Crypto World
Spirit Aviation (FLYYQ) Stock Skyrockets Nearly 200% Amid Federal Bailout Discussions
TLDR
- Spirit Aviation (FLYYQ) stock exploded by as much as 218% Wednesday following news of potential federal rescue financing
- Trump White House reportedly in final stages of negotiations for approximately $500 million emergency loan
- Proposed agreement may include warrants granting government potential equity ownership in the airline
- The discount carrier was approaching possible liquidation without external financial intervention
- Soaring jet fuel costs, which have roughly doubled in certain U.S. regions, compound the airline’s financial woes
The struggling discount airline has been navigating turbulent waters for months. Wednesday’s developments, however, sparked renewed optimism among shareholders — though uncertainty remains.
Spirit Aviation Holdings (FLYYQ) rocketed as much as 218% during Wednesday’s trading session after news broke that the Trump White House is conducting final-stage negotiations to extend approximately $500 million in emergency capital to the financially troubled budget carrier.
Spirit Aviation Holdings, Inc., FLYY
Shares had already climbed roughly 122% during Tuesday’s session when initial reports surfaced that Spirit had approached Washington seeking federal assistance.
According to The Wall Street Journal’s initial coverage and subsequent CNBC confirmation via anonymous sources with direct knowledge, the discussions are progressing rapidly.
Under the contemplated arrangement, federal authorities would extend senior-level financing, positioning the government ahead of existing creditors. The package may also feature warrant provisions, granting Washington the option to purchase equity at predetermined prices — potentially establishing the government as a significant stakeholder.
President Trump acknowledged the situation Tuesday during a CNBC Squawk Box interview, stating: “Spirit’s in trouble, and I’d love somebody to buy Spirit. It’s 14,000 jobs, and maybe the federal government should help that one out.”
White House communications also targeted the former administration’s policies. Press representative Kush Desai noted that Spirit “would be on a much firmer financial footing had the Biden administration not recklessly blocked the airline’s merger with JetBlue.”
Spirit refused to address the financing negotiations specifically. The company issued this statement: “We are operating our business as normal; Guests can continue to book, travel and use tickets, credits and loyalty points as usual.”
The Association of Flight Attendants-CWA, representing Spirit’s flight crew members, expressed support for federal intervention. “We are hopeful that the government will recognize the needs for emergency funds especially in the current economic environment,” a union representative stated.
A Long Road to This Point
Spirit entered its second Chapter 11 bankruptcy filing this past August, barely one year following its initial reorganization. The airline had been implementing aggressive cost-reduction measures, downsizing its aircraft fleet, and concentrating operations on profitable routes. Labor unions representing pilots and cabin crew accepted temporary furloughs as part of survival efforts.
Management projected a bankruptcy exit during late spring or early summer in February announcements. However, that projection faced significant headwinds when aviation fuel prices surged nearly 100% across multiple U.S. markets, further eroding already-thin profit margins.
The failed JetBlue acquisition attempt two years prior eliminated what Spirit viewed as a crucial pathway to stability.
What the Deal Could Look Like
Federal financing of this magnitude directed toward a single carrier represents uncommon territory. Previous government airline assistance programs — including post-9/11 support and pandemic relief — distributed funding industry-wide rather than targeting individual operators.
The current administration has previously acquired equity positions in enterprises deemed strategically critical, such as Intel and USA Rare Earth. Spirit would mark an unprecedented case of such intervention involving a company currently operating under bankruptcy protection.
Specific agreement terms remain unconfirmed and subject to modification.
Spirit Aviation currently lacks Wall Street analyst coverage. According to TipRanks’ Technical Analysis tool, the stock presently displays a Buy signal derived from three Bullish indicators versus two Bearish signals recorded over the most recent month.
Thailand’s Securities and Exchange Commission (SEC) is seeking public comment on proposed rule changes that would allow licensed digital asset businesses to apply directly for derivatives licenses, removing the requirement to establish separate entities.
The proposed revisions would build on earlier changes recognizing digital assets as eligible underlying assets for futures contracts, expanding the scope of Thailand’s derivatives market while introducing additional requirements to manage conflicts of interest and strengthen oversight.
The proposal could lower barriers for crypto companies to enter the derivatives market by allowing them to apply for licenses within existing entities, rather than establishing separate companies, while bringing those activities under tighter regulatory oversight.
The regulator said the changes are intended to provide investors with additional tools for hedging and portfolio management, as well as bringing standards for derivatives exchanges and clearing houses in line with international practices.
The proposed changes are open for public consultation until May 20, with feedback from industry participants expected to inform the final framework.
Related: Thailand proposes tighter scrutiny of funders behind crypto firms
Crypto derivatives expand as US moves toward approval
Thailand’s proposal comes as crypto derivatives expand globally and momentum builds toward regulatory approval in the United States.
On Tuesday, Blockchain.com introduced perpetual futures trading in its self-custody wallet, allowing users to open leveraged positions using Bitcoin (BTC) as collateral without transferring funds to an exchange. Underpinned by Hyperliquid, the feature offers access to more than 190 markets with as much as 40x leverage.
