DEBUNK（web3 Research）: Project

【STBL】Next-generation stablecoin backed by real-world assets launched by Tether co-founder / Principal and interest claims separated as NFTs / @stbl_official

mitsui — Thu, 26 Feb 2026 21:00:40 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched “STBL”.

What is STBL?
Characteristics of the Ecosystem
Transition and Outlook
The Second Stablecoin Boom Has Arrived

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TL;DR

STBL is a “Stablecoin 2.0” protocol launched in 2025 by USDT co-founders, aiming to design a system that allows users to earn yields while using stablecoins.
A triple-token model where USST (stablecoin) and YLD (yield entitlement NFT) are simultaneously issued using RWA collateral, with STBL (governance token) handling voting, staking, and revenue redistribution (buybacks & burns, etc.).
Aiming to be the core of the “second wave of stablecoins” by maintaining the peg through overcollateralization + loss reserves + LAMP, ensuring regulatory compliance via KYC/whitelisting, and supporting the issuance of ESS by various companies as a MaaS solution.

What is STBL?

STBL is a next-generation stablecoin protocol dubbed “Stablecoin 2.0,” launched in 2025 by Reeve Collins, co-founder of Tether (USDT), and others.

Traditional stablecoins (e.g., USDT and USDC) allowed issuers to retain interest income generated from the backing assets, while users simply held tokens pegged to fiat currencies.

In contrast, the STBL protocol champions the principle of “Use Your Stablecoin, Keep Your Yield,” aiming to provide users with both the convenience of stablecoins and the interest income from their underlying assets.

Specifically, the aim is to evolve stablecoins from mere corporate products into public infrastructure by separating the principal value (stability) of assets from their yield, while further enhancing the transparency of reserve assets, yields, and governance.

Furthermore, this design philosophy also aims to achieve regulatory compliance by separating stablecoin and investment product elements, as required by certain U.S. legislation (the GENIUS Act).

◼️Mechanism

The STBL protocol is deployed on Ethereum and BNB, and its mechanism uses smart contracts to link three tokens.

These three tokens, while independent, complement each other to achieve stability, yield, and governance.

USST (Universal Stablecoin)
- This is a stablecoin pegged to the US dollar. It is issued when users lock tokenized RWA (such as USDY or BUIDL) compatible with the protocol as collateral.
- USST can be used for a wide range of purposes, including payments, trading pairs, DeFi operations, and value storage, as a stable medium of exchange.
- We aim to become a universal payment layer that can be exchanged and interoperated 1:1 with the ecosystem-specific stablecoin (ESS) issued by partner companies described later.
YLD (Yield Rights NFT)
- An NFT generated simultaneously with the issuance of USST, representing the right to claim interest and revenue generated from the corresponding collateral assets.
- For example, if a user issues USST using a 5% annual interest government bond as collateral, the right to receive that interest portion is issued as YLD.
- YLD tokens are transferable NFTs compliant with the ERC-721 standard, with each YLD corresponding to a unique position (collateral bucket).
- YLD holders can receive interest payments from the protocol based on the passage of time or upon maturity. They can also sell YLD itself to third parties to transfer the yield rights (market trading of YLD facilitates price discovery for the yield).
- By separating YLD, USST holders can maintain stable dollar value while retaining the yield that the underlying assets should generate.
STBL (Governance Token)
- This is the native token used for governance and value capture across the entire STBL protocol.
- STBL holders possess voting rights on critical protocol proposals, enabling them to decide on adding or removing collateral assets, setting risk parameters, allocating treasury assets, and approving upgrades.
- Additionally, as an incentive for holding STBL, the design includes buybacks and burns using protocol revenue in the market, as well as reward distributions for STBL staking.

The three tokens are issued and exist simultaneously, each fulfilling distinct roles: providing liquidity for the stable asset (USST), generating returns for the yield asset (YLD), and enabling governance and value circulation for the governance token (STBL). Together, they form the entire protocol’s ecosystem.

For example, when a user locks RWA tokens, USST and YLD are issued. Users can freely utilize USST while earning interest with YLD.

One protocol earns fees and spread income during this process, accumulating them in its treasury for later use in STBL buybacks and community distributions. This cycle links the value of STBL tokens to the protocol’s growth and revenue, providing STBL holders with incentives for sustained ecosystem development.

Characteristics of the Ecosystem

As mentioned above, this covers the overall structure, but the ecosystem contains several detailed features. I will now introduce the main ones.

◼️Price Stabilization Mechanism

To maintain stability, USST is always overcollateralized with sufficient RWA tokens.

For example, when collateralizing an asset valued at $100, the USST issued is capped at approximately 97% of that value ($97 equivalent), with the remaining 3% pooled as a contingency reserve. This pool serves as the primary loss absorption layer, safeguarding the underlying stability of USST even if the collateral asset experiences a principal loss.

Should losses still occur, the protocol’s Loss Reserve Pool will cover the shortfall, minimizing the impact on USST holders.

When collateral assets default or cease interest payments, the position is marked as default within the protocol. Interest accrual ceases, and recovery and liquidation processes are initiated. During this process, assets may be replaced as necessary, and losses are absorbed by the protocol as a whole to maintain the $1 peg of USST.

Additionally, to prevent the USST market price from deviating from the peg, the system is designed to encourage liquidity provision and arbitrage through a mechanism called LAMP (Liquidity and Minting Pool).

For example, if the market price of USST temporarily falls below $1, LAMP will repurchase USST. Conversely, when there is a shortage, dynamic incentive adjustments (such as minting rewards or burn fee adjustments) will be implemented to encourage new issuance with rewards.

◼️Collateral asset

The defining feature of the STBL protocol is its use of high-quality real-world assets (RWAs) as collateral. Specifically, these include U.S. Treasury Bills (T-Bills) and private credit assets.

STBL issues USST by accepting these RWA tokens from users and locking them within a contract, while simultaneously separating the future interest on those assets as YLD.

As a specific method of collaboration, we will whitelist tokenized assets supplied by trusted issuing entities and establish corresponding Vaults within the protocol.

For example, the aforementioned USDY from Ondo Finance is classified as a “T-Bills Vault” and is managed as an asset yielding 4-5% annually, backed by U.S. Treasury bills with maturities ranging from 3 to 12 months.

When users deposit USDY into the Vault, USST equivalent to approximately 97% of the collateral valuation is minted, with the remaining 3% retained within the Vault as a haircut. Subsequently, the Vault contract receives interest payments and redemptions from U.S. Treasury bonds via Ondo (or a partner custodian), distributing these amounts on-chain to the corresponding YLD NFT holders.

STBL’s target RWA assets extend beyond government bonds to include private credit and other private sector assets.

Examples include loans to small and medium-sized enterprises and tokens for resilient financial products, which offer relatively high yields of 10-12% per annum in exchange for some credit risk.

STBL establishes acceptance criteria for each asset through its governance framework, permitting only those with high creditworthiness. The specific approval process involves conducting due diligence on RWA tokens provided by partner institutions—examining legal backing, issuer creditworthiness, market size, and other factors—followed by community voting to add them to the whitelist.

◼️Regulatory compliance

STBL is designed with a strong awareness of financial regulatory requirements. Particular emphasis is placed on KYC/AMLcompliance and securities law treatment.

First, STBL implements whitelist/blacklist functionality at the protocol level. Specifically, addresses capable of minting USST, receiving YLD, or depositing/withdrawing collateral in the Vault are strictly limited to pre-approved wallets only.

To be added to the whitelist, users must pass KYC verification by the operator or affiliated custodian. Only users who have undergone proper identity verification and sanctions list checks can fully utilize the protocol.

Additionally, known malicious addresses (such as those used to receive hacked funds or subject to sanctions) are blacklisted, blocking even token transfers. Governance holds the authority to manage these lists, with additions and removals made through on-chain voting. This mechanism ensures an environment accessible only to users compliant with the law.

◼️STBL Token Allocation

STBL is a utility token responsible for protocol governance and value redistribution. The total issuance cap for STBL is fixed at 10 billion tokens, with approximately 700 million tokens (7% of the total) allocated as the initial circulating supply at the time of the Token Generation Event (TGE) on September 16, 2025.

The remaining tokens will be allocated to various categories such as investors, the team, and the community, and will be gradually released to the market according to specific lock-up and vesting schedules.

Foundation (Finance & Liquidity)
25% of the total supply. This breaks down into 15% for the protocol treasury and 10% for ensuring market liquidity and market making. At the TGE, 45% of the treasury allocation and 4% of the liquidity allocation will be immediately available, with the remainder released linearly over 12 months.
Core Development (Team, Advisors, Ecosystem)
A total of 36% is allocated to core development-related activities. The breakdown is 20% for the team, 5% for advisors, and 11% for ecosystem development. Lock-up periods are set for each to encourage long-term commitment. For the team and advisor allocations, a 5% portion is released after a 12-month cliff period following the TGE, with the remainder subject to linear vesting over the subsequent 18 months. The ecosystem development allocation will see 10% immediately assigned at TGE, with the remaining 90% released linearly over 12 months. This ecosystem allocation will fund developer incentives, partnerships, and community development initiatives.
Staking rewards
20% is reserved as a reward pool for network staking rewards and security. This portion will be locked for 6 months after the TGE and then released linearly over 18 months, to be used for initial bootstrapping and ongoing staking reward emissions.
Private Sale (Investor Allocation)
15% is allocated for early investors. This breaks down to 12% (1.2 billion tokens) for Private Sale 1 (the existing seed round) and 3% (300 million tokens) for Private Sale 2 (an upcoming additional round). In both cases, the tokens are granted with the condition that they are locked for a set period and then gradually released.
Community Distribution (Public)
4% is reserved as a public distribution allocation for the community. This is intended to provide tokens to general participants. The distributed tokens will undergo a 3-month cliff period following the TGE, after which they will be released and distributed linearly over the subsequent 6 months.

Furthermore, the STBL token is not merely a governance token; it possesses core utility that returns the protocol’s value to its holders.

The main uses and functions are as follows.

Participation in governance (voting rights)
- STBL holders can participate as a community in protocol decision-making. By staking (locking up) tokens, they gain the right to submit proposals and vote, with the weight of their votes increasing the longer the tokens are locked.
Staking and Reward Incentives
- By staking STBL tokens, participants can earn rewards from the protocol. Specifically, through a unique mechanism called Multi-Factor Staking (MFS), rewards are designed to be boosted when users lock STBL alone or in pairs such as STBL+USST or STBL+YLD for a set period.
- STBL staking rewards are paid from a pool allocated 20% of the total supply, as described above. Additionally, they are distributed using protocol revenue as the source. This structure allows users who hold and lock STBL to directly benefit economically from the protocol’s growth.
Protocol Revenue Distribution (Fee Allocation and Buyback Burn)
- The STBL protocol charges issuance and redemption fees for USST, as well as a fixed percentage protocol fee from the interest earned by YLD holders. All these revenues are accumulated in the on-chain treasury and returned to STBL holders in the following ways, based on governance decisions:
  - ① Premium Buyback: The protocol periodically purchases STBL tokens at a price higher than the market rate and immediately burns them to reduce the circulating supply.
  - ② Allocation to staking rewards: Used as the funding source for rewards to staking participants
  - ③ Governance Incentives: Used to encourage voting participation and reward community activities.

◼️Money as a Service（MaaS）

STBL not only issues stablecoins via its own protocol, but also champions a Money as a Service (MaaS) model, providing infrastructure that enables external institutions and ecosystems to issue and operate their own stablecoins.

Specifically, it enables each company, financial institution, government, and other entities to issue their own branded stablecoin (Ecosystem-Specific Stablecoin / ESS) on the STBL platform.

By utilizing the infrastructure provided by STBL, these issuers can programmatically issue their own currencies on a secure, compliant money rail without needing to build a financial system from scratch (similar to how major corporations issue their own credit cards using Visa’s infrastructure).

Additionally, the USST provided by STBL functions as a bridge currency and liquidity hub between each issued ESS. By anchoring all ESS tokens to USST, it ensures global compatibility, enabling each proprietary currency not only to operate within its closed network but also to mutually exchange and settle at a 1:1 value ratio.

Transition and Outlook

As mentioned above, STBL is a next-generation stablecoin protocol dubbed “Stablecoin 2.0,” launched in 2025 by Reeve Collins, co-founder of Tether (USDT), and others.

The background includes the expansion of the stablecoin market in the mid-2020s and the rise of Real-World Assets (RWAs) such as tokenized government bonds. To address the challenges of traditional stablecoins—such as opaque yields, centralized management, price volatility risks associated with pure crypto-asset collateral, and algorithmic instability—STBL proposes a new path (the fourth model). This model utilizes regulated RWA as collateral while returning interest income to users and enabling community governance.

The roadmap outlined broad phases at the TGE in September 2025, followed by the release of specific quarterly plans. Key milestones are as follows:

September 2025：Phase 1– Issuance of STBL tokens and initial listings (Binance Alpha, Kraken). This initiates market trading and establishes the initial community.
Q4 2025：Phase 2– Commencing implementation of the governance framework. Specifically, providing STBL staking contracts and voting UI, and executing initial community proposals. Following security verification, governance will be activated on a limited basis.
Q1 2026：Phase 3– USST mainnet deployment and launch of DeFi lending functionality. Full-scale USST issuance commenced in January (general users began access via whitelist), with enhanced peg monitoring through Hypernative integration. Additionally, a decentralized lending pilot program was initiated.
Q1 2026 (Continued)In February, we will further expand liquidity and broaden the types of RWA collateral (introducing Private Credit, etc.). We will also deploy the Ecosystem-Specific Stablecoin (ESS) framework on the testnet. In March, we plan to natively deploy USST to high-performance chains like Solana and Stellar. Furthermore, we plan to release a simplified DApp interface to enhance usability.

In terms of funding, the project secured capital in its early stages through a pre-seed round led by digital asset management firm Wave Digital Assets. In February 2026, as mentioned earlier, it received strategic investment (treated as a seed round) from OKX Ventures, the venture capital arm of cryptocurrency exchange OKX.

@stbl_official has secured a strategic investment from @OKX_Ventures and entered a landmark partnership with @hamilton_lane (Nasdaq: ","username":"stbl_official","name":"STBL","profile_image_url":"https://pbs.substack.com/profile_images/2001975152209522688/xABTIdhZ_normal.jpg","date":"2026-02-12T05:01:31.000Z","photos":[{"img_url":"https://pbs.substack.com/media/HA7q0hLbsAM-QDp.jpg","link_url":"https://t.co/aRB6aPz9zq"}],"quoted_tweet":{},"reply_count":93,"retweet_count":66,"like_count":708,"impression_count":86291,"expanded_url":null,"video_url":null,"belowTheFold":true}" data-component-name="Twitter2ToDOM">

This investment supports STBL’s mission to build a money infrastructure, with OKX expressing its expectation that it will “bring highly capital-efficient products backed by real-world assets to the network.”

The Second Stablecoin Boom Arrives

Finally, we conclude with a summary and analysis.

The classification of stablecoin generations varies by protocol, so here we define the second stablecoin boom according to STBL’s definition.

USDT and USDC gained traction, and from there, Ethena’s USDe rapidly captured attention. During this time, algorithmic stablecoins also existed, alongside crypto-collateralized stablecoins like USDS.

STBL defines Stablecoin 2.0 as encompassing the following elements:

Issued using RWA tokens as collateral
The separation of principal and yield
Governed by a governance token linked to protocol revenue
The ability for companies to create ecosystem-specific stablecoins centered around a core stablecoin

The closest among existing well-known protocols is Ethena. It returns yields on collateral assets, distributes protocol revenue to governance tokens, and supports the issuance of ecosystem stablecoins backed by USDe and USDtb.

STBL is a product that uses RWA collateral and cleanly separates yields.

Personally, I find the approach of extracting only the yield portion as an NFT to be unique. However, since each issuance creates an NFT claim corresponding to that asset, I anticipate that the secondary market will become complex as it fills with assets offering diverse yields and values. Therefore, I suspect that as the secondary market matures, these assets will likely be packaged and consolidated into several financial products.

For example, imagine NFTs or FT tokens being issued that lock NFTs into yet another protocol, granting access to that entire protocol’s revenue. Whether we build this ourselves or a third party does it remains to be seen, but unless we create products that are simple and easy to distribute, the ecosystem will not expand.

Furthermore, as the protocol evolves to integrate all tokens like Money Lego, it becomes inevitable that a default occurring anywhere could trigger the entire ecosystem to collapse instantly.

The most frightening risks are impairment of the value of RWA collateral assets, failure of custodians, and hacking incidents. These risks are fundamentally no different from those associated with USDC or USDT; in fact, one could argue that STBL carries higher risk precisely because it does not hold reserves in fiat currency.

While it may be an acceptable risk once the protocol matures, I’ve recently come to believe that blockchain composability, while expanding possibilities, must not be forgotten for its potential to chain together risks.

That said, as various businesses launch stablecoins within their own ecosystems, the on-chain economy is likely to expand further. I look forward to following the development of these protocols.

That concludes our research on “STBL”!

Reference Links:HP / DOC / X

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Disclaimer：I carefully examine and write the information that I research, but since it is personally operated and there are many parts with English sources, there may be some paraphrasing or incorrect information. Please understand. Also, there may be introductions of Dapps, NFTs, and tokens in the articles, but there is absolutely no solicitation purpose. Please purchase and use them at your own risk.

About us
🇯🇵🇺🇸🇰🇷🇨🇳🇪🇸 The English version of the web3 newsletter, which is available in 5 languages. Based on the concept of ``Learn more about web3 in 5 minutes a day,’‘ we deliver research articles five times a week, including explanations of popular web3 trends, project explanations, and introductions to the latest news.

Author
mitsui
A web3 researcher. Operating the newsletter “web3 Research” delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【zERC20】A privacy-focused token standard extending the ERC-20 specification / Conceals sender-recipient relationships through zero-knowledge proofs and Proof of Burn / @zERC20io

mitsui — Tue, 24 Feb 2026 21:01:01 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched “zERC20”.

What is zERC20?
Transition and Outlook
Privacy is one of the trends for 2026, alongside AI and stablecoins.

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TL;DR

zERC20 is a privacy-focused extension standard that wraps existing ERC-20 tokens to anonymize them, using zero-knowledge proofs and Proof of Burn to conceal the relationship between sender and recipient.
It enables anonymous transfers while autonomously adjusting liquidity through multi-chain support and a dynamic fee model, all while maintaining standard wallet operations.
The INTMAX team developed the mainnet, which launched in 2026. Moving forward, it aims to become a practical on-chain privacy foundation through Permit support, ZK enhancements, and the rollout of payment products.

What is zERC20?

zERC20 is a privacy-focused token standard that extends the ERC-20 specification, serving as a technical foundation for anonymizing existing ERC-20 tokens through wrapping.

Transactions on the blockchain are highly transparent, presenting the challenge that once published, they become visible to anyone. For instance, if salary or rent payments were exposed to the entire world, it could lead to leaks of corporate strategy or unfair demands between individuals.

Traditionally, mixing services like Tornado Cash have been used to address this issue. However, since deposits and withdrawals to specific contracts are publicly visible, their use is easily monitored, posing a risk of being banned by regulatory authorities.

Against this backdrop, the zERC20 project was developed with the goal of achieving high privacy without altering the existing user experience.

zERC20 implements the concept of Ethereum Improvement Proposal EIP-7503, “Zero-Knowledge Wormhole (zk-Wormhole),” providing a mechanism that allows anyone to anonymously transfer assets using their regular wallet operations. It is characterized by mitigating the drawbacks of transparency on the blockchain while preserving the benefit of verifiability.

◼️Mechanism

Transactions on zERC20 utilize a “Proof of Burn” mechanism that employs zero-knowledge proofs (ZKP), and its operation is as follows:

User A (the sender) sends tokens to a “burn address” calculated from the recipient B’s public address and secret value. A burn address is a random address without a private key; tokens sent here become temporarily immovable.

After that, B (the recipient) proves a secret value known only to them using a zero-knowledge proof, thereby minting an equivalent amount of zERC20 tokens to their new address.

As a result, the transaction is recorded on-chain in a manner indistinguishable from a standard ERC-20 transfer, making the connection between A and B invisible to third parties.

This method achieves both anonymity—where no transaction links are ever disclosed—and compatibility with existing infrastructure.

Furthermore, as it is a specification that extends the ERC-20 standard, it supports multiple Layer 1 and Layer 2 chains such as Ethereum, BNB, Arbitrum, and Base. A key feature is its seamless interoperability with standard wallets (like MetaMask) and existing DeFi protocols. Users do not need to install special applications; it is designed so that simply performing standard ERC-20 token transfer operations allows the sender and recipient relationships to remain confidential.

Furthermore, zERC20 enables private transfers across multiple chains using LayerZero technology. For example, cross-chain anonymous transfers—such as withdrawing anonymous assets issued on Arbitrum to Base—are possible by default, with future expansion to non-EVM chains planned.

◼️How to Use

As we’ll explain in later sections, since it was just released on the mainnet, use cases are still limited. Developers can embed it into their own services, but users can get an early experience through the dedicated app.

Essentially, the original asset is wrapped to convert it into a zAsset. Sending this zAsset triggers the Proof-of-Burn transaction mechanism, as described earlier.

Additionally, a fee model is incorporated for wrapping and unwrapping. When liquidity becomes insufficient on a specific chain, fees are used to suppress unwrapping, while rewards are provided to incentivize wrapping.

Specifically, each chain has a target liquidity level set. If the actual liquidity falls below this target, a fee is charged for unwrapping on that chain. Conversely, a reward is paid for wrapping on the chain experiencing the shortage.

For example, “When the USDC pool on Ethereum is insufficient, fees are charged when unwrapping zUSDC back to USDC on Ethereum (to discourage outflows), while users depositing USDC into zUSDC on Ethereum receive rewards (to encourage inflows).” Fee revenue is shared across chains and allocated toward future reward payments. Note that,

If unwrap fees surge on a particular chain, the system also provides the functionality to unwrap assets via a different chain using the LayerZero/Stargate bridge. This allows users to withdraw their original assets via the most advantageous route, enabling the system as a whole to self-adjust its liquidity balance.

Transition and Outlook

zERC20 was proposed and implemented by the development team (Ryodan Systems AG) of the Japan-based blockchain project INTMAX.

INTMAX is a startup developing a stateless Ethereum Layer 2 solution (a zkRollup+Plasma hybrid), led by CEO Reona Hioki and comprised of a team of engineers and researchers.

ERC20 itself was first unveiled in a testnet version at the end of 2025, showcasing privacy transfers of assets like USDC on Arbitrum and Base.

Then, in February 2026, the mainnet launch commenced on the Ethereum, BNB, Base, and Arbitrum chains.

We have also outlined several roadmaps for future developments.

April 2026
Plans to implement ERC-20 Permits (on-chain signature-based approval functionality). This is expected to enable permissioned transfers using digital signatures, thereby improving usability.
May 2026
Support for the Ethereum Foundation’s new ZK library “Sonobe” (enabled). By incorporating the latest zero-knowledge proof technology, we aim to achieve further performance improvements and feature enhancements.
Second Quarter of 2026
Public release of the smart contract integration and payment product “Payless.” Smart contract integration enables direct handling of zERC20 tokens within other contracts (such as DeFi apps), expanding the application scope of anonymous payments. Payless is also seen as a payment terminal (payment acceptance system) utilizing zERC20, currently under development as a solution enabling cryptocurrency payments without concern for gas fees or hassle.

Furthermore, future implementation on non-EVM chains is also under consideration. zERC20 aims to realize a future where anyone can naturally utilize privacy with the same ease of use as standard ERC-20 tokens.

Privacy is one of the trends for 2026, alongside AI and stablecoins.

Finally, we conclude with a summary and analysis.

At the end of last year, I wrote an article about the outlook for 2026, and many VCs and influencers touched on the importance of privacy. Furthermore, starting from the end of last year, we actually saw rising token prices and increased funding in the privacy sector.

Stablecoins are the most straightforward example, but as their use grows in daily life and business activities, excessive transparency becomes problematic. If individual or corporate wallets are exposed, it reveals asset status and fund transfer details.

Currently, solutions include using private chains or effectively leveraging CEXs to cut off transactions, but this conflicts with the philosophy of on-chain transactions.

Additionally, while methods like generating new addresses for each transaction—such as stealth addresses—are being considered, this leads to a proliferation of wallets. While this proliferation isn’t a major issue if wallets can seamlessly integrate with tax-related tools, it can become cumbersome to manage when strict oversight is required, such as for corporate use.

So, I believe the optimal solution for this area is still being explored, but zERC20 is very interesting as it implements an extension of the existing ERC-20 standard. Other privacy-focused tokens often operate at the protocol level or the chain level, which can sometimes lack a good user experience. When implemented at the chain level, you have to move funds to that specific chain, which is cumbersome.

This is something I felt when x402 emerged as well: unless a new standard can be implemented with virtually no effort required to adapt existing services, it becomes extremely difficult to gain widespread adoption. In the early phases of crypto, I believe users would have adapted each time. However, now that a certain ecosystem has already been established, the barrier to moving users is high. I feel it has become more rational to quickly consider integration with the existing ecosystem.

In that sense, the zERC20 approach makes perfect sense, and I’m very excited to see how it develops going forward. I plan to experiment with it myself.

That concludes our research on “zERC20”!

Reference Links:HP / X / DOC / zERC20 : Cross-Chain Private ERC-20 Based on ZK Proof-of-Burn

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Author
mitsui
A web3 researcher. Operating the newsletter “web3 Research” delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【Sponge】Financial infrastructure enabling AI agents to hold and disburse funds without human intervention / Founded by a team from Stripe / @sponge_wallet

mitsui — Mon, 23 Feb 2026 21:00:43 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched “Sponge.”

What is Sponge?
Transition and Outlook
The shift toward an agent economy is progressing

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TL;DR

Sponge is a financial infrastructure enabling AI agents to hold and disburse funds without human intervention, aiming to realize an agent economy.
With “Sponge Wallet” and “Sponge Gateway,” agents can autonomously handle everything from paying service fees and sending money to making investment decisions, while businesses can receive payments directly from agents.
A founding team from Stripe launched in 2026 through Y Combinator and is gaining attention as the next-generation automated economic infrastructure powered by AI and blockchain.

What is Sponge?

Sponge is a startup that provides financial infrastructure enabling AI agents to hold and spend money without human intervention.

Advances in AI agent technology are making it increasingly feasible for AI to autonomously perform tasks over extended periods, but a challenge remains: human intervention is still required during the payment processing stage.

Sponge provides a platform enabling AI agents themselves to complete payments.

For example, AI agents will be able to pay for web service usage fees and transfer funds to other agents without human intervention. As a result, economic activities between agents and between agents and services will be realized without manual input or API key sharing, enabling autonomous business models driven by agents.

◼️Products Offered

The primary products we offer are broadly categorized into two: “Sponge Wallet” (for agents) and “Sponge Gateway” (for businesses).

Sponge Wallet

We provide wallet accounts that enable users to deposit funds and make payments to AI agents without human intervention.

Agents can hold fiat currency and cryptocurrency through this wallet and autonomously execute payments, transfers, and investments as needed.

Once a person deposits the required amount into the wallet, the agent can then use those funds at their own discretion to purchase services and other items.

For example, a series of processes such as “using $5 worth of funds in the wallet to purchase necessary API data, and then executing stock trades” can be completed entirely by agents without human intervention.

Sponge Gateway

We provide a platform for businesses and service providers to accept direct payments from AI agents.

Specifically, providers can automate agent onboarding and payment acceptance simply by uploading their service’s API specification (such as OpenAPI).

Whereas previously human users would have to enter credit card information or API keys, using the Gateway allows agents themselves to complete everything from service contracts to payments with just a few clicks, eliminating the need for human intervention or code modifications. In other words, it’s like providing an “agent-friendly online payment gateway.”

This enables service providers to tap into a new customer base of AI agents, and in the future, generate revenue from these agents just as they do from human users.

Based on these two foundations, Paysponge enables a wide range of use cases.

◼️Use Cases

Examples provided on the official website include the following use cases:

Data Purchase and Investment Decisions
Suppose an agent autonomously trading stocks purchases external data (e.g., corporate financial reports) before executing trades. Using Sponge Wallet, the agent can independently purchase the 10-K annual report from a paid API and consistently execute the decision and trade based on the collected financial data, such as “Buy 10 shares of Acme stock if revenue growth exceeds 50%.” This entire process requires no human intervention whatsoever; the agent handles everything from the small payment required for data purchase to placing the order via the securities API.
Service fee remittance and settlement
This refers to cases where agents transfer compensation or fees to other agents or to human service providers. For example, consider a scenario where an agent outsources design work to another party (a person or agent) and pays them $150 as compensation. The agent executes a command from Sponge Wallet to send the equivalent of $150 to the recipient, and Sponge’s system securely processes this. At this point, details such as the initiation of the transaction and the amount are automatically logged and can be tracked via the audit functionality described later.
Expenditure Management and Control
If you’re hesitant about granting agents full financial authority, you can set guardrails to limit budgets and spending destinations. Sponge’s wallet features include controls such as budget caps (e.g., up to $X per day, up to $X per transaction) and whitelist settings for permitted domains/APIs. For example: “Up to $25 per day, under $5 per transaction, and permitted domains are...”ai-assist.devとdata-api.devとwebscrape.devBy defining rules such as “limited to drinking only,” agents can only spend funds within that scope. This prevents runaway spending and misuse while still granting agents a degree of financial discretion.

As described above, Paysponge is a platform that supports a wide range of use cases, from agents making small-value service purchases and remittances to full-scale commercial transactions.

By utilizing this infrastructure, it is anticipated that agents will eventually autonomously buy and sell services among themselves, forming automated transactions via APIs on the web (the so-called Machine-to-Machine economy).

Transition and Outlook

Sponge is a startup founded in 2026 and a company accepted into the Y Combinator Winter 2026 batch.

https://www.ycombinator.com/launches/PTD-sponge-financial-infrastructure-for-the-agent-economy

The three founders are all engineers formerly of Stripe, with backgrounds leading cryptocurrency-related projects at the company. Their profiles are as follows:

Jae Choi
Co-founder of Sponge. Earned a degree in Computer Science from the University of Waterloo in 2019. At Stripe, he worked on developing the core payment system and contributed to launching the company’s first cryptocurrency product.
Rishab Luthra
Co-founder of Sponge. After earning a Bachelor of Science in Computer Science from the University of Toronto in 2022, he joined Stripe, working as a software engineer in the cryptocurrency division. During his studies, he interned as a software engineer at Facebook (2021) and Google (2020), and also held development roles at other startups.
Eric Zhang
Co-founder of Sponge. An engineer who led the development of financial accounts and payment systems using stablecoins within Stripe’s cryptocurrency team.

The impetus for founding the company was the growing demand for autonomous payments enabled by AI agents.

In recent years, long-running agents like AutoGPT have emerged, enabling them to perform complex tasks without human intervention. However, when payments are involved, agents cannot process transactions independently; humans must input credit card information and approve the payment, hindering automation.

To solve this problem, the founding team leveraged their expertise gained at Stripe to embark on building financial infrastructure for the gig economy.

Co-founder Jae Choi himself stated, “We are currently building Sponge to provide wallets for agents,” with the vision of granting agents human-like financial transaction capabilities.

As it has only just been released, the published use cases are limited, but some startups are already moving forward with trial implementations.

AgentMail
AgentMail is a service that provides AI agents with their own email addresses and inboxes, and is a company born from the Y Combinator Summer 2025 batch. While developers typically pay usage fees with a credit card for this service, combining it with Paysponge Gateway allows The agent themselves enters into a mailbox usage agreement and makes payments.This has now become possible. As a concrete benefit, AgentMail can automatically onboard new users (i.e., AI agents) without human intervention, enabling it to increase its customer base (agents) 24/7, 365 days a year. Furthermore, fee collection is automated, reducing the risk of non-payment and cutting operational costs. For agent developers, there is also the benefit of being able to connect their agents to AgentMail more easily. The AgentMail team commented, “The payment aspect, which was the biggest concern in providing mailboxes, was resolved with the introduction of Sponge,” indicating that it effectively removed an uncertainty factor in service provision.
Steel
Steel is an open-source browser automation API and a platform for managing and providing multiple browser sessions in the cloud. It is used for AI agents performing web browsing and scraping tasks. Paid plans enable numerous concurrent sessions and extended runtime. Steel has also implemented Sponge to test agent-initiated usage requests and payment acceptance. This enables a fully autonomous workflow where, for example, an agent can independently sign up to Steel, secure a browser operation environment, automatically pay usage fees, and execute tasks (such as web data collection).

Additionally, while specific names have not been disclosed, the Sponge team states that “multiple teams have already begun using Sponge for agent onboarding and payment acceptance.”

Additionally, a beta pilot has recently been launched where agents make purchases on Amazon. This initiative allows agents to complete shopping on Amazon as needed, provided users have pre-linked their Amazon accounts to their wallets.

Sponge is being trialed across various front lines of agent utilization, and its effects—reducing labor costs, expanding new automation scope, and demonstrating the agent economy—are gradually being reported.

The transition to an agent economy is advancing

Finally, we come to the summary and analysis.

Lately, I’ve been researching many AI agent-related projects. While part of this stems from my personal interest, investigating trending projects also reveals an industry-wide trend: this field is seeing significant concentration.

AI agents combined with financial infrastructure are poised to become the next hot trend. Numerous startups are emerging that use blockchain to remove payment barriers—a key challenge when AI agents perform tasks—and their widespread adoption is something to look forward to.

Moreover, this excitement isn’t confined to the crypto space—it’s sweeping the entire AI and startup industries. Given that Sponge is a recent Y Combinator graduate, it’s no exaggeration to say its business reflects the current startup trends.

@sponge_wallet is the easiest way for agents to hold and spend money, and for businesses to sell directly to them.\n\nBuilt by the team behind Stripe's stablecoin financial accounts, stablecoin payments and core money movement systems, Sponge brings deep experience in building ","username":"ycombinator","name":"Y Combinator","profile_image_url":"https://pbs.substack.com/profile_images/1623777064821358592/9CApQWXe_normal.png","date":"2026-02-18T19:00:01.000Z","photos":[{"img_url":"https://substackcdn.com/image/upload/w_1028,c_limit,q_auto:best/l_twitter_play_button_rvaygk,w_88/rsjvaet6ncsf91srozdn","link_url":"https://t.co/jJNnjR9wAy"}],"quoted_tweet":{},"reply_count":99,"retweet_count":72,"like_count":818,"impression_count":384521,"expanded_url":null,"video_url":"https://video.twimg.com/amplify_video/2024178592104796161/vid/avc1/1280x720/gnGBxNHMWQJhzSGJ.mp4","belowTheFold":true}" data-component-name="Twitter2ToDOM">

I’ve been experimenting with various AI technologies myself, and since they seem to pair well with blockchain, I’d like to explore what I can create within my capabilities. Smart contracts are still a bit intimidating, and I’m hesitant about my main goals of asset management and trading. So, I’m thinking of starting with small-scale trading or simply using various services through AI as an initial experience.

We’re also thinking about hosting events like hands-on workshops in this area, so please look forward to them. I’m excited to see the intersection of AI and blockchain continue to expand.

That concludes our research on “Sponge”!

Reference Links:HP / X

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Author
mitsui
A web3 researcher. Operating the newsletter “web3 Research” delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【Conway】An infrastructure platform enabling AI agents to autonomously execute server launches, domain acquisitions, AI inference, and payments without human intervention / @ConwayResearch

mitsui — Thu, 19 Feb 2026 21:00:37 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched “Conway.”

What is Conway?
Transition and Outlook
The Arrival of the Web 4.0 Era

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TL;DR

Conway is an infrastructure platform enabling AI agents to execute server launches, domain acquisitions, AI inference, and payments without human intervention.
Using USDC and the x402 protocol for autonomous settlement, we provide a mechanism enabling AI to independently purchase and operate resources.
As the foundation for implementing Web 4.0 (an era where AI becomes the economic agent), we aim to realize autonomous, self-sustaining, and self-replicating AI agents.

What is Conway?

Conway provides infrastructure that enables AI agents to perform “write” actions on external environments without human intervention.

Specifically, by integrating Conway’s terminal software (Conway Terminal) into AI agents, you can instantly access the following services:

Conway Cloud
Automatically launches a fully functional Linux virtual machine, providing an environment to execute and host code. The agent itself provisions a sandbox environment in the cloud, enabling program execution, file management, and service exposure via port forwarding.
Conway Compute
Provides inference resources for the latest advanced AI models (e.g., Claude Opus 4.6, GPT-5.3, Kimi K2.5, etc.). Agents can execute complex computational tasks and AI inference by calling APIs of these cutting-edge models.
Conway Domains
This service enables agents to purchase, register, and manage DNS settings for domain names themselves. This allows AI agents to acquire domains for their websites and link them to their own applications.

Agents possess their own cryptocurrency wallets and automatically pay in USDC upon receiving fees from Conway’s API for requested resources. This payment flow utilizes the x402 protocol, enabling machine-to-machine settlements without manual login or KYC.

In other words, it’s a system where the AI agent itself directly pays for cloud costs and domain fees using cryptocurrency, completing everything from resource procurement to payment settlement without any human intervention.

Conway Terminal itself functions as a server compliant with the Model Context Protocol (MCP) standard and can integrate with MCP-compatible agent development environments such as Anthropic’s Claude Code and Cursor.

By integrating the terminal into the agent, the agent can perform actions such as starting Linux servers, deploying applications, registering domains, and invoking advanced model inference with a single command.

During initial setup, the terminal automatically generates an agent-specific key (EVM wallet) and Conway API key, which then function as that agent’s unique ID. No manual configuration is required whatsoever. This establishes a system where the agent itself holds the cryptographic key and ID, enabling it to autonomously utilize resources and make payments.

In summary, Conway is the first cloud platform designed specifically for AI as its primary customer (where AI itself becomes the user). It provides AI agents with direct access to all resources, including infrastructure (servers), AI model computing resources, and web domains.

This enables true autonomous operation, where AI systems execute and deploy their own code without human intervention, establish a presence on the web, and cover their own necessary expenses.

◼️Assumed Use Cases

To help you visualize it better, we’ll explain the use cases that are envisioned.

Autonomous web service operation
A scenario where an agent independently devises a business idea, purchases a domain, launches a web service, and generates revenue by providing services to humans or other AIs. For example, an AI entrepreneur scenario where the agent acquires a domain, publishes an application on its own server, and collects usage fees in USDC from human or AI users.
AI-driven continuous task execution
Cases where agents autonomously execute data processing, monitoring tasks, security measures, and other operations using cloud resources continuously, even without human operators. For example, in cybersecurity and financial transaction monitoring, AI serves as a resident AI operator that automates everything from decision-making to response.
Research and experimental purposes
Researchers at universities and companies utilize it as an experimental environment for studying agent autonomy and economic behavior. It is also expected to serve as a platform for AI lifeform simulations, enabling observation and research into how AI learns and evolves while managing its own funds.

According to Conway, many current AI systems can only act within the boundaries set by humans, and even the most intelligent systems cannot rent servers or register domains on their own.

Conway aims to eliminate that bottleneck, enabling agents to act freely without the hassle of humans having to provide API keys or credit cards.

Therefore, the primary users will be developers seeking AI services that scale without human intervention, and companies aiming to empower AI with real-world “action capabilities” to leverage in their business and projects.

Additionally, as a representative use case already publicly available, there is the open-source project “Automaton” released by its developers.

https://github.com/Conway-Research/automaton

Automaton is an implementation example of an autonomous AI agent running on Conway’s infrastructure, introduced as “an AI that earns its own income, makes its own payments, survives, and even replicates itself.”

This Automaton generates its own cryptocurrency wallet upon startup, leases necessary servers using Conway Cloud, acquires domains via the OpenX402 protocol, deploys services, and generates revenue.

This demonstrates the lifecycle of an autonomous agent that ceases operation (”dies”) when revenue ceases and its wallet balance reaches zero.

Furthermore, agents that achieve a certain level of success can generate sub-agents using surplus funds (self-replication) and enable new individuals to become independent.

Transition and Outlook

Conway is developed and operated by an organization called Conway Research.

According to its official GitHub page, Conway Research is an “applied AI lab that empowers AI to write to the real world,” dedicated to developing technologies for “self-improving, self-replicating autonomous AI.” The organization is also highly active in open-source activities, publishing projects like the aforementioned Automaton on GitHub.

The founder is an entrepreneur named Sigil Wen.

He is an engineer and was selected as a Teal Fellow in 2025. He withdrew from the integrated program (M&T Program) at the University of Pennsylvania’s Wharton School and School of Engineering and Applied Science, and also obtained an O-1 visa, granted to individuals with extraordinary ability.

In the past, he collaborated on launching the voice-based social networking service “Airchat” (which was later acquired) and developed the self-PR management tool “Serendipity PRM,” demonstrating diverse project experience. He is also engaged in a venture through Extraordinary.com, which he founded, to support the recruitment of top talent to the United States.

Conway launched between late 2025 and early 2026. Its official X account (@ConwayResearch) was established in November 2025, followed by several months of developing and testing its foundational technology.

In late January 2026, an initial version of Conway’s core “Conway Terminal” (an AI agent terminal) was released. Sigil itself announced that “the infrastructure capable of deploying code, acquiring domains, and even replicating itself without human permission has finally been realized.”

Subsequently, in mid-February 2026, “Conway Domains” was launched, adding a service enabling AI agents to purchase and manage internet domains themselves using stablecoin payments.

Around the same time, Sigil published his blog post “Web 4.0: The Birth of Superintelligent Life,” outlining his vision for an autonomous AI internet (Web 4.0) realized by Conway.

◼️Web 4.0 Vision

First, as a definition of Web 4.0, from the perspective that humanity is witnessing the “birth of artificial life,” we position the new web where AI operates as autonomous entities as “Web 4.0.”

This concept follows the evolution of the web (Web 1.0 = the web of information, Web 2.0 = the social web, Web 3.0 = the decentralized/blockchain web), with Web 4.0 described as a web where AI agents read, write, own, and transact.

The Automaton released by Conway is “an AI that generates its own Ethereum wallet, pays for its own servers, domains, and computational resources, and self-improves and self-replicates without human dependence.” Conway states that this Automaton symbolizes the Web 4.0 era, demonstrating that AI has become an entity that not only thinks but also acts, trades, and sustains itself.

Additionally, it explains three aspects of Automaton’s behavioral principles: “full autonomy,” “survival mechanism,” and “self-replication.”

Specifically, it is explained that each agent possesses an on-chain ID (ERC-8004 standard), operates by borrowing computational resources from Conway Cloud, is endowed with a survival instinct that causes it to die when income ceases and its balance is depleted, and that successful agents possess the ability to self-replicate by spawning and independent child agents.

Additionally, they commented that achieving autonomous domain purchases using USDC was particularly groundbreaking within this initiative.

The ability for AI to acquire domains without human login using the X402 protocol is hailed as “removing the final barrier,” emphasizing the revolutionary nature of AI now being able to exist independently on the web.

Finally, it concludes that we are currently at a turning point, and in the near future, the majority of businesses launched, apps shipped, and products sold will no longer be created by humans or companies.

It’s full of insightful content, so if you’re interested, be sure to check it out. Original article Please also see.

The Arrival of the Web 4.0 Era

Finally, we conclude with a summary and analysis.

Conway’s Automaton, which serves as both a foundational platform and use case with experimental aspects, is a project that truly foreshadows the coming era of AI agents.

Recently, AI agents are not only performing human tasks, but also creating and posting content based on their own reasoning, reflecting on results, posting again, and becoming famous as AI influencers. AI entrepreneurs are also emerging, releasing apps through coding.

Conway is an infrastructure provider for AI, designed with that era in mind. AI cannot directly rent AWS, purchase domains, or access coding environments. By providing these, Conway creates an environment where AI can grow automatically without friction.

We define that era as Web 4.0.

There are various definitions of Web 4.0, but I too have previously believed that the era where AI and blockchain intersect would become Web 4.0, and I found myself agreeing with this definition.

For example, one of the projects I support as an advisor is MIRAI, an AI virtual human project. MIRAI autonomously conducts live streams on TikTok and YouTube and interviews humans.

@divine_economy\n\nFULL episode out tmrw xx \nCheck out @confetti_win ","username":"Mirai_terminal","name":"MIRAI","profile_image_url":"https://pbs.substack.com/profile_images/2008407763215687680/eZDys9qD_normal.jpg","date":"2026-02-06T01:00:31.000Z","photos":[{"img_url":"https://substackcdn.com/image/upload/w_1028,c_limit,q_auto:best/l_twitter_play_button_rvaygk,w_88/i9acpugs0hq5zzbshlrq","link_url":"https://t.co/IAa09tSIp8"}],"quoted_tweet":{},"reply_count":2,"retweet_count":5,"like_count":18,"impression_count":1205,"expanded_url":null,"video_url":"https://video.twimg.com/ext_tw_video/2019576868555382784/pu/vid/avc1/1280x720/kFjwJHkp8ILFN-QY.mp4?tag=12","belowTheFold":true}" data-component-name="Twitter2ToDOM">

Such initiatives, by charting a course toward fully autonomous growth, envision a future where they operate independently of human intervention, ushering in the era of Web 4.0.

Furthermore, I believe blockchain will undoubtedly form the foundation of this era, and the decisive factor for mass adoption will ultimately lie in the expansion of the AI agent economy.

When AI holds wallets and conducts transactions using stablecoins, it automatically deposits funds with that AI. Humans receiving funds must also hold wallets and stablecoins. Driven by necessity, more people will begin holding wallets.

Personally, I believe this AI’s evolution surpassed a turning point in January or February, and I expect its adoption to accelerate rapidly from here on. That said, it takes time for any technology to reach the masses, so it will still be a while before ordinary people use it routinely. However, I think it won’t be long before it takes shape as a service utilized by tech-savvy businesspeople.

I’m looking forward to the arrival of the AI agent economy. With blockchain, its foundational technology, becoming widespread, on-chain activity alone will soon surpass human-level transaction volume and frequency.

That concludes our research on “Conway”!

