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It hasn’t been an easy one, but it’s sure been a week.

Bitcoin’s up to start the day, and we haven’t had any new tariff threats just yet, so maybe the market’ll have a chance to stabilize — my fingers are crossed.

Meanwhile, the Blockworks crew is gearing up for DAS next week in New York. If you’re planning to be in the Big Apple — bonus points if it’s your home base — I hear DAS will be a good time. While I won’t be there, there is an Empire meetup on Wednesday. 

See you bright and early Monday!

📦 Neat little boxes

The SEC has some questions and it seems a16z might have some answers. 

In a 50-page filing, a16z addressed the newly-established Crypto Task Force, and some of the 50-page filing is filled with what you’d expect: how a16z Crypto thinks that the Howey test should be utilized on a crypto company, their thoughts on what’s needed for a decentralized regulatory framework and so on. 

The biggest takeaway is simple: “When control is eliminated, the application of securities laws should be limited; When control is present, traditional (but modernized) approaches should be used.”

Makes sense, right? This approach is technologically neutral while also appeasing the fact that this industry needs some regulation (a point I think we can all finally agree on). Essentially, regulators should just need to get ahead of potential risks rather than using merit as an assessment.  

But the 50-page filing also included nuggets that don’t just apply to the SEC, and they’ve very kindly labeled categories of tokens for all of us. 

These include: Network Tokens, Security Tokens, Company-Backed Tokens, Collectible Tokens, Arcade Tokens, Asset-Backed Tokens, and Memecoins.

Admittedly, there could be more, but the a16z Crypto team noted that these are the main types they’ve seen in the space. And, honestly, they check out in my book. 

Now I know what some of you are thinking: We have a friendlier SEC, is a filing explaining this to our very own Crypto Mother Hester Peirce really necessary? Yes. Mostly because crypto lacks the regulatory framework and legal precedents to protect the industry should non-crypto folks step back into the SEC.

Okay, so let’s go back to the token classifications. For network tokens, the suggestion is a “control-based decentralization framework guidance” for such tokens. The requirements would separate a network from the definition of a company, allowing profit expectations to network as opposed to a more centralized entity. 

And, perhaps one of the most important tidbits: There should be guidance that properly lays out the conditions for liquidity for sales by insiders so that they differ from securities transactions.

“Doing so could help to restrict persons that exert control over a network token from participating in secondary markets of such a token and limit their ability to act on potential information asymmetries,” and therefore solving a problem that’s popped up a few times in crypto. 

Simply put, asset-backed tokens refer to stablecoins and wrapped tokens and, well, as you saw yesterday, those are (hopefully) getting their own regulatory frameworks. A collectible token is another easy one, basically just something — like a piece of art, music, etc — that’d be protected under a safe harbor proposal.

Along those lines, an arcade token isn’t something you can use in an actual arcade (if you can still find one that’s open), but rather a form of currency within a game or online economy. 

Company-backed tokens are linked to the company backing them (RIP FTT). And a security token is exactly what it sounds like: the digital form of a security aka tokenization. 

Memecoins are the outlier in this list, having already gotten some regulatory clarity from the SEC when they said they have no intrinsic value. At least we have that one figured out!

We’re still in the wait and see era of crypto where we’re finally in a friendlier environment, but the rules haven’t quite been laid out yet. Once we can get clarity, I can finally stop going on and on about being patient. Aren’t you excited?

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ZKsync is accelerating institutional blockchain adoption and the rise of tokenization. Institutions choose ZKsync to move tokenized assets securely across enterprises while preserving privacy and governance. With gasless transactions, seamless onboarding, and scalable ZK infrastructure, enterprises can transfer financial products and data privately using ZK Stack — an open-source, trustless blockchain platform designed for speed, low costs, security, and interoperability without sacrificing control.

Learn more at ZKsync.io/empire.

“Memecoins are stress-testing infra,” Empire co-host Santiago Santos said on the Empire roundup this morning. 

Santos compared it to the porn industry stress-testing the internet. Good times. 

“ I get really excited about the fact that we've come such a long way in building infrastructure … [and you] see a line of sight into actually becoming the future of finance, like tokenizing stocks,” he continued. 

The point Santos makes is a personal favorite of mine, as I’m sure you’re aware. 

We’re seeing a lot of developments happening, and I’m speaking to a new founder almost every day about their projects and raises. It’s hard not to — even as an objective bystander — respect the amount of work that’s gone into getting crypto to this point. 

It’s also just so inherently crypto for the space to use memecoins as a stress test. Love ‘em or hate ‘em, they seem to have a use case after all (but don’t tell the SEC).

With the Digital Asset Summit next week, my assumption is that we’ll see more bullishness given that DAS is offering something that a conference like ETH Denver couldn’t: a look behind the scenes of what the institutions are up to. And we know that’s going to play a big part this cycle.

And now you know. 

We don’t really talk about SOL too much. Part of that is because, obviously, we have a whole newsletter and podcast dedicated to it and Jeff and Jack are far better at discussing Solana. I’d even go so far as to say Jack’s sense of humor rivals mine… but I’m not sure I want him to hold that over my head. 

Anyway, I took a shallow dive down the SIMD-0228 lane, as I was curious to see what has some folks up in arms about the proposal. 

(If you’re nosy like me, you can also check out Jeff and Jack’s reporting on the SIMD here.)

Thankfully, I didn’t have to dig too deep before Blockworks Research’s Carlos Gonzalez Campo picked up the phone and filled me in.

Basically: Solana’s inflation rate sits at 4.6% right now, which — some argue — is too high. It’s set at 8% to start with a yearly decrease of 15% (with a terminal rate of 1.5% in 2030). 

The resolution didn’t pass with the vote closing late last night, though Gonzalez Campo was leaning in favor of the proposal because he thought that the benefits outweighed the potential concerns.  

When asked what it means for SOL, Gonzalez Campo told me: “You continue to overpay for security and dilute naked SOL holders. SOL emissions also add selling pressure through what Max Resnick calls the ‘leaky bucket,’ defined as transfers lost due to taxes or middlemen with market power (e.g., validators like Coinbase or Binance that charge high commissions).”

The other side, he added, is that the so-called leaky bucket can be “viewed as a distribution spend, especially to institutions” which take a percentage of the staking yield but aren’t exposed to the underlying asset. 

So that’s your snapshot into Solanaland. If you want something more in depth, may I recommend the Lightspeed newsletter this afternoon?

Brought to you by:

ZKsync is accelerating institutional blockchain adoption and the rise of tokenization. Institutions choose ZKsync to move tokenized assets securely across enterprises while preserving privacy and governance. With gasless transactions, seamless onboarding, and scalable ZK infrastructure, enterprises can transfer financial products and data privately using ZK Stack — an open-source, trustless blockchain platform designed for speed, low costs, security, and interoperability without sacrificing control.

Learn more at ZKsync.io/empire.

Last week, we asked: Does crypto need disclosures?

Wow, 100% of you are all in on disclosures. 10/10 no notes today.

This week we want to know: