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Unlocking Encryption for Consumer-Grade Applications, How Can zkTLS Enable On-Chain "Visa"?
Original Title: zkTLS: Unlocking Crypto Consumer Apps
Original Author: @yeak__, @Delphi_Digital Researcher
Original Translation: zhouzhou, BlockBeats
Editor's Note: TLSNotary verifies communication between the client and server, allowing selective data disclosure while ensuring privacy. Pluto introduces TLSNotary to smart contracts, Primus Labs enhances efficiency and develops zkFHE scheme, Opacity prevents collusion through Eigenlayer AVS and TEE, enhancing security. Opacity requires Web2 account verification, reducing Sybil attack risk, and adopts a verifiable log mechanism. Future optimization directions include vector blinding linear assessment to improve MPC efficiency for faster TLS proofs. HTTPS proxies act as intermediaries to enhance security and privacy protection, commonly used for enterprise traffic monitoring.
The following is the original content (slightly rephrased for better readability):
The encryption industry has always possessed a mindset, talent, and funding to change the world, but often lacks the means to achieve this goal. Currently, most real-world encryption success cases still rely on the support of Web2 giants. We can only hope that Visa and Mastercard continue to support crypto cards, Coinbase, PayPal, and Stripe keep optimizing the compatibility between traditional payment systems and blockchain, BlackRock continues to promote tokenization of government bonds, and Walmart keeps selling Pudgy Penguins.
Today, we have a powerful new tool that allows encryption industry builders to truly drive change. The traditional markets are rife with inefficiencies and limitations, while the encryption industry is in an unprecedentedly advantageous position to offer alternative solutions.
zkTLS (also known as TLS Oracle or Web Proof) enables private data to be extracted from the Web2 closed ecosystem, allowing users to prove various data types such as legal identity, financial records, educational background, and behavioral patterns in a completely privacy-preserving manner. Here is a brief overview of how it works.
TLS (Transport Layer Security protocol) is a protocol used to encrypt communication between clients and servers. TLS makes up the "S" in HTTPS (HTTPS = HTTP + TLS) and has become a network standard, protecting 95% of network traffic.
TLS is a trusted centralized authority responsible for issuing session keys. When a user accesses a website, the browser and the target server perform a TLS handshake to generate a session key for subsequent data transmission using symmetric encryption. However, the data exchanged between the client and server is not signed, making it impossible to prove its authenticity elsewhere.
Security provided by TLS:
· Authenticity
· Integrity
· Privacy
· Lack of data portability
zkTLS accomplishes identity verification between the client and server during an HTTPS session and brings privacy-preserving proofs onto the chain, addressing the issue of data portability. Importantly, this is often undetectable by the server and cannot be blocked by a firewall. With zkTLS, the entire Internet's database can become a composable building block for blockchain applications, a task that Web2 is almost powerless to achieve.
Various implementations of zkTLS: MPC (Multi-Party Computation), Proxy, TEE (Trusted Execution Environment)
MPC (Multi-Party Computation)
MPC allows multiple participants to jointly perform a computation without revealing their private inputs. MPC provides strong security guarantees but incurs high computational costs and suffers from a collusion problem.
Deco
In 2019, Deco first proposed an MPC-based TLS solution. Deco's maliciously secure two-party computation (2PC) approach has extensive compute overhead; for example, authenticating a 2KB data packet requires 475MB of communication and takes 50 seconds to complete. The solution is highly susceptible to timing out and has not been successfully deployed. Subsequently, Deco was acquired by Chainlink, who, along with Teller, developed a proof-of-concept solution.
TLSNotary
TLSNotary built upon Deco's work, utilizing a 2PC implementation based on garbled circuits and oblivious transfers. Garbled circuits are the simplest and most direct method in MPC.
TLS Notary "notarizes" the session between the client and server to prove its authenticity. During the TLS handshake, the prover and verifier collaborate to perform key encryption and decryption. Throughout the process, only the prover communicates with the server, while the verifier only sees encrypted data. The prover cannot forge inputs or responses. In the final stage, the prover can partially obscure the session record before presenting it to the verifier, for example, only proving to the verifier that it is located in a specific jurisdiction while concealing specific latitude and longitude information.
A validator can act as a notary, or outsource the validation role to generate more generic, portable proofs. This introduces an additional trust assumption that the validator must trust the notary not to collude with the prover to produce fake proofs. To mitigate this issue, a validator can request proofs from multiple notaries or define their own trusted notary list. However, these schemes still have various flaws, and the collusion problem remains one of the main challenges of MPC.
The advantage of TLSNotary is that it can maintain data portability, protect privacy, and does not rely on server cooperation. It achieves selectively disclosed authenticated data through circuit obfuscation and key splitting techniques but does not use ZKP. Currently, several projects have introduced zero-knowledge technology based on TLSNotary to make it easier to integrate.
Related Projects
Pluto
Pluto Labs is an open-source zero-knowledge TLSNotary implementation aimed at productizing it, allowing developers to integrate any off-chain data into smart contracts with just five lines of code. A detailed overview of its trust assumptions can be found in the related links.
Primus Labs (formerly PADO Labs)
Primus Labs has enhanced Deco using a garble-then-prove technique, replacing the high-cost malicious secure 2PC. It has achieved a 14x improvement in communication efficiency and up to a 15.5x improvement in execution time, successfully integrated into real-world APIs such as Coinbase and Twitter. Additionally, Primus is developing a zkFHE solution that may support more complex architectures in the future. Primus has also released a browser extension and plans to launch iOS/Android apps.
Opacity
Opacity addresses the collusion problem through a set of mechanisms and employs Eigenlayer AVS to provide economic security, overlaying multiple security measures:
· Sybil resistance based on on-chain Web2 account IDs
· Commit-and-reveal mechanism—users must submit a value before a randomly selected notary node
· Random selection of MPC nodes
· Verifiable attempt logs
Opacity restricts users from colluding using multiple wallets, with each wallet tied to a Web2 account. Additionally, users must submit a proof request before being randomly matched with a notary node, preventing them from changing their position if they attempt collusion without being matched to a colluding node. The verifiable attempt logs can be used to track suspicious proof submissions where a wallet attempts but fails to prove ownership of, for example, $10 million in bank deposits.
In addition, Opacity requires the attestation software to run in a Trusted Execution Environment (TEE) to ensure that unless the TEE is compromised, collusion is not possible. This is crucial because Opacity does not rely entirely on the TEE as a security guarantee.
To forge a proof within the Opacity framework, all of the following conditions must be met:
· User intentionally colludes
· At least one attestation node participates in collusion
· The attestation node runs on a compromised TEE
· The user randomly matches a collusion node within 1-3 attempts
· Verifiers can request proof regeneration multiple times, exponentially reducing the probability of the fourth condition
· Additionally, malicious behavior will face a penalty mechanism
The resistance to Sybil attacks in Opacity remains the weakest link. It can prevent one Web2 account from binding to multiple wallets but cannot prevent one person from creating multiple Web2 accounts. In fact, Opacity effectively outsources Sybil attack protection to Web2 platforms, with some platforms being more reliable than others (e.g., Rippling HR's identity authentication is more trustworthy than a Twitter account). In the future, Opacity may integrate multiple Web2 accounts to enhance security.
Opacity is developing the best practices implementation of zkTLS, making significant progress in decentralization and reducing trust assumptions. Its ability to overcome MPC computation overhead will be a key factor in future success.
In the future, there is still ample room for MPC performance optimization. For example, Vector Oblivious Linear Evaluation can achieve efficient 1-of-N Oblivious Transfer, leading to significant progress in each interaction. This can reduce network overhead by 100 times, making MPC-TLS proofs within 1 second feasible.
Proxy
An HTTPS proxy is an intermediary between a client and a server, responsible for forwarding encrypted traffic and only decrypting data when verifying user identity. Proxies can enhance security, performance, and privacy, particularly common in enterprise environments for monitoring and restricting employee access.
Proxies can also be used for zkTLS. This model inserts a proxy witness between the client and server to prove the legitimacy of communication. The proxy model is fast, cost-effective, and simple in structure, capable of handling large amounts of data. However, issues such as auditing, collusion, and decentralization persist. Additionally, this method can be detected by servers, potentially leading to blocking in widespread applications.
