We’d rather it looked like this:

The supply overhang that crushed alts has dissipated and is, for the first time in the asset class's history, manageable. Payouts to holders minus new supply, as a share of market value: 2021-22: -17% a year 2026: -2.9% Tokens paying holders more than they dilute them: 4% then, 17% now. Part of this is capital discipline. Better unlock management, maturing protocols, and revenue-funded buybacks. Tokens are starting to take on equity-like properties. The other part is demand. It's showing up. Tokenisation first, and eventually AI agentic commerce. Less drag, more demand. Structurally, crypto has never been in better shape. @RealVision

>At their core, blockchains give us a way to take financial activity spread across different databases around the world and unify it in real time under shared rules. The opportunity is to bring the siloed databases of exchanges, banks, and other financial institutions into one shared database, with the blockchain acting as a common API. Assets, collateral, and applications can then operate within the same system. >The two big questions are who houses this activity and how large it can become. I’ll save the first for another day, but the second is where I think people are dramatically underestimating the opportunity. It's actually unbelievable that people are still writing a thesis around a blockchain (the one they'd prefer, of course) serving as a "unified ledger" that connects these disparate systems in 2026. What's actually happening is that "financial activity spread across different databases around the world" is *STILL* being spread across different siloed databases around the world, except, those siloed, databases are now peer-hosted and they're called...a blockchain. Consider: Ethereum thinks of itself as the "global settlement layer" because it has the most TVL. Solana calls itself "Internet Capital Markets" because it has the most spot trading volume of any chain. Hyperliquid calls itself the "chain to house all of finance" because it has the most open interest among perp DEXes. XRPL calls itself the "Internet of Value" because it has a cult that can't look up data on DeFiLlama. LayerZero (ZERO) is launching a high performance chain and it will have Citadel (supposedly) trading on it. Broadridge's Distributed Ledger Repo (DLR) platform—which runs on the Canton Network—processes over $359 billion in average daily repo transactions and more than $7.5 trillion in monthly repo volume Avalanche calls itself the blockchain "built for institutions" because it hosts Goldman Sachs' $100B Treasury fund and Progmat's $3B securities book, on its private subnets. DTCC, which settles $4 quadrillion per year for all US capital markets, is launching their own chain (DTCC Collateral Appchain) in Q1 2027, along with a multichain tokenization service. SWIFT, which moves the world's GDP every three days, is launching its own chain for its 11,000+ member banks for cross-border payments, which can also evolve into supporting securities, too. Euroclear (36.8 trillion Euros worth of assets under custody), which is the DTCC of Europe, says that they need to have a **MINIMUM** of one chain for each asset class and that they can't even share a ledger with non-EU citizens/entities. Countless more banks (JPM, Wells Fargo, etc) and institutions are launching (or already using) their own private, permissioned chains. Even the BIS, which originally coined the vision and term of the "Unified Ledger", conceded that a single shared ledger to host the world's activity will not happen. The goal of tokenization (or onchain finance or Internet Capital Markets) is to have a consistent state across all chains with real-time data orchestration, automated compliance and atomic DvP/ PvP transactions, enabling T+0 settlement, 24x7 open markets, and regulatory monitoring. I'll let you decide which protocol will come closest to "bringing together the siloed databases of exchanges, banks, and other financial institutions into one shared system, so that assets, collateral, and applications can then operate within the same system", but you can take it to the bank that it won't be a blockchain.