Other exchanges have taken a similar approach. Earlier this year, both Kraken and Coinbase launched perpetual futures tied to equities for non-US users as part of a broader push toward 24/7, multi-asset trading.
While most of these products remain largely unavailable in the United States, that could change soon. In March, Michael Selig said the Commodity Futures Trading Commission is working to enable crypto perpetual futures, adding the agency could move on the products “within the next month or so.”
In the meantime, exchanges appear to be positioning for potential approval. Last week, Kraken parent Payward agreed to acquire Bitnomial, a US-regulated derivatives venue, in a move aimed at expanding access to products including perpetual futures for US clients.
Magazine: How to fix insider trading on platforms like Polymarket and Kalshi
Circle’s Chief Economist Gordon Liao has proposed a major recalibration of Aave’s USD Coin (USDC) interest rate model. The proposal aims to restore Aave USDC liquidity on Ethereum after days of full utilization.
Circle CEO Jeremy Allaire endorsed the governance proposal on X, calling attention to Liao’s recommended parameter changes.
Why Aave USDC Liquidity Dried Up
USDC on Aave v3 Ethereum Core has been pinned at 99.87% utilization for four consecutive days. Available liquidity sits below $3 million, while total supply contracted by roughly $60 million in 24 hours.
The freeze traces back to the April 18 KelpDAO rsETH exploit, which triggered approximately $300 million in incremental borrowing.
Trapped suppliers began borrowing stablecoins against their own deposits to exit via decentralized exchanges.
These borrowers are structurally rate-insensitive, according to Liao’s analysis.
At 14%, one week of carry costs just 27 basis points. That makes the current rate ceiling insufficient to deter borrowing or attract new capital.
A Two-Step Rate Fix
Liao proposed a two-phase approach. The first step involves a same-day Risk Steward action to raise Slope 2 to 40% and lower optimal utilization to 87%. A full governance vote within five to seven days would then push the parameters to final targets.
At the proposed 50% Slope 2, the maximum supply rate would reach approximately 48%. Liao argued that level should pull capital from allocators across venues within hours, pushing utilization back below the kink.
Aave Working Toward Resolution
Meanwhile, Aave founder Stani Kulechov said the team is working around the clock on multiple paths forward. He noted the Arbitrum Security Council recovered $70 million in ETH, which could meaningfully reduce exposure.
“Every decision we are making is aimed at an orderly return to normal market conditions and the best possible outcome for everyone involved,” wrote Kulechov in a post.
The proposal now awaits input from LlamaRisk, Aave’s remaining risk service provider since Chaos Labs departed earlier this month.
Whether the interim parameters take effect depends on a Risk Steward multisig action.
Despite this news, AAVE token price is up by nearly 5% in the last 24 hours, and was trading for $95.21 as of this writing.
The post Circle Proposes Aave Rate Overhaul to Fix USDC Liquidity Crisis appeared first on BeInCrypto.
Admiral Samuel Paparo, commander of US Indo-Pacific Command, told the Senate Armed Services Committee that his command is running a Bitcoin (BTC) node and conducting operational tests with the protocol.
The April 21 testimony marked the first time a sitting US combatant commander publicly framed Bitcoin as a national security asset during congressional proceedings.
Bitcoin as a ‘Power Projection’ Tool
Responding to questions from Senator Tommy Tuberville (R-AL), Paparo described Bitcoin as “a peer-to-peer, zero-trust transfer of value” and said that anything supporting all instruments of national power “is to the good.”
He characterized the research as focused on computer science rather than monetary policy.
Proof-of-work, he said, “has got really important computer science applications for cybersecurity,” including protecting data and raising the real-world cost for adversaries conducting cyber operations.
“We have a node on the Bitcoin network right now. We’re doing a number of operational tests to secure and protect networks using the Bitcoin protocol,” he said.
The admiral offered to provide classified details on the tests if requested.
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Broader Strategic Context
Paparo’s remarks align with a growing US posture toward Bitcoin at the federal level. Legislators have advanced the BITCOIN Act and a Strategic Bitcoin Reserve through executive order.
Meanwhile, Major Jason Lowery’s “Softwar” thesis previously proposed proof-of-work as a form of cyber power projection.
Tuberville framed the exchange around competition with China, noting that Beijing’s top monetary think tank has published its own strategic Bitcoin research.
INDOPACOM oversees approximately 380,000 personnel across the Asia-Pacific theater, the primary front for US-China strategic competition.
No official follow-up from the Department of Defense has clarified the scope of the tests as of April 22.
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The post US Military Runs Bitcoin Node for Cybersecurity Tests, Admiral Confirms appeared first on BeInCrypto.
Base’s Azul upgrade is currently live on testnet, with mainnet launch scheduled for mid-May.
Base, the Ethereum layer 2 network developed by Coinbase, announced Tuesday evening its first independently built network upgrade, dubbed Azul, targeting mainnet activation on May 13.
The upgrade marks a “major step” in Base’s push toward Stage 2 decentralization — the highest trust-minimization standard for Ethereum L2s, according to the Base Engineering Blog post announcing the upgrade.
The centerpiece of Azul is a multiproof system that combines two independent proof mechanisms — a trusted execution environment (TEE) prover and a zero-knowledge (ZK) prover — into a single security layer. Either can finalize a transaction on its own, but when both agree, withdrawals from Base to Ethereum settle in as little as a day, the post notes. This architecture satisfies a core Stage 2 requirement: the ability to detect and handle proof system failures entirely on-chain.
Base currently ranks as the second-largest L2 by total value secured, with $12.12 billion, per L2Beat data. Arbitrum One is ranked first with just over $16 billion.
The announcement comes amid growing pressure on L2s to mature their security models. Ethereum co-founder Vitalik Buterin has pushed for faster L2 withdrawal times to reduce reliance on third-party bridges, while also questioning whether the original L2 vision still holds as the space has evolved. Base’s multiproof design is explicitly modeled on Buterin’s L2 finalization roadmap, the Azul announcement notes.
Beyond security, Azul streamlines Base’s underlying client stack and aligns the network with Ethereum’s latest execution-layer specs. Base has also doubled down on stablecoins, global markets, and AI agents as its core growth bets, and faster, cheaper finality is foundational to all three.
Azul is live on testnet now, with a $250,000 bug bounty competition running through May 4.
This article was written with the assistance of AI workflows. All our stories are curated, edited and fact-checked by a human.
Aave TVL has dropped by $10B since the Kelp attackers used the protocol to borrow $190 million in WETH, depositing unbacked rsETH.
DeFi’s lending landscape is being reshuffled in real time as capital flees Aave in the wake of the Kelp bridge exploit, and a notable chunk of appears to be landing on SparkLend.
Spark’s stablecoin lending protocol SparkLend has seen over $1.4 billion in deposits flow into it in the past few days since the $290 million Kelp bridge exploit on Saturday, April 18, which has continued to rock DeFi since.
Total value locked on SparkLend surged from around $1.89 billion to $3.3 billion as of today, April 22, per DefiLlama data.
Meanwhile, Aave — now the second-largest protocol in DeFi by TLV, and where the Kelp hackers’ faked funds were deposited — has seen its TVL plunge by $10 billion over the same time frame, from above $26 billion to just over $16 billion today.
Per DefiLlama data, Morpho has seen the second-largest outflows in USD aftr Aave.
Active loans on SparkLend have climbed by roughly $500 million over the same period, suggesting the inflows aren’t just parked deposits but fresh borrowing demand.
The April 18 Kelp exploit saw the attacker deposit unbacked rsETH into Aave as collateral and borrowed about $190 million in real wrapped ETH (WETH) against it, leaving the protocol with between $124 million and $230 million in bad debt, depending on how Kelp ultimately allocates losses from the exploit.
Aave has partially unfrozen WETH markets and received indicative commitments from ecosystem participants to help cover shortfalls, as The Defiant reported yesterday.
In the latest Kelp-related update from Aave, the protocol’s founder and CEO Stani Kulechov wrote on X today, “every bit of my energy right now is focused on the outcome for Aave users and the protocol.”
This article was written with the assistance of AI workflows. All our stories are curated, edited and fact-checked by a human.
Welcome to our institutional newsletter, Crypto Long & Short. This week:
- Jennifer Rosenthal on the need to protect the people actually building DeFi infrastructure.
- Alexis Sirkia on how Ethereum’s L2 strategy is failing due to a fundamental design flaw.
- Top headlines institutions should pay attention to by Francisco Rodrigues.
- Aave’s Market Share Slides After rsETH Exploit in Chart of the Week.
Expert Insights
Protecting the people building DeFi infrastructure
By Jennifer Rosenthal, chief communications officer, DeFi Education Fund
There has been a consistent uptrend in traditional finance companies announcing DeFi-related initiatives, and it’s exciting that these companies embrace technology innovations that will serve as infrastructure for 21st century finance. There seems to also be a growing understanding that open-source, permissionless, programmable, noncustodial, globally accessible and interoperable technology presents major upgrades for certain parts of the financial system.
If you are new to decentralized finance (DeFi), intend to rely on DeFi or want to connect your customers to DeFi, we at the DeFi Education Fund, a nonpartisan, nonprofit organization, invite you to join us in helping to protect the technology and infrastructure that makes it valuable. There are some high-level policy objectives we believe worth defending:
- Protecting Software Developers and Infrastructure
- Preserving Self-Custody
- Advocating for Open Access and Interoperability
- Championing Permissionless Blockchain Infrastructure and DeFi Markets
- Supporting Clear Laws and Policies
For months, my team has participated in productive bipartisan, bicameral discussions with members of Congress. We have been impressed by how many Congressional leaders have engaged productively and in good faith to build legislation that reflects a fundamental understanding of neutral, decentralized technology. Software developer protections have come up as a topic of conversation in recent market structure and broader crypto policy discussions. Why? A majority of industry participants agree that if we’re going to use DeFi, we have to protect the people building it.
For example, on February 26, 2026, Representatives Scott Fitzgerald (R-WI), Ben Cline (R-VA) and Zoe Lofgren (D-CA) introduced the bipartisan Promoting Innovation in Blockchain Development Act of 2026 (PIBDA) to protect software developers — who write code but do not control other people’s money — from inappropriate misclassification under criminal code Section 1960. PIBDA clarifies that Section 1960 applies only to those that control customer assets and transmit funds on behalf of customers, aligning the statute with congressional intent and the Treasury Department’s long-standing regulatory interpretation.
In discussing the bill, Rep. Scott Fitzgerald (WI-05) said: “For years, innovators and software developers have been caught in the crosshairs of an aggressive regulatory approach that treats them like criminals. The Promoting Innovation in Blockchain Development Act draws a clear line between those who develop and deploy blockchain software and those who actually move or manage funds. It provides long-overdue legal clarity, protects innovation here at home and allows law enforcement to focus on genuine criminal activity rather than chilling American technological leadership.”
Like the early internet in the 1990s, blockchain technology is a novel innovation evolving faster than existing regulation. Engineers developing open, disintermediated systems do not neatly fit into financial regulations designed for a system that assumes the existence of intermediaries.
As more individuals and companies interact with decentralized infrastructure, our shared voice can play a constructive role in shaping thoughtful and durable policy outcomes. We should collectively support legislative and regulatory initiatives that foster clarity, reduce uncertainty and enable responsible participation across both centralized and decentralized markets.
Thank you for taking DeFi’s tools and technology seriously, and I hope you will join us in defending the policy principles that make building and using DeFi possible.
Principled Perspectives
Ethereum’s scaling problem was never about throughput
By Alexis Sirkia, chairman and co-founder, Yellow Network
Vitalik Buterin recently conceded that most Layer 2 networks are fragmenting Ethereum rather than scaling it. He’s right, but the diagnosis doesn’t go deep enough. The rollup model was never going to deliver a unified scale because it was designed around the wrong assumption: that Ethereum’s limitation was throughput, when the actual constraint was always how value moves between participants.
Rollups addressed congestion by creating parallel execution environments, each processing transactions independently and posting compressed proofs back to the base layer. On paper, that increases capacity. In practice, it produced dozens of isolated liquidity pools that can’t interact without routing assets through bridge infrastructure. The concentration is stark: Base and Arbitrum now capture 77% of all L2 decentralized finance (DeFi) total value locked (TVL), while usage across smaller rollups has declined 61% since June 2025. The long tail is collapsing, and the capital that remains is fragmenting further. Bridge infrastructure has bled $2.5 billion since 2021 for a simple reason: every time value moves between rollups, it passes through a custodial chokepoint. Attackers don’t need to break the chains on either side, they just need to compromise what sits in between.
The industry responded to each bridge exploit by building better bridges. That instinct, while logical at the time, was wrong. The vulnerability isn’t in the bridge implementation. It’s in the premise that value needs to pass through an intermediary at all. State channels eliminate that premise entirely by allowing participants to transact peer-to-peer off-chain, with the base layer serving as the enforcement mechanism rather than the transaction processor. Settlement touches the blockchain only once state-channel transacting finishes, and either party can invoke on-chain enforcement at any point if the counterparty misbehaves.
This isn’t an incremental improvement on the rollup model, but rather a rejection of the assumption that created the fragmentation in the first place. Where rollups multiply execution environments and then try to reconnect them, state channels keep participants connected from the start and only engage the base layer when finality is needed.
The CFTC is preparing to approve the first U.S. framework for perpetual futures, which will pull a meaningful share of $14 trillion in offshore derivatives volume into regulated venues. To put the scale of that shift in context, U.S.-regulated platforms currently handle just 1.6% of global crypto derivatives volume. The infrastructure that absorbs even a fraction of the remaining 98.4% needs to settle cross-chain, in real time, without passing through custodial chokepoints. Rollups, by design, are not candidates for the job.
The 21Shares prediction that most L2s won’t survive 2026 feels pessimistic, but the reason matters more than the timeline. Rollups failed to deliver a unified scale because they treated Ethereum’s constraint as a throughput problem. The market is starting to price in that the real constraint was always trust at the intermediary layer, and the infrastructure that eliminates that layer entirely is where capital and builders will migrate.
Headlines of the Week
This week’s headlines highlight that while the bridges between traditional finance and the crypto sector keep on growing, the devastation caused by smart contract exploits is hitting the market.
Chart of the Week
Aave’s Market Share Slides After rsETH Exploit
Aave’s TVL market share has dropped sharply from ~51.5% in February to ~39% today following the April 18 KelpDAO rsETH exploit, which froze rsETH markets and triggered deposit withdrawals. Active loan share proved stickier, falling only ~2% (54% to ~52%), as existing borrowers couldn’t easily unwind. The AAVE token is down ~50% from its January peak, pricing in both bad debt risk and the reputational cost of being DeFi lending’s largest venue when a collateral asset failed.
Listen. Read. Watch. Engage.
Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc., CoinDesk Indices or its owners and affiliates.
XRP is rallying steadily with 1.7% gain, and every holder still has the same bullish price prediction. A viral clip shared by crypto commentator John Squire on X is reigniting long-dormant conviction among holders. What he described as “game over” for latecomers may still be early innings.
Squire posted the video with a blunt caption: “If this f***ing XRP video doesn’t give you chills, you have no idea what’s coming.” He argued that once institutional utility demand fully activates XRP’s role in global payments, supply will tighten sharply, not through speculation, but through structural scarcity.
If this fucking $XRP video doesn’t give you chills, you have no idea what’s coming. — John Squire (@TheCryptoSquire) April 22, 2026
pic.twitter.com/oGkfghhVK0
Fewer holders are willing to sell. Fewer coins available at any price. The clip frames XRP as the backbone of the “internet of value,” with money moving across networks as freely as data does.
Ripple’s ecosystem is generating real catalysts to back that narrative. Ripple announced a four-phase quantum-resistance roadmap on April 20, targeting XRP Ledger upgrades by 2028 as the first major crypto asset to formally address institutional quantum threats.
Weekly fund inflows hit $119.6 million, and seven spot XRP ETFs await final SEC review ahead of Q2 2026 decisions. Will the price follows the narrative?
Discover: The best pre-launch token sales
XRP Price Prediction: $1.50 Needed
XRP’s current setup is a study in compressed tension. The asset has been consolidating in a $1.30–$1.45 range for too long, having pulled back sharply from a $3.65 peak last July. But the 24-hour trading volume of $2.6 billion reflects its demand.
For now, key support sits at $1.39–$1.41, with a deeper floor at $1.32–$1.35 if that breaks. Resistance clusters at $1.50 since forever.
“Rising volume during this pullback suggests dip buyers are active, not scared,” according to CaptainAltcoin’s April 20 analysis.
If the $1.39 support holds, with FOMC delivering dovish signals on April 28, and ETFs get the approvals, they will catalyze a breakout toward $1.50–$1.53 easy. But a break below $1.39 opens the path to $1.32. Broader market weakness, especially if FOMC disappoints, invalidates near-term bullish setups. Not just XRP, but most major coins.
Longer-term analyst targets remain significantly higher, but the short-term path runs through $1.50 resistance first.
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Maxi Doge With Bigger Upside Potential as XRP Fights Resistance
XRP at $1.45 is a compelling hold, but with a $89 billion market cap and resistance capping near-term upside at $1.50, the asymmetric return window has narrowed considerably from where it stood at under a dollar.
That’s the trade-off with established assets: conviction is easy, multiples are hard. Early-cycle positioning in lower-cap assets is where outsized gains typically originate, which is what makes presale timing relevant to this conversation.
Maxi Doge ($MAXI) is positioning itself as the meme token built for the current market cycle’s trading culture with a 240-lb canine juggernaut embodying the 1000x leverage mindset.
The project runs on Ethereum with the chain currently experiencing a meme frenzy. Right now, Maxi is priced at $0.0002814, with $4.7 million raised in presale. Features include holder-only trading competitions with leaderboard rewards, a Maxi Fund treasury for liquidity and partnerships, and a huge 60% APY staking.
The presale has drawn notable attention as it approaches key fundraising milestones.
Check out the Maxi Doge Presale here.
The post XRP Price Prediction: Chilling XRP Video Reminding Us What’s Coming appeared first on Cryptonews.
Network News
KELP DAO EXPLOIT: A cross-chain bridge holding nearly a fifth of a restaked ether token’s circulating supply just got drained, and the fallout is moving through DeFi faster than Kelp DAO can pause contracts. An attacker drained 116,500 rsETH (restaked ether) from Kelp DAO’s LayerZero-powered bridge at 17:35 UTC over the weekend, worth roughly $292 million at current prices and representing about 18% of rsETH’s 630,000 token circulating supply tracked by CoinGecko. LayerZero is a cross-chain messaging layer, or the infrastructure that lets different blockchains send verified instructions to each other. Kelp DAO is a liquid restaking protocol, which takes user-deposited ETH, routes it through EigenLayer to earn additional yield on top of standard Ethereum staking rewards, and issues rsETH as a tradeable receipt. The bridge that was drained held the rsETH reserve backing wrapped versions of the token deployed on more than 20 other blockchains. The attacker tricked LayerZero’s cross-chain messaging layer into believing a valid instruction had arrived from another network, which triggered Kelp’s bridge to release 116,500 rsETH to an attacker-controlled address. Kelp’s emergency pauser multisig froze the protocol’s core contracts 46 minutes after the successful drain, at 18:21 UTC. Two follow-up attempts at 18:26 UTC and 18:28 UTC both reverted, each carrying the same LayerZero packet attempting another 40,000 rsETH drain worth roughly $100 million. — Shaurya Malwa Read more.
NORTH KOREA CRYPTO HEIST PLAYBOOK: Less than three weeks after North Korea-linked hackers used social engineering to hit crypto trading firm Drift, hackers tied to the nation appear to have pulled off another major exploit with Kelp. The attack on Kelp, a restaking protocol tied into LayerZero’s cross-chain infrastructure, suggests an evolution in how North Korea-linked hackers operate, not just looking for bugs or stolen credentials, but exploiting the basic assumptions built into decentralized systems. Taken together, the two incidents point to something more organized than a string of one-off hacks, as North Korea continues to escalate its efforts to hijack funds from the crypto sector. “This is not a series of incidents; it is a cadence,” said Alexander Urbelis, chief information security officer and general counsel at ENS Labs. “You cannot patch your way out of a procurement schedule.” More than $500 million was siphoned across the Drift and Kelp exploits in just over two weeks. At its core, the Kelp exploit did not involve breaking encryption or cracking keys. The system actually worked the way it was designed to. Rather, attackers manipulated the data feeding into the system and forced it to rely on those compromised inputs, causing it to approve transactions that never actually occurred. — Margaux Nijkerk Read more.
AAVE AFFECTED BY KELP DAO HACK: An attacker exploited that setup by forging a transfer message that appeared valid. The system approved the transfer even though the tokens were never taken out of the sending chain, meaning new tokens were effectively created without backing, releasing 116,500 rsETH from the Ethereum-side bridge. Rather than selling the assets on the open market, the attacker deposited 89,567 rsETH into Aave as collateral and borrowed roughly $190 million in ETH and related assets across Ethereum and Arbitrum, according to the report. This left Aave exposed to collateral whose backing may be significantly impaired. Aave Labs said it moved quickly to contain the risk. Within hours, the protocol froze rsETH markets across its deployments, set loan-to-value ratios to zero, and halted new borrowing against the asset. The outcome now depends largely on how Kelp handles the shortfall. If losses are spread across all rsETH holders, the token would face an estimated 15% depegging (meaning the value of the staked tokens would not match the value of actual ETH), resulting in about $124 million in bad debt for Aave. If losses are instead isolated to Layer 2 networks, the impact would be far more severe, with bad debt rising to roughly $230 million and concentrated on networks such as Arbitrum and Mantle.— Margaux Nijkerk Read more.
COINBASE COMMISSIONS PAPER ON QUANTUM COMPUTING RISKS: A new report commissioned by Coinbase sounds a cautious, but urgent, alarm: Quantum computing won’t break crypto tomorrow, but the industry can’t afford to wait. The 50-page paper, authored by an independent advisory board that includes prominent cryptographers and academics like Dan Boneh of Stanford University, Justin Drake of the Ethereum Foundation and Sreeram Kannan of Eigen Labs, concludes that while today’s blockchains remain secure, a future “fault-tolerant quantum computer” capable of breaking widely used encryption is increasingly plausible, and preparation must begin now. In recent months, concerns around quantum risk have moved further into the mainstream. Google researchers have published estimates suggesting that a sufficiently advanced quantum computer could one day break Bitcoin’s cryptography. Major crypto ecosystems have already started mapping out their responses. The Ethereum Foundation has proposed new types of digital signatures that are designed to be safe against quantum computers, while Solana and others are experimenting with quantum-resistant wallet designs. The report stresses that current quantum machines are far from powerful enough to crack the cryptography underpinning Bitcoin, Ethereum and other networks. Breaking standard encryption would require vast computational overhead, a milestone still considered a major engineering challenge. — Margaux Nijkerk Read more.
In Other News
- A chunk of the Kelp DAO haul is no longer going anywhere. Arbitrum’s Security Council froze 30,766 ETH worth roughly $71 million on Monday night, moving funds linked to Saturday’s $292 million rsETH exploit into an intermediary wallet that can only be accessed through further Arbitrum governance action. The council said it acted on law enforcement’s input regarding the exploiter’s identity and executed the freeze “without impacting any Arbitrum users or applications.” The transfer completed at 11:26 p.m. ET on April 20, according to Arbitrum’s statement on X. The stolen funds are no longer under the control of the address that originally held them. — Shaurya Malwa Read more.
- A Polymarket contract on whether Kelp DAO will spread the losses from the weekend’s $292 million exploit beyond those directly affected is pointing to a clear answer: probably not. Bettors are giving a 14% chance that Kelp will “socialize the losses,” or implement a mechanism forcing rsETH holders on Ethereum, which wasn’t hit, to share the pain of users on other chains. The attackers drained roughly 116,500 rsETH from a LayerZero-powered bridge that held the reserves backing the token across more than 20 blockchains. That left parts of the system undercollateralized, with some holders effectively owning tokens no longer fully backed by ether (ETH). “Socializing the losses” would mean Kelp redistributes the shortfall across all rsETH holders, including those on the Ethereum mainnet, rather than leaving losses concentrated among users and protocols tied to the compromised bridge. The most widely cited precedent of this approach came in 2016, when Bitfinex imposed losses on all users after a $60 million hack, effectively mutualizing the hit to avoid shutting down. — Sam Reynolds Read more.