Reclaim Protocol
The Reclaim Protocol is the pioneer of the proxy model, leading the way in all zkTLS projects. Reclaim has broad support across almost all blockchains and boasts 889 community-built oracles. Several projects are built on Reclaim, including the zkP2P ticketing marketplace.
Reclaim is able to generate proofs on a user's mobile device in approximately 2–4 seconds without requiring users to download any apps or extensions. Reclaim employs a residential proxy to circumvent Web2 firewall issues.
Compared to MPC-TLS, Reclaim's proxy model is simpler, resulting in faster speeds. Many concerns about the proxy model have been addressed in the academic paper "Proxying is Enough" and Reclaim's blog. Studies show that the probability of breaking Reclaim's security is 10⁻⁴⁰.
zkPass
zkPass utilizes a hybrid model, originally based on an MPC approach but later transitioning to a proxy-witness model in production while keeping MPC as a fallback. zkPass is currently deployed on networks such as Base, BNB, Scroll, Linea, Arbitrum, zkSync, OP, X Layer, among others. zkPass uses its native TransGate Chrome extension and supports over 70 data sources and 200 data formats.
zkPass focuses primarily on identity verification and protection against Sybil attacks. The project is currently running incentive programs where users can complete challenges to earn ZKP token points. zkPass may become the first zkTLS project to introduce a liquidity token.
TEE
Trusted Execution Environment (TEE) is a tamper-resistant enclave in a processor that can store sensitive data and perform secure computations. TEE provides both hardware and software isolation, with dedicated memory and computational capabilities independent of the rest of the CPU. Intel SGX is currently the most well-known TEE solution. However, TEE has had vulnerabilities in the past and is susceptible to side-channel attacks.
Clique
Clique adopts a TEE-based approach to build zkTLS. This method offers very low computation and network overhead, addressing many issues but introducing a reliance on trusted hardware, shifting risks from notaries to chip manufacturers. In this model, TEE fully takes on the security guarantee responsibilities.
Summary
It is worth noting that zkTLS is just a generic term. Different zkTLS schemes vary in the degree of application of zero-knowledge technology and do not provide the same level of security guarantees as other zero-knowledge technologies like zkEmail. Strictly speaking, zkTLS may be better classified under MPC-TLS (+zkp), TEE-TLS, and zkTLS Proxy.
In the future, discussions in the zkTLS field will revolve around the trade-off between performance and security.
Proxy: This is a more general solution but requires additional trust assumptions, demands that clients can afford a zero-knowledge (ZK) solution, and also requires additional measures to bypass firewalls.
Multi-Party Computation (MPC): This model provides strong security guarantees but entails significant network communication overhead during MPC setup. Due to the high cost of the truth table, MPC methods are more suitable for small request/response interactions and TLS sessions without strict time limits. MPC has anti-censorship properties but faces collusion issues.
Trusted Execution Environment (TEE): The TEE model cleverly addresses most of the issues zkTLS faces, but at the cost of requiring full trust in TEE hardware.
Currently, Reclaim and Opacity are rapidly gaining momentum and seem to be leading the discussions in the zkTLS field. As zkTLS evolves, the trade-off between MPC and proxy models in terms of performance and security will remain a core topic.
Conclusion
zkTLS is an emerging narrative that is changing everything. However, many unresolved issues remain: Will zkTLS providers be commodified? Will the value capture flow to the application layer? How significant is the extractable value of forged proofs? How will these issues impact the discussions on zkTLS scheme trade-offs?
One thing is clear: zkTLS has greatly expanded the design space of decentralized applications and provided new ideas for building new systems. Today, many innovative ideas are already being implemented:
· Ticketing Marketplace – zkP2P (based on Reclaim)
· Web2 Reputation Import (Uber, DoorDash authentication) – Nosh Delivery (based on Opacity)
·KOL Marketing/Promotion Proof – Daisy (based on Opacity)
·Smart Predictions Market – TMR.NEWS (based on Reclaim)
·Low Collateral Loans through Payroll Earn – Earnifi (based on Opacity)
·Precision Targeting with Digital Ad Incentives – EarnOS (based on Opacity)
·Soft Collateral Loans – 3Jane (based on Reclaim)
zkTLS has disrupted the existing market landscape of Web2 by weakening data monopolies. All current inefficient markets are opportunities for cryptographic technology to penetrate and improve society.
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$COIN Joins S&P 500, but Coinbase Isn't Celebrating
On May 13, S&P Dow Jones Indices announced that Coinbase would officially replace Discover Financial Services in the S&P 500 on May 19. While other companies like Block and MicroStrategy, closely tied to Bitcoin, were already part of the S&P 500, Coinbase became the first cryptocurrency exchange whose primary business is in the index. This also signifies that cryptocurrency is gradually moving from the fringes to the mainstream in the U.S.
On the day of the announcement, Coinbase's stock price surged by 23%, surpassing the $250 mark. However, just 3 days later, Coinbase was hit by two consecutive events: a hack where employees were bribed to steal customer data and a demand for a $20 million ransom, and an investigation by the U.S. Securities and Exchange Commission (SEC) into the authenticity of its claim of having over 100 million "verified users" in its securities filings and marketing materials. These two events acted as mini-bombs, and at the time of writing, Coinbase's stock had already dropped by over 7.3%.
Coincidentally, Discover Financial Services, being replaced by Coinbase, can also be considered the "Coinbase" of the previous payment era. Discover is a U.S.-based digital banking and payment services company headquartered in Illinois, founded in 1960. Its payment network, Discover Network, is the fourth largest payment network apart from Visa, Mastercard, and American Express.
In April, after the approval of the acquisition of Discover by the sixth-largest U.S. bank, Capital One, this well-established digital banking company of over 60 years smoothly handed over its S&P 500 "seat" to this emerging cryptocurrency "bank." This unexpected coincidence also portrayed the handover between the new and old eras in Coinbase's entry into the S&P 500, resembling a relay race scene. However, this relay baton also brought Coinbase's accumulated "external troubles and internal strife" to a tipping point.
Over the past decade, cryptocurrency exchanges have been the most stable "profit machines." They play a role in providing liquidity to the entire industry and rely on trading fees to sustain their operations. However, with the comprehensive rollout of ETF products in the U.S. market, this profit model is facing unprecedented challenges. As the leader in the "American stack," with over 80% of its business coming from the U.S., Coinbase is most affected by this.
Starting from the approval of Bitcoin and Ethereum spot ETFs, traditional financial capital has significantly onboarded users and funds that originally belonged to exchanges in a more cost-effective, compliant, and transparent manner. The transaction fee revenue of cryptocurrency exchanges has started to decline, and this trend may further intensify in the coming months.
According to Coinbase's 2024 Q4 financial report, the platform's total trading revenue was $417 million, a 45% year-on-year decrease. The contribution of BTC and ETH's trading revenue dropped from 65% in the same period last year to less than 50%.
This decline is not a result of a decrease in market enthusiasm. In fact, since the approval of the Bitcoin ETF in January 2024, the inflow of BTC into the U.S. market has continued to reach new highs, with asset management giants like BlackRock and Fidelity rapidly expanding their management scale. Data shows that BlackRock's iShares Bitcoin ETF (IBIT) alone has surpassed $17 billion in assets under management. As of mid-May 2025, the cumulative net inflow of 11 major institutional Bitcoin spot ETFs on the market has exceeded $41.5 billion, with a total net asset value of $1214.69 billion, accounting for approximately 5.91% of the total Bitcoin market capitalization.
Institutional investors and some retail investors are shifting towards ETF products, partly due to compliance and tax considerations. On one hand, ETFs have much lower trading costs compared to cryptocurrency exchanges. While Coinbase's spot trading fee rate varies annually in a tiered manner but averages around 1.49%, for example, the management fee for IBIT ETF is only 0.25%, and the majority of ETF institution fees fluctuate around 0.15% to 0.25%.
In other words, the more rational users are, the more likely they are to move from exchanges to ETF products, especially for investors aiming for long-term holdings.
According to multiple sources, several institutions, including VanEck and Grayscale, have submitted applications to the SEC for a Solana (SOL) ETF, with some institutions also planning to submit an XRP ETF proposal. Once approved, this may trigger a new round of fund migration. According to a report submitted by Coinbase to the SEC, as of April, the platform's trading revenue from XRP and Solana accounted for 18% and 10%, nearly one-third of the platform's fee revenue.
However, the Bitcoin and Ethereum ETFs passed in 2024 also reduced the fees for these two tokens on Coinbase from 30% and 15% to 26% and 10%, respectively. If the SOL and XRP ETFs are approved, it will further undermine the core fee revenue of exchanges like Coinbase.
The expansion of ETF products is gradually weakening the financial intermediary status of cryptocurrency exchanges. From their original roles as matchmakers and clearers to now gradually becoming mere "on-ramps and off-ramps" for funds, exchanges are seeing their marginal value squeezed by ETFs.
On May 12, 2025, SEC Chairman Paul S. Atkins gave a keynote speech at the Tokenization and Cryptocurrency Working Group roundtable. The theme of his speech revolved around "It is a new day at the SEC," where he indicated that the SEC would not approach enforcement and regulation the same way as before but would instead pave the way for cryptocurrency assets in the U.S. market.
With signs of cryptocurrency compliance such as the SEC's "NEW DAY" declaration, an increasing number of traditional brokerages are attempting to enter the cryptocurrency industry. One of the most representative cases is the well-known U.S. brokerage Robinhood, which began expanding its crypto business in 2018. By the time of its IPO in 2021, Robinhood's crypto business revenue accounted for over 50% of the company, with a significant boost from the Dogecoin "moonshot" promoted by Musk.
In Q1 2025 earnings report, Robinhood showcased strong growth, especially in revenue from cryptocurrency and options trading. Fueled by Trump's Memecoin, cryptocurrency-related revenue reached $250 million, nearly doubling year-over-year. Consequently, Robinhood Gold subscription users reached 3.5 million, a 90% increase from the previous year, with the rapid growth of Robinhood Gold providing the company with a stable source of income.
Meanwhile, RobinHood is actively pursuing acquisitions in the cryptocurrency space. In 2024, it announced a $2 billion acquisition of the long-standing European cryptocurrency exchange Bitstamp. Additionally, Canada's largest cryptocurrency CEX, WonderFi, which recently went public on the Toronto Stock Exchange, also announced its integration with RobinHood Crypto. After obtaining virtual asset licenses in the UK, Canada, Singapore, and other markets, RobinHood has taken a proactive approach in the compliant cryptocurrency trading market.
Furthermore, an increasing number of brokerage firms are exploring the same path. Futu Securities, Tiger Brokers, and others are also dipping their toes into cryptocurrency trading, with some having applied for or obtained the VA license from the Hong Kong SFC. Although their user bases are currently small, traditional brokerages have a natural advantage in user trust, regulatory licenses, and low fee structures. This could pose a threat to native cryptocurrency platforms in the future.
In April 2025, security researchers discovered that some Coinbase user data was leaked on the dark web. While the platform initially responded by attributing it to a "technical misinformation," it still raised concerns among users regarding its security and privacy protection. Just two days before Dow Jones Indexes announced Coinbase's addition to the S&P 500 Index, on May 11, 2025, Coinbase received an email from an unknown threat actor claiming to have obtained customer account information and internal documents, demanding a $20 million ransom to keep the data private. Subsequent investigations confirmed the data breach.
Cybercriminals obtained the data by bribing overseas customer service agents and support staff, mainly in "non-U.S. regions such as India." These agents abused their access to Coinbase's internal customer support system and stole customer data. As early as February this year, blockchain detective ZachXBT revealed on X platform that between December 2024 and January 2025, Coinbase users lost over $65 million to social engineering scams, with the actual amount potentially higher.
Among the victims was a well-known figure, 67-year-old Ed Suman, an established artist in the art world for nearly two decades, having been involved in the creation of artworks such as Jeff Koons' "Balloon Dog" sculpture. Earlier this year, he fell victim to an impersonation scam involving fake Coinbase customer support, resulting in a loss of over $2 million in cryptocurrency. ZachXBT critiqued Coinbase for its inadequate handling of such scams, noting that other major exchanges have not faced similar issues and recommending Coinbase to enhance its security measures.
Amidst a series of ongoing social engineering incidents, although there has not been any impact on user assets at the technical level so far, it has raised concerns among many retail and institutional investors. Especially institutions holding massive assets on Coinbase. Just considering the U.S. BTC ETF institutions, as of mid-May 2025, they collectively hold nearly 840,000 BTC, and 75% of these are custodied by Coinbase. If we price BTC at $100,000, this amount reaches a staggering $63 billion, which is equivalent to the nominal GDP of two Iceland in the year 2024.
In addition, Coinbase Custody also serves over 300 institutional clients, including hedge funds, family offices, pension funds, and endowments. As of the Q1 2025 financial report, Coinbase's total assets under management (including institutional and retail clients) reached $404 billion. The specific amount of institutional custodied assets was not explicitly disclosed in the latest report, but it should still be over 50% based on the Q4 2024 report.
Once this security barrier is breached, not only could the rate of user attrition far exceed expectations, but more importantly, institutional trust in it would undermine the foundation of its business. Therefore, after a hacking event, Coinbase's stock price plummeted significantly.
Facing a decline in spot trading fee revenue, Coinbase is also accelerating its transformation, attempting to find growth opportunities in derivatives and emerging assets. Coinbase acquired a stake in the options platform Deribit at the end of 2024 and announced the official launch of perpetual contract products in 2025. This acquisition fills in Coinbase's gap in options trading and its relatively small global market share.
Deribit has a strong presence in non-U.S. markets, especially in Asia and Europe. The acquisition has enabled Coinbase to gain a dominant position in bitcoin and ethereum options trading on Deribit, accounting for approximately 80% of the global options trading volume, with daily trading volume remaining above $2 billion.
Meanwhile, 80-90% of Deribit's customer base consists of institutional investors, with their professionalism and liquidity in the Bitcoin and Ethereum options market highly favored by institutions. Coinbase's compliance advantage, coupled with its already robust institutional ecosystem, makes it even more suitable. By using institutions as an entry point, it can face the squeeze from giants like Binance and OKX in the derivatives market.
Facing a similar dilemma is Kraken, which is attempting to replicate Binance Futures' model in non-U.S. markets. Since the derivatives market relies more on professional users, fee rates are relatively higher and stickiness is stronger, making it a significant source of revenue for exchanges. In the first half of 2025, Kraken completed the acquisition of TradeStation Crypto and a futures exchange, aiming to build a complete derivatives trading ecosystem to hedge the risk of declining spot transaction fee income.
With the surge of Memecoin in 2024, Binance, OKX, and various CEX platforms began massively listing small-market-cap, highly volatile tokens to activate active trading users. Due to the wealth effect and trading activity of Memecoins, Coinbase was also forced to join the battle, successively listing popular tokens from the Solana ecosystem such as BOOK OF MEME and Dogwifhat. Although these coins are controversial, they are frequently traded, with fee rates several times higher than mainstream coins, serving as a "blood-boosting" method for spot trading.
However, due to its status as a publicly traded company, this practice is a riskier endeavor for Coinbase. Even in the current crypto-friendly environment, the SEC is still investigating whether tokens like SOL, ADA, and SAND constitute securities.
In addition to the forced transformation strategies carried out by the aforementioned CEXs, they are also starting to lay out RWAs and the most talked-about stablecoin payment fields, such as the PYUSD launched through a collaboration between Coinbase and Paypal, Coinbase's support for the Euro stablecoin EURC by Circle that complies with EU MiCA regulatory requirements, or the USD1 launched through a collaboration between Binance and WIFL. In the increasingly crowded trading field, many CEXs have shifted their focus from just the trading market to the application field.
The golden age of transaction fees has quietly ended, and the second half of the crypto exchange platform game has silently begun.
Key Market Insights for May 16th, how much did you miss out on?
