Weekly Top Stories - 8/29/25

In this week's newsletter, Thad Pinakiewicz previews the imminent trading debut of WLFI, issued by the Trump family's World Liberty Financial; Zack Pokorny analyzes Google's entry into the corporate L1 race; and Lucas unpacks an industry group's bold push to protect software developers from prosecution.

From Locked to Liquid: World Liberty Token Set to Be Liberated

After a month of waiting, World Liberty Financial (WLFI) token holders will see the token become tradable in spot markets at 8:00 a.m. ET on Monday, Sept. 1. WLFI holders voted with a resounding "yes" on the project's third governance proposal a month ago, with 99.94% of tokens voting to make the token tradable.

The first onchain unlock window will open via the Trump family-led project's lockbox, allowing eligible buyers to claim 20% of their presale allocations while leaving subsequent unlocks to future governance votes. Onchain, the "lockbox" contract now custodies roughly 15 billion WLFI, 15% of the project's supply. That sets up a near-term liquidity event where nearly 3 billion WLFI tokens, worth ~$950 million at recent prices, can begin trading, followed by DAO-driven supply decisions in the weeks and months to come.

Notably, more than 30,000 of the 85,873 wallets that held WLFI before the lockbox launch have locked all their WLFI in the contract (a precondition for trading).

OUR TAKE:

This is, by any measure, one of the most active and engaged tokenholder bases in crypto. Having over one-third of holders actively onchain, up to date, and interacting with WLFI smart contracts is notable in DeFi, where much of the sector suffers from lethargic governance participation-dynamic protocols have often been exploited by taxing idle holders.

While the active user base is laudable, the large portion of wallets depositing all their assets into the lockbox signals a broad-based intent to trade. WLFI holders that bought in the first tranche at $0.015/token are sitting on a 20x gain, and holders that bought in the second tranche at $0.05/token are sitting on a ~6x gain. Desire to hedge and monetize the position will be high, with some easy math for holders selling part of their 20% unlock to dollarize their entire investment principal.

Based on premarket trading levels, WLFI's fully diluted value ranges from about $20 billion at $0.20 to about $42 billion at $0.42. With 20% of the lockbox's ~15 billion WLFI balance eligible to be unlocked on Sept. 1, we can expect a minimum of 3 billion tokens to become liquid. At $0.20 apiece, that's about $592 million of float, and at $0.42 each, it's about $1.24 billion. Framed differently, the first release is 20% of the $0.015 and $0.05 presale tranches, representing at most 5% of total supply-the kind of token Alameda relished trading back in the day, one with low float and high FDV.

Trading in the pre-launch markets has been quite active. Binance has nearly $250 million in open interest (OI) and over $500 million in 24-hour trading volume. Hyperliquid has seen over ~1.5 billion WLFI trade on platform and has ~$60 million in OI. Pre-launch markets should always be taken with a grain of salt, because of structural weaknesses: price is a consensus among participants without an external spot oracle, so market power can drive prints. That dynamic was on display this week when a well-capitalized trader blew out the Hyperliquid XPL pre-market, roughly tripling the price in a short window and triggering widespread liquidations of shorts. Funding on Hyperliquid "hyperps," and broadly all pre-launch markets, is calculated from a moving average of closing prices rather than an external spot reference, which can amplify these episodes.

A first-wave float in the $0.20-$0.42 range equates to several hundred million dollars to over $1 billion of notional tokens crossing into circulation. Such scale typically produces big basis swings and funding skews as the spot markets open and cross-venue liquidity rebalances. As spot trading commences, the cross-exchange basis should compress, but not without volatility. While trading has been vigorous, the scale of the unlock can still eclipse current pre-market OI and cause massive price swings.

Taking a step back from the numbers, it's important to remember what the WLFI token represents. WLFI's "gold paper" terms state the token is for governance only: no revenue, no distributions, no equity, and no rights to protocol cash flows. The same terms disclose a fixed grant of 22.5 billion WLFI to DT Marks DeFi, LLC (affiliated with Donald J. Trump) and a revenue-sharing agreement that routes 75% of net protocol revenues to that entity and 25% to other insiders-outside of the tokenholder base. WLFI governance votes are for signaling only and can be overturned by the World Liberty team at their discretion. The most profitable venture of World Liberty Financial thus far, its USD1 stablecoin (coded by Binance), launched without a forum post or governance vote.

If you are a memecoin trader or a rates trader, good luck. If you are more concerned with fundamentals, re-read the paragraph above. - Thad Pinakiewicz

Google Enters the Corporate Blockchain Race

This week, Google announced its layer-1 (L1) chain, Google Cloud Universal Ledger (GCUL). This was the third corporate blockchain announcement in just two weeks (following Circle's Arc and, informally, Stripe's Tempo), and the fourth since Robinhood's announcement in June.