Most people are not yet seeing the major shift that is taking place in the markets. The global capital has spoken & confirmed. One region is heading into a period of easy money = easy stimulus for the economy While the other is exiting the easy times of the past two decades and entering a challenging period of expensive money & hard time. In that same time, global Gold holdings has exited the accumulation of the past twenty years and will be heading north for a while in the #DecadeOfCommodities The commodity bull run has only started and what we saw in 2024/2025 has been just the first impulse. US treasuries will continue to get dumped on therefore US Yields will continue to rise. Most people cannot comprehand this major shift happening because they are stuck in false narratives of the past few years while missing the bigger picture. You are not late to this shift. Yet. Wishing you all a nice Sunday

My Downfall Prediction of Papertrade I'm no stranger to writing scathing reviews of various protocols. But my audience has likely noticed that I've really calmed down on that front over the past several months. The reason is simple: since becoming a founder in the crypto space I have a new appreciation for the hard work and expense that goes into trying to build something. As a result, this particular thesis is not one I put out there lightly. Nor does it bring me any joy to write. My qualifications: I have been in the crypto space for quite a while and a full time perps trader for multiple years. I have made, lost, and re-made more money in perps than the vast majority of perp traders. I'm quite literally in the top 1% of perps traders globally. I've tested countless protocols and have even consulted multiple protocols in their design. I've earned the right to form a qualified opinion. Although it still is - at the end of the day - only my opinion and should be taken as such. My bias: I have zero financial incentive tied to where you ultimately decide to trade. I trade against market makers (as do the vast majority of traders whether they realize it or not). There are no outside factors influencing my opinions on this topic. The Structure Let's start with the elephant in the room. Papertrade isn't a conventional perpetuals exchange. It's a peer-to-pool model, and your counterparty is quite literally the house. In fact, Papertrade itself refers to its liquidity pool as the House in an almost shocking twist of transparency. I have never been fond of peer-to-pool perpetuals models. In fact I have been quite outspoken against that design over the years. In a traditional peer-to-peer order-book exchange (like Hyperliquid), buyers and sellers interact through a marketplace. Market makers provide liquidity, opposing positions are matched, and the exchange generally earns revenue from facilitating those transactions. The exchange doesn't inherently need its customers to lose money to remain solvent. Peer-to-pool changes that relationship fundamentally. Instead of matching your position against another trader, the protocol's liquidity pool takes the opposite side. You win, the pool loses. You lose, the pool wins. Now, to be clear, that doesn't automatically make every peer-to-pool protocol bad. Some have operated successfully, and their liquidity providers knowingly accept that counterparty risk. In fact, I believe good protocols should have a pool fallback for times of thin liquidity - I just strongly disagree that it should be the primary or sole counterparty to all trades. I hate this model so much because it creates a negative incentive structure: The financial interests of the trader and the house are directly opposed. In the case of Papertrade things are considerably worse. You see, Papertrade didn't even launch with a conventionally funded liquidity pool. Its model is designed to bootstrap liquidity from the realized losses of its own traders on top of their own protocol owned liquidity. Think about that for a moment. The money available to pay successful traders is accumulated only through the losses of unsuccessful ones. The starting cash was literally provided by the casino itself. You're trading against the casino directly, and they are betting on your losses to compound the size of their pool. But what happens when the pool doesn't have enough money to pay a winning trader? You wait. Literally. Papertrade has a mechanism that places unpaid profits into a queue, where they become claims against future liquidity. Those claims are subsequently paid as other traders lose money. Imagine closing a profitable position, and being told that your winnings will be available once enough other customers lose their money. And if trading activity dries up while the pool owes money, what exactly is supposed to replenish it? The answer is that there is no guaranteed replenishment mechanism. These are just some of the fundamental problems with the peer-vs-pool model. The house has a direct incentive in who wins and loses, and the house must stay solvent at all costs. Peer-vs-pool is a cheap, lazy way to launch a perps dex. But that's not where Papertrade's problems end - in fact that's where they begin. The Already Exploited Vulnerability Let's talk about how Papertrade actually determines the price of your position. Papertrade doesn't maintain its own traditional order book. Instead, it references Hyperliquid's best bid and offer, calculates the midpoint, and uses that single external venue's price to execute synthetic