MOG Coin Skyrockets as Elon Musk and Garry Tan Embrace "mog/acc" Identity
STARTUP's Price Surges 40x in 30 Minutes: How did he become the Emotion King of Believe?
Key Market Intelligence on May 14th, how much did you miss out on?
1.Binance Alpha Launches HIPPO, BLUE, and Other Tokens
2.Believe Ecosystem Tokens See General Rise, LAUNCHCOIN Surges Over 250% in 24 Hours
3.Tiger Securities Introduces Cryptocurrency Deposit and Withdrawal Service, Supports Mainstream Cryptocurrencies such as BTC and ETH
4.Current Bitcoin Rally Possibly Driven by Institutions, Retail Traders Yet to Join
5.Binance Wallet's New TGE Privasea AI Participation Requires a 198 Point Threshold, with a Point Consumption of 15
Source: Overheard on CT (tg: @overheardonct), Kaito
PUMP: Today's discussions about PUMP focus on its new creator revenue-sharing model: the platform will allocate 50% of PumpSwap revenue to token creators, sparking varied reactions from users. Some criticize the move as insufficient or even misleading, while others view it as a positive step the platform is taking to reward creators. Meanwhile, PUMP faces market pressure from emerging competitors like LetsBONKfun and Raydium, which are rapidly gaining market share. Users also express concerns about PUMP's sustainability and potential regulatory risks in the U.S., with discussions extending to the platform's impact on the entire memecoin ecosystem.
COINBASE: Today, Coinbase became the first crypto company to join the S&P 500 Index, replacing Discover Financial Services, sparking widespread industry attention. The entire crypto community views this milestone as a significant development, signaling that crypto assets are further integrating into the mainstream financial system. The news has sparked lively discussions on Twitter, with many users pointing out that this may attract more institutional investors to enter the Bitcoin and other cryptocurrency markets.
XRP: XRP became the focal point of today's crypto discussion, with its significant market movements and strategic advances drawing attention. XRP has surpassed USDT to become the third-largest cryptocurrency by market capitalization, sparking market excitement and discussions about its future potential. The surge in market capitalization and price is believed to be related to increasing institutional interest, deepening strategic partnerships, and its role in the crypto ecosystem. Additionally, XRP's integration into multiple financial systems and its potential as a macro asset class are also seen as key factors driving the current market sentiment.
DYDX: Today's discussions about DYDX mainly focused on the dYdX Yapper Leaderboard launched by KaitoAI. The leaderboard aims to identify the most active community participants, with a total of $150,000 in rewards to be distributed over the first three seasons. This initiative has sparked broad community participation, with many users discussing the potential rewards and the incentive effect on the DYDX ecosystem. Meanwhile, progress on the ethDYDX to dYdX native chain migration and historical airdrop events have also been topics of discussion.
1. "What Is 'ICM'? Holding Up the $4 Billion Market Cap Solana's New Narrative"
Overnight, the hottest narrative in the crypto space has become "Internet Capital Markets," with a host of crypto projects and founders, led by the Solana ecosystem's new Launchpad platform Believe, releasing this phrase. Together with "Believe in something," it has become the new slogan heralding the onset of a bull market. What exactly is the so-called "Internet Capital Market," will it become a short-lived hype phrase like the Base ecosystem's previous Content Coin, and what related targets are available for selection?2.《LaunchCoin Surges 20x in One Day, How Did Believe Create a $200M Market Cap Shiba Inu After Going to Zero?｜100x Retrospective》
LAUNCHCOIN broke through a $200 million market cap today, with the long-lost liquidity and such a high market cap "Memecoin" almost bringing half of the on-chain crypto community CT into the fray. The community is crazily discussing this token, with half of it being FOMO and the other half being FUD. This token, originally issued by Believe founder Ben Pasternak under his personal identity, transformed into a new platform token after a renaming. From once going to zero to a $200 million market cap, what happened in between?May 14 On-chain Fund Flow
Within 24 hours, GOONC's market cap soared to 70 million, could GOONC be the next billion-dollar dog on the Believe platform?
Bitcoin has broken $100,000, Ethereum has surpassed 2500, and is Solana's hot streak about to make a comeback?
The current market is in a state of macro euphoria, with GOONC riding the wave today, skyrocketing 10x in just a few hours, reaching a market cap of tens of millions of dollars, trading volume soaring past 50 million, and rumors swirling that the developer may be from OpenAI (unconfirmed but intriguing enough).
A ludicrous and absurd Solana meme that some actually buy into.
GOONC is a meme coin that has sprouted from the "gooning" subculture, offering no technological innovation or practical use, its sole function being speculation.
It takes inspiration from an NSFW term "gooning," which refers to a person being deeply immersed in certain content (you know what), eventually entering a nearly religious-like trance.
In Reddit (such as r/GOONED, r/GoonCaves) and some counterculture media outlets (such as MEL Magazine in 2020), "gooning" has gradually transitioned from an adult label to a meme-addicted, digital content and virtual self-indulgence synonym, arguably the epitome of Degen spirit.
GOONC is playing around with this concept, packaging the addictive nature, uselessness, and irony of gooning into a tradable financial product. The project team has made it clear: "We do not solve blockchain problems, we only trade absurdity." Blunt but oddly genuine.
GOONC launched on May 13, 2025, using the meme coin launch platform Believe App's LaunchCoin module on Solana. This tool is highly Degen: zero technical barriers, a few clicks to create a coin, perfect for projects like GOONC that can come up with ideas out of the blue.
The mastermind behind GOONC is also quite something and is the most talked-about, with KOL @basedalexandoor on X platform (alias "Pata van Goon") personally involved. His profile even caught the attention of Marc Andreessen, co-founder of a16z, making onlookers unable to resist speculating if GOONC has a hint of OpenAI lineage.
While this 'OpenAI Endorsement' is currently just community speculation, it is definitely a good card to play to fuel hype. Saying "we are pure speculation" on one hand, while tagging a few "AI + a16z" on the other.
GOONC took off as soon as it launched. After its launch on May 13, 2025, its market capitalization skyrocketed to $22 million within 4 hours, with a trading volume exceeding $25.6 million in 24 hours. According to platform data, the first day of trading saw an astonishing +41,100% surge, soaring from $0.0000001 to $0.02, becoming a "missed-the-boat" situation.
GOONC quickly formed an active trading community post-launch, with a lot of discussion and trading signals appearing on X platform (such as the 292x return signal provided by DeBot). Liquidity pools on exchanges like Raydium and Meteora grew rapidly, supporting high trading volumes and price increases.
The real climax occurred between May 13 and May 14, with the market cap rising to $5.5 million in the morning and directly surpassing $55 million in the afternoon. By the 14th, it briefly approached a $70 million market cap, with the trading volume soaring to $59 million. Some community members even posted screenshots claiming an increase of +85,000%, creating a new myth out of the ruins.
As of 1:30 pm on May 14, the price stabilized around $0.039, with a total market cap and FDV both around $39.6 million, and a 24-hour trading volume of $5.43 million. Active platforms include XT.COM, LBank, Meteora, and others.
Although there was a slight pullback from the peak ($0.07), the coin's popularity remains strong. For a coin that relies purely on "irony + community + X post" to thrive, this performance is already at a stellar level.
Currently, the background of the token's development team is not transparent, increasing the potential risk of a rug pull. Rugcheck.xyz warns that the creator of the GOONC contract may have permission to modify the contract (e.g., change fees or mint additional tokens), posing certain security risks.
Community members speculate that the meteoric rise of GOONC may be the "last hurrah".
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After Surging 40%, Has Ethereum Price Peaked Upon Exiting the Craze?
Whether you are an insider or an outsider, these days you must be familiar with the news about Ethereum. The reason is simple, causing Ethereum enthusiasts to sigh with emotion and almost throwing off-guard those who defend Ethereum, Ethereum, with a "3-day surge of 40%," climbed to the top of the Douyin Hot List.
