Crypto World
On-Chain Insurance Markets – Smart Liquidity Research
The Most Underrated Primitive in DeFi
DEXs get the glory.
Lending markets get the TVL.
Memecoins get the chaos.
But what is the quiet infrastructure that will determine which protocols survive the next bear cycle?
Insurance.
And not the polite, brochure-friendly version.
I’m referring to native, on-chain risk pricing markets integrated directly into DeFi protocols.
The Hard Truth: DeFi Is Structurally Underinsured
DeFi has:
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Billions in TVL
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Smart contracts controlling systemic liquidity
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Cross-chain bridges holding economic nukes
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Governance tokens directing treasury decisions
What doesn’t it have?
Adequate, scalable risk markets.
Insurance in DeFi today is niche. Optional. Afterthought-level.
But if capital markets teach us anything, it’s this:
Markets don’t mature without mechanisms to price risk.
Right now, DeFi prices yield far better than it prices fail.
That’s backwards.
Why Risk Pricing Markets Matter More Than DEXs
Yes, decentralized exchanges unlocked permissionless liquidity.
Yes, AMMs were revolutionary.
But over the long term, risk markets determine capital efficiency.
In traditional finance, insurance, and derivatives:
In crypto, we built leverage first… and safety second.
That’s like inventing jet engines before seatbelts.
What Is an On-Chain Insurance Market?
An on-chain insurance market is a protocol layer where:
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Smart contract risk is priced dynamically
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Coverage can be bought or sold permissionlessly
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Premiums adjust based on real-time demand and risk signals
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Claims are resolved via transparent mechanisms
Think of it as a prediction market for failure — except with capital backing it.
Risk becomes tradable.
Failure becomes priced.
Security becomes economically measurable.
The Bear Market Stress Test
Bull markets hide structural weakness.
TVL is up. Tokens pump. Hacks feel like isolated incidents.
Bear markets are different.
Liquidity dries up.
Confidence collapses.
Treasuries get tested.
Governance becomes brittle.
And here’s the thesis:
Protocols without native insurance primitives won’t survive the next real bear cycle.
Why?
Because when volatility spikes:
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LPs withdraw if the downside is unprotected
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Institutions avoid uninsured smart contract exposure
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Retail panics faster when risk is opaque
Without insurance, capital becomes fragile.
With insurance, capital becomes sticky.
Native Insurance vs. Third-Party Coverage
Most DeFi insurance today is external.
Protocols like:
offers coverage marketplaces.
That’s a start. But it’s not enough.
The future isn’t external add-ons.
The future is:
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Embedded coverage at the deposit
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Automated coverage ratios
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Insurance pools funded by protocol revenue
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Dynamic risk premiums are visible in UI
Insurance must be default, not optional.
The Capital Efficiency Argument
Insurance unlocks:
1. Lower Cost of Capital
If LPs are insured, they demand lower yield premiums.
Risk compression = deeper liquidity.
2. Institutional Participation
Institutions require hedged exposure.
No insurance = no serious capital.
3. Governance Discipline
If risk is priced, governance decisions become economically accountable.
Risk markets are truth machines.
They expose weakness before hacks do.
Insurance as a Signal Layer
On-chain insurance markets can function as:
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Early warning systems
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Governance credibility scores
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Smart contract risk dashboards
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Protocol health indicators
If premiums spike, something’s wrong.
Markets don’t lie — especially when capital backs the signal.
DEX volume can be gamed.
TVL can be mercenary.
Insurance pricing? Much harder to fake.
The Inevitable Convergence
Over time, we’ll see convergence between:
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Lending markets
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Perpetuals
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Options
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Insurance
All of them are risk-transfer systems.
The line between hedging and insurance will blur.
Smart contracts will self-insure.
Treasuries will auto-allocate to coverage pools.
Risk will be tokenized.
And the protocols that integrate this layer early?
They’ll survive volatility cycles with stronger balance sheets and higher trust.
The Real Competitive Moat
Most protocols compete on:
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APY
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Incentives
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UX
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Tokenomics
The next cycle will reward:
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Resilience
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Risk transparency
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Embedded protection
Yield attracts capital.
Insurance retains it.
Final Thesis
DeFi’s first phase was about access.
The next phase is about durability.
Risk pricing markets are not a side feature.
They are foundational infrastructure.
Protocols without native insurance primitives won’t survive the next bear cycle.
And when the next liquidity crunch hits, the market won’t ask:
“How high was your APY?”
