana-based token launchpad, Pump.fun allows users to issue and trade tokens without setting up a conventional liquidity pool at launch. Its application became closely associated with meme coins, many of which trade on an automated bonding curve before moving to an external decentralized exchange.

HyperEVM support adds assets from another blockchain environment to the same interface. The announcement refers only to trading existing HyperEVM tokens and does not say whether users will be able to create HyperEVM assets through Pump.fun.

Trading support also extends Pump.fun’s business beyond the Solana market, which produced most of its activity and fee income. As crypto.news reported on Aug. 10, the platform generated $10.03 million in fees during the previous seven-day reporting period as trading volume reached $2.97 billion.

During that period, Pump.fun used $5.02 million to buy and burn approximately 2.15 billion PUMP tokens. The company said it directs 50% of revenue to automated repurchases and burns through a locked smart contract, with the mechanism having removed the equivalent of 15.7% of the token’s original supply by Aug. 10.

The platform’s token economics have also faced supply pressure. On-chain tracking in July showed 57.279 billion PUMP, worth approximately $86.49 million at the time, moving to 121 team and investor wallets after a one-year lockup ended. The transfers began a three-year vesting period, although movements to recipient wallets did not establish that the tokens had been sold.

HyperEVM connects applications with Hyperliquid liquidity

According to Hyperliquid’s documentation, HyperEVM is the Ethereum-compatible smart-contract environment built into the Hyperliquid blockchain. It is not a separate chain and shares the network with HyperCore, the system that handles Hyperliquid’s spot and perpetual order books.

Because HyperEVM supports the Ethereum Virtual Machine, developers can deploy applications written for Ethereum-compatible networks. HYPE serves as the gas token for transactions, while precompiled contracts and other network tools allow applications to read information from HyperCore.

Spot assets can also move between HyperCore and HyperEVM through Hyperliquid’s transfer system. Once deposited into the smart-contract environment, the assets can interact with decentralized exchanges, lending protocols, and other applications built on HyperEVM.

For users entering through Hyperliquid, the network’s onboarding documentation says they can buy HYPE with USDC and then transfer the HYPE from HyperCore to HyperEVM to cover gas costs. Pump.fun has not explained whether its interface handles that process automatically or whether users must maintain HYPE separately.

HyperEVM initially reached the testnet in February 2025, when Hyperliquid introduced support for Ethereum-compatible smart contracts. Since then, wallet providers, custodians, and decentralized finance projects have integrated the network.

Circle launched native USDC on HyperEVM in September 2025 alongside Cross-Chain Transfer Protocol V2. The system lets eligible users move USDC between supported networks without relying on conventional wrapped tokens.

Circle later became a stakeholder in the Hyperliquid ecosystem by purchasing HYPE. In May 2026, the stablecoin issuer said it had also extended USDC support to HyperCore and increased liquidity between HyperCore, HyperEVM and other supported blockchains.

Hyperliquid activity gives Pump.fun a larger token pool

Data from DeFiLlama shows that Hyperliquid L1 currently holds about $1.59 billion in decentralized finance value. Stablecoins on the network have a market value of roughly $6.79 billion, with USDC accounting for nearly 98% of the total.

Hyperliquid L1 processed around $503 million in decentralized exchange volume over the latest 24-hour period and approximately $3.75 billion over seven days. Perpetual trading volume reached about $12.43 billion over 24 hours and $82.47 billion for the week.

Network activity included roughly 612,000 transactions, 21,900 active addresses, and 5,400 new addresses during the latest daily period tracked by DeFiLlama. Protocols listed on the network include Kinetiq, HyperLend, Project X, HyperSwap, and Felix.

Rising activity has also supported HYPE’s recent price performance. An Aug. 25 market report said the token had reached a record high near $83.27 before trading around $80.50. HYPE had opened the preceding seven-day period near $69.60, leaving it with a double-digit gain after some traders took profits.

Pump.fun has not disclosed which decentralized exchanges or liquidity sources execute HyperEVM orders through its interface. Its announcement also did not specify whether every token becomes available automatically or whether contracts must pass technical or security checks first.

US users receive limited federal protection for meme coins

For American users, access to HyperEVM assets does not establish that every listed token has the same regulatory status. The U.S. Securities and Exchange Commission said in a February 2025 staff statement that transactions involving the types of meme coins described in the document generally do not constitute securities offerings.

SEC staff compared typical meme coins with collectibles whose prices depend mainly on trading and market sentiment rather than rights to business income, profits, or assets. Under that view, issuers of qualifying meme coins would not need to register the transactions under the Securities Act of 1933.

The SEC staff statement also said buyers and holders of qualifying meme coins are not protected by federal securities laws. Staff warned that the position does not cover tokens labeled as meme coins to avoid securities requirements or assets whose economic structure otherwise meets the definition of a security.

A March 2026 SEC interpretation reiterated that staff statements have no legal force, do not change applicable law, and have neither been approved nor rejected by the Commission. The agency said regulatory analysis depends on the economic facts surrounding each crypto asset and transaction.

Blockstream co-founder and CEO Adam Back has a reputation as a quantum computer skeptic who believes the technology is so immature the threat won’t materialize for decades.

Which makes it all the more fascinating that his company is one of the leaders in researching practical solutions to the issue. Back told Cointelegraph earlier this year “the safe thing” is to prepare for the threat well in advance.

Blockstream has already proven its experimental post-quantum signature scheme called SHRINCS works in production on its Liquid sidechain and a Bitcoin Improvement Proposal for SHRINCS was published earlier today.

Blockstream Research’s Jonas Nick called it “the first concrete proposal for a post-quantum signature scheme designed specifically for Bitcoin.” But he added that “SHRINCS is not intended to be Bitcoin’s ‘final’ signature scheme, and it is not optimal along every axis.

”I do think it is a very good trade-off among the options we have now,” he said.

Source: Jonas Nick

While the timeline is hotly debated, scientists agree that sufficiently advanced quantum computers will be able to reverse engineer private keys from public keys, thereby undermining Bitcoin’s security and enabling the theft of billions. That’s why the race is on to develop ways to upgrade Bitcoin to make it safe from attack. 

Shrinking the size of post quantum signatures

One of Blockstream’s most promising areas of study has been in optimizing post-quantum signature schemes for Bitcoin’s requirements to enable the blockchain to keep more of the existing properties Bitcoiners hold dear.

The current crop of post-quantum secure hash and lattice-based signature schemes endorsed by the National Institute of Standards and Technology are between 38 and 123 times larger than Bitcoin’s existing ECDSA and Schnorr signatures.

Deploying any of them in Bitcoin could slow the blockchain down to a fraction of 1 TPS. Ethereum’s post-quantum team plans to deal with this issue by aggregating signatures using a tiny zero-knowledge proof for each block. That’s under consideration for Bitcoin too, and if implemented, it would see Bitcoin actually run faster than it does today, as a single proof takes less blockspace than a bunch of signatures. But in the Bitcoin world, adding zero-knowledge proofs would be a fairly radical change and face a steep uphill battle to garner enough support for activation. 

Blockstream is considering that option too, but has wisely separated the proposal from the much more palatable option of figuring out how to shrink the size of NIST-approved hash based post-quantum signatures by around 13.23 times.

Related: Bitcoin’s quantum dilemma — Bigger blocks or STARK proofs?

Bitcoin optimized small(er) signatures

In December 2025, Blockstream researchers Jonas Nick and Mikhail Kudinov unveiled the SHRINCS signature scheme, and the opcode proposal was published in May. It’s a hash-based post-quantum signature scheme that has a minimum size of 548 bytes (plus the 48 byte public key) but can grow as large as 4,619 bytes.

“SHRINCS is the most Bitcoin-native post-quantum signature design anyone has produced,” explains Marin Ivezic, author of PostQuantum.com and founder of Applied Quantum.

“[It has] full BIP-39 seed recovery, and security resting on the same SHA-256 assumptions Bitcoin mining already depends on.” 