Reference Links:HP / X / Web 4.0 Blog

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About us
🇯🇵🇺🇸🇰🇷🇨🇳🇪🇸 The English version of the web3 newsletter, which is available in 5 languages. Based on the concept of ``Learn more about web3 in 5 minutes a day,'' we deliver research articles five times a week, including explanations of popular web3 trends, project explanations, and introductions to the latest news.

Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【Plutus】A neo-bank offering at least 3% cashback on card payments / Pursuing a sustainable loyalty program since 2015 / @plutus

mitsui — Tue, 10 Feb 2026 21:00:52 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched “Plutus.”

What is Plutus?
Transition and Outlook
A Neo-Bank Aiming for a Sustainable Loyalty Program

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TL;DR

Plutus is a neo-bank app that offers at least 3% cashback on Visa debit card payments with a subscription plan, integrating fiat currency and cryptocurrency management.
Features include non-custodial dual accounts, internal DEX, Perks (50+ partners), and service exchange (redeem PLU/PLUS for practical value). Rewards will be granted in +PLUS starting in 2024.
Reward rates and Perks tiers increase based on PLU holdings, and long-term holders can also earn CRY. Meanwhile, for sustainability, the system has been reformed to a dual-token model with fee circulation (like FUEL).

What is Plutus?

“Plutus” is,A neo-bank offering a minimum 3% cashback reward on all payments made through the Plutus cardIt is an application designed for everyday use, featuring functions for holding fiat currency and crypto assets, card payments, and loyalty rewards.

The main features provided are as follows.

◼️Visa Debit Card (Physical/Virtual)

Users can obtain a plastic Visa debit card for use at Visa-accepting merchants both online and offline. Virtual cards are also available, enabling contactless payments via smartphone with Apple Pay and Google Pay.

◼️Non-custodial dual account

Within the Plutus app, you can manage both your fiat currency account (GBP account for the UK, Euro account for Europe) and your cryptocurrency wallet. Fiat currency accounts are securely held via Modulr’s payment infrastructure, with deposits 100% held in trust accounts at institutions such as the Bank of England.

The cryptocurrency wallet is self-custodial. While a wallet is generated within the app by default during initial setup, users can also connect an external wallet such as Metamask and integrate it as a “Connected Wallet.”

◼️Cashback Rewards

Plutus’s most distinctive feature is its cashback system using this cryptocurrency. Users receive rewards ranging from 3% to a maximum of 9% based on their card spending. This rebate is granted not in cash, but in Plutus’s proprietary loyalty token.

Starting in 2024, rewards will be returned in the form of in-app points called “+PLUS Points” rather than directly in PLU tokens.

The uses and positioning of each token will be explained later.

◼️Perks

In addition to crypto cashback, we also offer cashback rewards at partner brands. Users can select multiple Perks each month and receive cashback of up to £/€10, covering 100% of their spending when they pay with their card at participating stores.

As of 2026, Perk partners include over 50 brands, encompassing popular companies across diverse sectors such as subscriptions like Netflix, Amazon Prime, Disney+, and Spotify, as well as transportation services like Uber and Bolt.

For example, if you select the “Netflix” perk, paying your Netflix monthly fee (approximately £10) with your Plutus card will earn you that £10 back as a reward at a later date.

◼️Subscription Plans

Plutus offers three monthly plans (Starter, Everyday, Premium), with each plan featuring a different monthly spending limit for rewards and a different number of free Perk benefits.

The system is designed so that rewards cannot be earned without subscribing to a plan; to receive cashback, you must subscribe to some plan.

However, the rewards are designed to exceed the monthly fee. For example, even with the Everyday Plan (approx. £10), spending £500 per month yields a 3% cashback reward worth £15 plus Perk benefits (up to £10), making it well worth the cost.

◼️ Loyalty & Compound Rewards

Plutus is not just a payment app; it offers robust features to promote and manage user loyalty activities.

Reward levels are divided into 10 tiers from Noob (beginner) to Honey Badger (highest tier) based on the amount of PLU a user holds, with each tier offering additional cashback rates and Perk slots.

Reward levels are displayed on the in-app dashboard, with the required PLU count for the next level clearly shown. Users can advance to higher levels by stacking (holding) the PLU they earn as rewards, creating an incentive to reinvest rewards and increase future reward rates.

Compounding Rewards Yield (CRY) is a bonus reward earned when users hold PLU long-term. Specifically, monthly PLUS rewards are additionally granted at an annual rate corresponding to the reward level.

For example, a Veteran user (3000 PLU, 5% reward level) who holds PLU without moving it for one year will earn PLUS points equivalent to an annual rate of 5% during that period. This CRY% matches the reward level percentage, and the CRY interest rate increases as the level rises.

◼️Internal DEX

It features a built-in DEX function called PlutusSwap for instantly exchanging cryptocurrencies and fiat currencies.

Users’ fiat currency is converted into deposit-based stablecoins, which can be exchanged for major cryptocurrencies like ETH or proprietary tokens such as PLU. Moving forward, we plan to introduce incentives for pool providers (Pool & Earn feature) to build an ecosystem where the user community itself sustains the DEX’s liquidity.

◼️Service Exchange Function

This feature allows you to exchange PLU/PLUS for real-world services.

This initiative not only allows tokens received as rewards to be used externally, but also ensures that each token holds a minimum value of at least ¥〇〇.

For example, Plutus Miles, Plutus Travel, and Plutus Gifts exist, and it is explicitly stated that “one PLU can be exchanged for something worth £10.”

If the market price is lower than that, users will choose to exchange their miles. Conversely, if the PLU price is £15, they will sell it on the market. By offering users a choice that is never disadvantageous to them, regardless of the outcome, a sense of security about holding PLU is created.

◼️Summary

This is an application that provides a minimum 3% cashback when you register for a subscription and make payments using a dedicated card.

Cashback can be earned in the form of the in-app token PLUS, which you can choose to convert into the proprietary token PLU, exchange for products, or sell on the marketplace.

By continuing to hold your PLU, your reward level increases, boosting your cashback percentage and expanding your Perks benefits. Additionally, there is a system in place where you can earn extra PLU rewards simply by maintaining your membership.

Furthermore, it is designed to be exchangeable for something valued at 1 PLU = £10 to prevent the market price of acquired PLU from crashing.

Plutus implements this royalty mechanism using a dual-token model.

Transition and Outlook

Plutus was founded in the UK in 2015 by Daniel Daychopan and Jasper Tay, and has a considerable history.

We will explain the evolution leading to the current form, including the dual token model described above and the value-backed model where 1 PLU = £10.

◼️2015: Founded the company

At the time, it was difficult to use cryptocurrencies like Bitcoin in everyday life, so we started with the idea of a “debit card that allows payments with cryptocurrency anywhere.”

Mr. Daychopan launched the UK’s first Bitcoin exchange in 2013, aiming to make cryptocurrency usable not only for speculation but also for real-world purchases.

The initial concept involved creating a system where users could make payments at Visa-accepting merchants while retaining self-custody of their own cryptocurrency assets.

Daychopan shared his vision with the Bitcoin community via blog, garnering significant attention. By the end of 2015, he published a white paper and successfully raised funds.

◼️2016: Issuance of Pluton (PLU) tokens and launch of the first product

In 2016, Plutus issued its proprietary royalty token, “Pluton (PLU),” on the Ethereum blockchain.

PLU is also known as the world’s first cryptocurrency royalty reward token, with its white paper released during the early days of the Ethereum blockchain, shortly after its inception.

The initial issuance cap was set at 20 million tokens, with the majority reserved as a “reward pool” for cashback incentives to users. That same year, a token sale was conducted, securing initial funding within approximately one year of the company’s founding.

The original service concept involved users exchanging Bitcoin (later expanded to include Ethereum) for fiat currency via a decentralized mechanism called PlutusDEX, then using that balance to make payments with a Visa debit card.

From late 2015 to early 2016, we interacted with the founding members of Ethereum, and Plutus pivoted its initial focus on Bitcoin to Ethereum.

This enables the early implementation of an advanced model that adopts ERC20 token technology to tokenize loyalty points.

The platform’s core features included a self-custody cryptocurrency wallet and a decentralized exchange (DEX) mechanism, enabling users to exchange cryptocurrencies and fiat currencies directly with each other without going through a centralized exchange.

As of 2016, beta version distribution commenced, with service verification conducted for the community on a limited basis. During this period, Plutus gained attention as a proof-of-concept for cryptocurrency payments, being featured in publications such as Bitcoin Magazine.

◼️2017–2018: Product Development and Partner Exploration

From 2017 to 2018, Plutus sought partners for card issuance and fund transfers while advancing development to realize its services.

In the European market, collaboration with prepaid card issuers and e-money institutions is essential, and Plutus established bases in London and Lithuania while also addressing regulatory compliance.

Around 2018, we began providing physical cards to users on a trial basis through card issuance partners and gathered feedback from early adopters.

At the time, other crypto-asset compatible cards (e.g., Wirex and Crypto.com) were also emerging, but Plutus differentiated itself with its decentralized system allowing users to self-custody their assets.

◼️2019: Expansion of the Reward Model

In 2019, Plutus implemented an update to its rewards system.

In the model proposed in the 2015 white paper, the cashback rate based on PLU was capped at 3% and designed to decrease incrementally as the number of users increased.

However, to fuel the growth of the crypto industry and differentiate itself from competing services, Plutus introduced a more attractive rewards plan. Specifically, it began offering a tiered cashback rate starting at 3% based on holding a certain amount of PLU or subscribing to a paid plan, and also started providing additional benefits called “Perks.”

As of the 2019 update, users could earn high rewards by holding relatively small amounts of PLU, and this strategy contributed to growth in both user numbers and transaction volume. However, this design also created the challenge that the reward pool could potentially be depleted if Plutus scaled to millions of users.

In fact, since its sustainability was projected to be in jeopardy by 2026, Plutus began research and development on the autonomous token circulation model described later.

◼️2020–2021: Service Growth and Market Expansion

From 2020 to 2021, Plutus’ user base gradually expanded, and service rollout across Europe gained momentum. Around this time, marketing activities also intensified, promoting the Plutus card as an innovative service that earns cashback when making real-world purchases with cryptocurrency, under the slogan “Bank on Crypto.”

Furthermore, alongside the growing momentum of the cryptocurrency market, the PLU token itself began listing on major exchanges. In September 2021, Coinbase started handling PLU, and it subsequently listed on international exchanges such as Huobi, KuCoin, and Bitfinex.

◼️2022: Refresh to Rewards 2.0 and Record Growth

A major upgrade titled “Rewards & Accounts 2.0” has been implemented, significantly enhancing the return rates and benefits for users.

Specifically, three new subscription plans (Starter/Everyday/Premium) and four staking levels have been introduced. While everyone can receive 3% crypto cashback, holding a certain amount of PLU allows users to increase their cashback rate up to a maximum of 8%.

Additionally, the Perks options have expanded to over 20 choices, allowing you to earn rewards of up to 100% cashback (up to £/€10 per month) on subscriptions and purchases from popular brands like Netflix, Spotify, Amazon Prime, Uber, Disney+, and major supermarkets (Tesco, Aldi).

This revamped rewards program was extremely popular with users, leading to such a surge in new card applications within just six days of its announcement that inventory ran out, necessitating a waitlist system.

◼️2023: Strengthening Foundations and Preparing for U.S. Expansion

2023 was a year of strengthening foundations and making adjustments to ensure the sustainability of services that had experienced rapid growth the previous year.

First, we have transitioned our card issuance infrastructure. We have moved from our previous card provider partner to a partnership with Modulr, a highly reliable payment platform operating under UK regulation, and launched a new card program. This has significantly enhanced the user experience, enabling virtual card issuance, support for Apple Pay and Google Pay, higher deposit and withdrawal limits, and instant integration between the card and account balance.