Google said more technical details will be announced in the coming months, but we do know a few important bits of information. For starters, we know the chain is "Google-developed," private and permissioned (for now), will support Python-based smart contracts, and has a clear focus on payments and asset issuance. The company went to great lengths to express its optimism about blockchains and payments, publishing a blog post titled "Beyond stablecoins: The evolution of digital money." The write-up details the history of money from privately issued banknotes in the 1700s to stablecoins today, the shortfalls of legacy digital infrastructure related to payments and capital markets at large, and how GCUL (or distributed ledgers generally) is positioned to fill the gaps and create new possibilities. It emphasizes that the combination of digitized dollars and distributed ledgers can deliver significant advancements without needing to reinvent the concept of money or markets, enabling great strides in capability and efficiency through evolution rather than revolution.

Google's blog post, combined with the recruitment of CME as a pilot partner for the chain, underscores that the chain's focus will be on payments and asset transfers. It's also important to note that a central part of the GCUL pitch is security and privacy, to be bootstrapped by Google-specific technologies.

OUR TAKE:

Google stepping into the arena is another sign that we are firmly in the era of corporate blockchains. These announcements have received mixed reviews from crypto natives.

Robinhood's Arbitrum Orbit Chain was well received by the community, while Arc and Tempo were met with skepticism. GCUL appeared to fly under the radar, possibly because Google's main announcement was posted on LinkedIn, and it is unclear if the company will adopt existing blockchain infrastructure (e.g., the Ethereum Virtual Machine).

The negative opinions of those in the community likely stem from two sources: 1) these corporate chains not exhibiting "alignment" with assets and architectures preferred by crypto natives, and 2) crypto natives' jaded memories of the enterprise blockchain wave of 2014-2019.

From the alignment perspective, there are two adjacent reasons why crypto natives have viewed corporate chains like Arc with skepticism while cheering on corporate chains like Robinhood Chain: 1) the technical design of the announced networks, and 2) their exclusion of crypto-native assets. Crypto natives are passionate about the technology they have built, and the community has played a central role in the formation of the industry at large. Corporations leaning on the tech but not building out solutions, as those in the industry think is best, have possibly pressed some buttons. This was apparent in the praise of Robinhood's project (an L2) and the skepticism of Arc (an L1). Moreover, not including the crypto-native assets of certain tech stacks while using components of them (e.g., building on the EVM but ignoring ETH) might have poured gas on the flames. This was apparent in the praise of Robinhood, which will have to pay fees to the Ethereum L1, and skepticism of Arc, which will be powered by a stablecoin.

Critiques framed solely around architecture and asset choice miss the point. What ultimately matters is whether these chains uphold principles of decentralization and promote individual sovereignty (e.g., self-custody) in the same way some public chains can. Judged on these lines, corporate chains can play a constructive role in introducing large groups of new users to crypto infrastructure (e.g., wallets), which is far more consequential than whether they operate as an L1 or an L2 or on the EVM or its Solana equivalent, and can introduce more people to the assets.

From the historical perspective, the clash of crypto-natives and corporations building on blockchains goes back at least a decade. This trend was tried before, and clearly never amounted to much. Most of the corporate chains built in the past were "enterprise blockchains," which were significantly less blockchain-like than some of the solutions announced over the last couple of months. Differentiating factors range from the recently announced chains supporting smart contracts, allowing them to host applications, supporting asset issuance, to their facing end users, so individuals can interact with the chain. This combination of traits was rare in enterprise blockchains of the past, which focused on practices such as supply chain management and logistics and were never really used directly by consumers.

Although crypto natives have critiqued aspects of the recently announced corporate chains, some of the panned design choices were intentional and partially driven by security and privacy. In the Arc litepaper, Circle cited concerns around the transparency of public chains being at odds with required confidentiality for real-world financial activity and the potential for settled transactions to be rolled back at the discretion of the chain's governance procedure (which the corporate can't control).

Privacy and security were also central to the pitch for GCUL, which included its simplicity, flexibility, and safety. Notably, Google has baked neutrality into its marketing materials for GCUL, suggesting the company is trying to use its lack of alignment with any established assets or architecture as a strength to attract a larger group of potential builders and users. - Zack Pokorny

Crypto Coalition to Congress: No Dev Protections, No Bill

On Wednesday, the DeFi Education Fund sent a letter to the Senate Banking and Agriculture Committees urging lawmakers to prioritize robust nationwide protections for software developers and non-custodial service providers in digital asset market structure legislation. Co-signed by more than 110 organizations (including Galaxy), the letter made clear that, absent such protections, the signatories could not support a market structure bill.