He tells Magazine the scheme is still at an early stage and hasn’t been audited, nor has it benefited from the years of public cryptanalysis the NIST signatures have weathered.

But he says even at this early stage, it’s a serious contender.

“It is real code that has signed real transactions on Liquid mainnet, and I rate it the strongest answer yet to going post-quantum without wrecking Bitcoin’s block economics.”

Despite being much smaller than most post-quantum signatures, SHRINCS will still be around nine times larger than Bitcoin’s existing Schnorr signatures, which are 64 bytes, or the older ECDSA signatures, which are 70 bytes. 

It might seem logical to assume that a signature nine times larger than the current ones would require Bitcoin’s block size to increase nine times to compensate, but Ivezic explains that’s not the case due to Bitcoin’s Segregated Witness.

“Under SegWit, signature bytes fit in the witness and take a quarter as much as other transaction data,” he says. 

According to estimates published in Blockstream’s earlier research (using slightly different parameters), Bitcoin could run at 6.5 transactions per second if everyone used Taproot’s Schnorr signatures (about 80% of people don’t). The blockchain’s speed would drop to 0.5 TPS if Bitcoin used the NIST-approved lattice-based signature ML-DSA and to just 0.36 TPS using the NIST-approved hash-based signature SPHINCS+.

But employing SHRINCS, the blockchain could run at 3 TPS, which is similar to today.

SHRINCS was tested in production on the Liquid sidechain in March this year — they even included a copy of the Bitcoin white paper. So if it works in production, everything is fine and Bitcoin’s quantum problems are solved, right?

Source: Blockstream

SHRINCS sounds great: What’s the catch?

As the BIP warns, “a security proof is TODO” meaning that the research is promising but it is not yet a cryptographically mature proposal that has been fully validated.

It also introduces additional complexity to Bitcoin.

Every signature uses a new one-time key, and one of the reasons SPHINCS+ is so large is because it wraps all of those one-time keys in a multi-layer hash tree structure that makes the scheme stateless. 

SHRINCS does away with all of that to save on space, and just stores used keys on your device (which is known as stateful) so it can quickly check keys aren’t being reused. The drawback is that signatures get larger by 16 bytes each time they are used, and if you lose your device, it requires a very large “stateless fallback” transaction around 5,777 bytes to recover.  

Yoon Auh, founder of BOLTS Technologies, says in reducing the size, SHRINCS’ designers added “statefulness, compact signing paths, fallbacks, assumptions about how many times a seed is initialized, and rules for when devices must switch to larger stateless signatures.”

“That may be pragmatic engineering, but it is also complexity and fragility introduced largely to maximize throughput and minimize computation cycles. In Bitcoin, every new consensus rule becomes a permanent maintenance obligation, and every wallet-side assumption becomes a possible user failure mode.”  

Refining SHRINCS and adding SHRIMPS

Blockstream has been researching and optimizing the scheme throughout 2026. Just last week it demonstrated that SHRINCS, and a range of other post quantum signature schemes, can effectively run on common hardware wallets. The BIP carries the warning however that this is not without risk:

SHRINCS keys generated using hypertree pruning for the stateless component are not compatible with SHRINCS implementations which do not support hypertree pruning. In fact, importing a key across such incompatible implementations may result in lost funds.

In March, the lab published a companion scheme called SHRIMPS, which was to be used in conjunction with SHRINCS to enable backup devices initialized from the same seed to be able to sign transactions. The SHRIMPS names has now been dropped for the BIP, and the scheme has been incorporated as a built in stateless path under the same 48 byte public key. It has been optimized with a non standard parameter set to be around 26% smaller than otherwise.

Blockstream has also been experimenting with lattice-based signature schemes, which are generally smaller than hash-based schemes but are seen as less proven and less reliable. It’s also considering the use of ZK proof aggregation of signatures. It estimates that if ZK proofs are used in conjunction with SHRINCS, Bitcoin’s speed could double to 6.7 TPS.

Blockstream has wisely separated the choice of signatures from questions around increasing the block size or adding ZK proof aggregation, as considering them together could sink the adoption of SHRINCS. Every post quantum upgrade to Bitcoin will be controversial and hard to gather enough support to activate.

“The binding constraint in Bitcoin’s quantum migration isn’t cryptography, it’s governance,” says Ivezic. “Between BIP-360, BIP-361, SHRINCS and STARKs, the engineering menu is filling up fast. What Bitcoin lacks is a mechanism for choosing from it before the clock runs out.”

Magazine: 5 tech predictions the mainstream media got horribly wrong

Bitcoin fell below $78,000 after its breakout above $81,000 reversed, triggering a wave of long liquidations as traders took profits and bullish leverage unwound. Strong US spot ETF inflows, however, suggest underlying demand has not disappeared.

Bitcoin price retreats after $81K breakout

Bitcoin’s pullback followed a round of profit-taking and an increase in leveraged long positions after last week’s short squeeze pushed the asset above $80,000.

Bitcoin (BTC) reached $81,238 on Tuesday after breaking out of a consolidation range that had held for about 10 weeks. The move placed the cryptocurrency roughly 29.5% above its range low before sellers returned near the May high.

Price subsequently fell to $77,870, marking a decline of about 4.1% from the peak. Bitcoin then recovered toward $78,000, placing it near the lower boundary of a short-term range identified by Bitfinex analysts.

The reversal did not follow a confirmed news catalyst. Instead, liquidation and open-interest data point to a derivatives reset after traders increased bullish exposure during the breakout.

CoinGlass data showed that the wider crypto market recorded $324.4 million in liquidations over 24 hours. Long positions accounted for approximately $270 million, or 83% of the total.

Bitcoin longs contributed about $109 million to those losses. The largest single liquidation involved an $11.91 million Bitcoin position on Binance.

Falling open interest signals leveraged longs exited

Bitcoin futures open interest declined to $54.79 billion, down 1.5% from $55.64 billion at the previous reading. Open interest has now fallen about 4.5% from the $57.38 billion recorded near Bitcoin’s $81,238 peak.

The combination of falling prices and lower open interest supports the view that leveraged long positions were closed or liquidated rather than replaced by an aggressive buildup of new short exposure.

CoinGlass recorded $68.81 billion in Bitcoin futures volume and $4.94 billion in spot volume. Funding rates were positive across several exchanges before the decline, showing that derivatives positioning had shifted toward bullish traders.

Jeff Ko, chief analyst at CoinEx, told crypto.news that the initial short squeeze had largely run its course, leaving spot buyers responsible for extending the rally.

“First, as above, the short squeeze is spent, so spot demand now has to lead rather than follow leverage,” Ko said.

Ko added that open interest and funding rates still appeared restrained to him despite the recent volatility. Continued restraint would reduce the risk of another large liquidation-driven reversal, although both measures will need monitoring if Bitcoin attempts to recover above $80,000.

US Bitcoin ETF inflows support the spot-demand case

US spot Bitcoin ETFs recorded $314.3 million in net inflows on Aug. 25, according to data from SoSoValue. BlackRock’s IBIT led the session with $284.4 million.

Seven consecutive positive trading sessions brought cumulative inflows to approximately $2.57 billion. Bitfinex said the flow represented firm spot demand rather than a rally sustained mainly by speculative leverage.

Ko separately estimated that the funds attracted roughly $1.9 billion during the week, describing it as the strongest weekly inflow of 2026.

“The question I care about most is whether this transitions from a derivatives-driven rally into a spot-driven one, and there are constructive signs,” Ko said.

Bitfinex also reported that 19 of the 20 largest liquid altcoins gained more than 12% during the broader market advance. Zcash rose 50.9%, Aave gained 44.7%, XRP climbed 43.3%, and Hyperliquid’s HYPE advanced 36.2% to a record high.

Aggregate altcoin market capitalization excluding Bitcoin and Ethereum rose 21% to $791.5 billion, according to the firm. Bitfinex added that holders who acquired Bitcoin 155 to 300 days earlier had moved from realizing losses to selling at a profit, creating overhead supply for ETF and other spot buyers to absorb.