It will ask:
“How well were you insured?”
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- The TON Wallet Vaults will let users earn yield on BTC, ETH, and USDT.
- Toncoin (TON) is deeply oversold, trading near $1.29 with bearish momentum.
- The key levels to watch are the support around $1.23–$1.26 and the resistance around $1.41–$2.02.
Toncoin (TON) cryptocurrency has faced a sharp decline even as Telegram rolls out its new Vault feature within the TON Wallet.
The launch of “Vault” in TON Wallet allows users to earn yield on Bitcoin (BTC), Ethereum (ETH), and Tether (USDT) without leaving the app.
Vaults are self-custodial, meaning users retain control of their private keys and assets while participating in decentralised earning strategies.
This integration of decentralised finance (DeFi) into a widely used messenger app marks one of the most accessible on-ramps to DeFi for everyday users.
The TON Wallet uses a combination of DeFi protocols to generate yield behind the scenes.
Morpho provides the lending backbone, while the TON Applications Chain executes transactions, and Re7 manages risk and strategy design.
Users simply interact through the Telegram interface, making the process seamless and user-friendly.
Toncoin market reaction
Despite the positive news, Toncoin’s market performance has been under pressure.
The cryptocurrency has dropped to $1.29, down 3.6% over 24 hours.
This decline aligns with a broader market-wide risk-off rotation.
The total crypto market cap fell 2.43%, and sentiment remains in extreme fear, with the Fear & Greed Index at 16.
Notably, altcoins are underperforming Bitcoin, and Toncoin has moved in line with the market.
TON price technical analysis
Technical indicators show a bearish trend.
The price has broken both the 7-day and 30-day simple moving averages, confirming downward momentum.
In addition, the Relative Strength Index (RSI) reads 26.42, indicating deeply oversold conditions.
The selling volume has also increased by almost 30%, showing persistent pressure despite the oversold state.
Looking at the historical chart movements, the key support lies between $1.23 and $1.30, and the Fibonacci levels highlight this zone as critical for potential short-term rebounds.
A bounce could occur if buyers step in at these levels, especially if Bitcoin stabilises after its recent decline.
CoinLore’s analysis highlights additional support at $1.06 and a secondary zone near $0.8280.
On the upside, the immediate resistance is at $1.41, $1.79, and $2.02, marking key thresholds for traders to watch.
Traders should focus on high-volume rejection or acceptance around the $1.26–$1.30 range to gauge the next move.
Toncoin price prediction
With the introduction of Vaults, TON now combines utility and DeFi access, which could support demand if broader market conditions improve.
If the Toncoin price holds above the $1.23–$1.26 support zone, a short-term rebound toward the 7-day SMA at $1.33 could be possible.
Otherwise, a break below $1.23 may open the path to $1.14, where further downside could extend toward $1.06.
But the oversold RSI suggest a potential bounce, although caution is advised, as the market remains under pressure.
In case of a rebound, clearing the $1.41 resistance would signal strength and potentially push TON toward $1.79 and $2.02.
As US policymakers scrutinize prediction markets platforms, many Polymarket users won bets over speculation as to which insider trading an online sleuth had exposed.
Polymarket users betting on an employee at trading platform Axiom as the target of an insider trading investigation by ZachXBT were rewarded after the crypto sleuth announced the results on social media to his 977,500 followers.
In a Thursday X post, ZachXBT said Axiom employee Broox Bauer and others allegedly were responsible for insider trading activity at the company “since early 2025.” According to the pseudonymous onchain investigator, Bauer allegedly used internal tools “to lookup sensitive user details to insider trade by tracking private wallet activity.”
ZachXBT shared audio clips related to the investigation, in which an individual he said was Bauer claimed he could track Axiom users. In an X post following the announcement, Axiom said it was “shocked and disappointed” in the news.
“We have removed access to these tools and will continue to investigate and hold the offending parties responsible,” said Axiom. “This does not represent us as a team, we have always tried to put the user first.”
The investigation was the latest by the online sleuth, known in the industry for uncovering scams, hacks and instances of insider trading or other unscrupulous activities. Polymarket users bet nearly $40 million leading up to today’s reveal speculating that Axiom would be the target of the probe.
Related: Kalshi bans US politician over alleged insider trading violation
One Polymarket user, who placed separate bets on a similar event contract, profited by about $400,000. Others traded more than $9.7 million on the platform’s “Which crypto company will ZachXBT expose for insider trading?” contract, winning their bets.
Prediction platforms under scrutiny in US for state-federal divide on enforcement
Last week, Commodity Futures Trading Commission (CFTC) Chair Michael Selig said that the federal regulator had “exclusive jurisdiction” over prediction markets, pushing back against several state-level authorities targeting platforms like Polymarket and Kalshi over sports betting. The CFTC chair warned that any state-level entities challenging the federal agency would be met in court.
Magazine: Clarity Act risks repeat of Europe’s mistakes, crypto lawyer warns
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
WhiteBIT’s WBT surges 3,337% in three years, hitting $65.30 from a $1.90 launch price.
Summary
- WhiteBIT’s WBT surges from $1.9 in 2022 to $65.30, marking a 3,337% rise in three years.
- WBT powers WhiteBIT’s ecosystem, offering fee discounts, staking perks, and weekly token burns to cut supply.
- WBT joins five S&P Crypto indices, signaling growing institutional recognition of exchange-based tokens.
WhiteBIT launched its native token WBT in August 2022 at around $1.9. Three years later, it touched an all-time high of $65.30 — a roughly 3,337% gain from its low — making it one of the top-performing exchange tokens in the market.
The numbers tell the story
WBT bottomed at around $3 in September 2022, just weeks after launch. It spent most of 2023 quietly grinding between $3 and $6. Nothing flashy. By the end of 2023, it closed the year at $5.78. A slow start by crypto standards.
Then came 2024. The token climbed steadily to close the year at around $24.61, roughly a 4x from where it started the year. And 2025 is where things really accelerated. WBT went past $30, then $40, then $50, eventually hitting $65.30 on November 18, 2025, according to CoinMarketCap. As of February 2026, it’s consolidating around $50, sitting at a market cap above $10 billion and ranking among the top 15 globally.
What’s actually driving it
WBT is not a standalone token. It’s the native coin of WhiteBIT, one of the largest European crypto exchanges by traffic. The exchange was founded in 2018 and serves 8 million customers. It’s also a part of the W Group, which serves 35 million customers globally, and reached a total capitalization of $38.9 billion in 2025.
WBT’s utility is embedded in the platform. It is said that holders of WBT get up to 90% off taker fees, up to 100% off maker fees, free daily ERC 20 and ETH withdrawals, free AML checks, boosted referral rates up to 50%, access to staking rewards, VIP status, and access to the Earn program.
WBT has a maximum token number of 400 million. On top of that, the exchange runs a weekly token burn mechanism, creating a deflationary pressure that reduces circulating supply over time. As of early 2026, about 214 million tokens are in circulation.
Most notably, WBT was added to 5 S&P Crypto indices, underscoring the platform’s expanding influence in the global digital asset market and highlighting a broader industry shift toward regulated, infrastructure-focused players.
Strategic moves that mattered
WhiteBIT relies on tokenomics, but the exchange has also made strategic bets that directly impacted WBT’s visibility and credibility.
In 2025, WhiteBIT doubled down by becoming the sleeve partner and official cryptocurrency exchange partner of Juventus FC. The deal marked a strategic move towards the company’s mission to make cryptocurrency more accessible to a wider audience.
On the expansion side, WhiteBIT launched operations in the United States through WhiteBIT US, an independent entity to scale and operate locally across the country. It also entered a cooperation agreement with Saudi Arabia, focusing on Kingdom’s blockchain infrastructure and CBDC framework development, and stock market tokenization.
Where could it go from here?
WBT is currently trading about 25% below its all-time high, with 99.52% of its circulating supply in profit according to recent on-chain data. That’s a positive position, but it also means the token is at a level where holders could take profits during any broader market weakness.
The bull case rests on continued exchange growth, further geographic expansion (the US and Saudi launches are still early), institutional adoption, and the deflationary burn mechanism steadily compressing supply. WhiteBIT has also mentioned that it is currently progressing with its MiCA compliance efforts and pursuing EU licensing.
If WhiteBIT continues scaling at its current pace and the broader crypto market enters a sustained bull cycle, WBT could push past its previous high.
The bear case is simpler: exchange tokens live and die by the exchange’s performance. Regulatory headwinds, increased competition from Binance or Coinbase, or a prolonged market downturn could stall momentum.
Disclosure: This content is provided by a third party. Neither crypto.news nor the author of this article endorses any product mentioned on this page. Users should conduct their own research before taking any action related to the company.