Regulatory and Policy
- April appears to be a lost cause for the crypto Clarity Act, but a U.S. Senate committee hearing sometime in May could keep the critical market structure legislation alive, as long as it can reach a final vote of the overall Senate by July, according to lobbyists and a lawmaker aide focusing on the market structure bill’s sluggish progress. The legislative calendar is running out of room for this year, but a Senate aide told CoinDesk that a potential new delay of a couple of weeks — allowing Republican Senator Thom Tillis to finish discussions with bankers over stablecoin-yield concerns — is not yet pushing this work past the point of no return. The aide also said that earlier negotiations over decentralized finance (DeFi) protections are effectively settled, leaving few other impediments in the way of a committee approval.One of the chief problems the crypto industry faces (if it can leap the stubborn hurdle of the banking sector’s objections about stablecoin rewards) is that the Senate Banking Committee hearing that the bill needs to clear would be only a first step of many. — Jesse Hamilton Read more.
- Tron creator Justin Sun sued World Liberty Financial, the stablecoin and crypto firm backed by members of U.S. President Donald Trump’s family, on Tuesday, alleging that the project had unfairly locked up his $WLFI holdings, made fraudulent misrepresentations, and threatened and defamed Sun. The lawsuit filed, which includes a line about Sun’s support for Trump himself, alleged that World Liberty’s leadership had engaged “in an illegal scheme to seize property” in the form of Sun’s tokens, which Sun alleged he had purchased after being solicited by the World Liberty team in 2024. “At that pivotal time for World Liberty, Mr. Sun invested $45 million to purchase $WLFI tokens from World Liberty not only because of the project’s claims that it would promote adoption of decentralized finance — an issue Mr. Sun cares deeply about and to which he has devoted much of his life’s work — but also because of the Trump family’s association with the project,” the suit said.— Nikhilesh De & Sam Reynolds Read more.
Calendar
- May 5-7, 2026: Consensus, Miami
- June 2-3, 2026: Proof of Talk, Paris
- June 8-10, 2026: ETHConf, New York
- Sept. 29-Oct.1, 2026: Korea Blockchain Week, Seoul
- Oct. 7-8, 2026: Token2049, Singapore
- Nov. 3-6, 2026: Devcon, Mumbai
- Nov. 15-17, 2026: Solana Breakpoint, London
Blockchains were built as public networks in the best tradition of open-source technology. But their future is private. And that future is arriving faster than most people realize.
This month, Tempo — the Stripe-backed payment blockchain that raised $500 million at a $5 billion valuation, with Visa, Mastercard, Paradigm, and UBS among its backers — published a detailed architectural proposal for private enterprise stablecoin transactions. Tempo is not a scrappy privacy-native project. It is arguably the most institutionally credentialed blockchain launch in years, built by people who deeply understand what banks, payment processors, and enterprises actually need. When a network with that pedigree makes privacy a launch-week priority, it isn’t a signal. It’s a verdict.
The question of whether or not institutional chains will be private has been settled. What remains is the harder one: what kind of privacy are we actually building?
The problem with public chains
Bitcoin solved a problem that had stumped computer scientists and bankers for decades: how to transfer value between strangers without a trusted intermediary. Ethereum took blockchains further, offering programmable value alongside value transfer — smart contracts that could encode agreements, automate settlement, and eliminate entire categories of middlemen. Then came stablecoins, which married programmability to the stability of the dollar, and from there, the migration of real-world assets to onchain protocols began.
Each wave has brought added institutional interest, capital, and ambition. And now, as regulatory clarity emerges, institutions are ready to deploy resources onchain.
But there’s one thing holding them back — a fundamental flaw that becomes more consequential the larger the numbers get.
Everything is visible. Every wallet. Every balance. Every transaction, in real time, is readable by anyone with a browser. In financial markets, this is not a feature. It is an existential problem. Imagine if every hedge fund’s positions, every corporate treasury’s holdings, every pension fund’s rebalancing trade appeared on a public screen the moment it was executed. Sophisticated counterparties would front-run. Competitors would map your strategy. Criminals would identify targets. The financial system as it exists today would seize up overnight.
Blockchains have been asking institutions to accept exactly that. Tempo’s announcement on April 16 is the clearest possible signal that institutions have finally said: no.
Architecture is destiny
Here is where the conversation gets more consequential — and more nuanced.
Tempo’s solution is Zones: private parallel blockchains connected to the main network. Within a Zone, participants transact privately. The public sees only cryptographic proofs of validity, not underlying data. Compliance controls travel with the token automatically. Assets remain interoperable with Tempo Mainnet. For enterprises running payroll, treasury operations, or settlement workflows, it is a thoughtful and practical design.
But Tempo’s privacy model is operator-visible. The Zone operator — an enterprise or infrastructure provider — sees all transactions within its Zone. The public sees nothing. The operator sees everything. For many regulated institutions, this is acceptable, and may even be required. But it means privacy is contingent on trusting an intermediary. You have moved the visibility problem; you have not eliminated it.
This is not a criticism of Tempo. It is a description of a genuine architectural choice — one with real consequences for anyone thinking carefully about risk.
Zero-knowledge cryptography offers a different path. ZK proofs allow a party to prove that a transaction is valid without revealing the underlying data. A new generation of ZK-native blockchains builds this privacy-preserving functionality into the execution layer itself. Accounts execute transactions locally, with the chain storing only a cryptographic commitment. Nothing sensitive ever touches a public ledger. Transaction history is not browsable. And crucially, no operator has a god’s-eye view — privacy is enforced at the base layer, not delegated to an intermediary.
If Bitcoin gave us trustless transfer and Ethereum gave us programmable trust, ZK-native blockchains offer verifiable privacy: the ability to prove that everything happened correctly without revealing what actually happened.
Compliance without full transparency
The obvious objection is regulatory. Privacy and compliance have long been framed as incompatible — oil and water. That framing is becoming obsolete.
Regulatory compliance does not require that everyone can see your transactions. It requires that the right parties, under the right conditions, can verify that your transactions were legitimate. That is a meaningful distinction, and it is one that ZK cryptography is uniquely positioned to enforce. Selective, programmable disclosure — revealing what regulators need to see, nothing more — is not a workaround. It is a more precise implementation of what compliance actually demands.
Tempo’s model handles this at the operator level. ZK-native approaches handle it at the cryptographic level. Both satisfy the compliance requirement. But they distribute trust very differently.
The question that matters
The financial industry knows it needs to move onchain. It now knows — Tempo’s announcement makes this undeniable — that it cannot do so on fully public infrastructure. The era of public-by-default blockchains as the assumed standard for institutional finance is ending.
What comes next depends on a choice the industry is only beginning to make clearly: privacy through trusted operators, or privacy through cryptographic guarantees that require no trust at all.
Both are legitimate answers. But they are not equivalent. The privacy model you choose determines your risk surface, your compliance posture, and your exposure to the failure modes of the intermediaries you depend on. Architecture is not a technical detail to be resolved later. It is the decision that determines everything else.
The question for the industry is not whether privacy. That debate is over.
The question is what sort of privacy — and who, if anyone, you are willing to trust with the view.
TLDR
- IO Global submitted nine treasury proposals for 2026 to support Cardano’s Leios scaling roadmap.
- The company requested just under 50% of the funding it sought last year.
- Voting on the Cardano treasury proposals will remain open until May 24.
- Leios is expected to enter testnet in June with a mainnet launch planned by late 2026.
- IO Global projected a 10% to 65% throughput increase under the Leios upgrade.
Input Output Global has filed nine treasury proposals for 2026 as it prepares the Leios scaling rollout. The company said it seeks just under 50% of last year’s funding request. Voting remains open until May 24, while the roadmap centers on Leios testnet progress and a planned 2026 mainnet launch.
Cardano Treasury Request Targets Core Upgrades
Input Output Global detailed nine proposals tied to core infrastructure, developer tools, and economic changes. The firm said its combined request equals just under 50% of the prior year’s ask. It confirmed that community voting will remain open through May 24.
The roadmap aligns with its 2030 Vision for network growth and higher transaction capacity. The consensus proposal stated, “Cardano must scale from today’s approximately 800,000 transactions per month to over 27 million.” It added that “Leios is the mechanism purpose-built to get there.”
IO Global expects Leios to enter testnet in June and plans mainnet deployment by late 2026. However, its public tracker shows development in mid-stage, with testnet progress near 24%. Specifications appear largely complete, while testing continues toward broader validation.
The company projected a 10x to 65x throughput increase under the Leios upgrade. It said the change will preserve Cardano’s existing consensus mechanism. IO linked the scaling effort to support for DeFi, real-world assets, and enterprise use cases.
Layer 2 and Developer Reforms Expand Roadmap
IO Global placed Layer 2 initiatives within the broader scaling plan and named Hydra and Midgard rollup. The proposal stated that “only with both does Cardano have a credible L2 story.” It positioned the two systems as complementary components of the network’s expansion.
The company also requested 62.1 million ADA for ongoing network maintenance and operations. It valued the amount at over $15.8 million based on current market prices. IO said the funds will support node upgrades, monitoring tools, and security systems.
Several proposals addressed developer experience and onboarding challenges within the ecosystem. IO described the current environment as “fragmented” and said it deters growth. A six-month initiative will streamline tooling and reduce onboarding costs.
Internal research showed many developers leave due to high setup demands and unclear processes. One proposal aims to expand formal verification across smart contract development. IO said it will improve Plutus tooling so users avoid “a PhD and three months of setup.”
Other measures focus on user interaction and new economic functions within the protocol. Planned upgrades include “Babel Fees,” which would allow transaction fees in tokens other than ADA. The company also proposed wallet-based micro-fees to create fresh revenue streams.
A separate proposal called Pogun targets bitcoin liquidity within the ecosystem. The document described BTC as “the world’s most valuable digital asset” that remains “almost entirely idle.” IO said Cardano could serve as a credit and yield layer for that capital.
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