Crypto World
The CFTC has one commissioner and all of crypto
Washington has spent a year arguing about which agency should regulate a $2.2 trillion market. Nobody checked whether that agency has anyone in the building. It has one person, four empty chairs, and a plan involving artificial intelligence.
Summary
- The CLARITY Act would hand the CFTC primary oversight of spot trading in digital commodities. The commission is designed to hold five seats and currently has one confirmed member, Chairman Michael Selig.
- The agency ran fiscal 2025 with roughly 556 staff against the SEC’s 4,200, and has since lost between 21% and 25% of its workforce. Its enforcement division sits around 108 positions, about 23% below the 140 it had on record in 2025.
- While shrinking, its remit has expanded: crypto market structure, exclusive jurisdiction over prediction markets, perpetual futures rules, DeFi guidance, and a joint initiative with the SEC. Each competes for the same attorneys.
- Selig’s answer is automation. The CFTC plans to use artificial intelligence to review registration applications and assist market surveillance.
- The surprise in the data is that a one-person commission is moving faster, not slower, because there is nobody to dissent. Whether speed without dissent produces durable rules is the actual question.
For a year, the entire American crypto policy debate has been a jurisdictional argument. Should the SEC or the CFTC supervise digital asset markets? The CLARITY Act answers CFTC, and the industry has spent enormous energy and money trying to get that answer written into law. Somewhere in that year, almost nobody stopped to ask a more basic question about the agency on the receiving end of the handoff. The Commodity Futures Trading Commission is designed to hold five commissioners. It currently has one. Four seats sit empty, including both minority-party positions. The body that Congress is preparing to make the primary regulator of a $2.2 trillion market is, at this moment, a single person, a shrinking staff, and a plan to have software pick up the difference.
The arithmetic
Start with the headcount, because it is the least arguable part.
The CFTC ran fiscal 2025 with roughly 556 employees. The SEC runs about 4,200. That gap existed before crypto and made sense when the CFTC supervised agricultural futures and interest rate swaps, which are large markets with a small number of sophisticated participants. It makes considerably less sense as a description of an agency preparing to police spot markets for tokens held by tens of millions of retail buyers.
Since January 2025, under the federal workforce reduction drive, the agency has lost somewhere between 21% and 25% of its people. The enforcement division, the part that actually pursues fraud, sits at roughly 108 positions following a budget request for three new hires, which leaves it about 23% below the 140 enforcement employees it had on record in 2025. So the agency shrank the function most relevant to the mandate it is about to receive.
Then leadership. The commission is statutorily five seats. Selig, confirmed in December 2025, is the only sitting commissioner. This is not new: his predecessor, acting chair Caroline Pham, was also the agency’s sole commissioner during her tenure, which means the CFTC has functioned as a one-person body across two administrations’ worth of leadership. Four vacancies, including both seats reserved for the minority party, on a commission designed for bipartisan balance.
Selig himself is not an accidental appointment. He is a former CFTC official who most recently served as chief counsel to the SEC’s Crypto Task Force, which makes him arguably the best-credentialed person in Washington for the job he holds. That is precisely why the vacancy math is worth taking seriously instead of reading as partisan noise. The problem is not the person in the chair. It is the four chairs with nobody in them.
What keeps getting added to the plate
Now the workload, which has moved in the opposite direction from the headcount.
Crypto market structure. CLARITY would give the CFTC primary oversight of spot trading in digital commodities, meaning Bitcoin, Ether, XRP, Solana, and the rest of the assets named in the March joint taxonomy. That is rulebooks, registration, examinations, supervision, and custody standards for an entirely new market.
Prediction markets. The agency is asserting exclusive federal jurisdiction over a sector that has grown from millions of dollars a year to multiple billions, and it is litigating that claim: the CFTC has sued Illinois, Arizona, and Connecticut over state efforts to regulate sports prediction markets. Selig has confirmed numerous ongoing investigations in the space, with lawmakers pressing him about trades on Polymarket and Kalshi in which small numbers of anonymous accounts appear to have profited on bets tied to US military actions and government announcements, a pattern suggesting possible access to non-public information.
Perpetual futures. The agency is writing rules for a product that generated tens of trillions in annual volume offshore and is now arriving onshore, while simultaneously being sued by the CME over what a perp legally is.
DeFi guidance and Project Crypto, the joint initiative with the SEC that produced the March taxonomy.
At an April House Agriculture Committee oversight hearing, Chairman Glenn Thompson put the contradiction to Selig directly, observing that Congress is putting a lot on your plate with digital assets while also pushing the agency down the prediction markets path, and asked him to request more staff if operations required it. Selig agreed he would.
Thompson and Representative Craig then said they would write to the White House encouraging prompt appointment of commissioners from both parties. That letter is the tell: the committee overseeing the agency is publicly lobbying the executive to staff it.
Selig’s public answer to the resource question is technology. He has said artificial intelligence and automation can compensate for the personnel cuts, and that the agency is pushing to use it for reviewing registration applications and assisting market surveillance. He has also warned that enforcement remains a top priority and that participants should be on notice.
Read that plainly. The agency about to inherit crypto plans to review its registration applications with software because it does not have the people.
The bull case: one voice moves faster
Here is the part that inverts the obvious reading, and it comes from the reporting rather than from the agency’s spin.
A one-person commission is not slower. It is faster. Bloomberg Law’s reporting on the CFTC’s recent output describes an agency accelerating its rulemaking on prediction markets and crypto precisely because there is nobody to argue with. No minority commissioners drafting dissents. No negotiating a majority. No scheduling votes around four other calendars. A chairman who wants a proposal out can put it out.
That speed is visible. The agency has moved on prediction market rulemaking with unusual pace, in part as a deliberate strategy to preempt state claims by putting a federal framework in place quickly. It ran a crypto sprint, updated regulatory language for blockchain-based markets, formally approved spot crypto trading, and co-authored the March taxonomy with the SEC, which Selig has called the most important action taken to date, saying simply that now there is clarity. For an agency supposedly paralyzed by vacancies, the output is substantial.
There is a resource argument on the same side. The Trump administration is seeking more money and a larger headcount for the CFTC, so the staffing hole is at least acknowledged and being addressed through the budget process. And the automation case is not absurd on its face: reviewing registration applications is exactly the kind of structured, document-heavy work where software genuinely helps, and an agency that automates intake can point its scarce attorneys at enforcement instead of paperwork.
The strongest version of the bull case is simply this: the CFTC has, over the past year, produced more usable crypto policy than Congress has, with one commissioner and a quarter fewer staff. Whatever the org chart says, the output is real.
The bear case: fast is not durable
The rebuttal is that speed achieved by removing dissent is not a feature of a regulatory body. It is the absence of one.
Multi-member commissions exist because financial regulation benefits from adversarial internal review. A dissenting commissioner forces the majority to answer the strongest objection before a rule publishes instead of after, in court. Remove the dissent and you do not get better rules faster; you get rules that have never been stress-tested by anyone with the standing to stress-test them. Former CFTC leaders have publicly doubted the agency can juggle crypto and prediction markets simultaneously, and Selig’s Democratic predecessor Rostin Behnam argued routinely that the agency lacked the people to police crypto and prediction markets as they spread.
The durability problem is worse, and it connects directly to the wider argument the industry keeps having. A rule written by a single commissioner is a rule a future five-member commission can revisit with ease and with a ready-made rationale: that it was adopted without the deliberative process the statute contemplates. The industry wants permanence. It is currently getting output from the least permanent possible configuration of a regulator. Selig himself acknowledged the point in a different context, noting that the joint taxonomy does not yet carry the full force of permanent policy.
Then the examination gap, which is where the theory meets the market. Writing a rulebook is the cheap part. Supervising a market means examiners: people who visit registrants, review books, test controls, and catch problems before they become enforcement matters. An enforcement division 23% below its 2025 level is not a division that can absorb spot supervision of every crypto exchange, custodian, and broker seeking dual registration.
Crypto-native exchanges, traditional broker-dealers, asset managers building tokenization platforms, custodians, and futures commission merchants would all queue for the same application reviews at an agency of roughly 550 people. Artificial intelligence does not conduct an examination.
And the prediction market investigations sharpen the point. Selig has confirmed the agency is investigating well-timed trades that lawmakers suspect involved non-public information, in a market that has grown into the billions. Those are exactly the labor-intensive cases that a shrunken enforcement division struggles to bring. Asserting exclusive jurisdiction over a sector is a claim about authority. Policing it is a claim about capacity, and the two have diverged.
There is a historical pattern worth naming here, because the industry has watched it before and drew the wrong lesson. Regulators handed a new market without the resources to supervise it do not simply fail quietly. They fail loudly and late, after something breaks, and the political response is invariably an overcorrection that lands harder than the original rules would have. The agency does not have the examiners to catch problems early, so problems surface as scandals instead of as findings, and scandals produce legislation written in anger. An industry that wants light-touch supervision should be the loudest voice demanding the supervisor be adequately staffed, because the alternative to competent oversight is not an absence of oversight. It is delayed oversight, imposed after a failure, by people who are no longer in a listening mood.
That is the argument the crypto lobby has not made and probably will not, because it sounds like asking for a bigger regulator. It is worth making anyway. The industry spent a year insisting that the CFTC is the right home for digital assets, largely on the theory that the agency is smaller, more pragmatic, and less litigious than the SEC. Every one of those qualities is downstream of the same fact: the CFTC is small. The thing that makes it attractive as a regulator is the thing that makes it questionable as a supervisor of a market this size, and nobody has reconciled the two.
The fight over the empty chairs
The vacancies are not an accident of paperwork. They are a live political dispute with documents on both sides, and it broke into the open this month.
On June 10, twelve Senate Democrats, led by Chris Van Hollen and Raphael Warnock, wrote to the White House complaining about staffing at federal financial regulators including the SEC and CFTC. Their argument was procedural: the administration had broken with the customary practice of consulting Senate Democrats on minority-party nominees to independent agencies, and vacancies weaken agency independence.
On July 9, the White House fired back in a letter to Majority Leader John Thune and Minority Leader Chuck Schumer, signed by Director of Presidential Personnel Dan Scavino and Director of Legislative Affairs James Braid, saying it wanted to set the record straight. The administration said it had already asked Senate Democrats to recommend candidates for the vacant Democratic seats at both agencies and had not received names in response. It argued that Senate Democrats have blocked essentially every civilian nominee, and pointed out that Trump has nominated Democrats to other independent bodies including the National Labor Relations Board and the International Trade Commission. It also invoked the Supreme Court’s decision in Trump v. Slaughter, which expanded presidential removal powers, a citation that does not obviously help the bipartisanship argument.
The history is messier than either letter admits. The administration withdrew Brian Quintenz’s nomination for the CFTC chairmanship in September 2025 before nominating Selig in October, a sequence documented in the White House’s own list of nominations and withdrawals. So the seat that is filled took two attempts, and the four that are empty have generated a blame exchange instead of names.
The SEC is in comparable shape and receives a fraction of the attention. It has two vacant Democratic seats against three Republican commissioners, and Hester Peirce, one of the three, is expected to leave by November. Which produces the fact that ought to be the headline of the entire CLARITY debate: both of the agencies that would divide American crypto oversight are short-staffed at the commissioner level, and one of them is a single person.
The provision nobody is reading
There is a clause in the bill that turns all of this from a governance complaint into a market-structure problem, and it is Section 106.
CLARITY does not simply hand the CFTC authority and walk away. It contemplates a window in which the agency must finalize rulebooks, hire examiners, build supervision teams, and stand up a digital asset custody framework. If the CFTC cannot do those things inside that window, the industry operates under provisional status.
Sit with what that means. The bill the industry has spent a year fighting for, on the theory that regulatory certainty is the prize, contains a fallback in which firms operate provisionally because the regulator could not staff up in time. Provisional status is not certainty. It is uncertainty with a statutory basis, which may be marginally better than the status quo and is nothing like what the lobbying promised.
That is the risk almost nobody in the vote-counting coverage has priced. The failure mode of CLARITY is not only that it dies in the Senate. It is that it passes, hands a $2.2 trillion market to a one-person commission with 550 employees and a quarter of its enforcement staff gone, and the handoff does not work on schedule. The bill can pass and still not deliver certainty for years.
What to watch
Three things.
Whether any commissioner gets nominated before the recess. The House Agriculture leadership is already writing to the White House about it, and both parties say the agencies should have full benches before major crypto rules advance. If CLARITY reaches a floor vote while the CFTC still has one commissioner, that fact becomes an argument for opponents and a genuine operational problem for supporters.