As we all know, Ethereum launched the Pectra upgrade on May 7th. This most significant network upgrade since early 2024 integrates the Prague execution layer hard fork and the Electra consensus layer upgrade, significantly improving Ethereum's performance through 11 improvement proposals. The account abstraction feature (EIP-7702) allows users to flexibly manage wallets through social media accounts or multi-signature schemes, reducing the user threshold, attracting more users and developers. The staking mechanism optimization increases the validator ETH cap from 32ETH to 2048ETH and introduces a flexible withdrawal method, making it easier for institutions and individuals to participate in network security, enhancing the market's confidence in Ethereum's long-term value.
At the same time, Pectra optimized the interaction efficiency of Layer 2 networks such as Arbitrum and Optimism, making transactions faster and cheaper, leading to a surge in on-chain activity. As a crucial step for Ethereum's transition from "2G" to "5G," the Pectra upgrade not only enhances network vitality but also "recharges confidence" in the market, directly driving the price increase.
Related Reading: "Ethereum Skyrockets 22% in One Day, E Enthusiasts Rejoice"
It's not just Ethereum itself, as Wall Street also brought important bullish news.
The world's largest asset management company, BlackRock, proposed to the SEC allowing Ethereum ETFs for staking. This proposal is expected to elevate Ethereum ETFs from a mere investment tool to a bond-like "interest-bearing asset," bringing investors both capital appreciation and passive income, igniting market optimism about Ethereum's future potential.
Specifically, BlackRock has proposed to amend its S-1 filing to allow investors to create and redeem ETF shares directly with Ethereum instead of the U.S. dollar (i.e., in-kind redemption). This move, combined with its $2.9 billion BUIDL Fund launched in March 2024, aims to deepen the integration of traditional finance with blockchain. The BUIDL Fund is a tokenized fund operating on the Ethereum network, investing in traditional assets such as U.S. Treasury bonds. This setup is highly attractive to institutional investors, as they can not only benefit from Ethereum's price appreciation but also earn stable cash flow through staking.
Robert Mitchnick, BlackRock's Head of Digital Assets, stated in a CNBC interview in March 2025 that the addition of staking functionality will significantly enhance the appeal of the Ethereum ETF. He admitted that when the Ethereum spot ETF was launched in July 2024 without staking functionality, the market demand was lackluster, and staking could be the key to reversing this trend.
Meanwhile, the SEC's shifting stance on cryptocurrency regulation has also fueled this upward trend. During the tenure of the previous SEC chairman, the regulatory approach was tough, and staking was strictly viewed through the Howey test as a potential unregistered security. Therefore, when approving the Ethereum spot ETF in May 2024, staking functionality was explicitly prohibited.
However, with Trump back in the White House and Paul Atkins taking over the SEC, there has been a noticeable relaxation in crypto regulation. Apart from BlackRock, ETF issuers such as Invesco Galaxy, VanEck, WisdomTree, and 21Shares have also submitted applications for similar staking and in-kind redemption.
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If staking ETFs are approved, the benefits are likely to go beyond price appreciation. The introduction of staking functionality could redefine the role of crypto assets, making them more similar to traditional financial products that provide returns and value appreciation, thereby driving Ethereum closer to mainstream finance.
Currently, the SEC still needs to address several decisions related to crypto ETFs, including whether to approve ETFs for Solana, XRP, Litecoin, and even Dogecoin. With the calls for an "altcoin season" growing louder, Ethereum's strong performance may just be the beginning of a larger crypto market frenzy.
In addition, the Trump family-related DeFi project WLFI is also bullish on this wave of rise, with frequent on-chain activities. According to on-chain data analyst @ai_9684xtpa's monitoring, a WLFI-related address is currently borrowing coins to go long on ETH, borrowing 4 million U from Aave to buy 1590 ETH at an average price of $2515 per ETH.
For this epic surge of Ethereum after half a year of silence, the community has indeed gained more confidence and hope, which has also led to a revival of the entire altcoin market. However, amidst the joy, there are also voices of pessimism. Below is a summary conducted by BlockBeats based on community discussions.
The optimists point out that the current market structure is similar to the eve of the bull markets in 2016 and 2020, predicting a life-changing surge in the next 3-6 months, where some altcoins may even achieve astonishing single-day gains of up to 40%.
@liuwei16602825 stated that this surge signifies the return of the bull market as a sure thing. There is no need to worry about a pullback. The driving force behind the surge uses a high-cost isolated operation, fearing a drop more than any retail investor and will definitely do everything to support the price.
Related Reading: "Ethereum Leads the Surge Triggering the 'Altcoin Season' Speculation, How Do Traders View the Future Market?"
The bears mainly believe that this surge is different from the bull market of 2021, as the current market lacks the confidence of large-scale retail investors entering and holding positions for the long term, with funds rotating too quickly.
@market_beggar observed that a Bitfinex E/B whale has started to close positions and believes that if this whale maintains its high-speed position-closing operation for the next few days, it can be inferred that the whale no longer sees the upside potential of ETH, preparing to take profits and exit. The closing time will be a key focus going forward.
@FLS_OTC stated that there are still many uncertainties at the macro level, and the liquidity cannot support a major bull market. At this stage, it is a "last hurrah," not a complete reversal, and will continue to remain in a short position.
@off_thetarget believes that after ETH transitioned from POW to POS, it lost the "gold standard" of mining machine power cost support. The staking economic model led to a breakdown in value anchoring. Additionally, the L2 ecosystem (such as Starknet, zkSync, etc.) suffered from liquidity fragmentation, failing to establish an effective capital inflow mechanism, causing the collapse of the split disc pattern. Furthermore, the ETH community's excessive pursuit of technical narratives divorced from real-world needs resulted in a weak ecosystem growth. Therefore, he believes that ETH's intrinsic value system has crumbled, and the price is bound to plummet to the 800-1200 range, with a decisive short position at 1800.
@Airdrop_Guard, based on the core logic of the "High Probability Trading Strategy," where three sets of underlying logic different trading systems (such as volume depletion, price supply-demand, long/short position funding rate, etc.) simultaneously issue a short signal at the same point (2580), creating a high-probability trading opportunity. He emphasizes that these systems must be based on different algorithms and logics (rather than mere technical indicator overlays). The current ETH trend aligns with the short conditions in multiple independent dimensions of his trading system, hence the decision to short.
Overall, Bitcoin still maintains over 54% market dominance, and institutional funds' continued preference for it may limit the altcoin's upward potential. The market's future direction will depend on multiple factors, such as Bitcoin's price trend, global macroeconomic conditions, and whether funds can effectively rotate from Bitcoin to the altcoin sector.
Although Ethereum's recent leadership in the market has brought about optimistic sentiment, investors still need to remain rational as different sectors of altcoins are likely to show divergence in trends. Whether this round of Ethereum's rise will usher in a true altcoin frenzy may require more time and conducive conditions.
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Binance Sparks "Delist Concept": Can CEX Still Produce the Next ALPACA?
On April 24, Binance announced that it would delist four tokens, including Alpaca Finance ($ALPACA), on May 2, and cease trading of these pairs' perpetual futures contracts at 00:00 on May 1, 2025, Beijing time. Fast forward to the last day of perpetual futures trading delisting, ALPACA surged on the liquidation heat map. Over the past 24 hours, a total of $52.21 million evaporated in ALPACA's contract trading, exceeding the sum of the token's liquidation volume over the past two years.
Historically, when a token is listed on Binance, many traders would buy the news instantly ("Buy the News"). As the Binance listing effect gradually waned, traders found another path, which is to short sell the tokens set to be delisted from Binance ("Sell the News"). This strategy often has a very high success rate. However, as traders followed this path, they encountered the Alpaca on their short-selling journey.
Every thrilling market manipulation game requires careful preparation. Before Binance's official announcement, on April 10, $ALPACA was ranked 7th in the preliminary list of the second batch of "Vote for Delisting" on Binance, causing its price to plummet almost by half. However, in the five days leading up to Binance's official announcement, from April 19 to April 23, trading volume suddenly surged.
The story traces back to the start of Binance's second round of "Vote for Delisting," where ALPACA was included in the delisting candidates list, ranked 7th among 17 projects. After the completion of Binance's delisting vote count, $ALPACA was included in the projects to be delisted. The market did not react significantly, price fluctuations were not substantial, but trading volumes expanded abnormally, suggesting the entry of "manipulative funds" into the community.