Crypto World
Ethereum adds $15b in market value amid rising allocations to emerging crypto protocols
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
Mutuum Finance gains momentum as Ethereum rebounds, raising $20.6m with 19,000+ holders.
Summary
- Mutuum Finance raises $20.6m as Ethereum gains momentum, with MUTM priced at $0.04 and 19,000+ holders.
- Ethereum-based Mutuum lets users borrow via over-collateralization while retaining full asset ownership.
- Lenders earn yield through mtTokens, which grow in value as borrowers repay interest-backed loans.
While much of the early year was defined by caution, a sudden surge in crypto buying activity has caught the attention of global analysts. Ethereum (ETH), the world’s second-largest cryptocurrency, is leading this recovery.
This move represents a deeper change in how the market values blockchain projects. Large investors are increasingly looking for platforms that provide transparent financial services. By rotating capital back into Ethereum and its broader ecosystem, investors are prioritizing projects with deeper liquidity, stronger fundamentals, and proven infrastructure.
Ethereum
The road to this recovery has been difficult for Ethereum. Since reaching peaks in August 2025, the asset faced a long and steady decline. By February 6, 2026, the Ethereum price had fallen to approximately $1,746, representing a drop of over 45% from its previous highs.
This fading period was caused by a mix of high interest rates and a general lack of confidence in the broader market. Many traders feared that the asset would continue to slide as leverage was wiped out across various exchanges.
However, the trend shifted dramatically in late February. In less than 24 hours, Ethereum managed to add more than $15 billion to its total market capitalization. This sudden jump pushed the asset back toward the $2,000 mark and restored a sense of optimism to the ecosystem.
This increase is crucial because it suggests that a “market bottom” has likely been formed. When such a massive amount of value is added in a single day, it usually indicates that institutional buyers are stepping in to secure positions before the next growth cycle begins.
This recovery is also supported by a massive drop in “open interest.” After a $7 billion leverage collapse earlier in the month, the market is now much “cleaner.” Most of the risky, debt-based positions have been closed, leaving behind long-term holders and spot buyers. With the market cap now holding firm, the focus has shifted to the projects being built on top of this rejuvenated network.
Mutuum Finance
As Ethereum regains its strength, the Mutuum Finance (MUTM) protocol is showing similar momentum. This Ethereum-based project has raised over $20.6 million in total funding, with the MUTM price currently at $0.04. This financial success is backed by a rapidly growing community that has officially surpassed 19,000 individual holders.
Preparing the dual-market mechanism
One of the primary reasons Mutuum Finance is catching the eye of professional investors is its dual-market design. According to its official plans, the protocol is preparing two distinct ways for users to interact with liquidity:
- Peer-to-Contract (P2C): This model uses automated liquidity pools. It allows lenders to deposit assets and earn immediate interest. Borrowers can access these pools to get instant loans without needing a direct match with another person. This is ideal for major assets like ETH and USDT where speed and high liquidity are needed.
- Peer-to-Peer (P2P): This market is designed for more customized deals. It allows two individuals to agree on their own terms, such as specific interest rates or loan lengths. This is perfect for niche or more volatile assets that might not fit into a standard pool.
By preparing both models, Mutuum Finance provides a complete solution for different types of risk profiles. It gives users the freedom to choose between automated, fast transactions and direct, custom agreements.
How lending and borrowing works
The Mutuum Finance whitepaper describes a system where users can unlock the value of their crypto without selling it. This is done through a process of over-collateralization. Those want to borrow money must provide assets that are worth more than the loan itself. This ensures the protocol remains safe even if the market becomes volatile.
While providing more collateral than the loan amount may seem counterintuitive, the advantage is that users keep 100% ownership of their assets. If the price of the collateral (like ETH or WBTC) increases while the user has an active loan, they still benefit from that entire price appreciation.
Lenders play a vital role by supplying these assets to the protocol. In return, they receive mtTokens. These are yield-bearing receipts that represent their share of the pool. As borrowers pay back their loans with interest, the value of the mtTokens grows.
This means a lender’s balance increases automatically over time. This mechanism is a draw for long-term holders who want to earn passive income while keeping their original investments.
Protocol launch and on-chain whale allocations
The recent activation of the V1 protocol on the Sepolia testnet has moved Mutuum Finance from a concept to a working product. This version allows the community to test the lending pools, the mtToken system, and the automated risk bots in a live risk-free environment. It supports major assets like WBTC, LINK, ETH, and USDT, giving a look at how the platform handles liquidity.