Whether the automation claim survives contact. The CFTC says artificial intelligence will review registration applications. The first wave of applications under any new framework will test that immediately, and the results will be visible in processing times and in whatever the first enforcement failure turns out to be.
Section 106 and the transition window. If the bill moves, read that section before reading the vote count. It determines whether passage produces rules or produces a provisional regime, and it is where the staffing arithmetic and the legislative arithmetic finally meet.
The crypto industry asked Washington to pick a regulator. Washington is close to picking one. What nobody checked, through a year of lobbying, hearings, and vote math, is whether the regulator has anyone left to answer the phone.
Disclaimer: This article is for information and educational purposes only and does not constitute financial, investment, or legal advice. It describes pending legislation, agency staffing, and political disputes, all of which are developing and can change quickly. Nothing here is a recommendation to buy or sell any asset. Always do your own research. Information is accurate as of July 17, 2026.
Frequently Asked Questions
How many commissioners does the CFTC have?
One. Chairman Michael Selig, confirmed in December 2025, is the sole sitting commissioner of a body statutorily designed to hold five. Four seats are vacant, including both positions reserved for the minority party. His predecessor, acting chair Caroline Pham, was also the agency’s only commissioner, so the CFTC has operated as a one-person commission across two leadership periods.
Why does that matter for crypto?
Because the CLARITY Act would give the CFTC primary oversight of spot trading in digital commodities, meaning the assets named in the March 2026 joint taxonomy including Bitcoin, Ether, XRP, and Solana. Supporters of the bill warn that a short-staffed agency could struggle to supervise a market worth roughly $2.2 trillion, and both parties have argued the agencies should have full leadership benches before major new crypto rules advance.
How big is the CFTC compared to the SEC?
Roughly 556 employees in fiscal 2025 against the SEC’s approximately 4,200. The CFTC has since lost between 21% and 25% of its workforce under the federal workforce reduction drive. Its enforcement division sits at about 108 positions after a request for three new hires, roughly 23% below the 140 enforcement staff it had on record in 2025.
What is the CFTC’s answer to the staffing problem?
Automation. Chairman Selig has said artificial intelligence and automation can compensate for personnel cuts, and that the agency intends to use the technology to review registration applications and assist with market surveillance. He has also said enforcement remains a top priority. The Trump administration is separately seeking more funding and a larger headcount for the agency.
Is a one-commissioner agency slower?
Apparently not. Reporting on the agency’s recent output indicates the opposite: rulemaking has accelerated, because a single commissioner faces no dissents to answer, no majority to negotiate, and no other calendars to accommodate. The agency has moved quickly on prediction market rules, approved spot crypto trading, and co-authored the March taxonomy. The open question is whether speed achieved by removing internal review produces durable rules.
What else is on the CFTC’s plate?
A great deal. It is asserting exclusive federal jurisdiction over prediction markets, a claim it is litigating against Illinois, Arizona, and Connecticut. It is writing rules for perpetual futures while being sued by the CME over how a perp is legally classified. It runs Project Crypto jointly with the SEC. And it is drafting DeFi guidance. Each mandate draws on the same pool of attorneys and economists.
What is the dispute over the vacant seats?
Twelve Senate Democrats led by Van Hollen and Warnock wrote on June 10 alleging the administration broke the customary process for consulting on minority-party nominees. The White House responded July 9 in a letter to Thune and Schumer, signed by Scavino and Braid, saying it had asked for Democratic recommendations and received no names, that Democrats blocked essentially every civilian nominee, and that Trump has nominated Democrats to other independent bodies.
What is Section 106 of the CLARITY Act?
It concerns the transition. The bill contemplates a window during which the CFTC must finalize rulebooks, hire examiners, build supervision teams, and stand up a digital asset custody framework. If the agency cannot complete that inside the window, the industry operates under provisional status. That makes the staffing question a market-structure question: the bill can pass and still fail to deliver the certainty it was sold on.
Zerodha co-founder Nikhil Kamath and Coinbase CEO Brian Armstrong warned that the sky-high valuations of premium AI companies like OpenAI and Anthropic face a massive structural threat.
The alarm arrives amid growing investor skepticism, as both leaders compared today’s AI frenzy to the dot-com crash and past crypto bubbles.
Why Kamath Would Short Every AI Company Today
Speaking on the “People by WTF” podcast, both leaders drew direct parallels between the current AI boom, the 2000s dot-com collapse, and standard crypto market bubbles.
Their shared concern centers on expensive proprietary models losing ground to cheaper alternatives.
Kamath framed the risk in personal, investor terms. He said shorting every private AI company today could, in five years, make him money, comparing the moment to the Internet bubble.
“Like me, the stock trader investor, I’m starting to feel at this point that if I were to take every private company in AI and short their stock today, in five years, I might make money… It feels a bit like… the ‘Internet bubble’,” Kamath said.
Follow us on X to get the latest news as it happens.
The Zerodha co-founder also expects the industry to fragment. A market dominated by a few American giants would give way to a regional, self-reliant economy built through reverse-engineering and rapid local development.
Under that view, individual nations stop importing expensive models and build their own. India would run its own domestic copy, with the tokens and energy sitting locally, functional enough for everyday use even if not cutting-edge.
“If the world goes in that direction, I don’t see the reason to pay the multiples that these private companies have today,” Zerodha co-founder argued.
What is the 99% Cheaper Threat Armstrong Describes
Armstrong, notably, agreed with that market assessment. He pointed to a stark cost gap between elite frontier labs and the open-source models trailing right behind them.
Top-tier labs spend billions building the next breakthrough. Open-source alternatives, roughly six months behind, reach the market at a tiny fraction of that price.
The Coinbase CEO put a figure on it. Open-source models run about six months behind and cost up to 99% less for inference, so a larger share of workloads could shift toward them.
He drew a clear line between two futures. Elite frontier models stay valuable for highly specialized tasks like discovering new physics, but average consumers and businesses turn intensely price-sensitive.
“It makes me a little nervous when I see these valuations growing this fast as well. Like I’ve seen things like this happen before in crypto. They correct, and then there’s real value under it, so then they grow later,” Armstrong noted.
Once standard models run cheaply on everyday commodity hardware, the corporate defenses protecting high-value AI companies could dissolve entirely. That erosion sits at the heart of the warning.
Armstrong closed on a cautious note. Fast-growing valuations make him nervous, echoing patterns he witnessed in crypto, where prices corrected before real value emerged and growth resumed later.
Subscribe to our YouTube channel to watch leaders and journalists provide expert insights.
The post Billionaire Investor Just Revealed the AI Bet That Could Pay Off Big in 5 Years appeared first on BeInCrypto.
Ethereum’s best marketing line was that using it destroyed it, that every transaction burned ETH and shrank the supply. Then the network solved its scaling problem, activity fled to layer 2s, and the burn collapsed. The scaling worked. The scarcity did not survive it.
Summary
- Ethereum’s “ultrasound money” thesis held that EIP-1559 fee burning would outpace new issuance, making ETH deflationary and a superior store of value to Bitcoin.
- It worked briefly after the 2022 Merge. Then the March 2024 Dencun upgrade moved activity to layer-2 rollups paying near-zero fees, and the daily burn collapsed from thousands of ETH to as low as 50 to 70.
- ETH has since been mildly inflationary, with net supply growth around 0.2% to 0.8% annually depending on the period, reversing the deflation the thesis promised.
- The December 2025 Fusaka upgrade added EIP-7918, a blob fee floor designed to restore a minimum burn. Fidelity modeled it would have added roughly $78.6 million in burn across 93% of days since 2024.
- The deeper tension is unresolved: a cheap, scaled Ethereum burns less than a congested, expensive one, so the network’s success as infrastructure works against its scarcity as an asset.
For about eighteen months, Ethereum had the best story in crypto, and the story was a paradox: the more people used the network, the rarer its token became. Every transaction burned a little ETH, and when the network was busy enough, it burned more than it created. Supply went down. The community called it ultrasound money, a deliberate jab at Bitcoin’s “sound money,” complete with a bat emoji and a movement.
For a while, the data backed it up. Then Ethereum did the thing it had promised to do for years, which was to scale, and scaling broke the story. Activity moved to layer-2 networks that pay almost nothing to the base chain, the burn collapsed, and ETH quietly went inflationary again. This is the story of how Ethereum’s greatest technical success dismantled its best economic narrative, and whether a December upgrade can put the pieces back.
What ultrasound money actually meant
The mechanism is worth getting exactly right, because the whole debate turns on it.
In August 2021, Ethereum activated EIP-1559, which changed how transaction fees work. Instead of paying miners directly, every transaction now pays a base fee that is burned, permanently removed from circulation. The busier the network, the higher the base fee, and the more ETH destroyed. On its own, that is just a fee-burning mechanism. It became a monetary thesis when Ethereum switched from proof-of-work to proof-of-stake in the September 2022 Merge, which cut new ETH issuance by roughly 90%, because the network no longer had to pay energy-intensive miners.
Put the two together, and you get the ultrasound thesis. Issuance dropped to a trickle after the Merge. Burning continued with every transaction. If burning exceeded issuance, total ETH supply would shrink over time, making the asset deflationary. And a deflationary asset with growing demand should, in theory, appreciate. Ethereum would become harder money than Bitcoin, whose supply still grows, hence “ultrasound.” The tracking site ultrasound.money existed to display exactly this: supply ticking down, day by day.
For a stretch after the Merge, it happened. Supply fell back toward and below the level it sat at during the Merge itself. Burns outpaced issuance. The narrative was not hype; it was, for that window, an accurate description of the data. That is what made it powerful, and what made its reversal so awkward.
How scaling broke it
The break came from Ethereum solving its most famous problem, and the irony is total.
Ethereum’s scaling strategy is to push transactions off the expensive base layer and onto layer-2 rollups, networks like Arbitrum, Optimism, and Base that process transactions cheaply and then post compressed data back to Ethereum for security. The base layer becomes a settlement and data-availability layer; the rollups handle the actual activity. This is the roadmap Ethereum has pursued for years, and it works.
The March 2024 Dencun upgrade was the pivotal moment. It introduced EIP-4844, “blob” transactions, a separate and far cheaper data channel for rollups to post their data. Costs for layer 2s dropped by a factor of 10 to 100. Activity that used to happen on mainnet, paying mainnet fees and burning mainnet ETH, moved to rollups paying blob fees that were, in practice, close to zero because blob space was massively oversupplied relative to demand.
The effect on the burn was immediate and severe. Before Dencun, Ethereum burned thousands of ETH per day during busy periods. After Dencun, daily burn dropped to as low as 50 to 70 ETH. The base layer had lost its primary fee source. With issuance running around 1,700 ETH per day and burn collapsing well below that, the equation flipped: Ethereum began creating more ETH than it destroyed. By various measures across 2025 and into 2026, net annual inflation ran somewhere between roughly 0.2% and 0.8%, depending on the window. ETH supply crossed back above its Merge-era level. The deflation was over.
The mechanism that made ultrasound money true, EIP-1559 burning at scale, had not been removed. It had been bypassed. The activity simply moved to a layer where the burn does not happen in any meaningful amount. Ethereum scaled successfully and, in doing so, severed the link between usage and scarcity that the entire thesis depended on.
The bull case: it still works, just differently
The response from Ethereum’s defenders is not denial. It is reframing, and parts of it are genuinely strong.
The first point is that elastic scarcity is the actual feature, not permanent deflation. Ethereum was never designed to deflate forever at a fixed rate. It was designed to burn in proportion to demand, which means it becomes deflationary when the network is busy and mildly inflationary when it is quiet. During periods of high mainnet activity, above roughly 16 gwei average gas, burn still exceeds issuance, and ETH still goes net deflationary, temporarily. The mechanism works exactly as designed; it is just that a scaled network spends more time in the quiet regime. In this reading, ultrasound money was always conditional, and the condition is demand, not a promise.
The second point is that issuance is still radically lower than before. Even mildly inflationary, Ethereum issues roughly 90% less ETH than it did under proof-of-work. Compared to Bitcoin, which currently inflates at around 0.8% annually on a fixed schedule, Ethereum’s roughly 0.2% net inflation in calmer periods is actually lower. Both assets inflate in 2026; Ethereum, by some measures, inflates less. The “harder than Bitcoin” claim survives in a narrow, technical form even without net deflation.
The third point is that the supply figure overstates the sell pressure. Roughly 28% to 30% of all ETH is locked in staking, earning yield and not circulating. The tradeable float, ETH actually available on exchanges, is meaningfully smaller than the headline supply number, and it shrinks as more ETH is staked. A modestly inflating total supply with a large and growing staked portion is a very different pressure than the raw inflation number suggests. Demand from ETFs, treasury companies, and staking can absorb 0.2% inflation without difficulty.
And the fourth point is simply that the store-of-value case never rested on deflation alone. As long as demand for Ethereum’s blockspace, its role as settlement for stablecoins, tokenization, and DeFi, grows faster than supply, price can rise regardless of whether supply ticks up 0.2% a year. Scarcity was a nice story. Utility is the real thesis.
The bear case: the narrative was load-bearing
The skeptical reading is that the ultrasound story was not just marketing, that it was doing real work in the investment case, and that losing it matters more than the reframing admits.
The blunt version comes from the on-chain data and the people watching it leave. Daily network fee revenue on Ethereum fell from near $40 million in early 2025 to a local low around $10 million in 2026. That is not just a burn problem; it is a value-accrual problem. If the base layer captures little fee revenue because activity happens on rollups that pay it almost nothing, then holding ETH is a bet on an asset whose own network is monetizing its users poorly. Some analyses have tied this directly to developer attrition and reduced whale support, framing the end of ultrasound money as the end of a period when ETH had a clean, quantifiable reason to appreciate.
The deeper problem is structural and hard to argue away: a scaled, efficient Ethereum is less deflationary than a congested, expensive one. This is the tension at the center of the whole debate. The very thing that makes Ethereum better as infrastructure, cheap transactions, more capacity, activity on fast rollups, is the thing that reduces the burn. Ethereum cannot simultaneously be the cheap, high-throughput settlement layer it wants to be and the fee-burning deflationary asset the ultrasound thesis needed. Those are in direct conflict, and the roadmap chose scaling. The asset thesis was, in a real sense, sacrificed to the technology roadmap.
Then there is the value-capture question that rollups sharpen. Layer 2s use Ethereum for security and pay it a pittance for the privilege. Robinhood’s own chain is an example: analyses of corporate L2s show the base layer capturing a rounding error of the economics while providing the security that makes the whole arrangement credible. If Ethereum’s future is thousands of rollups settling to it cheaply, then Ethereum is providing enormous value and capturing little of it, and no amount of narrative reframing fixes a value-capture problem that lives in the fee structure.
The fix nobody is talking about
Which brings us to December 2025, and the upgrade that was designed, in part, to address exactly this, and that most of the market ignored.
The Fusaka upgrade activated on December 3, 2025. Its headline features were about scaling further, PeerDAS and expanded blob capacity. But buried in it was EIP-7918, the “blob base fee bound,” which is the most direct attempt yet to repair the burn. The problem Dencun created was that blob fees could collapse to near-zero, one wei, when execution costs dominated and blob demand was soft, which meant rollups consumed Ethereum’s capacity almost for free and burned almost nothing. EIP-7918 sets a floor: it ties the minimum blob fee to the execution base fee, roughly the execution base fee divided by 16, so that even in quiet periods rollups pay a meaningful minimum, and a minimum stream of ETH gets burned.
The modeling is striking. Fidelity Digital Assets analyzed what would have happened if EIP-7918 had been active since blobs launched, and found that on 93% of days since the 2024 Dencun upgrade, the adjusted fee would have exceeded the actual fee, generating an estimated additional $78.6 million, roughly 24,641 ETH, in cumulative blob-fee revenue. Blockworks noted that had the mechanism been introduced in June 2025, burnt blob fees would have been nearly 8x higher. The intent is explicit: restore a floor under the burn so that as stablecoins, DeFi, and tokenization migrate to rollups, ETH still captures value from that activity instead of subsidizing it.
The honest caveat is that this is a floor, not a restoration. EIP-7918 prevents the burn from collapsing to zero; it does not recreate the thousands-of-ETH-per-day burn of the congested mainnet era. Whether it produces measurable, sustained deflation depends on how much activity flows through blobs and how high execution base fees run, and the market is still watching. It is a serious, well-designed attempt to reconnect usage and scarcity. It is not a return to 2022.
Sound money versus ultrasound money, honestly compared
Because the entire thesis was built as a shot at Bitcoin, it is worth putting the two monetary models side by side without the tribalism, since the comparison is more interesting than either camp admits.
Bitcoin offers fixed scarcity. The supply schedule is written into the protocol, capped at 21 million coins, and halves on a predictable timetable roughly every four years. A holder knows today, with certainty, what Bitcoin’s issuance will be in 2030 and 2040. That certainty is the entire product. Bitcoin does not react to demand, does not burn, does not adjust; it simply issues on schedule toward a hard cap, and its current inflation runs around 0.8% annually, trending toward zero over decades. The trade-off Bitcoin holders accept is that the base layer offers little native utility and no yield. You hold it for the certainty, and you give up productivity in exchange.
Ethereum offered, and to a degree still offers, elastic scarcity. Supply responds to network demand: high usage burns more and can push ETH net deflationary; low usage burns less and lets mild inflation through. The appeal was a token that becomes scarcer precisely when it is most used, tying the asset’s scarcity to the network’s success. The trade-off, which the L2 era exposed, is that elasticity cuts both ways.
A demand-responsive supply is only deflationary when demand is high on the layer that burns, and Ethereum deliberately moved demand to layers that do not burn. Bitcoin’s rigidity, often criticized as inflexible, turned out to be the thing that made its monetary promise keepable. Ethereum’s flexibility, often praised as sophisticated, turned out to be the thing that made its monetary promise conditional.
The honest scorecard is that these are different products for different buyers, not better and worse versions of the same thing. Bitcoin sells certainty and asks you to forgo utility. Ethereum sells utility and asks you to accept that its scarcity depends on how that utility is used. The ultrasound-money era was the brief window when Ethereum appeared to offer both, certainty of deflation and utility of a working network, and that window closed not because Ethereum failed but because it succeeded at scaling.
A holder choosing between them in 2026 is really choosing between guaranteed scarcity with no yield and demand-driven scarcity with staking yield and network utility. Framed that way, the loss of ultrasound money is less a defeat than a clarification: Ethereum was never going to be Bitcoin, and the burn was hiding how different the two bets actually are.
What this means for holding ETH
Strip away the narrative fight and the practical question is whether the ultrasound story mattered to the price, and the uncomfortable answer is that it is hard to tell, because ETH has underperformed through the entire period regardless.
The clean way to see it: the ultrasound thesis was strongest right after the Merge, and it has been dismantled steadily since Dencun in March 2024. Over that same window, ETH has been a persistent underperformer against both Bitcoin and its own former highs. Either the market was pricing the loss of the deflation narrative, or the market never cared about the narrative and ETH’s problems lie elsewhere, in L2 value leakage, in competition from Solana, in the sheer difficulty of the modular roadmap. Both readings are defensible, and they point to different conclusions about whether fixing the burn fixes the price.
The most honest framing is that ultrasound money was a proxy for a real question that has not gone away: does Ethereum capture value from its own success? When the network was congested and expensive, the answer was visibly yes; the burn made it legible. When the network scaled and cheapened, the answer became murky, and the burn stopped telling the story. EIP-7918 is an attempt to make the answer legible again by putting a floor under value capture.
Whether it works will show up not in the marketing but in two numbers over the next year: net ETH supply, and base-layer fee revenue. If both turn up meaningfully, the thesis has a second life. If they do not, then ultrasound money was a phase, not a property, and Ethereum’s investment case has to stand on utility alone, which is a harder, slower, less tweetable argument than the one that shrank the supply.
Frequently Asked Questions
What is Ethereum ultrasound money?
It is the thesis that Ethereum’s ETH token would become deflationary and a superior store of value to Bitcoin. It rests on two mechanisms: EIP-1559, activated in 2021, which burns a portion of every transaction fee, and the 2022 Merge, which cut new ETH issuance by roughly 90%. When burning exceeds issuance, total supply shrinks. The term was a play on Bitcoin’s “sound money” branding.
Is Ethereum still deflationary in 2026?
Not on a net basis, in normal conditions. After the March 2024 Dencun upgrade shifted activity to cheap layer-2 rollups, the burn collapsed, and ETH became mildly inflationary, with net supply growth around 0.2% to 0.8% annually depending on the period. During bursts of high mainnet activity, it can still turn temporarily deflationary, but the sustained deflation of the immediate post-Merge period ended.
Why did layer 2s break the burn?
Because they moved activity off the base layer, where transactions burned meaningful ETH, onto rollups that pay near-zero fees. The Dencun upgrade introduced cheap “blob” transactions for rollups, cutting their costs 10 to 100 times. Blob space was oversupplied, so blob fees fell close to zero, and the daily burn dropped from thousands of ETH to as low as 50 to 70. The activity continued; the burn did not follow it.
Does this mean ETH is a worse investment?
Not necessarily, and defenders make several counterpoints: issuance is still about 90% lower than under proof-of-work, roughly 0.2% net inflation in calm periods is actually below Bitcoin’s, nearly a third of ETH is locked in staking and off the market, and the real case rests on demand for blockspace rather than deflation. Critics counter that base-layer fee revenue collapsed too, raising a genuine value-capture problem.
What is EIP-7918?
A change introduced in Ethereum’s December 2025 Fusaka upgrade that sets a minimum price for blob transactions, tied to the execution base fee, roughly that fee divided by 16. It prevents blob fees from collapsing to near-zero during quiet periods, ensuring a minimum stream of ETH is burned. Fidelity modeled that it would have added roughly $78.6 million in cumulative burn across 93% of days since 2024 had it existed earlier.
Did Fusaka restore ultrasound money?
No, it put a floor under the burn rather than restoring the deflation of the post-Merge era. EIP-7918 stops the burn from collapsing to zero and improves value capture as activity migrates to rollups, but it does not recreate the thousands-of-ETH-per-day burn of the congested mainnet period. Whether it produces sustained net deflation depends on blob activity and execution fees, and remains to be seen.
Is Ethereum still harder money than Bitcoin?
In a narrow technical sense, sometimes. In calm periods, Ethereum’s roughly 0.2% net inflation can run below Bitcoin’s roughly 0.8% fixed-schedule inflation. But Bitcoin offers predictable, protocol-guaranteed scarcity indefinitely, while Ethereum’s supply is elastic and responds to demand, so it can inflate more during quiet, scaled periods. They offer different kinds of scarcity: fixed and certain versus elastic and demand-driven.
What should I watch to know if the thesis recovers?
Two numbers over the next year: net ETH supply growth, and Ethereum base-layer fee revenue. If EIP-7918 and rising rollup activity push net supply back toward flat or negative while base-layer revenue climbs from its roughly $10 million lows, the value-capture story recovers. If supply keeps growing and fee revenue stays depressed, ultrasound money was a temporary phase, and ETH’s case rests on utility and demand alone.
Disclaimer: This article is for information and educational purposes only and does not constitute financial or investment advice. It describes monetary mechanics and network upgrades whose effects are uncertain and still developing. Nothing here is a recommendation to buy or sell any asset. Always do your own research. Figures on supply, burn, and inflation move continuously and are accurate as of July 17, 2026.
Robinhood Chain launched, filled with memecoins, briefly ranked third among DEXs, and the “Solana killer” talk started immediately. Then you look at the actual numbers. Solana has 27 times the value locked and 2 million more users. This is not a flippening. It is a fair fight over the wrong metric.
Summary
- Robinhood Chain launched July 1 and drew roughly $185 million in value locked and over $3 billion in first-week DEX volume, briefly ranking among the top DEXs by volume and prompting Solana comparisons.
- Solana dwarfs it on every durable metric: around $4.93 billion in value locked, $1.91 billion in daily DEX volume, more than 2 million active addresses, and roughly $3 million in daily app revenue.
- The gap on value locked is about 27 to 1. On active users, it is larger. Volume alone, the one metric where Robinhood looked competitive, is the least durable measure and is inflated by a memecoin frenzy and a gas subsidy.
- The real bull case for Robinhood is not flipping Solana on-chain. It is distribution: roughly 28 million existing customers and a decade of retail brand equity that no crypto-native chain can match.
- The honest verdict is that Robinhood will not flip Solana on DeFi metrics any time soon, but the two are not actually competing for the same thing, which makes the flippening question the wrong one.
Within days of Robinhood Chain going live, the comparison wrote itself. A memecoin frenzy sent the chain’s DEX volume past $3 billion in a week; it briefly cracked the top three networks by daily DEX volume, and crypto Twitter did what crypto Twitter does: it declared a Solana killer.