On April 24, Binance officially announced the delisting of the $ALPACA spot trading pair on May 2 and the settlement of the futures contracts on April 30. Following the announcement, the spot price of $ALPACA dropped from $0.0329 to $0.029, with a market cap of only about $5 million. However, what followed were two price "rollercoaster" moments; within an hour, the price surged from $0.029 to $0.0857, an increase of about 195%, only to rapidly drop back to $0.04 within 3 hours. Shorts were caught off guard, and the open interest of contracts surged rapidly, initiating the "long and short grinder" mode.
On April 25, Alpaca Finance officially announced that the trading volume in the past 24 hours had exceeded 1 billion tokens. The liquidity provider had suggested a "minting for stability" to be returned to the treasury after a decrease in trading volume. However, as public opinion began to ferment, opposition filled the community. Alpaca Finance deleted the previous tweet and posted a new one at 9 p.m. on the same night, announcing the cancellation of the minting due to community opposition.
On April 26, Binance amended the contract funding rate rules, shortening the maximum rate cap settlement period to hourly and setting it at up to ±2%. Some high-leverage accounts continued to hold short positions against the high rate and were liquidated. Millions of dollars disappeared within a few hours, with $13 million in short positions vanishing on a token with a market cap of less than $30 million.
With the establishment of this short-selling trend, the price skyrocketed nearly 12 times from a low of $0.029 to $0.3477 within 3 days. The contract's open interest surged significantly, especially with a notable increase in short positions, resembling a microcosm of the Wall Street battle of GME's retail investors. However, this time, the retail investors' opponents could continue to mint additional chips.
From April 26 to April 29, these days were relatively calm, with the price fluctuating around $0.2 to $0.34. On April 29, Binance announced another increase in the rate cap to ±4%. Theoretically, such a high rate would severely impact short positions. If the rate remains at -4%, the bears will face a 96% "cost of ruin" after holding a short position for 24 hours. However, miraculously, the price plummeted from $0.27 to $0.067.
On April 30, with the contract delisting and liquidation scheduled in the final 24 hours, the price continued to experience intense fluctuations. ALPACA's attention peaked, with its highest price reaching $1.2 at one point. From a week before the delisting announcement to the eve of the contract delisting, ALPACA's price surged 40 times, creating an independent market for the token delisted by Binance. The total liquidation volume across the network also reached $50 million, with $42 million in "bearish fuel" beneath the price surge.
After the first surge of ALPACA, Heyi, the co-founder of Binance, replied to a netizen asking, "Can the teacher who buys the shell guarantee breakeven?" This has also triggered endless speculation among community members.
KOL Tunbtc believes that Heyi's reply to this matter was the starting point of ALPACA's surge. "The large holders of Alpaca's native token, by transferring spot chips, operating rights, and distribution rights, have pledged allegiance to Binance's deep-water core interest circle, allowing it to fully harvest market liquidity before delisting, slaughtering opposing positions." Through a triple path of fees, contract liquidations, and spot volatility, they converted user attention into profits.
He also called on Binance to thoroughly investigate this matter, clarify which market maker is manipulating the candlestick patterns, as ALPACA saw an 18x surge within 24 hours with users liquidated of tens of millions of dollars, while previously GPS's 500% surge was promptly halted, and expressed his sentiment: "All of this is thought-provoking."
Wenze, the founder of Beta Capital, believes that bypassing the regular listing process, buying shells, renaming, and restarting has crossed Binance's bottom line of maintaining listing credibility and brand compliance. Binance sometimes has a high tolerance for market fluctuations, and the OM issuance only adjusts the collateralization ratio, with many projects only allowed for leveraged trading. However, once the project, such as these "shell projects," is identified, it is easily labeled for observation, triggering a vote for delisting, ultimately leading to delisting rather than using mild measures.
Renowned KOL Rui, "YeruiZhang," likened the ALPACA incident to "crazy revenge on an ex" and shared a piece of insider information, claiming that the original whale behind ALPACA was a team that controlled BSC's MEV for a period of time and expressed dissatisfaction with Binance's current management for some reason. The comments section is rampant with speculation that it is BSC's whale 48CLUB, and 48CLUB's Ian even personally appeared to eat "his own melon."
With the recent buzz around VOXEL's surge and the wealth effect and discussion surrounding ALPACA, more and more "delisting concepts" have emerged. This concept does not necessarily refer to tokens that have already been delisted but rather shares some common characteristics of delisted tokens.
Famous KOL Chuanmo recently shared on Twitter his logic for choosing concept tokens and listed several tokens, all of which experienced varying degrees of price increase after his recommendation.
His "Concept Delisting" strategy involves selecting low-cap tokens from Bybit and Binance, arranging them by market cap from lowest to highest, with almost 100% price increase for the tokens with the highest holdings/circulating market cap. He buys three tokens daily following this order with a fixed amount, and based on the holdings/circulating supply ratio, he removes tokens that no longer meet the criteria daily and continues to buy the new top three tokens.
Many community members have tested this strategy, with some creating helpful tools. The dreamer Disney "discountifu" has created a dashboard, and Vivek10 early bird "vivekw_eth" has developed a monitoring and alert system that can be directly pushed to WeChat with a copyable link, although it is currently deployed locally and not yet entirely stable.
However, when using tools created for free by community members, please be cautious. While there are many enthusiastic contributors in the community, there are also many uncertain factors in this dark forest.
In an increasingly insular market, retail investors not only have to contend with whales and other retail investors but also must bear many unstable elements. The recent ALPACA incident serves as a warning to us. Whether it's a primary or secondary listing on a top-tier exchange or the "Concept Delisting" approach, we need to make rational asset allocations amidst FOMO to protect our principal and reach the other shore.
The mention of all tokens above does not constitute financial investment advice "NFA".
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$COIN Joins S&P 500, but Coinbase Isn't Celebrating
On May 13, S&P Dow Jones Indices announced that Coinbase would officially replace Discover Financial Services in the S&P 500 on May 19. While other companies like Block and MicroStrategy, closely tied to Bitcoin, were already part of the S&P 500, Coinbase became the first cryptocurrency exchange whose primary business is in the index. This also signifies that cryptocurrency is gradually moving from the fringes to the mainstream in the U.S.
On the day of the announcement, Coinbase's stock price surged by 23%, surpassing the $250 mark. However, just 3 days later, Coinbase was hit by two consecutive events: a hack where employees were bribed to steal customer data and a demand for a $20 million ransom, and an investigation by the U.S. Securities and Exchange Commission (SEC) into the authenticity of its claim of having over 100 million "verified users" in its securities filings and marketing materials. These two events acted as mini-bombs, and at the time of writing, Coinbase's stock had already dropped by over 7.3%.
Coincidentally, Discover Financial Services, being replaced by Coinbase, can also be considered the "Coinbase" of the previous payment era. Discover is a U.S.-based digital banking and payment services company headquartered in Illinois, founded in 1960. Its payment network, Discover Network, is the fourth largest payment network apart from Visa, Mastercard, and American Express.
In April, after the approval of the acquisition of Discover by the sixth-largest U.S. bank, Capital One, this well-established digital banking company of over 60 years smoothly handed over its S&P 500 "seat" to this emerging cryptocurrency "bank." This unexpected coincidence also portrayed the handover between the new and old eras in Coinbase's entry into the S&P 500, resembling a relay race scene. However, this relay baton also brought Coinbase's accumulated "external troubles and internal strife" to a tipping point.
Over the past decade, cryptocurrency exchanges have been the most stable "profit machines." They play a role in providing liquidity to the entire industry and rely on trading fees to sustain their operations. However, with the comprehensive rollout of ETF products in the U.S. market, this profit model is facing unprecedented challenges. As the leader in the "American stack," with over 80% of its business coming from the U.S., Coinbase is most affected by this.
Starting from the approval of Bitcoin and Ethereum spot ETFs, traditional financial capital has significantly onboarded users and funds that originally belonged to exchanges in a more cost-effective, compliant, and transparent manner. The transaction fee revenue of cryptocurrency exchanges has started to decline, and this trend may further intensify in the coming months.