Since the V1 launch, on-chain data has revealed a significant spike in activity. Several whale allocations have been spotted, with single investments exceeding $100,000. By delivering a working protocol on the testnet and completing a security audit with Halborn, Mutuum Finance has provided the transparency that these larger players require.
Disclosure: This content is provided by a third party. Neither crypto.news nor the author of this article endorses any product mentioned on this page. Users should conduct their own research before taking any action related to the company.
Crypto World
Progmat Taps Avalanche for $2B Token Migration as Japan Pushes Toward Global On-Chain Finance
TLDR:
- Progmat is migrating 439.6 billion yen in tokenized assets from Corda5 to Avalanche, targeting full completion by June 2026.
- All Security Token projects on Progmat’s platform will become EVM-compatible, enabling integration with Ethereum-based DeFi ecosystems.
- Project Keystone uses LCP technology to enable DvP settlement between Security Tokens and stablecoins across different blockchains.
- Avalanche’s sub-second finality and customizable validator controls meet Japan’s strict financial regulatory and settlement infrastructure requirements.
Progmat, a Japan-based fintech company backed by major megabank groups, is migrating over $2 billion in tokenized assets to the Avalanche blockchain.
The company announced the move on February 26, 2026, as part of a broader infrastructure renewal. The migration covers all Security Token projects currently on its platform, totaling assets worth more than 439.6 billion yen. This shift marks one of the largest tokenized asset migrations in Asia’s financial history.
Tokenized Asset Migration Moves From Corda5 to Avalanche
Progmat’s Security Token platform, “Progmat ST,” has operated on Corda5 since its SaaS migration in October 2024.
Now, the company is replacing Corda5 with Avalanche as the underlying distributed ledger. All existing ST projects will transition to an EVM-compatible, gradually permissionless environment on the new chain.
The migration began in fall 2025 and is expected to reach full completion by June 2026. New ST projects have already started including Avalanche transition disclosures in their securities reports.
Trust banks, securities companies, and relevant authorities have been briefed and are cooperating with the process.
Progmat structured the migration to minimize disruption for financial operators and investors already using the platform.
The SaaS layers for ST issuers and administrators remain largely unchanged. Only the chain layer is being replaced, keeping the operational impact on existing participants as low as possible.
Avalanche Selected for Financial-Grade Performance and Flexibility
Avalanche’s technical architecture made it a strong fit for Japan’s regulated financial market. Its L1 framework allows operators to control who can transact, who can develop on the chain, and who can run validator nodes. These controls can be tightened or relaxed over time without stopping the chain.
The platform’s consensus algorithm delivers finality in under one second. This speed is critical for financial settlement, where delays create counterparty risk.
Avalanche also supports native cross-chain communication through its InterChain Messaging protocol, enabling fast and low-cost transfers between L1 chains.
EVM compatibility adds another layer of value. Developers can use existing Ethereum tools and libraries when building on Progmat’s Avalanche infrastructure.
This opens the door to integration with a wide range of DeFi services and smart contract ecosystems, expanding the market reach for tokenized assets held on the platform.
Cross-Chain Infrastructure Enables Global Settlement Capabilities
Beyond the migration, Progmat is commercializing cross-chain settlement services under a project named “Project Keystone.”
At its core is LCP, a light client proxy running on Trusted Execution Environments, developed in collaboration with Datachain.
This technology enables DvP settlement between Security Tokens and stablecoins, and PvP settlement between stablecoins from different jurisdictions.
The need for cross-chain services stems from a fragmented global market. Japan, the United States, Europe, and South Korea are each developing their own currency-denominated stablecoins on separate ledgers.
Without interoperability, cross-border transactions between these platforms remain blocked. Progmat’s infrastructure aims to bridge these gaps for institutional participants.
The IBC/LCP protocol was chosen as a core component because it operates without locking operators into a single vendor.
As an open standard, it allows multiple solution providers to participate, which protects the sovereignty concerns of regulated financial institutions.
Combined with Avalanche’s native communication tools, the framework positions Progmat’s platform as a bridge between Japan’s domestic ST market and global on-chain finance infrastructure.
Recordings and screenshots reviewed by the blockchain investigator show internal tools that surfaced users’ private wallets and trade histories.
Blockchain sleuth ZachXBT has accused employees at crypto trading platform Axiom of abusing internal tools to spy on users and trade using private wallet data, according to a detailed investigation posted on X today.
The alleged activity dates back to early 2025 and involves a senior business development employee based in New York.
According to ZachXBT, the employee, Broox Bauer, is heard on recordings claiming he could track “any Axiom user via ref code, wallet, or UID” and could “find out anything to do with that person.” In one clip cited by ZachXBT, Bauer also describes gradually increasing the number of wallets he monitored “so it does not look that suspicious.”
Axiom was founded by Henry Zhang — also known as Mist — and Preston Ellis — also known as Cal — in 2024 and later went through Y Combinator before quickly becoming one of the most profitable crypto platforms. The web-based trading terminal pulled in tens of millions of dollars in fees just months after launching in late January 2025, The Defiant reported earlier.
‘No Monitoring or Access Controls’
Screenshots shared in the X thread also show internal dashboards listing users’ private wallets, linked accounts, and transaction history, data that sources contacted by ZachXBT said appeared accurate.
The group also allegedly maintained shared spreadsheets mapping wallets tied to well-known traders and memecoin promoters. In another recording, Bauer lays out a plan to help a colleague make $200,000 by abusing this access, saying he would send over “the full list of wallets.”
“Regardless of whether Cal or Mist were aware, there was little to no monitoring or access controls in place to mitigate this abuse from happening in the first place,” ZachXBT wrote.
Because Bauer is based in New York, he added that the case could fall under the Southern District of New York, even if no criminal charges are ultimately filed.
It’s unclear, however, how much profit, if any, was made using the alleged insider information.
‘Shocked and Disappointed’
As the details came out, Axiom said in an X post, “We are shocked and disappointed to hear that someone on our team abused internal customer support tools to look up user wallets.” The company added that it “removed access to these tools and will continue to investigate and hold the offending parties responsible.”
Days before ZachXBT publicly named the firm, an alleged Axiom affiliate using the alias devininsider was already pushing back on speculation around Axiom. “We are simply a terminal that allows people to trade open market memecoins, what could we be possibly insider trading lol,” they said.
Blockchain tracker Lookonchain noted in an X post that just hours before ZachXBT named Axiom as the company accused of insider trading, two new anonymous wallets bet $59,800 on Axiom on Polymarket, and within three hours, turned it into $109,000.
Blockchains and artificial intelligence are complementary technologies, according to crypto asset manager Grayscale, even as markets have recently treated them as part of the same trade.
Zach Pandl, Grayscale’s head of research, said that while disruptive technologies tend to produce clear winners and losers, the relationship between AI and blockchain is more symbiotic than competitive. Rapid AI adoption is expected to reward some industries, such as chipmakers, while pressuring others, including segments of professional services.
“Although crypto valuations have been tightly correlated with the drawdown in software stocks, we think blockchains and AI are complementary from a fundamental standpoint,” he said in the Wednesday blog post.
U.S. equity markets have lately focused on the downside. The S&P 500 software index has fallen roughly 20% year to date, and crypto valuations have moved closely with the selloff. But Pandl maintains that the parallel drawdown obscures a more constructive long-term dynamic between the two technologies.
Investor anxiety about artificial intelligence’s disruptive potential has sparked a broad sell-off in tech and software stocks, erasing significant market value as traders reassess long-held valuations.
U.S. software and services shares have plunged sharply, wiping out roughly $1 trillion in market capitalization, as fears mount that fast-advancing AI tools could upend traditional business models and revenue streams.
The S&P 500 software index has slumped as investors rotate out of high-flight tech names amid heightened volatility and skepticism over how quickly and profitably AI adoption will play out.
Pandl contends that blockchains are likely to become the financial rails for AI agents. Today’s chatbots operate largely outside the financial system. But if AI agents are equipped with digital wallets, he expects them to transact over blockchains rather than traditional bank infrastructure.
Blockchains offer transparency, near-instant settlement, 24/7 availability and global reach with an internet connection, he said. While opening a bank account requires a human intermediary, any user, including a bot, can create a blockchain address. Pandl said rising volumes of low-value stablecoin transactions would be an early signal that this thesis is playing out.
At the same time, he argued that blockchain technology could help mitigate some of AI’s risks. As large language models proliferate, concerns around data provenance, deepfakes and the concentration of control over resources and decision-making are likely to intensify. Public blockchains, Pandl said, can provide verifiable records and more decentralized infrastructure to counterbalance those trends.
The report acknowledged AI may also introduce new challenges for crypto networks. Advanced tools could make blockchain surveillance more effective, potentially eroding user privacy. AI agents may also uncover new vulnerabilities in smart contracts; OpenAI recently launched EVMbench, an initiative aimed at using AI to identify and patch such risks.
Read more: Crypto isn’t losing to AI, its just ‘capitalism doing its job,’ says Dragonfly
Leading altcoins retraced some of their gains from Wednesday.
Crypto markets dipped slightly on Thursday, with the total market cap dropping by about 2% over the past day to around $2.39 trillion.
Bitcoin (BTC) is trading near $67,000, down 2% over the past day but up 1% for the week, slightly below Wednesday’s peak.
Ethereum (ETH) slipped to $1,992, posting a 3% daily loss. Among other Top 10 assets, Solana (SOL) dropped 3.5%, XRP plunged 5%, and BNB fell 1.5%.
‘Constructive Return of Liquidity’
Analysts at glassnode noted in an X post today that “profit-taking continues to absorb momentum at the $70K threshold,” implying that this is consistent with a thin liquidity regime where even modest realization events are sufficient to suppress recovery attempts.
“Historically, breaks below 1 have persisted for 6+ months before reclaiming it, a recovery that typically signals a constructive return of liquidity to the market,” they added.
Paul Howard, senior director at crypto trading firm Wincent, said in commentary for The Defiant that stronger-than-expected earnings overnight had lifted tech stocks and risk assets more broadly.
He noted that “the short squeeze on Circle was notable, alongside the significant short interest in MSTR and the earnings beat from NVDA,” adding that these moves contributed to Bitcoin’s rally over the past 24 hours.
Howard added that the market is still looking for a clear catalyst that could push cryptocurrencies significantly higher, rather than just supporting them as a hedge trade.
Big Movers and Liquidations
Among the Top 100 assets by market cap, Pippin (PIPPIN) led gains with an 18.4% jump, followed by Internet Computer (ICP), which is up 8.5%.
On the downside, Cosmos Hub (ATOM) fell 7.9%, and Morpho (MORPHO) declined 3.6%.
CoinGlass reports that more than 157,000 traders were liquidated over the past 24 hours for a total of $560 million.
Shorts dominated with around $420 million liquidated, compared with nearly $148 million in long positions.
ETFs and Macro Conditions
Spot Bitcoin ETFs saw inflows of $506 million on Wednesday, Feb. 25, the largest single-day inflow since Jan. 5, bringing total net assets to $87.6 billion. On that same day, spot Ethereum ETFs added $157 million, bringing cumulative net assets to $11.8 billion.
On the macro front, U.S. Treasury yields were mostly flat. The 10-year note slipped slightly to 4.042%, the 30-year bond yield edged down to 4.687%, and the 2-year note ticked higher to 3.473%.
Thursday’s Labor Department report showed initial unemployment claims for the week ended Feb. 21 at 212,000, slightly above the prior week’s revised 208,000 but below the 215,000 forecast, CNBC reported.
On the geopolitical side, Iran’s foreign ministry said today’s nuclear talks in Geneva produced “very constructive” proposals, but didn’t give any details, according to the Associated Press. The U.S. and Iran are negotiating indirectly, with Oman’s foreign minister and the UN’s nuclear watchdog also present.
The AI and data center boom partly driven by Bitcoin miners is increasingly being financed through high-yield bond issuance, underscoring how lenders are pricing both risk and opportunity in the sector.
According to TheEnergyMag’s latest newsletter, companies tied to AI data center development have raised about $33 billion in long-term senior notes over the past 12 months, excluding convertible debt — bonds that can later be converted into equity and typically carry different risk dynamics.
The interest rate spread is notable: While regulated utilities and traditional energy companies generally borrow at 4% to 5%, AI- and crypto-linked issuers pay closer to 7% to 9%.
The average coupon on newly issued US dollar high-yield debt has was close to 7.2% in late 2025, from 8% to 9% in 2023, according to Janus Henderson Investors, citing BofA Global Research, average coupon, as of Nov. 30.
Those at the higher end of the spectrum are largely current or former digital asset mining companies that have pivoted into AI infrastructure, suggesting capital remains comparatively expensive for the group.
TheEnergyMag cited recent raises, including CoreWeave at 9.25% and 9% in May and July 2025, Applied Digital at 9.2% in November, TeraWulf at 7.75% and Cipher Mining at 7.125% and 6.125%.
“The message from lenders is clear,” TheEnergyMag wrote. “Regulated load and contracted generation still get treated as infrastructure. AI and bitcoin, even when attached to long-term offtake agreements, are still treated as growth credit.”
Related: Canaan buys 49% stake in three Texas mining sites for $40M
AI infrastructure boom intensifies
Despite concerns about overspending and potential overcapacity, the AI data center build-out remains one of the most visible trends in the economy, and a major driver of demand on Wall Street.
The scale of that momentum was underscored on Wednesday when chipmaker Nvidia posted blockbuster fourth-quarter results, with profit rising 94% and revenue climbing 73% year-on- year. The chipmaker reported $43 billion in net income and $68.1 billion in revenue.
Meanwhile, Bitcoin mining companies are planning about 30 gigawatts of new power capacity aimed at AI workloads, nearly triple the capacity they currently operate. Much of it remains in development pipelines or early-stage planning, but the industry has made clear that AI infrastructure is a strategic priority.
Related: The real ‘supercycle’ isn’t crypto, it’s AI infrastructure: Analyst
Crypto World
Ethereum’s Fast L1 Vision: Vitalik Buterin Unveils Strawmap Plan for Slots and Finality
TLDR:
-
- Vitalik proposes cutting Ethereum’s slot time from 12 seconds to 2 seconds using a sqrt(2) formula.
- Erasure coding upgrades to Ethereum’s p2p layer will reduce block propagation time across the network.
- The Minimmit finality algorithm targets a reduction from 16 minutes today down to just 8 seconds.
- Ethereum’s quantum-resistant upgrades will roll out in phases, with slot protection arriving first.
- Vitalik proposes cutting Ethereum’s slot time from 12 seconds to 2 seconds using a sqrt(2) formula.
Ethereum’s Fast L1 goal took center stage as Vitalik Buterin published a detailed strawman roadmap outlining how the network plans to evolve its base layer.
The document covers slot time reductions, peer-to-peer network upgrades, and a new finality algorithm. Buterin walks through each goal methodically, explaining how the changes interconnect.
The roadmap presents a phased, component-by-component transformation of Ethereum’s consensus layer toward a faster, simpler, and quantum-resistant design.
Slot Time and Network Architecture at the Core of Fast L1
Ethereum’s Fast L1 goal begins with a structured reduction of slot time across multiple incremental steps. Buterin proposes moving from the current 12 seconds down through 8, 6, 4, 3, and eventually 2 seconds per slot.
Each reduction follows a “sqrt(2) at a time” formula, with steps only taken when safety is confirmed.
Supporting shorter slots requires major improvements at the network layer. Buterin points to ongoing work by @raulvk on an optimized peer-to-peer design using erasure coding.
The new architecture splits each block into pieces so that any subset of them is enough to reconstruct the full block.
In his post, Buterin explained: “split each block into 8 pieces so that with any 4 of them you can reconstruct the full block.” This design cuts 95th percentile block propagation time and makes shorter slots viable without security tradeoffs.
That said, adding protocols like ePBS and FOCIL to the slot structure tightens timing constraints. These changes shrink the safe latency window from one-third of a slot to one-fifth.
To offset this, researchers are exploring a model where only 256 to 1,024 randomly selected attesters sign per slot, eliminating the aggregation phase and shortening slot duration further.
Finality Overhaul and the Shift to Quantum-Resistant Consensus
Beyond slot time, the strawman roadmap targets a complete rework of how Ethereum achieves finality. Today, finality takes roughly 16 minutes on average, calculated across 12-second slots, 32-slot epochs, and 2.5 epochs. Buterin wants to decouple finality from slot time entirely so each can be optimized on its own path.
The target is a one-round-finality algorithm called Minimmit, a variant of the established BFT consensus design. A projected trajectory moves from 16 minutes today through several intermediate stages, eventually reaching as low as 8 seconds with aggressive Minimmit parameters.
These changes will also carry a transition to post-quantum cryptography, including hash-based signatures and a STARK-friendly hash function.
Three hash function options are under active research: adjusting Poseidon2’s round count, returning to Poseidon1, or adopting BLAKE3 as a conventional alternative.
Buterin described the overall transformation as a “ship of Theseus” style process, replacing each part of Ethereum’s consensus layer one at a time.
Notably, the phased approach means slot-level quantum resistance could arrive well ahead of finality-level protection, providing an early security layer if quantum computing advances faster than anticipated.
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