Bitcoin must reclaim $80K to repair the breakout

Bitfinex analysts expect Bitcoin could consolidate between $77,100 and $80,000 before determining its next direction.

“We now have a squeeze that has run into a defined population of sellers but with a genuine bid underneath it,” the analysts told crypto.news.

“This leads us to believe that a potential lower timeframe range, or a continuation of the move is likely.”

The immediate support zone sits between $77,800 and $78,000, where buyers responded during the latest decline. A sustained break below that area could expose $76,500 to $77,000, followed by $75,700 to $76,000.

Bitcoin’s broader recovery would face a more serious test if BTC price falls below $72,500 to $73,000. Ko identified the 200-day moving average around $69,000 to $70,000 as the main medium-term support after Bitcoin moved above it for the first time since November 2025.

On the upside, Bitcoin must reclaim the $79,200 to $80,000 region to weaken the failed-break structure. A close above $81,100 to $81,250 would provide stronger confirmation that buyers have regained control.

Ko identified May’s high near $82,000 as the next difficult barrier. He said sustained ETF demand could support a move toward $85,000 to $90,000 because the source of demand will determine whether the advance holds.

Policy and bond yields remain risks for Bitcoin

US policy and Treasury-market conditions could influence whether institutional demand persists. Ko described the Sept. 15 CLARITY Act vote as an active risk for Bitcoin rather than merely a potential positive catalyst.

He also noted that the 30-year Treasury yield had returned to 5.27% after reversing an earlier decline. Higher long-term yields can tighten financial conditions and reduce demand for risk assets, including cryptocurrencies.

Bitcoin’s next move, therefore, depends on whether ETF and other spot demand can absorb profit-taking without another increase in leverage. Continued inflows could support a renewed attempt at $81,000, while a loss of $77,100 would shift attention toward lower support and the strength of US institutional flows.

Stablecoin compliance could determine which issuers win institutional adoption as new US accounting and regulatory rules raise standards for redemption, reserves and risk controls, according to Aquanow CEO Phil Sham.

The Financial Accounting Standards Board issued a proposal on Aug. 18 that would clarify how the existing definition of cash equivalents applies to certain digital assets, including some stablecoins.

The proposal does not classify every stablecoin as cash. Instead, it focuses on qualifying assets with characteristics such as price stability, liquid reserves, and contractual rights allowing holders to redeem directly with the issuer for cash on demand.

FASB’s proposal arrived one day after the US Treasury requested public comments on rules for implementing Section 3 of the GENIUS Act. Together, the two measures could reduce accounting uncertainty while raising the compliance threshold for issuers seeking institutional adoption in the US.

Phil Sham, CEO and co-founder of digital asset infrastructure provider Aquanow, told crypto.news that accounting recognition could remove a meaningful barrier for financial institutions. However, he said it would not automatically make stablecoins equivalent to bank deposits or other traditional cash holdings across every part of an institution.

Stablecoin accounting could remove treasury friction

Classifying qualifying stablecoins as cash equivalents could make them easier for companies to use in treasury management, payments, and settlement. The change may also affect how firms present digital assets on their balance sheets and assess their available liquidity.

Sham said the proposal could make it easier to add eligible stablecoins to existing financial workflows.

“If adopted, the proposal could remove meaningful accounting friction and make qualifying stablecoins easier to integrate into treasury and settlement workflows.”

Accounting treatment would only address one part of the institutional approval process. Banks, investment firms, and corporations would still need to consider regulatory capital rules, internal risk limits, collateral standards, and contractual obligations.

Many bond agreements and credit facilities have their own definitions of cash and cash equivalents. Even if a stablecoin meets the FASB standard, a borrower may need lender approval before using the asset to meet a liquidity covenant or minimum-cash requirement.

Institutions would also need to evaluate custody, issuer exposure, secondary-market liquidity, and their ability to redeem during periods of market stress.

“Firms would also require confidence in redemption, custody, issuer exposure, operational controls and liquidity under stress,” Sham said. “It could accelerate adoption, but not replace traditional cash holdings overnight.”

The distinction means a favorable accounting standard could support stablecoin use without resolving every legal, credit, and operational concern attached to the asset.

Redemption rights may matter more than the token

FASB’s focus on direct, on-demand redemption could also produce different accounting outcomes for institutions holding the same stablecoin.

Stablecoins are generally fungible on-chain, meaning one unit of a token is designed to be interchangeable with another. However, the legal rights attached to those units may depend on whether the holder bought them directly from the issuer, holds them through a custodian, or has exposure through an exchange account.

An institution holding a stablecoin through an exchange may have a contractual claim against the platform rather than the issuer. According to Sham, that additional counterparty exposure could prevent the asset from meeting the proposed cash-equivalent criteria.

“The same stablecoin could be fungible on-chain but treated differently depending on the holder’s contractual rights.”

A bankruptcy-remote trust or custodial arrangement could produce another outcome if it legally passes direct redemption rights to the beneficial owner. Sham said the result would depend on the final accounting standard, the institution’s documentation and the terms of the arrangement.

The proposal could therefore influence how institutional stablecoin products are structured. Exchanges and custodians may face pressure to show that customers retain enforceable redemption rights rather than only a claim against an intermediary.

“Accounting eligibility may therefore depend as much on how the stablecoin is held as on the asset itself,” Sham said.

GENIUS Act rules raise the compliance threshold

The GENIUS Act adds a separate regulatory test for issuers seeking access to US customers.

Under Treasury’s proposed implementation framework, a person generally would not be permitted to issue a payment stablecoin in the US after Jan. 18, 2027, without an appropriate federal or state license.

The law also places conditions on foreign-issued stablecoins offered in the country. Foreign issuers would need the technical ability to follow lawful US orders and comply with applicable arrangements between the US and their home jurisdictions.

A further restriction is due to begin on July 18, 2028. Digital asset service providers generally would no longer be permitted to offer payment stablecoins to US customers unless a licensed issuer issued them.

For institutions choosing among eligible stablecoins, Sham said formal authorization will be only the starting point. Firms will examine the issuer’s redemption terms, the quality and concentration of its reserves, asset segregation and independent reporting.

They are also likely to study what happens if the issuer or one of its reserve banks fails.

“Institutions ask three practical questions: who owes us the dollar, where is it held, and how quickly can we recover it under stress?”

Sham said a 1:1 reserve claim would not be enough by itself. Institutional users would want evidence that they can consistently redeem at par, including when liquidity conditions deteriorate.

Governance, cybersecurity, business continuity, anti-money laundering procedures and sanctions controls could also affect an issuer’s ability to win institutional business.

Compliance could concentrate stablecoin liquidity

The combined accounting and licensing requirements could direct more activity toward a limited group of issuers with established banking relationships, distribution channels, and compliance teams.

Large issuers can spread regulatory and operational costs across a wider user base. They also benefit from existing exchange integrations and deeper liquidity, making their stablecoins easier to use for trading, settlement and collateral.

Sham said those advantages could make it harder for newer issuers to attract enough liquidity to compete.

“Liquidity may concentrate among established issuers because compliance costs, distribution and network effects favour scale. That will make it harder, but not impossible, for newer players to compete.”

Smaller issuers could still build a market by targeting regional payment needs, industry-specific settlements, or markets underserved by the largest dollar-backed tokens. Lower costs alone may not be enough if users cannot reliably redeem the token or if intermediaries cannot offer it in the US.

A smaller issuer would need sound regulatory foundations, clear redemption terms and an ecosystem prepared to support the asset, according to Sham.

“Compliance earns the right to compete; utility and ecosystem readiness drive usage,” he said.

FASB’s proposal and the GENIUS Act framework remain subject to their respective rulemaking processes. Treasury said comments on its proposed rule should be submitted within 60 days of publication in the Federal Register.

If the rules take effect largely as proposed, stablecoin competition could shift from a race based mainly on supply, yield and exchange availability toward one shaped by legal claims, reserve access and the ability to return dollars during a crisis.

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