The letter argues that developers and non-custodial service providers should not be forced into "unworkable regulatory categories" designed for traditional intermediaries. Instead, legislation must recognize open-source development as neutral infrastructure, continuing the longstanding U.S. tradition of safeguarding software innovation. The letter highlights the risk of ceding leadership, noting that America's share of open-source developers has already fallen from 25% in 2021 to 18% in 2025, a decline attributed largely to regulatory uncertainty.

While the House and Senate have already advanced measures like the Blockchain Regulatory Certainty Act (BRCA) and Keep Your Coins Act (KYCA), the coalition stressed that additional clarifications and federal preemption are essential. They call for explicit statutory language ensuring that individuals engaged in creating, publishing, or maintaining blockchain software, as well as those providing non-custodial interfaces, are not regulated as financial intermediaries. Without this clarity, the coalition warns, innovation risks being driven offshore, weakening U.S. competitiveness in the digital economy.

The DeFi Education Fund is a research and advocacy group that works to bridge understanding between the DeFi community and policymakers, simplifying decentralized finance for regulators and pushing for clearer, balanced policy frameworks while defending developers and open-source builders. It was founded in 2021 following a Uniswap governance vote to fund advocacy and lobbying for the DeFi sector with an initial funding of 1 million UNI tokens.

OUR TAKE:

As progress is made in Washington toward comprehensive crypto legislation, the letter highlights a key outstanding area of debate: how to provide clear protections for developers and non-custodial service providers so the United States can maintain its leadership in open-source innovation. By demanding that developers and non-custodial providers not be regulated as money transmitters, the letter pushes lawmakers to go beyond existing proposals, ensuring that protections are clear, uniform, and binding at the federal level.

The timing of the letter is especially significant considering recent enforcement cases. The conviction of Roman Storm, co-founder of Tornado Cash, on charges of conspiracy to operate an unlicensed money-transmitting business, highlighted the risks developers face when building non-custodial protocols (covered by Galaxy Research here previously). The letter's message, "no developer protections, no bill," aims to get ahead of these issues now. While the Department of Justice has recently signaled it does not intend to pursue similar prosecutions against purely non-custodial developers, the letter argues that discretion is not enough. Instead, Congress must legislate clear protections so innovators can build with confidence.

Other past cases illustrate the stakes. In CFTC v. Ooki DAO, the court allowed regulators to pursue a decentralized autonomous organization as an unincorporated association, raising liability risks for developers and governance participants. The Commodity Futures Trading Commission's 2023 settlements with Opyn, Deridex, and 0x treated protocol builders as responsible for unregistered derivatives offerings, while earlier Securities and Exchange Commission actions, such as SEC v. EtherDelta, imposed exchange operator obligations on individual developers. Litigation around bZx and Ooki DAO has also raised the specter of personal liability by treating DAO participants as general partners. In each instance, regulators and courts have blurred the line between software writers and financial intermediaries. The coalition's push for explicit federal safe harbors seeks to reverse that drift and anchor developer protections in statute.

Finally, the letter reflects the growing political footprint of the crypto industry in Washington. Alongside established organizations like the Blockchain Association and Chamber of Digital Commerce, newer entrants such as the Solana Policy Institute, Stand with Crypto, and numerous state blockchain crypto councils signed on, showing that individual ecosystems and grassroots groups are now standing up policy arms of their own and advocacy is maturing into a coordinated and institutionalized presence capable of mobilizing more than 100 signatories around a single issue. - Lucas Tcheyan

Chart of the Week

Despite chatter that Solana's DeFi "trenches" are dying, decentralized exchange (DEX) volumes have held steady in the $3 billion to $6 billion daily range and have trended upward since March.

Other News

‍⬛ Trump Media, Crypto.com to build $6.4B CRO treasury firm

Hyperliquid to add safeguards following whale-driven XPL pre-market liquidations

Donald Trump Jr.'s VC invests 'double-digit millions' in Polymarket

⛓️‍ Prediction market Kalshi to expand onchain presence

Union Square Ventures leads $15M round for new onchain prediction market

U.S. Commerce Department to put economic data onchain via ChainLink and Pyth

JPMorgan backs hedge fund Numerai with $500M, fueling crypto-AI convergence

Anthropic: Criminals are weaponizing AI with help from bitcoin

Treasury sanctions crypto IT scam spanning North Korea, Russia, and China

⚡ Hut 8 to build four new sites with more than 1.5 GW of capacity