According to Coinbase's 2024 Q4 financial report, the platform's total trading revenue was $417 million, a 45% year-on-year decrease. The contribution of BTC and ETH's trading revenue dropped from 65% in the same period last year to less than 50%.
This decline is not a result of a decrease in market enthusiasm. In fact, since the approval of the Bitcoin ETF in January 2024, the inflow of BTC into the U.S. market has continued to reach new highs, with asset management giants like BlackRock and Fidelity rapidly expanding their management scale. Data shows that BlackRock's iShares Bitcoin ETF (IBIT) alone has surpassed $17 billion in assets under management. As of mid-May 2025, the cumulative net inflow of 11 major institutional Bitcoin spot ETFs on the market has exceeded $41.5 billion, with a total net asset value of $1214.69 billion, accounting for approximately 5.91% of the total Bitcoin market capitalization.
Institutional investors and some retail investors are shifting towards ETF products, partly due to compliance and tax considerations. On one hand, ETFs have much lower trading costs compared to cryptocurrency exchanges. While Coinbase's spot trading fee rate varies annually in a tiered manner but averages around 1.49%, for example, the management fee for IBIT ETF is only 0.25%, and the majority of ETF institution fees fluctuate around 0.15% to 0.25%.
In other words, the more rational users are, the more likely they are to move from exchanges to ETF products, especially for investors aiming for long-term holdings.
According to multiple sources, several institutions, including VanEck and Grayscale, have submitted applications to the SEC for a Solana (SOL) ETF, with some institutions also planning to submit an XRP ETF proposal. Once approved, this may trigger a new round of fund migration. According to a report submitted by Coinbase to the SEC, as of April, the platform's trading revenue from XRP and Solana accounted for 18% and 10%, nearly one-third of the platform's fee revenue.
However, the Bitcoin and Ethereum ETFs passed in 2024 also reduced the fees for these two tokens on Coinbase from 30% and 15% to 26% and 10%, respectively. If the SOL and XRP ETFs are approved, it will further undermine the core fee revenue of exchanges like Coinbase.
The expansion of ETF products is gradually weakening the financial intermediary status of cryptocurrency exchanges. From their original roles as matchmakers and clearers to now gradually becoming mere "on-ramps and off-ramps" for funds, exchanges are seeing their marginal value squeezed by ETFs.
On May 12, 2025, SEC Chairman Paul S. Atkins gave a keynote speech at the Tokenization and Cryptocurrency Working Group roundtable. The theme of his speech revolved around "It is a new day at the SEC," where he indicated that the SEC would not approach enforcement and regulation the same way as before but would instead pave the way for cryptocurrency assets in the U.S. market.
With signs of cryptocurrency compliance such as the SEC's "NEW DAY" declaration, an increasing number of traditional brokerages are attempting to enter the cryptocurrency industry. One of the most representative cases is the well-known U.S. brokerage Robinhood, which began expanding its crypto business in 2018. By the time of its IPO in 2021, Robinhood's crypto business revenue accounted for over 50% of the company, with a significant boost from the Dogecoin "moonshot" promoted by Musk.
In Q1 2025 earnings report, Robinhood showcased strong growth, especially in revenue from cryptocurrency and options trading. Fueled by Trump's Memecoin, cryptocurrency-related revenue reached $250 million, nearly doubling year-over-year. Consequently, Robinhood Gold subscription users reached 3.5 million, a 90% increase from the previous year, with the rapid growth of Robinhood Gold providing the company with a stable source of income.
Meanwhile, RobinHood is actively pursuing acquisitions in the cryptocurrency space. In 2024, it announced a $2 billion acquisition of the long-standing European cryptocurrency exchange Bitstamp. Additionally, Canada's largest cryptocurrency CEX, WonderFi, which recently went public on the Toronto Stock Exchange, also announced its integration with RobinHood Crypto. After obtaining virtual asset licenses in the UK, Canada, Singapore, and other markets, RobinHood has taken a proactive approach in the compliant cryptocurrency trading market.
Furthermore, an increasing number of brokerage firms are exploring the same path. Futu Securities, Tiger Brokers, and others are also dipping their toes into cryptocurrency trading, with some having applied for or obtained the VA license from the Hong Kong SFC. Although their user bases are currently small, traditional brokerages have a natural advantage in user trust, regulatory licenses, and low fee structures. This could pose a threat to native cryptocurrency platforms in the future.
In April 2025, security researchers discovered that some Coinbase user data was leaked on the dark web. While the platform initially responded by attributing it to a "technical misinformation," it still raised concerns among users regarding its security and privacy protection. Just two days before Dow Jones Indexes announced Coinbase's addition to the S&P 500 Index, on May 11, 2025, Coinbase received an email from an unknown threat actor claiming to have obtained customer account information and internal documents, demanding a $20 million ransom to keep the data private. Subsequent investigations confirmed the data breach.
Cybercriminals obtained the data by bribing overseas customer service agents and support staff, mainly in "non-U.S. regions such as India." These agents abused their access to Coinbase's internal customer support system and stole customer data. As early as February this year, blockchain detective ZachXBT revealed on X platform that between December 2024 and January 2025, Coinbase users lost over $65 million to social engineering scams, with the actual amount potentially higher.
Among the victims was a well-known figure, 67-year-old Ed Suman, an established artist in the art world for nearly two decades, having been involved in the creation of artworks such as Jeff Koons' "Balloon Dog" sculpture. Earlier this year, he fell victim to an impersonation scam involving fake Coinbase customer support, resulting in a loss of over $2 million in cryptocurrency. ZachXBT critiqued Coinbase for its inadequate handling of such scams, noting that other major exchanges have not faced similar issues and recommending Coinbase to enhance its security measures.
Amidst a series of ongoing social engineering incidents, although there has not been any impact on user assets at the technical level so far, it has raised concerns among many retail and institutional investors. Especially institutions holding massive assets on Coinbase. Just considering the U.S. BTC ETF institutions, as of mid-May 2025, they collectively hold nearly 840,000 BTC, and 75% of these are custodied by Coinbase. If we price BTC at $100,000, this amount reaches a staggering $63 billion, which is equivalent to the nominal GDP of two Iceland in the year 2024.
In addition, Coinbase Custody also serves over 300 institutional clients, including hedge funds, family offices, pension funds, and endowments. As of the Q1 2025 financial report, Coinbase's total assets under management (including institutional and retail clients) reached $404 billion. The specific amount of institutional custodied assets was not explicitly disclosed in the latest report, but it should still be over 50% based on the Q4 2024 report.
Once this security barrier is breached, not only could the rate of user attrition far exceed expectations, but more importantly, institutional trust in it would undermine the foundation of its business. Therefore, after a hacking event, Coinbase's stock price plummeted significantly.
Facing a decline in spot trading fee revenue, Coinbase is also accelerating its transformation, attempting to find growth opportunities in derivatives and emerging assets. Coinbase acquired a stake in the options platform Deribit at the end of 2024 and announced the official launch of perpetual contract products in 2025. This acquisition fills in Coinbase's gap in options trading and its relatively small global market share.
Deribit has a strong presence in non-U.S. markets, especially in Asia and Europe. The acquisition has enabled Coinbase to gain a dominant position in bitcoin and ethereum options trading on Deribit, accounting for approximately 80% of the global options trading volume, with daily trading volume remaining above $2 billion.
Meanwhile, 80-90% of Deribit's customer base consists of institutional investors, with their professionalism and liquidity in the Bitcoin and Ethereum options market highly favored by institutions. Coinbase's compliance advantage, coupled with its already robust institutional ecosystem, makes it even more suitable. By using institutions as an entry point, it can face the squeeze from giants like Binance and OKX in the derivatives market.
Facing a similar dilemma is Kraken, which is attempting to replicate Binance Futures' model in non-U.S. markets. Since the derivatives market relies more on professional users, fee rates are relatively higher and stickiness is stronger, making it a significant source of revenue for exchanges. In the first half of 2025, Kraken completed the acquisition of TradeStation Crypto and a futures exchange, aiming to build a complete derivatives trading ecosystem to hedge the risk of declining spot transaction fee income.