The parallel was tidy. Solana also grew through a memecoin boom, so surely Robinhood was running the same playbook toward the same destination. Then you pull the actual data, and the tidy story falls apart. Solana has roughly 27 times Robinhood Chain’s value locked and millions more users.
The one metric where Robinhood looked competitive, raw volume, is the flimsiest number on the board. This piece is about whether Robinhood Chain can flip Solana, and the short answer is no, not close, and the more interesting answer is that flipping Solana was never the right frame.
The scoreboard
Start with the numbers, because the numbers settle most of the argument before it starts.
Solana, as of mid-July 2026, carries around $4.93 billion in total value locked, does roughly $1.91 billion in daily DEX volume, has more than 2 million active addresses, and generates about $3 million in daily application revenue. These are the metrics of a mature, heavily used layer-1 with a deep DeFi ecosystem, years of accumulated liquidity, and a large, sticky user base.
Robinhood Chain, roughly 2 weeks after launch, sits at around $185 million in value locked, having posted more than $3 billion in DEX volume across its first week. Depending on the day and the source, its TVL has been quoted between $185 million and $312 million, with the higher figure heavy on stablecoin deposits. Active addresses are counted in the hundreds of thousands cumulatively, not the millions active.
Line the durable metrics up, and the gap is stark. On value locked, Solana leads by a factor of roughly 27 to one against the lower Robinhood figure, and still around 16 to 1 against the higher one. On active users, the gap is larger still. On application revenue, Solana’s ecosystem earns real fees across a diverse set of protocols; Robinhood Chain’s revenue is concentrated in memecoin trading and inflated by incentives. There is exactly one metric where Robinhood looked competitive in its first fortnight, and that is raw DEX volume, where a memecoin frenzy briefly pushed it into the same conversation as networks many times its size.
That single metric is doing all the work in the flippening narrative, and it is the metric that deserves the least trust.
Why volume is the wrong number
Volume is seductive because it is large and it moves fast, and it is misleading for the same reasons.
Robinhood Chain’s $3 billion first week was overwhelmingly memecoin trading. CASHCAT alone generated roughly $98 million in a single day, about 17% of the chain’s entire DEX volume, and the broader wave of Robinhood-themed tokens, Cash Dog in Hood, Little John, Hoodrat, drove most of the rest.
Memecoin volume is the most transient category of on-chain activity there is. It arrives with attention and leaves with it, and it leaves no infrastructure behind. A chain doing $3 billion in memecoin volume this week can do a fraction of that next month, as the 33% single-day CASHCAT drop after its launchpad exited already showed.
Then there is the subsidy. Robinhood Chain ran a 90-day gas fee subsidy from launch, which makes transactions artificially cheap and inflates transaction counts and, indirectly, trading activity. Any volume comparison during the subsidy window is measuring a promotion as much as organic demand. The honest read of that number will only be available once the subsidy expires and users start paying real costs.
Value locked, by contrast, is sticky. It represents capital that has chosen to reside on the chain, in lending protocols, liquidity pools, and asset-management strategies, and it does not evaporate with a memecoin’s attention cycle. Solana’s ~$4.93 billion in TVL is the accumulated result of years of protocols, integrations, and users committing capital. Robinhood’s ~$185 million is a 2-week-old figure heavily weighted toward stablecoin deposits and speculative liquidity. TVL is the metric that predicts whether a chain is durable. Volume is the metric that predicts whether it is currently trending. They are not the same, and the flippening narrative relies entirely on the second.
The bull case for Robinhood
The strong case for Robinhood Chain does not run through on-chain metrics at all, and the people making the flippening argument are looking in the wrong place because the actual advantage is off-chain.
Robinhood has roughly 28 million customers across 38 countries and more than a decade as one of the largest retail investment platforms in the United States. That is a distribution asset no crypto-native chain possesses. Solana had to acquire its users one at a time through the slow, expensive work of crypto adoption.
Robinhood already has tens of millions of funded accounts belonging to people comfortable trading both stocks and crypto, and it can put its chain in front of them inside an app they already use. If even a modest fraction of that base becomes active on-chain, the user numbers change quickly. Brand equity and distribution are exactly what earlier tokenization projects lacked, and Robinhood has both in abundance.
The memecoin-as-ignition argument also has real historical support. Solana itself grew through a memecoin cycle: BONK, WIF, and the Pump.fun era, before it produced serious infrastructure and institutional adoption. Base followed a similar arc. Speculative trading bootstraps the liquidity, the market makers, the tooling, and the attention that serious applications later need. In this reading, Robinhood Chain’s memecoin phase is not a failure to attract real activity; it is the normal first stage, and judging a 2-week-old chain by its TVL is like judging Solana by its 2021 numbers.
And Robinhood is playing a different game entirely. Its chain is built for tokenized stocks and real-world assets, a category Solana is also chasing but where Robinhood brings brokerage licenses, custody relationships, and regulatory infrastructure that a crypto-native chain has to build from scratch. If the RWA thesis plays out, Robinhood competes on ground where its traditional-finance credentials are an advantage, not on the DeFi metrics where Solana is years ahead. The flippening question assumes the two chains want to be the same thing. They may not.
The bear case for Robinhood
The skeptical case is that Robinhood Chain has attracted exactly the kind of activity that does not convert, and that the gap to Solana is not a head start Robinhood can close but a structural difference it may never close.
The mercenary-liquidity problem is the core of it. Memecoin traders are loyal to activity, not to chains. They arrived on Robinhood Chain because that is where the new-launch action was, and they will leave for the next chain offering quicker profits without a second thought. The Noxa launchpad that powered the entire boom generated roughly $12 million in fees and then stopped accepting launches and went dark within 11 days of the chain’s launch. That is not the behavior of infrastructure settling in; it is the behavior of an extraction cycle moving through. When the memecoin attention leaves, the question is what remains, and right now what remains is roughly $12.8 million in actual tokenized real-world assets, the thing the chain was built for.
The convert-the-traffic problem compounds it. Robinhood’s 28 million customers are a distribution asset only if they can be moved on-chain, and there is no evidence yet that memecoin degens and Robinhood’s retail stock traders are the same people or that 1 becomes the other. The chain’s current users may have almost no overlap with the tokenized-asset investors Robinhood hopes to serve. Distribution is potential, not conversion, and the conversion has not been proven.
Then there is the structural point that on-chain metrics are not a race Robinhood is quietly winning. Solana continues to outperform Robinhood Chain across essentially every DeFi metric despite the new chain’s loud debut, and Solana is not standing still. It has its own institutional momentum, its own tokenized-asset push, its own SBI partnership for on-chain financial markets in Japan. Robinhood is not catching a stationary target. It is entering, 2 weeks old, a competition against a network with a multi-year head start that is itself accelerating. Closing a 27-to-1 TVL gap against a moving, growing competitor is a different proposition than the volume charts suggest.
The Base comparison nobody makes
The flippening debate fixates on Solana, but the more instructive comparison is Coinbase’s Base, because Base is the closest thing to a control group for exactly what Robinhood is attempting, and it complicates both the bull and bear cases.
Base launched in 2023 as a corporate-backed Ethereum layer 2, built by a licensed, publicly traded American financial company with a large existing user base, aimed at bringing mainstream users on-chain. That is Robinhood Chain’s template almost exactly. And Base’s early growth, like Robinhood’s, ran heavily through memecoins before it developed into a more diversified ecosystem. So Base is the case study for whether a corporate chain can convert a speculative launch into durable activity, and the answer it offers is genuinely mixed.
On the bull side, Base did convert. It built real DeFi, real stablecoin activity, and real applications on top of the initial speculation, and it became one of the larger L2s by several measures. Coinbase’s distribution, tens of millions of users, mattered, and the memecoin phase did function as ignition rather than as the whole story. That is the precedent Robinhood is betting on, and it is a real one: a corporate chain did turn a speculative launch into something lasting.
On the bear side, Base did not flip Solana either, and it had a 2-year head start on Robinhood plus a parent company that was crypto-native from birth. If Base, with Coinbase’s crypto-specific expertise and a longer runway, sits alongside Solana instead of above it, the idea that Robinhood Chain will vault past Solana looks even less plausible. And Base has its own value-capture questions as an Ethereum L2, the same ones that apply to Robinhood Chain, where the base layer captures little of the economics. Base shows the corporate-chain model can work; it also shows that working means becoming a significant chain, not dethroning the incumbent. That is the realistic ceiling for Robinhood Chain too: not flipping Solana, but earning a durable place alongside it, and only if it converts the way Base did rather than fading the way most launch-frenzies do.
What a flippening would actually require
The word “flippening” gets thrown around loosely, so it is worth being precise about what would have to happen for Robinhood Chain to actually surpass Solana, because the specifics show why the headline math is not close.
Flipping Solana is not one event; it is a set of them across separate metrics, and they do not move together. On total value locked, Solana holds roughly $4.93 billion against Robinhood Chain’s ~$185 million, a gap of about 27 times. Closing that does not mean matching Solana’s memecoin volume for a week. It means persuading serious capital, lending markets, stablecoin issuers, restaking protocols, and asset managers to park billions on a corporate L2, which is a trust-and-time problem that speculative volume does nothing to solve. TVL is sticky precisely because it represents commitment, and commitment is the thing a memecoin wave cannot manufacture.
On active addresses, Solana runs above 2 million against a far smaller base on Robinhood Chain, and the composition matters more than the count. Solana’s addresses span DeFi users, NFT traders, payment apps, and memecoin degens across a mature ecosystem. Robinhood Chain’s early activity is concentrated in memecoin speculation and a gas subsidy that inflates the raw transaction figure. An address trading CASHCAT once is not equivalent to an address running a lending position, a payment flow, and a staking allocation. The headline number can converge while the underlying engagement stays a chasm apart.
On application revenue, Solana generates around $3 million daily from a diversified base of protocols. Robinhood Chain’s revenue is thin and skewed toward the launchpad-and-memecoin complex that already showed it can evaporate in days when Noxa went dark. Sustainable app revenue requires applications people use for reasons other than speculation, and building that catalog is measured in years of developer adoption, not weeks of viral trading.
Then there is the structural ceiling nobody in the flippening conversation mentions: Robinhood Chain excludes US persons from its flagship products. Stock Tokens are barred to Americans, wallet perpetuals are barred to Americans, and the chain’s entire regulated-RWA thesis is aimed at a user base that cannot legally touch its marquee offerings from Robinhood’s home market. Solana has no such wall. A chain competing for global L1 dominance with its largest potential market fenced off from its best products is running the race with a weight the incumbent does not carry.
Put those together, and the flippening is not a single line for Robinhood Chain to cross. It is four separate lines, on four metrics that move at different speeds for different reasons, at least one of which is capped by regulation. Memecoin volume, the one number Robinhood Chain can actually post, is the least sticky and least predictive of the set. That is why the honest answer to the headline is not “not yet.” It is “not close, and the gap is wider than the volume charts make it look.”
The verdict
So will Robinhood Chain flip Solana? On the metrics that matter, no, and not close, and not soon.
The value-locked gap is roughly 27 to 1. The user gap is larger. The revenue gap is structural. The only metric where Robinhood was competitive is raw volume, which is the least durable measure available, is dominated by transient memecoin trading, and is inflated by a temporary gas subsidy. A chain does not flip a mature layer-1 by winning the one number that evaporates when attention moves on. Every durable indicator points to Solana remaining well ahead for the foreseeable future.
But the question contains a flawed assumption, and that is the more useful thing to say. “Flip Solana” treats the two chains as competitors for the same prize, and they may not be. Solana is a general-purpose, crypto-native layer-1 with a deep DeFi ecosystem built by and for crypto users. Robinhood Chain is a corporate settlement layer built by a licensed brokerage to bring tokenized stocks and real-world assets to a retail base that already trades on Robinhood. Their overlap right now is memecoins, which is precisely the activity neither of them was built for and which will belong to whichever chain is currently paying attention. The lasting competition, if there is one, is over tokenized real-world assets, and that race has barely started.
The honest framing is this. Robinhood will not out-DeFi Solana; that is not a contest it is positioned to win and probably not one it is trying to win. What Robinhood can do is convert a slice of 28 million existing customers into on-chain users of tokenized-asset products, on rails where its brokerage credentials matter more than its DEX volume. If it does that, it does not need to flip Solana, because it will be winning a different game. If it does not, the memecoin volume fades, the chain settles back to its $12.8 million of real assets, and the flippening talk looks like what it probably is: a volume chart mistaken for a verdict. The number to watch is not DEX volume and not the gap to Solana. It is whether tokenized real-world assets on Robinhood Chain grow, and Robinhood’s July 29 earnings are the first real look.