positions. The protocol doesn't actually execute corresponding trades on Hyperliquid (despite half of the timeline believing they do as a result of marketing wordplay). It simply references Hyperliquid's price, records your position, and calculates what the House owes you - or what you owe the House - based on subsequent price movements. This is how Papertrade advertises zero slippage and no funding costs. That might sound great...until you consider this is an exchange allowing extraordinarily large leveraged positions and is relying on the best bid and offer of a single external order book to determine their execution prices. Not a robust composite index incorporating several independent markets, as is the industry standard. Not an independently validated reference price capable of rejecting abnormal quotations. A midpoint derived from the top of Hyperliquid's order book. This can go dangerously wrong (and already has). Papertrade's own risk disclosures acknowledge that this price source can be manipulated. The documentation discusses how relatively small changes to Hyperliquid's best bid or offer could influence the midpoint used for Papertrade settlement. It also acknowledges the absence of an independent reference price capable of identifying and rejecting those abnormal quotes. None of the very limited safeguards Papertrade has in place establishes that manipulating the reference price is economically unprofitable. This isn't just a hypothetical concern voiced by many of us on the timeline - it's a risk identified in their own documentation. Now combine that with 1,000x leverage. At 1,000X leverage, Papertrade's liquidation threshold is approx a .05% adverse price movement. Approximately five hundredths of one percent. The platform uses isolated positions that cannot be rescued by adding additional margin after opening. Positions also cannot be partially closed. Once the liquidation threshold is reached, the position is liquidated and its isolated margin is forfeited. Consider what that means when your execution price depends on a single external order book. But wait, there's more... Papertrade uses what it calls an asymmetric impact mechanism. In practical terms, profitable trades don't necessarily receive their full calculated profits. According to its published parameters, a profitable BTC trade capturing a 0.1% price movement retains approximately 74% of its gross profit before the additional 2% winning fee. Even on a 1% movement, approximately 12% of the gross profit is surrendered before that fee. Losing trades, meanwhile, incur their actual losses. So the trader absorbs the full downside, while the protocol systematically reduces the upside. Because once again, you're playing against the house. Are all of these concerns simply imaginary? No. Within hours of launch reports began circulating on CT pointing out that sophisticated traders were taking advantage of Papertrade's vulnerabilities in order to drain the pool. These are not insignificant allegations. For perspective, a 0.15% favorable price movement on $300M worth of synthetic positions represents approx $450K in gross PnL before Papertrade's profit adjustments. It's incredibly easy and doesn't take a lot of capital to spoof a 0.15% price move on HL's BBO. This is the only time I'm going to say "trust me, bro" because I'm not about to educate the world on how easy and relatively inexpensive this form of manipulation actually is. The protocol has less than $5M at the time of this post in house liquidity. With staggering amounts of open interest and volume. This morning I saw someone on CT write: "Regardless of potential exploits or vulnerabilities, bullish on Papertrade since it offers degens a way to make $1M from just $1,000." Until you realize that if only five people do that the protocol is bankrupt. Besides the obvious open door to manipulate price, exploit and drain the protocol of funds that we've discussed there lies another danger to peer-vs-pool: those times where most people win during established trends. You see, the entire thing is held together on the premise that most perps traders lose - which is true. But there are multiple periods of times in every cycle where that flips. One really bullish day is all it takes to bankrupt Papertrade. Where traders don't even need to catch a move early, they just need to ape in and chase with incredibly high leverage and exit after only the tiniest bit of price action. And that "turn $1,000 into $1M"? It doesn't really matter if the protocol is bankrupt and cannot pay. The purpose of a perpetuals exchange should be to facilitate efficient markets, not to invent increasingly elaborate ways to turn its customers into the House's liquidity pool. We've spent years building decentralized trading infrastructure capable of competing with traditional financial exchanges. We should be moving toward deeper liquidity, more reliable price discovery, transparent risk management, and stronger settlement guarantees. Not celebrating the reinvention of the bucket shop model where traders play against the house simply because someone put it on-chain and gave the losing customers a token. Without some serious and rapid changes to the structure, I do expect the downfall of Papertrade. This is not the same as me hoping for it. I'm not sitting here cheering for their failure, nor do I really care whether they succeed or not. The current risks, however, are simply too great to ignore. 🫡 From the depths — The White Whale 🐋