With the surge of Memecoin in 2024, Binance, OKX, and various CEX platforms began massively listing small-market-cap, highly volatile tokens to activate active trading users. Due to the wealth effect and trading activity of Memecoins, Coinbase was also forced to join the battle, successively listing popular tokens from the Solana ecosystem such as BOOK OF MEME and Dogwifhat. Although these coins are controversial, they are frequently traded, with fee rates several times higher than mainstream coins, serving as a "blood-boosting" method for spot trading.
However, due to its status as a publicly traded company, this practice is a riskier endeavor for Coinbase. Even in the current crypto-friendly environment, the SEC is still investigating whether tokens like SOL, ADA, and SAND constitute securities.
In addition to the forced transformation strategies carried out by the aforementioned CEXs, they are also starting to lay out RWAs and the most talked-about stablecoin payment fields, such as the PYUSD launched through a collaboration between Coinbase and Paypal, Coinbase's support for the Euro stablecoin EURC by Circle that complies with EU MiCA regulatory requirements, or the USD1 launched through a collaboration between Binance and WIFL. In the increasingly crowded trading field, many CEXs have shifted their focus from just the trading market to the application field.
The golden age of transaction fees has quietly ended, and the second half of the crypto exchange platform game has silently begun.
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Source: Overheard on CT (tg: @overheardonct), Kaito
PUMP: Today's discussions about PUMP focus on its new creator revenue-sharing model: the platform will allocate 50% of PumpSwap revenue to token creators, sparking varied reactions from users. Some criticize the move as insufficient or even misleading, while others view it as a positive step the platform is taking to reward creators. Meanwhile, PUMP faces market pressure from emerging competitors like LetsBONKfun and Raydium, which are rapidly gaining market share. Users also express concerns about PUMP's sustainability and potential regulatory risks in the U.S., with discussions extending to the platform's impact on the entire memecoin ecosystem.
COINBASE: Today, Coinbase became the first crypto company to join the S&P 500 Index, replacing Discover Financial Services, sparking widespread industry attention. The entire crypto community views this milestone as a significant development, signaling that crypto assets are further integrating into the mainstream financial system. The news has sparked lively discussions on Twitter, with many users pointing out that this may attract more institutional investors to enter the Bitcoin and other cryptocurrency markets.
XRP: XRP became the focal point of today's crypto discussion, with its significant market movements and strategic advances drawing attention. XRP has surpassed USDT to become the third-largest cryptocurrency by market capitalization, sparking market excitement and discussions about its future potential. The surge in market capitalization and price is believed to be related to increasing institutional interest, deepening strategic partnerships, and its role in the crypto ecosystem. Additionally, XRP's integration into multiple financial systems and its potential as a macro asset class are also seen as key factors driving the current market sentiment.
DYDX: Today's discussions about DYDX mainly focused on the dYdX Yapper Leaderboard launched by KaitoAI. The leaderboard aims to identify the most active community participants, with a total of $150,000 in rewards to be distributed over the first three seasons. This initiative has sparked broad community participation, with many users discussing the potential rewards and the incentive effect on the DYDX ecosystem. Meanwhile, progress on the ethDYDX to dYdX native chain migration and historical airdrop events have also been topics of discussion.
1. "What Is 'ICM'? Holding Up the $4 Billion Market Cap Solana's New Narrative"
Overnight, the hottest narrative in the crypto space has become "Internet Capital Markets," with a host of crypto projects and founders, led by the Solana ecosystem's new Launchpad platform Believe, releasing this phrase. Together with "Believe in something," it has become the new slogan heralding the onset of a bull market. What exactly is the so-called "Internet Capital Market," will it become a short-lived hype phrase like the Base ecosystem's previous Content Coin, and what related targets are available for selection?2.《LaunchCoin Surges 20x in One Day, How Did Believe Create a $200M Market Cap Shiba Inu After Going to Zero?｜100x Retrospective》
LAUNCHCOIN broke through a $200 million market cap today, with the long-lost liquidity and such a high market cap "Memecoin" almost bringing half of the on-chain crypto community CT into the fray. The community is crazily discussing this token, with half of it being FOMO and the other half being FUD. This token, originally issued by Believe founder Ben Pasternak under his personal identity, transformed into a new platform token after a renaming. From once going to zero to a $200 million market cap, what happened in between?May 14 On-chain Fund Flow
Within 24 hours, GOONC's market cap soared to 70 million, could GOONC be the next billion-dollar dog on the Believe platform?
Bitcoin has broken $100,000, Ethereum has surpassed 2500, and is Solana's hot streak about to make a comeback?
The current market is in a state of macro euphoria, with GOONC riding the wave today, skyrocketing 10x in just a few hours, reaching a market cap of tens of millions of dollars, trading volume soaring past 50 million, and rumors swirling that the developer may be from OpenAI (unconfirmed but intriguing enough).
A ludicrous and absurd Solana meme that some actually buy into.
GOONC is a meme coin that has sprouted from the "gooning" subculture, offering no technological innovation or practical use, its sole function being speculation.
It takes inspiration from an NSFW term "gooning," which refers to a person being deeply immersed in certain content (you know what), eventually entering a nearly religious-like trance.
In Reddit (such as r/GOONED, r/GoonCaves) and some counterculture media outlets (such as MEL Magazine in 2020), "gooning" has gradually transitioned from an adult label to a meme-addicted, digital content and virtual self-indulgence synonym, arguably the epitome of Degen spirit.
GOONC is playing around with this concept, packaging the addictive nature, uselessness, and irony of gooning into a tradable financial product. The project team has made it clear: "We do not solve blockchain problems, we only trade absurdity." Blunt but oddly genuine.
GOONC launched on May 13, 2025, using the meme coin launch platform Believe App's LaunchCoin module on Solana. This tool is highly Degen: zero technical barriers, a few clicks to create a coin, perfect for projects like GOONC that can come up with ideas out of the blue.
The mastermind behind GOONC is also quite something and is the most talked-about, with KOL @basedalexandoor on X platform (alias "Pata van Goon") personally involved. His profile even caught the attention of Marc Andreessen, co-founder of a16z, making onlookers unable to resist speculating if GOONC has a hint of OpenAI lineage.
While this 'OpenAI Endorsement' is currently just community speculation, it is definitely a good card to play to fuel hype. Saying "we are pure speculation" on one hand, while tagging a few "AI + a16z" on the other.
GOONC took off as soon as it launched. After its launch on May 13, 2025, its market capitalization skyrocketed to $22 million within 4 hours, with a trading volume exceeding $25.6 million in 24 hours. According to platform data, the first day of trading saw an astonishing +41,100% surge, soaring from $0.0000001 to $0.02, becoming a "missed-the-boat" situation.
GOONC quickly formed an active trading community post-launch, with a lot of discussion and trading signals appearing on X platform (such as the 292x return signal provided by DeBot). Liquidity pools on exchanges like Raydium and Meteora grew rapidly, supporting high trading volumes and price increases.
The real climax occurred between May 13 and May 14, with the market cap rising to $5.5 million in the morning and directly surpassing $55 million in the afternoon. By the 14th, it briefly approached a $70 million market cap, with the trading volume soaring to $59 million. Some community members even posted screenshots claiming an increase of +85,000%, creating a new myth out of the ruins.
As of 1:30 pm on May 14, the price stabilized around $0.039, with a total market cap and FDV both around $39.6 million, and a 24-hour trading volume of $5.43 million. Active platforms include XT.COM, LBank, Meteora, and others.
Although there was a slight pullback from the peak ($0.07), the coin's popularity remains strong. For a coin that relies purely on "irony + community + X post" to thrive, this performance is already at a stellar level.
Currently, the background of the token's development team is not transparent, increasing the potential risk of a rug pull. Rugcheck.xyz warns that the creator of the GOONC contract may have permission to modify the contract (e.g., change fees or mint additional tokens), posing certain security risks.
Community members speculate that the meteoric rise of GOONC may be the "last hurrah".
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