Frequently Asked Questions
Is Robinhood Chain bigger than Solana?
No, and the gap is large. As of mid-July 2026, Solana holds around $4.93 billion in total value locked against Robinhood Chain’s roughly $185 million, a gap of about 27 to 1. Solana also has more than 2 million active addresses and around $1.91 billion in daily DEX volume from a mature ecosystem. Robinhood Chain briefly matched Solana on raw DEX volume during a memecoin frenzy, but trails badly on every durable metric.
Why do people compare Robinhood Chain to Solana?
Because Robinhood Chain’s DEX volume surged past $3 billion in its first week, briefly ranking among the top networks, and because Solana famously grew through a memecoin cycle of its own before maturing. The parallel is that both bootstrapped with speculation. The comparison relies heavily on volume, which is the least durable metric and, for Robinhood, is inflated by memecoin trading and a temporary gas subsidy.
Could Robinhood Chain flip Solana eventually?
On DeFi metrics, it is unlikely any time soon, given a 27-to-1 value-locked gap against a competitor that is itself growing. Robinhood’s real advantage is off-chain: roughly 28 million existing customers and strong retail brand equity. If it converts a meaningful share of that base into on-chain users of tokenized-asset products, it could become large without ever matching Solana on DeFi, because it would be competing on different ground.
Why is DEX volume a misleading metric?
Because it is transient and easily inflated, Robinhood Chain’s volume was overwhelmingly memecoin trading, which arrives and leaves with attention and builds no lasting infrastructure. A 90-day gas subsidy also made transactions artificially cheap during the launch window. Value locked, which represents capital committed to the chain’s protocols, is a far better predictor of durability, and on that measure Solana leads decisively.
What is Robinhood Chain actually built for?
Tokenized stocks and real-world assets. It launched as an Ethereum layer 2 with Stock Tokens as the flagship product, targeting a retail base that already trades equities on Robinhood. Its competitive advantage is brokerage licenses, custody relationships, and regulatory infrastructure. The memecoin activity that drove its early volume is not the use case it was designed for, and only about $12.8 million in real-world assets currently sit on it.
What happened with CASHCAT and the memecoins?
CASHCAT, a token named after Robinhood’s original working name, surged to a roughly $156 million market cap and at one point generated about 17% of the chain’s daily DEX volume. It spawned a wave of Robinhood-themed tokens. The launchpad driving the boom, Noxa, earned around $12 million in fees, then went dark within 11 days, and CASHCAT fell more than 33% in a day, illustrating how quickly memecoin activity can leave.
Does Robinhood’s user base guarantee success?
No. Roughly 28 million customers is a distribution advantage, but distribution is potential, not conversion. There is no evidence yet that Robinhood’s retail stock traders will become active on-chain users, or that the memecoin traders currently driving activity overlap with the tokenized-asset investors the chain targets. Converting existing customers into on-chain users is the unproven step the entire strategy depends on.
When will we know if the strategy is working?
Watch the tokenized real-world asset figure on the chain, currently around $12.8 million, rather than DEX volume or the gap to Solana. If real assets grow substantially while memecoin activity fades, the traffic is converting, and the strategy is working. Robinhood’s second-quarter earnings on July 29 should offer the first real look at Stock Token adoption, and liquidity behavior after the gas subsidy expires will be the next test.
Disclaimer: This article is for information and educational purposes only and does not constitute financial or investment advice. It compares blockchain networks and company strategies, not the merits of any token. Memecoins are highly speculative, and most participants lose money. Nothing here is a recommendation to buy any asset or use any platform. Always do your own research. On-chain figures move quickly and are accurate as of July 17, 2026.
There is $1.6 trillion in Bitcoin sitting idle, earning nothing, doing nothing. Charles Hoskinson has a plan to put it to work on Cardano, and the plan quietly requires every transaction to burn a little ADA. Whether that saves Cardano or exposes its central problem is the whole question.
Summary
- Cardano founder Charles Hoskinson has laid out a strategy to bring Bitcoin into Cardano’s DeFi ecosystem through a platform called Pogun, targeting the roughly $1.6 trillion in idle Bitcoin.
- Pogun rolls out in three phases across 2026: a non-margin credit market in the second quarter, a yield application in the third, and a BitVM-based trust-minimized bridge in the fourth.
- The mechanism that matters for ADA holders: every transaction in the system requires ADA for fees, paid invisibly by Bitcoin users, creating a demand driver that Cardano’s token has lacked.
- It leans on Midnight, Cardano’s privacy partner chain, for confidential transactions, and on Cardano’s EUTXO architecture, which shares design lineage with Bitcoin’s own UTxO model.
- The sharp objection, raised by Cardano’s own community: if Bitcoin can be lent, earn yield, and settle without users noticing ADA, why hold ADA at all? The plan may build against its own token.
Cardano has a problem it has had for years, and it is not a technology problem. ADA trades around 94% below its 2021 high, the network’s DeFi activity has long lagged its ambitions, and its founder spends a meaningful share of his time denying rumors that he is quitting. What Cardano has never lacked is engineering and ideas.
What it has lacked is a reason for capital to show up. Charles Hoskinson’s answer, laid out across 2026, is audacious: stop trying to attract crypto capital to Cardano and go get Bitcoin’s instead. There is roughly $1.6 trillion in Bitcoin sitting idle in wallets, earning nothing, and Hoskinson wants to route a slice of it through Cardano’s infrastructure, with every transaction quietly paying fees in ADA. It is the most concrete demand thesis Cardano has produced in years. It also contains a contradiction its own community has already spotted.
The idle-Bitcoin thesis
The premise starts with a real and large number. Something on the order of $1.6 trillion in Bitcoin sits in wallets doing nothing productive. Bitcoin is superb as a store of value and poor as a financial instrument: it does not natively lend, earn yield, or plug into decentralized finance without wrapping, bridging, or handing custody to an intermediary. That gap, enormous dormant capital with no native way to work, is what every “Bitcoin DeFi” project is chasing, and Hoskinson has decided Cardano should chase it hard.
His framing, delivered publicly in May 2026 and reiterated through the year, is that Bitcoin holders would be able to access lending, yield, and privacy tools through Cardano without surrendering control of their assets. A dedicated team, described at various points as around 19 people, is building it. The pitch to Bitcoin holders is straightforward: keep your Bitcoin, but make it productive, through infrastructure that does not require you to trust a centralized custodian.
The pitch to Cardano holders is different and more important to the ADA investment case. Hoskinson has been explicit that the entire system runs on ADA underneath. In his own words, every single transaction requires ADA to happen; the Bitcoin user pays a fee in ADA but does not see it. The idea is to make ADA the invisible fuel of a Bitcoin-DeFi economy, generating persistent, usage-based demand for the token regardless of whether anyone is speculating on ADA itself. For a token whose central weakness has been the absence of a demand driver, that is the whole game.
What Pogun actually is
Pogun is the platform that operationalizes the thesis, and its structure is more concrete than Cardano’s roadmaps usually are.
It rolls out in three phases across 2026. The first, targeted for the second quarter, is a non-margin credit market: lending against Bitcoin without the liquidation-cascade risk that leveraged lending carries. The second, targeted for the third quarter, is a yield-focused application that lets Bitcoin holders earn returns.
The third, targeted for the fourth quarter, is a BitVM-powered bridge, a trust-minimized way to move Bitcoin onto Cardano infrastructure without the custodial risk that has plagued wrapped-Bitcoin products. Input Output Group sought treasury funding for the effort, with figures around 12.3 million ADA cited, as part of a larger proposal slate that also funded the Leios scaling upgrade.
The architecture leans on two Cardano-specific pieces. The first is Midnight, Cardano’s privacy-focused partner chain, which launched its mainnet in early 2026 and serves as the confidential coordination layer, letting Bitcoin holders use DeFi tools without exposing their positions publicly. Hoskinson has framed Midnight as proof of Cardano’s partner-chain model, specialized chains operating alongside the main network while drawing on its security.
The second is Cardano’s EUTXO accounting model, which shares design lineage with Bitcoin’s own UTxO model. That shared lineage is not incidental; it is part of the technical argument that Cardano is a more natural home for Bitcoin DeFi than account-based chains like Ethereum, because the two systems think about transactions in a similar way.
The sequencing is deliberate. The team has described building the credit market and liquidity first, so that by the time the consumer-facing products launch, there is already a functioning market underneath them instead of an empty shell waiting for users.
The bull case
The strongest version of this argument is that Cardano has finally identified the right target and built a credible, differentiated way to reach it.
The demand mechanism is genuinely elegant. Cardano’s problem was never capability; it was that ADA had no structural reason to be in demand beyond speculation and staking. Embedding ADA as the mandatory fee layer of a Bitcoin-DeFi economy creates exactly the kind of usage-based demand that speculation cannot provide, and that does not evaporate when sentiment turns. If Bitcoin DeFi on Cardano generates real volume, ADA demand rises mechanically with it, transaction by transaction, whether or not anyone is bullish on ADA as a trade. That is a far healthier demand base than the memecoin-and-narrative cycles driving other chains.
The target is also the right one. Every serious chain is chasing Bitcoin DeFi because the prize, a fraction of $1.6 trillion in dormant capital, is the largest untapped pool in crypto. Cardano bringing brokerage-grade patience, a privacy layer, and UTxO compatibility to that chase is a real differentiator against the wrapped-Bitcoin approaches that have dominated and repeatedly failed on custody and trust. A BitVM bridge that reduces custodial risk addresses the exact failure mode, hacked or insolvent custodians, that has burned wrapped-Bitcoin users before.
And it fits Cardano’s identity rather than betraying it. Cardano’s whole brand is methodical, research-driven, security-first engineering, often criticized as too slow. Bitcoin holders are, as a group, the most conservative and security-conscious in crypto. A careful, peer-reviewed, custody-minimizing approach to Bitcoin DeFi is arguably better matched to Bitcoin holders than the move-fast culture of other DeFi ecosystems. For once, Cardano’s slowness could be a feature aimed at exactly the audience that values it.
The bear case
The skeptical case starts with a question a Cardano community member asked Hoskinson directly, and it is devastating in its simplicity: what would be the point of holding ADA over Bitcoin? Are we building against our own core token?
The concern is real and structural. If the system is designed so that Bitcoin users pay fees in ADA without seeing it, then the design goal is explicitly to make ADA invisible. A Bitcoin holder using Pogun holds Bitcoin, earns yield in Bitcoin, and never needs to acquire, hold, or think about ADA. The fees are abstracted away. If ADA is successfully hidden from the user, then ADA is a backend utility token that the end user has no reason to hold as an investment, which means the demand is limited to whatever float the protocols need to operate, not the broad holder demand that supports a token’s price.
Making ADA the invisible plumbing is good for usage and potentially bad for ADA as an asset people want to own. Hoskinson’s answer, that transactions require ADA regardless, addresses mechanical demand but not the deeper question of why anyone holds ADA rather than the Bitcoin it is helping to mobilize.
The second problem is execution and timeline. Cardano has a long history of ambitious roadmaps that arrive late or underdeliver relative to the promise. Pogun’s phases are targeted across 2026, and Cardano’s governance has been visibly deadlocked, with treasury votes for exactly this kind of initiative facing friction and Hoskinson warning that rejecting research funding could drive engineers away. A plan that depends on multiple new components, Midnight, the BitVM bridge, the credit and yield layers, all shipping and integrating on schedule, is a plan with substantial execution risk in an ecosystem that has struggled to convert roadmap into adoption before.
The third problem is competition. Cardano is not alone in chasing Bitcoin DeFi; it is late to a crowded race. Bitcoin layer-2s, wrapped-Bitcoin protocols on Ethereum, and Bitcoin-native DeFi efforts are all pursuing the same idle capital, several with more liquidity, more developers, and more existing integrations than Cardano has managed to attract. Cardano’s DeFi TVL has sat around $1.1 billion at times, a fraction of Ethereum’s or Solana’s, which raises the question of why Bitcoin holders would route their capital through the ecosystem that has struggled most to attract capital in the first place. Being a natural technical home for Bitcoin DeFi does not help if the liquidity and developers are elsewhere.
The token question at the center
Everything about this plan comes back to one unresolved tension, and it is worth stating plainly because it is the crux of whether Pogun helps ADA or merely helps Bitcoin.
Cardano is trying to solve its demand problem by making ADA essential but invisible. Those two properties are in tension. Essential means every transaction needs ADA, which creates mechanical demand proportional to usage. Invisible means users never consciously hold or value ADA, which suppresses the discretionary demand that actually drives a token’s price above its pure utility floor. A token that is essential-but-invisible tends to trade at its utility value, the minimum float the system needs to function, rather than at the premium that comes from people wanting to own it. Ethereum resolved this tension by making ETH visible and desirable as an asset in its own right, through staking, through the ultrasound narrative, through being the reserve asset of its own economy. Cardano’s Pogun design points the other way, toward ADA as backend infrastructure.
The optimistic resolution is that sufficient usage makes even utility-value demand large. If Bitcoin DeFi on Cardano processes enormous volume, the mechanical ADA demand could be substantial even if no one holds ADA for love of it. The pessimistic resolution is that Cardano will have built a successful piece of Bitcoin infrastructure whose value accrues to Bitcoin holders and Pogun’s operators, while ADA captures only the thin utility margin, which is not the outcome ADA holders are hoping for when they cheer a Bitcoin-DeFi announcement.
Which resolution wins depends on numbers that do not exist yet, because the products are still launching. The second-quarter credit market and third-quarter yield app are the first real tests. If they generate meaningful Bitcoin volume and ADA demand rises visibly with it, the thesis has legs. If they launch quietly into the same low-liquidity environment that has characterized Cardano DeFi, then Pogun becomes another well-engineered Cardano initiative that did not move the token, and the community member’s question, why hold ADA over Bitcoin, will have answered itself.
Why Cardano needs this to work
To understand why Hoskinson is betting so heavily on Bitcoin DeFi, you have to understand how much pressure Cardano is under, because Pogun is not an opportunistic add-on. It is a response to an existential question the market keeps asking.
The pressure is visible in the numbers and the noise around them. ADA trades roughly 94% below its 2021 high, deep in the ranks of large-cap tokens that led the previous cycle and never recovered. Cardano’s DeFi total value locked, around $1.1 billion at times, is a fraction of Ethereum’s or Solana’s despite Cardano having been live since 2017 and commanding one of the most committed communities in crypto. Hoskinson has spent 2026 denying rumors that he is leaving the project and calling them fiction, which is not a thing founders of thriving networks typically have to do. And the governance apparatus, the CIP-1694 on-chain system Cardano is genuinely proud of, has been deadlocked over treasury proposals, with Hoskinson warning that rejecting research funding could push engineers out.
Underneath all of it is a criticism Hoskinson himself has accepted in his own framing: Cardano’s problem is not technology. He has said explicitly that it is not a node problem, not a problem of imagination, not a problem of execution capability, but a problem of governance, coordination, and ultimately getting capital and users to show up. That is a striking admission from a founder, and it reframes Pogun. Bitcoin DeFi is not just a product; it is Hoskinson’s answer to the accusation that Cardano builds impressive technology that nobody uses. If he can route Bitcoin’s enormous, idle capital base through Cardano, he solves the adoption problem and the demand problem at once, and he does it without needing to win the crypto-native DeFi users who have consistently chosen other chains.
That is why the stakes are higher than a normal roadmap item. Cardano has tried narratives before: smart contracts, then DeFi, then real-world assets, and none produced the adoption inflection the community keeps waiting for. Bitcoin DeFi is the biggest swing yet, aimed at the biggest target, and it arrives at a moment when patience with the slow-and-steady thesis is visibly thinning. If Pogun works, it vindicates the entire methodical approach. If it lands quietly like its predecessors, it will be much harder to argue that the next initiative will be different. Hoskinson has effectively staked the credibility of Cardano’s whole strategy on reaching an audience that has never been Cardano’s, which is either the boldest possible move or a sign of how few options remain.
What to watch
Three concrete markers will tell you which way this breaks.
The first is whether the Pogun phases actually ship on their 2026 timeline. The credit market was targeted for the second quarter and the yield app for the third; slippage on those dates, in an ecosystem already criticized for slow delivery, would be an early negative signal. Shipping on time, with working products, would be a genuine and somewhat unexpected positive given Cardano’s track record.
The second is Bitcoin volume through the system, not ADA price. The entire thesis rests on attracting idle Bitcoin, so the metric that matters is how much Bitcoin actually flows into Pogun’s credit and yield products once they are live. ADA price will be noisy and driven by the broader market; Bitcoin TVL on Cardano is the clean read on whether the idle-Bitcoin thesis is working.
The third is whether ADA demand becomes visible in the data as usage grows. This is the crux question made measurable. If Bitcoin volume rises and on-chain ADA demand rises with it in a legible way, the essential-and-invisible design is working as a demand driver. If Bitcoin volume rises and ADA does nothing, then the community’s fear was correct, and Cardano will have built valuable infrastructure for someone else’s asset. Hoskinson has made the boldest, most concrete bet of Cardano’s recent history. The next two quarters start to settle whether it was aimed at the right target or against his own token.
Frequently Asked Questions
What is Cardano’s Bitcoin DeFi plan?
It is a strategy, led by founder Charles Hoskinson, to bring Bitcoin into Cardano’s DeFi ecosystem and tap the roughly $1.6 trillion in idle Bitcoin. The centerpiece is Pogun, a platform letting Bitcoin holders lend, borrow, and earn yield through Cardano infrastructure without surrendering custody. Crucially, every transaction in the system requires ADA for fees, creating usage-based demand for Cardano’s token.
What is Pogun?
A three-phase Bitcoin DeFi platform rolling out across 2026: a non-margin credit market in the second quarter, a yield-focused application in the third, and a BitVM-based trust-minimized bridge in the fourth. It integrates Midnight, Cardano’s privacy partner chain, for confidential transactions, and builds on Cardano’s EUTXO architecture, which shares design lineage with Bitcoin’s UTxO model. Input Output Group sought around 12.3 million ADA in treasury funding for it.
How does this benefit ADA holders?
Through embedded demand. Hoskinson has stated that every transaction in the system requires ADA for fees, paid by Bitcoin users who may not even notice. If Bitcoin DeFi on Cardano generates real volume, ADA demand rises mechanically with it, independent of speculation. For a token whose main weakness has been the lack of a structural demand driver, that is the core of the investment argument.
What is the main criticism?
That the design makes ADA essential but invisible, which are properties in tension. If Bitcoin users pay fees in ADA without seeing it, they have no reason to hold ADA as an investment, so demand may stay limited to the minimum the protocols need instead of the broad holder demand that lifts a token’s price. A community member asked Hoskinson directly what the point of holding ADA over Bitcoin would be, capturing the concern that Cardano may be building against its own token.
How is this different from wrapped Bitcoin?
Wrapped Bitcoin typically requires trusting a custodian to hold the underlying Bitcoin, a model that has failed through hacks and insolvencies. Pogun’s fourth phase is a BitVM-based bridge designed to be trust-minimized, reducing reliance on a custodian. Combined with Cardano’s UTxO compatibility with Bitcoin and the Midnight privacy layer, the pitch is a more secure, more private way to make Bitcoin productive than existing wrapped approaches.
Why does Cardano think it can win Bitcoin DeFi?
Three arguments: its EUTXO architecture shares design lineage with Bitcoin’s UTxO model, making it a technically natural fit; its methodical, security-first culture matches Bitcoin holders’ conservatism; and its Midnight privacy chain offers confidentiality that Bitcoin holders value. The counterargument is that Cardano is late to a crowded race with lower liquidity and fewer developers than competitors, which may outweigh any technical fit.
When does Pogun launch?
Its phases are targeted across 2026: the credit market in the second quarter, the yield application in the third, and the BitVM bridge in the fourth. Given Cardano’s history of ambitious roadmaps arriving later than promised, and ongoing governance friction over treasury funding, whether these dates hold is itself a meaningful signal to watch.
Will this fix ADA’s price?
Unknown, and it depends on the essential-versus-invisible tension. If Bitcoin volume through Pogun is large, mechanical ADA demand could be substantial even without holders wanting ADA for its own sake. If volume is modest, or if ADA is so well hidden that demand stays at the minimum float the system needs, the plan could succeed as Bitcoin infrastructure while doing little for ADA as an asset. The next two quarters of launches are the first real test.
Disclaimer: This article is for information and educational purposes only and does not constitute financial or investment advice. It describes a development roadmap whose components are still launching and whose outcomes are uncertain. Nothing here is a recommendation to buy or sell any asset. Always do your own research. Information is accurate as of July 17, 2026.
The network that moves the world’s money spent 9 months building a blockchain, and the most important decision it made was what not to put on it. No stablecoins. No public tokens. Just bank deposits, wearing a new coat.
Summary
- On July 9, SWIFT launched a blockchain-based shared ledger with 17 major banks, including Citi, HSBC, UBS, and BNP Paribas, for round-the-clock cross-border payments using tokenized deposits.
- The ledger is built on Hyperledger Besu, an EVM-compatible architecture, developed with Consensys in 9 months, and it is positioned openly as the banking industry’s answer to a $315 billion stablecoin sector.
- The decisive choice is the instrument. SWIFT built this for tokenized deposits, not stablecoins. That distinction determines who controls the money, whether it is insured, and whether it funds lending.
- Tokenized deposits keep money on bank balance sheets, carry deposit insurance, and preserve credit creation. Stablecoins pull money into reserves, sit outside the banking system, and remove liquidity from it.
- For SWIFT, this is a structural shift: for the first time in 53 years, it is moving from a pure messaging network that never touches funds to an active coordination layer for the movement of value.
For 53 years, SWIFT has done exactly one thing: move messages. When a bank in Singapore pays a bank in Sao Paulo, SWIFT carries the instruction, not the money. It is the postal service of global finance, and it never once opened the envelope.
On July 9, 2026, that changed. SWIFT switched on a blockchain-based shared ledger with 17 of the world’s largest banks, and for the first time in its history it is coordinating the movement of value rather than just the messages about it. The financial press covered the launch as a technology story, which it is.
The more important story is a choice buried inside it: SWIFT built this thing to carry tokenized deposits and pointedly not stablecoins, and that single decision is a statement about who the banking system intends to let issue digital money. This piece is about that choice, why it matters, and who it leaves out.
What SWIFT actually launched
The facts first, because they are concrete and verified across SWIFT’s own release and independent reporting.
On July 9, SWIFT announced its blockchain-based shared ledger was ready for initial use, with 17 banks across 6 continents preparing to pilot live transactions. The roster reads like a directory of global banking: ANZ, BNP Paribas, BNY, Citi, DBS, First Abu Dhabi Bank, FirstRand, HSBC, Itau Unibanco, Lloyds, Mashreq, MUFG, OCBC, Standard Chartered, UBS, UOB, and Wells Fargo. The system was built in 9 months from announcement to production readiness, developed with input from financial institutions globally and, per multiple reports, with Consensys involved in the build.
Technically, the ledger uses an EVM-compatible architecture based on Hyperledger Besu, functioning as a shared orchestration layer that validates inter-bank payment commitments while preserving existing compliance, credit, risk, and control standards. Its purpose is specific and narrow: enable 24/7 cross-border payments, including overnight and on weekends, that current infrastructure cannot support because it depends on overlapping business hours between sender and receiver. Final settlement still occurs through existing payment rails. The ledger does not replace correspondent banking; it coordinates on top of it.
SWIFT’s chief business officer framed the move as extending the trust and stability of incumbent finance into the frontiers of digital money. That sentence is corporate, but it is also precise. The whole design is about carrying something old, bank money, on something new, a shared ledger, without letting go of the controls that make bank money what it is.
The choice that defines it
Here is the decision that matters more than the technology, and that most launch coverage mentioned only in passing: SWIFT built this for tokenized deposits, not stablecoins.
A tokenized deposit is a digital representation of money held in a regulated commercial bank, issued by that bank on a blockchain, maintaining a one-to-one relationship with the deposit on the bank’s balance sheet. It is commercial bank money with a new wrapper. A stablecoin is a token pegged to a currency and issued by a non-bank entity, backed by reserves such as Treasury bills that sit outside the banking system, and it operates on public blockchains accessible to anyone with a wallet.
They look almost identical. A dollar-denominated stablecoin and a tokenized dollar deposit both claim to be worth $1, both move on a blockchain, both settle in seconds. The New York Fed, in a February 2026 staff report, drew the structural line that the surface similarity hides: stablecoins intermediate safe assets into a medium of exchange, while tokenized deposits allow banks to keep funding loans and supporting credit creation, just on digital rails. That is not a technical distinction. It is a distinction about who gets to create money and what happens to the banking system if the answer changes.
SWIFT chose the instrument that keeps banks in the center. Its stated position is that bank-issued tokenized deposits offer a compliance-ready alternative within existing regulatory frameworks, without the risks some institutions associate with non-bank stablecoins. In plainer terms: SWIFT built a blockchain that does what stablecoins do, on rails the banks already control, so that the banks do not have to adopt an instrument that cuts them out.
Why banks care so much about the difference
The reason this choice carries such weight is that stablecoins and tokenized deposits do opposite things to a bank’s balance sheet, and therefore to the banking system’s capacity to lend.
When a customer buys a stablecoin, they move fiat out of their bank account and into the issuer’s reserves. That money leaves the bank. It now sits in Treasury bills or a custodial account backing the token, where it does nothing for credit creation. Multiply that across a $315 billion sector, and you get a measurable drain: deposits leaving banks reduce the money multiplier, the mechanism by which $1 of deposits supports several dollars of lending. Stablecoins, in the language of one industry analysis, remove liquidity from the banking system.
Tokenized deposits do the reverse. The money stays on the bank’s balance sheet, still counted as a deposit, still available to fund loans and investment. The token is just a more mobile representation of it. So a bank that issues tokenized deposits keeps the funding it would lose to a stablecoin, while offering customers the same 24/7 programmable settlement. From the bank’s perspective, that is the entire game: match the stablecoin’s user experience without surrendering the deposit base that the lending business depends on.
There is a safety dimension too, and it is not merely marketing. Tokenized deposits are backed by a bank’s capital and the supervisory framework that governs commercial banks; they carry deposit insurance up to the statutory limit, and the issuing bank can borrow from the Federal Reserve’s lender-of-last-resort window, which reduces run risk. Stablecoins have none of that. Under the GENIUS Act, they must hold full reserves and disclose them, which is real protection, but a stablecoin holder is not an insured depositor, and there is no central bank standing behind the token. The 2008 money-market-fund parallel is apt: instruments that look like deposits and are treated like deposits right up until one breaks the buck and reveals it was never a deposit at all.
The bull case for SWIFT’s approach
The optimistic reading is that SWIFT has done the sober, correct thing, and that its distribution makes it the most credible entrant in the entire tokenized-money contest.
The reach argument is genuinely hard to counter. SWIFT connects more than 11,000 financial institutions across over 200 countries. No stablecoin issuer, no crypto-native payment network, and no single bank consortium can match that footprint. If the pilot works across 17 banks and multiple currency corridors, the marginal cost for the next institution to join is low, because it is already on SWIFT. That is a distribution advantage measured in decades of accumulated network membership, and distribution is what actually decides payment standards.
The problem SWIFT is solving is also real rather than invented. SWIFT already processes 75% of payments to beneficiary banks within 10 minutes on existing rails, often in seconds, so speed of messaging was never the true constraint. The constraint is the dependency on overlapping business hours: a Friday-evening payment from Asia to a counterparty in the Americas waits for Monday. The shared ledger removes exactly that, enabling weekend and overnight settlement inside the regulated perimeter. This is a targeted fix to a specific friction, not a solution in search of a problem to solve.
And the model preserves what regulators and treasurers actually want preserved. Corporate treasurers who have routed weekend wires through batch systems for decades get round-the-clock movement without stepping outside the compliance framework their auditors require. Banks keep their deposits. Regulators keep their oversight. The financial system gets programmable, always-on settlement without a parallel monetary system forming outside it. For institutions whose first question about any innovation is what could go wrong, that is a strong pitch.
The bear case for SWIFT’s approach
The skeptical reading is that SWIFT is defending an incumbency, that a permissioned bank ledger recreates most of the limitations stablecoins were built to escape, and that the market has already voted for the other model.
Start with the scoreboard. Stablecoins are not a proposal; they are in the wild, with supply above $300 billion and tens of trillions in settled transaction volume, having survived multiple crypto winters. Tokenized deposits remain largely in pilots, and SWIFT’s own launch is explicitly an initial pilot, not full deployment. One instrument is battle-tested at scale, and the other is a promising experiment, and the gap is years, not months. BlackRock’s Larry Fink put the competitive framing memorably in his 2025 investor letter: if SWIFT is the postal service, tokenization is email, moving assets directly and instantly, sidestepping intermediaries. SWIFT’s ledger is an attempt to make the postal service deliver like email while keeping the post offices in business.
The permissioning is the deeper limitation. SWIFT’s ledger is a closed, bank-only system. Stablecoins are open: anyone with a wallet can hold and send them, no banking relationship required, which is precisely why they took hold in cross-border corridors that the banking system serves poorly or expensively. A fintech in Lagos pays a supplier in Shenzhen in USDC because the bank wire costs 6% and takes 4 days. SWIFT’s ledger does nothing for that user, because that user is not a bank on SWIFT. The tokenized-deposit model, by design, only serves people already well served by banks, which is not where the disruptive demand is.
There is also a crowding problem that undercuts the reach argument. SWIFT is not the only bank consortium building this. A group including JPMorgan, Bank of America, Barclays, and BNY is building a US-focused tokenized-deposit network through The Clearing House, targeting 2027. JPMorgan already runs Kinexys, live on Base and expanded to Canton, settling institutional payments today. If every major bank and consortium builds its own tokenized-deposit rail, the result is not one clean alternative to stablecoins but a fragmented set of walled gardens, which is the exact problem SWIFT’s shared ledger claims to solve, reappearing one level up.
What this means for the stablecoin giants
For Tether and Circle, the two issuers who dominate the $315 billion sector, SWIFT’s move is a signal rather than an immediate threat, and the distinction matters.
It is not an immediate threat because the two instruments serve partly different users. Stablecoins own the open, permissionless, retail-and-crypto corridors: exchange settlement, DeFi collateral, remittances, and the long tail of users without good banking access. SWIFT’s ledger serves regulated institutions moving money between themselves. In the near term, these are different markets, and SWIFT’s pilot takes nothing directly off Tether’s or Circle’s books.
It is a signal because it marks the point where the banking system stopped treating stablecoins as a curiosity and started building the institutional-grade alternative in earnest, with the sector’s most powerful distribution network behind it.
The competitive question for the stablecoin issuers is whether tokenized deposits expand to absorb the use cases stablecoins hoped to grow into, particularly institutional cross-border settlement and corporate treasury, which is exactly the ground stablecoins have been migrating toward as they moved from crypto on-ramps into real commerce. If banks lock down the institutional corridor with insured, compliant tokenized deposits, stablecoins may find their growth capped at the permissionless edge instead of expanding into the regulated core.
The GENIUS Act complicates the picture in both directions. It gave stablecoins a federal framework and legitimacy, which helps them. It also opened the door to bank-issued stablecoin models and, through OCC trust charters granted to Circle, Paxos, Ripple, and others, blurred the line between the two instruments. The likely future is not one model winning but convergence: bank-issued stablecoins, tokenized deposits, and non-bank stablecoins coexisting, with the interesting fights happening at the boundaries. SWIFT just planted a very large flag on the bank side of that boundary.
The three-way race nobody named
The cleanest way to see where SWIFT fits is to stop treating this as stablecoins-versus-banks and start counting the actual competitors, because there are three distinct bets being placed on how institutional money moves next, and they do not all win.
The first is the open stablecoin model: Tether, Circle, and the newer consortium efforts like Open USD. Non-bank issuers, public blockchains, permissionless access, reserves held outside the banking system. This model owns the present. It has the volume, the corridors, and the proven product-market fit in exactly the places banks serve badly. Its weakness is regulatory and structural: it pulls deposits out of banks, it carries no insurance, and it sits in a legal category the GENIUS Act only recently defined.
The second is the single-bank tokenized-deposit model: JPMorgan’s Kinexys is the leading example, live on Base and Canton, settling real institutional payments today. Here, a single large bank builds its own rail, issues its own tokenized deposits, and offers clients programmable settlement inside that bank’s walls. The strength is control and immediacy: JPMorgan did not wait for a consortium. The weakness is reach. A JPMorgan rail moves JPMorgan money well and everyone else’s money not at all, which reintroduces the interoperability problem that correspondent banking exists to solve.
The third is the shared-network model, and this is SWIFT’s bet, alongside the JPMorgan-BofA-Barclays-BNY effort running through The Clearing House for a 2027 launch. Instead of one bank’s walled garden or an open public chain, a coordinated ledger that many banks share. The strength is exactly what the single-bank model lacks: interoperability across institutions. The weakness is governance and speed, because getting 17 banks, let alone 11,000, to agree on anything is slower than one bank acting alone or an issuer minting a token.
Notice that the second and third models are in tension with each other, not just with stablecoins. Every bank that builds its own Kinexys-style rail is a bank that has less reason to join a shared network, because it already has a working system. SWIFT is betting that no single bank’s rail can achieve the reach that its 11,000-member network offers by default, and that banks will therefore converge on a shared layer instead of fragmenting into competing private ones. That is a plausible bet and not a certain one. The history of financial infrastructure is full of both outcomes: shared utilities that became universal, and walled gardens that stayed walled because their owners preferred control to reach.
Where this leaves the honest observer is that the digital-money endgame is not stablecoins-win or banks-win. It is a question of which of three architectures captures which use cases, and the likeliest answer is that all three persist, serving different corridors, with the boundaries between them contested for years. SWIFT’s launch does not settle that. It just guarantees that the shared-bank-network model has the strongest possible distribution behind it, which was not true a month ago.
The honest read
Strip away the framing and SWIFT’s launch is best understood as the incumbent financial system’s most serious attempt yet to answer a question stablecoins forced onto the table: if money is going to move on programmable rails, who issues it and who controls the rails?
Stablecoins answered: non-banks, on open networks, outside the system. SWIFT’s answer is the opposite: banks, on a permissioned ledger, inside the system, with all the existing controls intact. Both answers are coherent, and the choice between them is not really technical. It is a choice about whether the digital-money era strengthens the two-tier banking system or routes around it, and that is a question about power and financial stability, not about block times.
What makes SWIFT’s move consequential is not that it is better technology, because in raw capability a public-blockchain stablecoin is more open and more composable. It is that SWIFT has the one thing the crypto-native challengers cannot manufacture: 11,000 banks already on the network. That distribution is why a 9-month pilot from a 53-year-old messaging cooperative is a bigger deal than a flashier launch from a better-funded startup. The banks are going to move digital money somehow. SWIFT just gave them a way to do it without ever holding a stablecoin, and for an industry whose entire instinct is to preserve itself, that may be exactly the product it wanted.
Whether it works is an open question, and the pilot will answer it slowly, corridor by corridor, over quarters. But the strategic picture is already clear. The stablecoin sector spent years arguing that banks were too slow to compete in digital money. SWIFT just proved they were slow, not absent, and being slow with 11,000 members is a very different position than being fast with none.
Frequently Asked Questions
What did SWIFT launch?
On July 9, 2026, SWIFT launched a blockchain-based shared ledger with 17 major banks across 6 continents, including Citi, HSBC, UBS, and BNP Paribas, for round-the-clock cross-border payments using tokenized deposits. Built on Hyperledger Besu in 9 months, it acts as an orchestration layer coordinating bank-issued tokenized deposits, with final settlement still occurring through existing payment rails. It is an initial pilot, not full deployment.
What is the difference between a tokenized deposit and a stablecoin?
A tokenized deposit is commercial bank money represented on a blockchain, issued by a regulated bank, kept on the bank’s balance sheet, and covered by deposit insurance up to the statutory limit. A stablecoin is a token issued by a non-bank entity, backed by reserves held outside the banking system, operating on open blockchains with no deposit insurance. They look similar but differ in legal status, insurance, and effect on bank lending.
Why did SWIFT choose tokenized deposits over stablecoins?
Because tokenized deposits keep money inside the banking system. When a customer buys a stablecoin, funds leave their bank for the issuer’s reserves, draining deposits banks use to fund lending. Tokenized deposits stay on the bank’s balance sheet, preserving credit creation, while offering the same 24/7 programmable settlement. SWIFT’s position is that they provide a compliance-ready alternative without the risks some institutions associate with non-bank stablecoins.
Is this a threat to Tether and Circle?
Not immediately, but it is a signal. Stablecoins dominate open, permissionless corridors such as exchange settlement, DeFi, and remittances, which SWIFT’s bank-only ledger does not serve. The competitive risk is longer term: if banks lock down institutional cross-border settlement with insured tokenized deposits, stablecoins may find growth capped at the permissionless edge instead of expanding into the regulated institutional core they have been moving toward.
Does SWIFT’s ledger replace the existing system?
No. It is an orchestration layer on top of correspondent banking, not a replacement. Banks issue tokenized deposits on their own ledgers; the shared ledger coordinates the movement, and final settlement still runs through existing payment rails. SWIFT already processes most payments to beneficiary banks within minutes; the ledger’s specific contribution is enabling weekend and overnight settlement that current infrastructure cannot support.
Who else is building tokenized deposit networks?
Several major institutions. A consortium including JPMorgan, Bank of America, Barclays, and BNY is building a US-focused tokenized deposit network through The Clearing House, targeting 2027. JPMorgan’s Kinexys is already live on Base and Canton, settling institutional payments. The proliferation of separate bank networks raises the risk of fragmentation, the same problem SWIFT’s shared ledger claims to solve.
Are tokenized deposits safer than stablecoins?
They carry different protections. Tokenized deposits are backed by bank capital, covered by deposit insurance up to the statutory limit, and issued by banks that can access the Federal Reserve’s lender-of-last-resort window, reducing run risk. Stablecoins under the GENIUS Act must hold full reserves and disclose them, but holders are not insured depositors, and no central bank stands behind the token. The instruments carry structurally different risk profiles.
Why does SWIFT’s reach matter so much?
Because payment standards are decided by distribution, not technology. SWIFT connects more than 11,000 institutions across over 200 countries, a footprint no stablecoin issuer or crypto-native network can match. Once the pilot works, the marginal cost for another member bank to join is low because it is already on SWIFT. That accumulated network membership is why a pilot from a 53-year-old cooperative can matter more than a technically superior launch from a startup.
Disclaimer: This article is for information and educational purposes only and does not constitute financial or investment advice. It describes payment infrastructure and a pilot program whose outcomes are uncertain, and it is not a recommendation to buy or sell any asset or token. Always do your own research. Information is accurate as of July 17, 2026.
Notional volume on prediction markets climbed sharply in the second quarter of 2026 and reached $113.8 billion, up 48.7% from the previous quarter.
CoinGecko found that the momentum accelerated in June, when monthly notional volume surged to a record $50.7 billion, which represented a 92% increase from the average monthly volume of $27.5 billion posted over the prior five months.
Sports Drive June Surge
In its latest report, CoinGecko attributed the spike to a packed calendar of major sporting events beginning in late May, such as the UEFA Champions League Final, Stanley Cup, NBA Finals, FIFA World Cup, and Wimbledon. The sports-driven activity was particularly evident on Polymarket, where sports-related contracts accounted for 81% of trading volume in June, as opposed to 40% in January.
Despite this increase in sports trading, Polymarket’s market share declined quarter-over-quarter from 35.8% to 30.2%. On the other hand, Kalshi has managed to expand its lead after increasing its share from 42.4% in the first quarter to almost 58.9% in the second.
Meanwhile, Rothera, the Robinhood/Susquehanna International Group joint venture launched in May, quickly climbed to fourth place in June with $2.1 billion in notional volume.
Wall Street and Big Tech Into the Race
Prediction markets gained momentum. Last month, Cboe Global Markets launched Cboe Predicts, its new prediction markets platform featuring securities-based binary option contracts tied to the Mini-S&P 500 Index. The contracts, trading under the symbols XSPBW and XSPBX, are already available through Interactive Brokers, while Charles Schwab is expected to add access in the coming months.
Cboe also said more brokerage firms are likely to support the products over time. The contracts allow traders to take a “yes” or “no” position on whether the Mini-S&P 500 Index will settle at or above a specified level at expiration.
Additionally, the New York Times reported that Meta is developing a standalone prediction markets app called Arena, where users would predict real-world outcomes using points instead of real money. According to the report, the experimental project is a top priority for CEO Mark Zuckerberg and could eventually expand to real-money betting. The initiative follows Meta’s earlier Forecast app, a points-based prediction platform launched in 2020 during the COVID-19 pandemic before being discontinued in 2022.
The post Sports Events Push Prediction Market Trading to Record Highs in June appeared first on CryptoPotato.
Jan said many Binance employees, including himself, already keep most of their assets on the exchange. “I could make payments, I could use my debit card to spend whatever I need wherever I want,” he said.
Lines are blurring
Eneko Knorr, co-founder and CEO of Dubai-based stablecoin company Stabolut, said the line between banks and crypto companies is becoming harder to see.
“Today, you see regular banks offering crypto, and crypto platforms offering real bank accounts and normal banking services,” Knorr told CoinDesk. “Of course, the world still runs on regular money, so we all have to make a standard bank transfer to pay rent or the utility bills.”
Knorr said younger customers may choose an app that combines stablecoins with daily banking services.
Rohan Misra, head of the Gulf Cooperation Council region and CEO of AMINA Bank ADGM, said stablecoins are increasingly used for payments and settlement but still need regulated banking infrastructure.
“The wallet alone isn’t the bank account,” Misra said. “The regulated infrastructure around it is.”
Misra also questioned whether self-custody, where users control their private keys, would become the default.
“Self-custody means if someone accesses your private key, your assets are gone with no recourse, no recovery and no insurance,” he said. “That’s cash under a mattress.”
Ethereum remains trapped below a major higher-timeframe resistance cluster despite recovering strongly from its June lows. The recent rejection near local highs has pushed the asset back into an important support zone, while the price is approaching a technical decision point that should determine whether buyers can extend the recovery toward higher resistance or whether another corrective leg unfolds.
ETH Price Analysis: The Daily Chart
On the daily timeframe, ETH continues to trade below the descending 100-day and 200-day moving averages, confirming that the broader market structure remains bearish despite the recent rebound.
The asset recently failed to sustain a move above the short-term resistance around $1.9K and has now pulled back into the $1.75K-$1.85K demand zone. This region has acted as support throughout the current recovery and now represents the first line of defense for buyers.
As long as Ethereum holds above this area, another push toward the major decision zone between $2K and $2.15K remains possible. This region also aligns with the descending long-term trendline and the declining 100-day moving average, making it the most significant resistance cluster on the daily chart.
A successful breakout above this confluence would mark an important structural improvement, while rejection would likely shift attention back toward the long-term demand zone around $1.45K-$1.55K.
ETH/USDT 4-Hour Chart
The 4-hour chart shows Ethereum pulling back after failing to extend above the recent swing high near $1.95K. The correction has pushed it back to the short-term demand zone around $1.76K-$1.84K, which has repeatedly attracted buyers over the past week.
This area now serves as the immediate support needed to preserve the sequence of higher lows established since early July. Holding above it could allow another attempt toward the upper boundary of the current recovery structure and eventually the daily resistance around $2K.
However, losing this demand zone would likely expose the lower support levels around $1.7K before buyers attempt another recovery.
Sentiment Analysis
The liquidation heatmap highlights a large concentration of short liquidations positioned above the current market, with the most notable liquidity cluster sitting around the $1.95K-$2K region.
Importantly, this liquidity pool aligns closely with the key technical resistance visible on both the daily and 4-hour charts. The cluster sits directly beneath the higher-timeframe supply zone around $2K-$2.15K and near the descending trendline, creating a strong confluence between derivatives positioning and technical resistance.
This alignment increases the probability that Ethereum could first stage an upside liquidity grab into the $1.95K-$2K area to sweep leveraged short positions before facing renewed selling pressure from the overhead supply zone. A decisive breakout through both the liquidity cluster and the daily resistance would invalidate this scenario and instead strengthen the case for a broader bullish reversal.
The post Ethereum Price Analysis: $2K Dream Remains on the Table as ETH Defends Key Levels appeared first on CryptoPotato.
Supporters of BIP-110 view Bitcoin as a public utility whose scarce block space should be reserved primarily for monetary settlement. Inscriptions and other data-heavy applications represent consumption of a limited resource that should be protected for financial transactions, even if doing so requires introducing new consensus rules.
DOG Mode starts from the opposite premise.
Leonidas argued Bitcoin should remain a neutral marketplace for block space, where any valid transaction is equally legitimate provided the sender pays the prevailing fee. From that perspective, there is no objective distinction between a bitcoin payment and an Ordinals inscription.
Rather than seeking permission through a protocol upgrade, the intention for DOG Mode is to remove policy restrictions that its supporters argue Bitcoin itself never required.
The proposal also raises a more subtle question about Bitcoin’s infrastructure.
If enough nodes begin running different policy software, the network’s mempool — the collection of unconfirmed transactions waiting to be mined — could become increasingly fragmented. Consensus would remain intact, but different parts of the network could relay different transactions, affecting fee estimation and how quickly some transactions reach miners.
That fragmentation already exists to a degree, but DOG Mode could widen those differences by encouraging broader acceptance of transactions that many default nodes currently refuse to relay.
Crypto World
Trump targets Brazil’s payments system while dollar stablecoins are quietly overtaking country’s payments
Dollar-linked stablecoins already account for roughly 90% of crypto transaction volume in Brazil, most of it used for payments and settlement, according to tax authority data.
Brazil processes between $6 billion and $8 billion in crypto each month, much of it using dollar-denominated stablecoins instead of the country’s own currency.
However, even as dollar stablecoins have proliferated, Brazil’s central bank has moved to limit their role in regulated cross-border payments. Resolution 561, effective October 1, is set to bar payment firms from settling cross-border payments in stablecoins or other crypto, closing a back-end channel that had routed reais through dollar tokens. The central bank has cast stablecoins as a threat to monetary sovereignty, tax enforcement and anti-money laundering controls.
Pix now faces pressure from both sides after Washington named it a trade barrier, while Brazilian regulators shield it from growing competition from dollar-backed stablecoins.
Pix, however, may not be competing with stablecoins.
“In practice, they are complementary,” Rodrigo Caggiano, founder of Brazilian real-world asset monitoring platform RWA Monitor, told CoinDesk. “Pix has addressed domestic instant payments well, while stablecoins expand what is possible by operating on blockchain networks.”
U.S. pressure is likely to accelerate Brazil’s regulatory debate on stablecoins and digital financial infrastructure, Caggiano said, as the central bank builds its own tokenized-settlement system, Drex, on similar programmable rails.
Update on food van fire at busy Cambridge train station
New CB, Caleb Banks, KOC Hot Seat
India fined HP $14.4 million for rigging government bids and fixing ink and toner prices
-
NewsBeat2 days agoLondon Mayor Sadiq Khan handed a peerage by Keir Starmer alongside 15 other Labour figures… just days before the PM leaves No10
-
Fashion1 day agoWeekend Open Thread – Corporette.com
-
Politics11 hours agoThe House | The City of London can help the new chancellor deliver growth in every postcode
-
Crypto World3 days agoCFTC blocks Kalshi from unwinding Michigan trades after court order
-
Politics3 days agoYoung campaigners urge incoming PM to act on outdoor junk food ads
-
Business3 days agoNvidia Stock Slips After Big Tuesday Rally as Huang Confirms Vera Rubin Chip Is Now in Production Today
-
Crypto World11 hours agoRipple Payments Joins MiCA With 14 Firms, Does It Mean Anything For XRP?
-
Entertainment3 days agoDisney’s Most Ambitious Failed Star Wars Attraction Is Coming to SDCC
-
Crypto World24 hours agoRipple wins EU-wide access as ESMA adds it to MiCA register
-
Business3 days agoPalantir Shares Rise After Expanded Nvidia Partnership and Fresh Analyst Upgrades Ahead of Earnings Day
-
Crypto World2 days agoInjective Submits SEC Transfer-Agent Registration to Onchain Ownership Records
-
Tech5 days agoGet Your ESP32 Sunny Side Up With This Solar Dev Board
-
News Videos4 days agoXRP BOMBSHELL… XRP OMBOARDED FOR TRANSACTIONS!!!
-
Tech4 days agoDark Secrets Emerge When Jailbreaking LLMs
-
NewsBeat1 day agoRegistration is now open for March for Men with Kev 2026
-
Sports3 days agoNew Cornerback Enters Vikings Trade Rumor Mill
-
News Videos2 days agoMoney | Class 12 Economics | CBSE Board Exam 2026-27
-
Business2 days agoBanco Bilbao Vizcaya Argentaria, S.A. (BBVA) Discusses Global Macro Environment and Economic Outlook for Core Markets Transcript
-
Tech5 days agoCloudflare Precursor Watches Your Mouse and Keyboard To Decide If You Are Human
-
NewsBeat17 hours agoDurham County Council to send out electoral registration emails
You must be logged in to post a comment Login