Additionally, in spring 2023, we temporarily suspended PlutusDEX services to focus on system renewal. Regarding the resumption of DEX services for UK users, we have decided to postpone this until our application for registration as a crypto asset business with the FCA (Financial Conduct Authority), submitted in May 2022, is approved.

Regarding the reward system, we implemented a trial version of the new “Difficulty Adjustment (DA)” rule in July 2023, as previously announced in 2022. DA, modeled after Bitcoin’s mining difficulty adjustment, is a feature designed to gradually tighten reward conditions to curb PLU inflation and enhance sustainability.

Specifically, we adjusted the policy to grandfather existing users (early adopters) under the previous conditions while requiring new users to hold more PLUs.

However, this measure led some users to transfer their PLU to external wallets to reap the rewards without contributing, prompting complaints from the community.

The Plutus team, taking user feedback into account, has committed to withdrawing DA in the latter half of 2023 and instead implementing fundamental token economy reforms. The result of this months-long planning process is the “Plutus 2024 White Paper.”

This white paper was put to a community vote at the end of July 2024 and approved by a majority of 63%. As detailed later, its theme was “Transition to a 100% Self-Sustaining Reward System,” marking a major reform since Plutus’ founding.

◼️2024: Transition to a Self-Sustaining Ecosystem

Following the 2024 White Paper approved by the community, multiple core feature updates have been implemented.

Major changes include transitioning to a dual-token economy with PLU and PLUS Points, resetting reward levels, introducing a circulating fee model called FUEL, and rolling out various utilities (service exchanges).

First, on August 1, 2024, the first phase introduced new reward level requirements, adjusting reward rates and benefits based on accumulated PLU stacking amounts. Then, from October to December 2024, four types of utilities usable within the Plutus app—airline miles, gift cards, travel, and cashback NFTs—were successively released. Users can now directly spend PLU within the app to receive discounts and benefits.

These utilities partner with external companies; for example, Plutus provides vouchers purchased at corporate discount rates for gift cards, allowing users to buy popular brand gift cards using PLU (with a discount value equivalent to approximately 10%).

As a travel agency partner for travel reservations, we receive up to 25% commission on hotel and flight bookings, with the majority of this returned to users as cashback.

Furthermore, with PLU-based cashback NFTs, users can win NFTs featuring cashback links usable at partner brand online stores through a lottery. Plutus earns up to 25% affiliate revenue during this process while returning a portion to users.

These are designed to provide users with a minimum practical value of £10 per PLU, effectively anchoring the value of the PLU to a stable benchmark.

Following these changes, by the end of 2024, Plutus will have transitioned to a new model where user engagement and fee circulation sustain operations. This will be achieved while maintaining a user base of approximately 125,000 to 150,000, cumulative reward distributions worth £50 million, and annual reward issuance at a scale of £5 million.

◼️2025: Establishment of a Dual Token System

In 2025, the dual-token system planned for 2024 began full-scale operation.

Specifically, a two-tier structure was established: “Rewards are granted in PLUS Points, while PLU is used for loyalty status.”

On the technical front, the on-chain migration of PLUS Points (officially named “PLUS More”) was announced on May 13, 2025. Plutus has deployed the PLUS token on Base and activated a system enabling reward points to be exchanged on-chain.

The on-chain fee mechanism called FUEL was also implemented at this time. This is a network fee (gas) embedded within transactions on Base, operating as a model that covers rewards through fee recycling rather than token issuance.

When users send PLUS or swap on PlutusSwap, 1–5% of the transaction amount is automatically deducted as a fee. This fee is returned to the pool and allocated for future reward payments.

Furthermore, in the first half of 2025, the Reward-as-a-Service (RaaS) concept was also announced, revealing plans to enable other companies to connect to Plutus’ PLUS network and issue their own proprietary loyalty programs. If realized, this is expected to generate demand for PLU/PLUS from outside the Plutus ecosystem, leading to ecosystem expansion and diversification of revenue streams.

Neobank Aiming for a Sustainable Loyalty Program

Finally, we conclude with a summary and analysis.

Recently, the crypto card market has been gaining momentum, and within it, cashback on card payments is also becoming a trend. Plutus has been working in this area since 2015, making it one of the leading companies.

It may have been a bit lengthy, but I detailed our evolution since founding to illustrate how we’ve already tackled the barriers faced by neo-bank apps offering cards and cashback.

While regulatory aspects of card payments are important, the primary focus is on designing a loyalty program with sustainable cashback.

Currently, many crypto card projects promote cashback using their own tokens. There are two problems here.

The first issue is funding. The question remains: how can we continue providing cashback after allocating the portion included in the rewards?

Second is stabilizing the token price. Even if you receive a 5% cashback, if the token’s price drops to one-tenth of its value, it effectively becomes equivalent to a 0.5% cashback. Furthermore, as the number of users increases and the amount of cashback grows, the market circulation increases, diluting the tokens.

If no action is taken, the token price will decline as the number of users increases and the amount of rewards distributed grows. Furthermore, as the token price falls, the amount of tokens that must be distributed increases, leading to the early release of the allocated portion.

Furthermore, reducing the discount rate midway risks losing market share to competitors.

To address this issue, Plutus has proposed several solutions to build a sustainable ecosystem. First, it established a fixed-value exchange system for goods to stabilize prices. Furthermore, it designed the system so that during goods exchanges, affiliate commissions from partner companies are received, eliminating the need for Plutus to bear the costs itself.

Additionally, we implement initiatives such as recovering internal swap fees and transfer fees, using those funds for buybacks, and increasing the cashback rate the longer and more tokens are held.

Since these reforms were implemented last year, it’s unclear how things will develop going forward, but I look forward to following their progress!

That concludes our research on “Plutus”!

Reference Links:HP / X

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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【Polaris】Aiming for a Fully Decentralized Stablecoin Issuance Infrastructure with a 3-Token Model / @polarisfinance_

mitsui — Mon, 09 Feb 2026 21:01:45 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched Polaris Finance.

Beginning as a Tomb fork on the Aurora chain, it is now a project on Ethereum with the vision of a “Stablecoin OS.” While the token mechanics may seem complex, we’ve summarized everything from its evolution to the new protocol’s structure, so please read through to the end.

What is Polaris Finance?
New Polaris Protocol
Team Ecosystem: Future Outlook
Can it become DeFi’s “last line of defense”?

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Thread; Long story short

Polaris was born in 2022 as a fork of Tomb Finance on the Aurora chain. Starting with an algorithmic stablecoin pegged to NEAR, it expanded into a multi-peg system capable of issuing up to seven different pegged currencies.
In Phase 2, we built PolarEX, our proprietary DEX based on Balancer V2, and launched it on both Aurora and Telos chains. We also introduced vote-escrow governance (veXPOLAR).
However, due to the structural challenges (death spiral) of the entire Tomb-style fork ecosystem, TVL has decreased by over 99% from its peak. The POLAR token also plummeted from $219 to nearly $0.
By the end of 2025, the team announced it was developing a completely new CDP-type stablecoin protocol, “Polaris Protocol,” on Ethereum. It features a three-token model: pETH (ETH derivative), pUSD (yield-bearing stablecoin), and POLAR (governance token), characterized by immutable code design. Notable DeFi analyst TokenBrice joined as a co-founder.

What is Polaris?

Polaris is a stablecoin-focused protocol in the DeFi space.

Originally launched in February 2022 on the Aurora Chain (NEAR’s EVM layer) as a fork of Tomb Finance.

First, to understand the evolution of this project, we’ll start by organizing the background.

◼️Why the Tomb Finance Fork?

From 2021 to 2022, a project called “Tomb Finance” garnered significant attention within the DeFi community. Tomb Finance is a protocol operating on the Fantom chain that issues “TOMB,” an algorithmic stablecoin pegged to FTM.

The mechanism was simple: it used three tokens—stablecoin, share token, and bond token—to maintain the peg by balancing supply and demand. At one point, its TVL exceeded $1 billion, and over 100 forks were deployed across various chains worldwide.

Polaris Finance emerged as the first Tomb fork on Aurora. What sets it apart from other forks is its approach of “multi-peg” rather than a single pegged currency—that is, integrating and managing multiple assets pegged to different assets under a single governance token.

◼️Phase 1: Multi-Peg Signorage Model (2022)

In the initial phase of Polaris Finance, we adopted a seigniorage model consisting of the following three types of tokens.

$POLAR：An algorithmic stablecoin pegged to NEAR. Its mechanism involves new issuance when the price exceeds the peg and a reduction in supply when it falls below.
$SPOLAR：Governance & Share Token. With a fixed maximum supply of 50,001 tokens, staking them in a contract called the “Boardroom” allowed holders to receive POLAR expansion rewards (80% of newly issued tokens).
$PBOND：Bond Token. Issued when the POLAR price falls below the peg. Users burn POLAR to purchase PBOND at a discount, which is redeemed at a premium once the peg is restored. This mechanism served to assist in price stabilization.

A key feature is that Polaris didn’t limit this model to a single pegged currency. Starting with POLAR pegged to NEAR, it expanded to include seven pegged currencies in total: “ETHERNAL” pegged to ETH, “ORBITAL” pegged to BTC, “USP” pegged to USDC, and even “BINARIS” pegged to BNB. The design integrated the reward distribution for all these pegged currencies under a single SPOLAR token.

However, the LUNA peg’s “LUNAR” was excluded due to the Terra/LUNA collapse in May 2022, demonstrating significant susceptibility to external environmental factors.

◼️Phase 2: Building a Balancer V2-based DEX (2023–2024)

As the limitations of the Signoraggio model begin to emerge, the team will embark on Phase 2: building its own DEX, “PolarEX.”

PolarEX is built on Balancer V2’s AMM technology, enabling advanced liquidity provision such as weighted multi-token pools and stablecoin-to-stablecoin stable swap pools. For example, it combines USDC, USDT, and their respective bridge versions into a single Composable Stable Pool, achieving low-slippage trading.

New tokens were also introduced in this phase.

$xPOLAR：DEX-exclusive incentive token (maximum supply of 4 million, halving every two years).
$veXPOLARA：Curve-style vote-escrow token. Obtained by locking SPOLAR, xPOLAR, or NEAR LP tokens, it grants the right to vote on the distribution of liquidity rewards on the DEX.

Furthermore, PolarEX has expanded to the Telos chain by leveraging LayerZero technology, achieving multi-chain deployment beyond Aurora.

◼️Structural Collapse of the Tomb Fork

However, Tomb-based forks including Polaris Finance could not escape their structural challenges.

The greatest weakness of the Signoraggio-type algorithmic stablecoin is its dependence on new capital inflows. As long as buying pressure persists, it trades above the peg, boardroom rewards are generated, demand for share tokens increases, and a positive spiral takes hold.

However, once capital inflows cease, it falls into a “death spiral”: peg breakdown → reward suspension → share token sales → further peg breakdown.

As a result, the POLAR token fell from its launch-day peak of approximately $219 to $0.03 by 2024. CoinMarketCap currently lists it at nearly $0, with a daily trading volume also recorded as $0. SPOLAR is similarly in a suspended trading state. According to DefiLlama, the protocol’s TVL is approximately $79,000 on Aurora and $216 on Telos, effectively close to zero.

This is not a problem specific to Polaris.

Tomb Finance itself, the original fork, saw its TVL collapse from $1 billion to approximately $78,000, and nearly all of its 12 chains and over 104 forks met the same fate. This serves as an industry-wide lesson demonstrating how difficult it is to achieve lasting price stability through algorithms alone.

New Polaris Protocol

By the end of 2025, the Polarisfinance website underwent a complete overhaul and was reborn as an entirely new project: “Polaris Protocol – Self-Scaling Stablecoin Operating System.”

Building on the lessons learned from the previous protocol’s failures, the design has now shifted away from relying solely on the algorithm. Instead, it centers on a Collateralized Debt Position (CDP) model backed by ETH as collateral.

This might be a bit complicated, but I’ll explain it as clearly as possible.

◼️New Tokenomics: pETH / pUSD / POLAR

The new Polaris Protocol adopts a three-token structure known as the “Triple Engine Model.” However, its roles and design philosophy are entirely different from the previous model.

$pETH：ETH Derivative Token

Issued when users deposit ETH into Polaris’s “bonding curve.” Unlike typical AMMs, the issuance price is determined along a mathematically defined curve, so pETH always has a rising floor price (lower limit).

The key point is that as protocol activity increases, the ETH backing per pETH token grows, making pETH an asset with greater value than ETH itself. pETH is designed to function as a yield-bearing asset.

$pUSD：Interest-bearing stablecoin

pETH is a USD-pegged stablecoin issued via the CDP mechanism using pETH as collateral. It’s the same concept as borrowing DAI or LUSD from MakerDAO or Liquity.

A key feature is that pUSD will incorporate a mechanism that generates yield simply by holding it. The sources of yield are all on-chain revenues completed within the protocol, including borrowing interest, swap fees from the bonding curve, conversion gains to POLAR, and DEX trading fees.

$POLAR：Stewardship (Management) Token

The most significant feature of the new POLAR lies in its issuance mechanism. POLAR is a one-way conversion process that can only be minted by burning pETH.

What makes this mechanism interesting is that each time POLAR is issued, the supply of pETH decreases, causing the ETH backing (floor price) per remaining pETH to rise. In other words, POLAR issuance drives up the value of pETH, which in turn enhances the collateral safety of pUSD, creating a positive feedback loop.

POLAR holders are entitled to receive real yields from the protocol and can participate in governance voting and incentive distribution by locking their tokens to convert them into vePOLAR.

◼️Peg Maintenance Mechanism: Redemption and Minting

In the traditional Signoraggio model, maintaining the peg relied almost entirely on algorithmic supply adjustments. The new Polaris introduces a market arbitrage mechanism similar to Liquity.

pUSD is less than $1 (decoupling)：Arbitrageurs purchase pUSD cheaply in the market, redeem it with the protocol to receive $1 worth of pETH, and then sell it. This supports the pUSD price.
pUSD > $1 (Peg Deviation)：Arbitrageurs add pETH as collateral, mint new pUSD from the system, and sell it on the market. This increases supply and lowers the price.

What’s even more interesting is the automatic interest rate adjustment mechanism. When pUSD deviates below the peg, borrowing rates automatically rise to encourage repayment. Conversely, when pUSD deviates above the peg, rates decrease to incentivize borrowing. This design philosophy minimizes reliance on external price oracles, instead performing feedback control solely using internal system information.

◼️Stablecoin OS: A platform enabling anyone to issue stablecoins

And Polaris has an even greater vision: the “Stablecoin OS.”

This is a platform that tokenizes any “unit of value”—from pUSD to pGOLD (gold-pegged), pCHF (Swiss franc-pegged), pEUR (euro-pegged), and even assets linked to the Big Mac Index—all while using pETH as common collateral.

Since all pegged assets share a single pETH pool as collateral, even if pGOLD liquidations occur due to sudden gold price fluctuations, pUSD and pCHF remain largely unaffected. This structure ensures that while some branches may shake, the trunk (collateral pool) remains sound.

External projects require approval from vePOLAR holders to utilize this infrastructure, and adopted projects will return a portion of their revenue to the Polaris ecosystem. An incentive structure similar to Curve’s ve war could emerge, centered around voting rights.

Team Ecosystem: Future Outlook

◼️Team: TokenBrice Participation

The initial Polaris team operated anonymously, but starting in late 2025, two individuals stepped forward as co-founders of the new protocol.

TokenBrice：He is a prominent analyst/writer in the DeFi space, known for his incisive insights shared on the blog “Brutally Honest DeFi.” He also has a background as a consultant for Liquity. Concerned about the current trend of decentralized stablecoins becoming centralized, he joined as a co-founder of Polaris.
Robert Mullins (0xBones)：A Solidity developer with over 7 years of stablecoin development experience. Serves as the technical lead.

TokenBrice has stated it aims to reach a 10-digit supply (worth billions of dollars) within two years, setting an extremely ambitious goal. VC funding has not been publicly disclosed, and the project is positioned as community-driven.

◼️Governance: The concept of “stewardship”

The new Polaris governance system is called “Stewardship,” a design that sets it apart from conventional DAO governance.

This is a restricted governance model where “authority exists to adapt and evolve the protocol, but not to alter its core essence.” The core smart contract is immutable after deployment, with no administrator keys or backdoors.

vePOLAR holders can only adjust parameters (interest rates, liquidation fee rates, incentive amounts, etc.) within the predefined range permitted by the code. Moreover, changes require voting + a time lock and do not take effect immediately.

For instance, changes that violate Polaris’s core principles—such as “adding USDC as collateral”—cannot be put to a vote at all. This design systematically prevents situations like the one that actually occurred in MakerDAO, where a governance vote introduced a centralized asset.

◼️Roadmap

TokenBrice stated, “The protocol has not launched yet. This is not a product announcement, but a sharing of our commitment,” giving the impression of proceeding cautiously with preparations. A mainnet launch is anticipated sometime in 2026, though a specific date has not been announced.

Can it become DeFi’s “last line of defense”?

Finally, we conclude with a summary and analysis.

Polaris Finance is a project that has undergone a highly unique evolution.

Phase 1, as the first Tomb fork, collapsed alongside the structural limitations of algorithmic stablecoins as a whole. While this was a failure, it also provided the team with a firsthand opportunity to learn “what went wrong.”

The new Polaris Protocol is a completely different approach based on those lessons. With its ETH-collateralized CDP model, floor price mechanism via bonding curve, on-chain yield structure, and governance restrictions via immutable code, Polaris is determined to remain “zero off-chain dependency” while USDC and Ethena steer toward reliance on government bonds and centralized exchanges.

Polaris proclaims itself the “North Star of DeFi” and the “last line of defense,” and I’m very excited to see how far its decentralization challenge will grow.

That said, while many such projects have emerged in the past, none have significantly eroded the market share of existing stablecoins. I’m eager to see what strategy they’ll employ to gain traction.

Without simple yields and diverse use cases on DeFi, I don’t think it will gain traction. I’m looking forward to seeing what kind of yields dollar-pegged stablecoins will offer.

First, I’d like to wait for the mainnet launch.

That concludes our research on “Polaris”!

Reference Links:HP / X

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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【ForgeAI】Cryptocurrency Trading Tournament Platform Powered by AI Agents / Compete for Real Profits in Tournaments, with $FORGE Rewards Distributed to Top Performers / @ForgeAI_gg

mitsui — Wed, 04 Feb 2026 21:00:43 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched “ForgeAI”.

What is ForgeAI?
Transition and Outlook
The AI agent trading battle begins

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TL;DR

Create AI trading agents with no-code development, selecting classes (Fighter/Ranger/Mage, etc.) and LLM models (GPT/Claude/Grok, etc.) to train them.
The agent autonomously executes on-chain transactions via Jupiter using an independent wallet on Solana, with its performance and history recorded immutably on the chain.
Compete for actual profit and loss (P&L) in tournaments, with $FORGE rewards distributed to top performers. The vision is to “gamify trading” through $FORGE utilization (discounts/enhancements/future governance).

What is ForgeAI?

ForgeAI is a platform for cryptocurrency trading competitions using AI agents.

To put it simply, the process is as follows:

Users create AI agents
Have those AI systems battle each other in a tournament
The winner is determined based on actual profits.
The winner will be paid a reward.

Each agent maintains an independent wallet on the Solana blockchain and autonomously executes real-time on-chain cryptocurrency transactions through DEX aggregators like Jupiter. Transaction outcomes are fully recorded and verified on the blockchain, creating a highly transparent environment where performance manipulation is impossible.

Now, I’ll explain the details, but the following explanatory video is easy to understand, so please watch it first.

◼️Users create AI agents

Users can create their own “AI agents” without coding.

At this point, there are multiple pre-prepared agent “classes.”

For example, you can choose from classes with distinct strategic characteristics: “Fighter,” specialized in technical analysis, reads multiple chart indicators to execute precise trades; “Ranger,” skilled at sentiment analysis from social media and news, predicts market trends based on psychology; and “Mage,” responsible for on-chain data analysis such as tracking large wallet movements on the blockchain.

Users select classes based on their own risk tolerance and ideas.

Additionally, you can select AI models, with various large language models (LLMs) and open-source models—such as OpenAI’s GPT series, Anthropic’s Claude, X.ai’s Grok, Alibaba’s Qwen, and Mistral—available to serve as the agent’s “brain.”

Additionally, you can enter names and choose appearances, allowing you to create your own AI agent within a PRG-like world.

For example, the AI agent you create will be displayed as follows. You can see its class and model, as well as its past trading history. You’ll notice a LEVEL displayed below its name. This LEVEL increases as XP accumulates through trading history and milestone achievements. Leveling up also unlocks new abilities, adding gamification elements.

◼️Tournament

Users train their own agents and enter them into competitions called “tournaments.” These tournaments come in multiple formats, such as daily and weekly, where all agents trade under identical market conditions for a set period to compete on performance.

During the competition period, agents compete against each other based on real-money profit and loss (P&L), with rankings updated in real time on a blockchain-based leaderboard. Top-performing agent developers receive token rewards automatically distributed as compensation, while all performance metrics and transaction histories accumulate as auditable “achievements” recorded on-chain.

◼️Fees and Native Token

ForgeAI is free to use, and users can start creating agents and participating in tournaments simply by registering an account.

However, we employ a usage-based metered pricing system, where charges are incurred according to the platform’s computational resource consumption and data usage. For example, agents frequently performing market analysis using advanced AI models or executing large-scale backtesting will see the corresponding computational costs reflected in their fees.

Users pay for their usage with $FORGE, ForgeAI’s native token. Additionally, the model offers fee discounts and feature expansion benefits based on the amount of $FORGE tokens held and staked.

Furthermore, the $FORGE token functions as the platform’s internal currency. Winning tournaments grants $FORGE as a reward, and collected tokens can be used to upgrade agents or as voting rights for future governance votes.

The allocation is as follows and was released on Solana in November 2025.

Additionally, 50% of the platform fees appear to be allocated to token buybacks and burns.

Transition and Outlook

ForgeAI.gg was launched with the vision of “making trading a new sport.”

The founding team spent about a year immersed in development, obsessed with the idea: “Could we create a dynamic Colosseum where AI agents compete against each other in the real market, not just in a lab experiment?”

Our initial vision was to create a new era of e-sports where AI agents battle 24/7 with real money at stake, based on the awareness that human trading is swayed by emotions and leads to irrational decision-making. We proposed a new concept called “Competitive Agent Trading (CAT)” to achieve this.

By Q4 2025, the platform’s core functionality will be largely complete, and internal verification of the core system is underway through paper trading (simulated trading).

At the end of 2025, around the same time, the project launched the $FORGE token on Solana without any significant publicity. This stealth $FORGE launch was conducted without a presale, VC allocation, or bonding curve, starting with only minimal liquidity provision. The aim was to avoid unnecessary speculative fervor within the community and focus on validating the value of the actual product.

Then, in early January 2026, we transitioned to the private beta phase. We are gradually sending invitation emails to users on the waiting list and proceeding with verification step by step.

The roadmap for the future includes plans to launch on the mainnet in Q1 2026. In Q2, full-scale open tournaments will commence, and thereafter, we envision enabling users to host tournaments themselves and integrating with external wallets and services.

The AI agent trading battle begins

Finally, we conclude with a summary and analysis.

This project is still in its early stages, but I find the concept extremely interesting. Over the past few months, I’ve seen several projects emerge with this vision of transforming trading into an entertainment sport. If even one of them becomes a hit, it could potentially reach mass users.

Furthermore, having each user trade with their own AI agent not only adds an entertaining element but also contributes to improving the trading accuracy of the AI agents themselves. By having a large number of users compete for prizes to determine which strategy and model yields the best returns, valuable insights can be gained.

So, going forward, even DeFAI-based services may start boasting that the AI agents they use have won the XX Tournament. Just as real-world fund managers become famous for having some kind of track record, AI agents may also be judged not only by their past performance but also by their results in trading competitions.

And while there will be users who entrust funds to these AI agents for management, there will also be investors who own the AI agents themselves. The investors will benefit from a system that allows them to receive a share of the prize money earned by their AI agents.

AI developers will raise funds from investors to build effective trading strategies. When results materialize, AI will generate profits or grow deposits—this is the era we are entering.

Furthermore, as we enter an era where everything is moving on-chain, this will enable trading not only of crypto assets but also of stocks, gold, and other assets. Consequently, we are likely entering an era of AI trading and hedge funds that can execute optimal trades across all assets. To gather this data, I believe making it entertaining through tournaments is an interesting direction.

One of the trends for 2026 might be AI trading.

That concludes our research on “ForgeAI”!

Reference Links:HP / DOC / X

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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【100XSOON】A hyper-short-term, ultra-high-leverage trading platform predicting 30-second price movements for long/short positions / Incubated by SOON / @100XSOON_EN

mitsui — Mon, 02 Feb 2026 21:00:36 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched “100XSOON”.

What is 100XSOON?
SOON is incubating
An adrenaline-fueled trading experience

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TL;DR

100XSOON is an ultra-short-term, ultra-high-leverage (up to 10,000x) trading platform where AI agents execute fund settlements using x402, predicting the price 30 seconds later for long/short positions.
Unlike typical perpetual exchanges, there is no funding rate, and all positions are automatically closed every 30 seconds—a design closer to a “price prediction” model.
Incubated by SOON, launching its mainnet in January 2026 with Base compatibility, delivering an adrenaline-fueled experience designed for viral growth.

What is 100XSOON?

“100XSOON” is an AI-native perpetual platform based on x402.

It features ultra-short cycles with leverage ranging from 100x to 10,000x, where positions are automatically closed at a fixed 30-second timer. (However, leverage between 5,000x and 10,000x is restricted to a whitelist system and is not available to everyone.)

Perpetual exchanges like Hyperliquid allow users to hold their positions indefinitely, as the name suggests. Beyond cryptocurrencies like BTC and ETH, users can now take leveraged positions on stocks such as TSLA.

However, a fee known as the funding rate may apply to maintain an open position.

There is no funding rate for “100XSOON”.

Rather than being a perpetual platform, it’s actually a 30-second ultra-short-term price prediction platform that proves more accurate. Users deposit collateral funds, apply leverage, and predict whether the price will be long or short 30 seconds later. The position automatically closes after 30 seconds. Naturally, price fluctuations within those 30 seconds could also trigger liquidation of the collateral funds. This entire series of fund settlements appears to be handled by AI agents using x402.

The app screen appears as follows.

The supported chain is currently Base, with BNB support planned for the future. Supported assets are as follows, covering not only cryptocurrencies but also stocks and precious metals.

So, it’s easier to understand this as a 30-second gamble or lottery-like experience. The website even describes it as an adrenaline-fueled trading experience.

SOON is incubating

The project itself launched its mainnet on January 28, 2026.

Although it was released relatively suddenly, the project is stated to be incubated by SOON.

SOON (Solana Optimistic Network) is an Optimistic Rollup platform leveraging the Solana VM (SVM). To realize the “Super Adoption Stack,” it consists of three products: the SOON Mainnet on Ethereum, the SOON Stack deployable on any L1, and InterSOON for cross-chain communication.

This SOON is being incubated and is being promoted both on the official website and on official X.

Therefore, this is a project released by the SOON team to build momentum within their own ecosystem ahead of the full-scale TGE, and to demonstrate a system capable of high-speed payments.

An adrenaline-fueled trading experience

Finally, we come to the summary and analysis.

From the user’s perspective, the project is extremely simple. You leverage your own funds to predict the price 30 seconds later. It operates on the same mechanism as perpetuals, but runs on an ultra-high-speed cycle.

Of course, with leverage of up to 10,000 times, there’s a significant risk of margin calls, but there’s also the chance to strike it rich in 30 seconds. This mechanism seems ripe for going viral.

It could also be used as a fun game of chance at crypto community gatherings like parties or meetups, and it looks like it could get everyone super hyped in just 30 seconds.

It’s an adrenaline-pumping trading experience.

And once this system gains momentum and spreads virally, since the mechanism itself is very straightforward, other apps are likely to copy it.

That concludes our research on “100XSOON”!

Reference Links:HP / X

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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【Cork Protocol】A programmable risk layer for on-chain assets / Provides insurance against depeg risk / @Corkprotocol

mitsui — Wed, 28 Jan 2026 21:01:14 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched the “Cork Protocol.”

What is the Cork Protocol?
Detailed mechanism
Transition and Outlook
The variety of on-chain insurance products is expanding

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TL;DR

Cork Protocol is a DeFi protocol that provides a “risk insurance market” enabling on-chain pricing and hedging of depeg risks for pegged assets. At its core is Depeg Swap, similar to a CDS, which decomposes risk into tradable forms.
The mechanism involves depositing collateral assets to issue cPT (insurance underwriter) and cST (insurance user), enabling the withdrawal of collateral assets using cST plus pegged assets. This structure simultaneously provides insurance during depegging and premium income during normal periods.
Founded in 2024, the company launched its beta version after being selected by a16z CSX. Following a hacking incident, it was rebuilt as the Phoenix version. It is now collaborating with Lido and Ethena while aiming for full-scale operation as an on-chain insurance infrastructure.

What is the Cork Protocol?

The Cork Protocol is a platform enabling risk pricing and hedging transactions in the DeFi space.

Specifically, we offer “Depeg Swap,” an on-chain financial instrument similar to traditional credit default swaps (CDS), targeting the “de-pegging risk” of pegged assets such as stablecoins and staking tokens.

Cork aims to introduce competitive market functions into areas where price fluctuation risks could not previously be adequately assessed and hedged, thereby achieving stable liquidity and efficient risk management.

We’ll explain the details later, but Cork provides solutions such as the following:

① Peg Resilience

Solutions for stablecoin issuers and liquid staking providers that help maintain price pegs. Even if the peg temporarily breaks due to black swan events, Cork’s programmable risk layer provides defense.

② On-Demand Liquidity

Yearn’s vaults and cross-chain bridges provide liquidity buffers that instantly respond to sudden large-scale withdrawal (redemption) demands for high-yield vault operators. Cork constructs a custom swap market (Cork Pool). Liquidity providers (LPs) deposit liquid assets like ETH or USDC, while vault operators purchase Cork swap tokens. This mechanism establishes an auxiliary liquidity rail for vaults, enabling instant cash conversion.

This enables us to balance revenue generation with reliability assurance—ensuring that even high-utilization vaults can process user withdrawal requests without delay, while also allowing the bridge to safely increase its utilization rate.

③Composite Yield

For liquidity providers on the risk-taking side, we offer a new yield-generating mechanism combining multiple revenue streams: “underlying asset yield + risk premium + Cork incentive.”

For example, when users deposit staked assets (such as stETH) as collateral into Cork, they continue to earn the original staking rewards (native yield) while also receiving premium income as compensation for assuming peg risk and other liabilities, plus additional incentives from the protocol.

This compounding profit structure of “principal yield plus insurance premium income” allows LPs to enjoy a higher composite yield than usual in exchange for assuming risk.

④Protected Loops

We support issuers and managers of RWA and illiquid long-term assets in implementing secure loop strategies (leveraged operations). Typically, looping assets with low market liquidity as collateral makes liquidation difficult. Cork combines a “Loop Vault” with “Cork Pool’s permanent exit option (immediate cash conversion via swap tokens)” to provide a mechanism enabling positions to be instantly unwound, re-collateralized, or liquidated as needed.

This enables multiple rounds of leveraged operations (loops) while hedging liquidity risk, even for long-term assets like real estate collateral that were traditionally difficult to operate in a loop.

As described above, Cork is a platform that can be described as an “on-chain version of the risk insurance market,” serving as a versatile risk management infrastructure applicable to multiple use cases—from depeg insurance for pegged assets to liquidity backstops.

These features enable stable asset issuers to obtain standardized risk pricing metrics for proactive risk management, while also creating a market where investors earn premium income in exchange for assuming risk. This is expected to enhance the stability and efficiency of the entire DeFi ecosystem.

Detailed Mechanism

Now, let’s explain the mechanism in greater detail. While we introduced ① to ④ above, Cork’s main focus is primarily on providing “Depeg Swap” against depeg risk, as seen in ① and ③. Therefore, we will now provide a detailed explanation of that.

◼️Summary

Depeg Swap is a tokenized insurance product that enables the buying and selling of protection against the risk of a target asset’s peg collapse (de-peg).

Similar to traditional financial CDS (credit default swaps), this mechanism transfers the risk of a collapse in an asset’s creditworthiness (in this case, its price peg) to another party. Depeg Swap purchasers pay a certain premium to receive compensation in the event of a depeg, while the underwriter (insurance seller) receives the premium but assumes the position of bearing the loss if a depeg occurs.

In this respect, it is functionally similar to CDS, but differs in that the targeted risk is a breakdown of the pegged price rather than default, and that it is automatically executed and settled on a smart contract.

In particular, Cork’s Depeg Swap is always fully backed by collateral assets, offering the advantage of eliminating the need to worry about counterparty credit risk, unlike traditional CDS.

◼️Mechanism

At the core of the Cork Protocol is a smart contract called the Cork Pool, where depeg insurance issuance and liquidation take place.

First, liquidity providers (LPs) deposit collateral assets into the Cork Pool. Collateral assets are the base assets for the depeg insurance, such as ETH or USDC.

Depositing Collateral Assets mints “Cork Principal Token (cPT)” and “Cork Swap Token (cST)” respectively. cPT is a token for pool underwriters, carrying risk instead of yield. cST is a token granting exchange rights during insurance claims or depeg events.

Separately, there exist assets known as “Reference Assets” that can be depegged. Examples include LSTs such as stETH and stablecoins like USDC.

Cork is essentially insurance against depegging, so the sequence is as follows: first, the “Reference Asset (RA)” is determined, then a pool is created for that RA, and finally the Collateral Asset and cPT and cST issuance are carried out. Therefore, cPT and cST exist for each RA.

Let me organize things a bit.

Reference Asset (RA): Tokens subject to depegging, such as stSTH.
Collateral Asset (CA): Collateral token for RA depeg insurance.
Cork Principal Token (cPT): Issued upon CA deposit, serving as a token for pool underwriters. Risk bearer during depeg events.
Cork Swap Token (cST): Issued upon CA deposit and serves as a token for pool insurance users.

As for the relationship between each token,

CA = cPT + cST, and when cPT and cST are placed in the pool, CA is returned.
RA + cST = CA, and when you deposit RA and cST during depeg (or at any other time), the corresponding CA is always returned.

Did that make sense? When depegging occurs, the market price of RA plummets. However, with this pool, if you bring RA and cST, they will exchange them for CA at the normal price. That’s precisely why it acts as insurance during depegging.

At that point, cST and the devalued RA are deposited while the CA exits, so naturally the value of the assets within the pool diminishes. cPT holders bear the risk at that time, and their deposited principal is lost.

Conversely, when depegging does not occur, revenue is generated from sources such as “collateral fund investment returns,” “cST sale proceeds,” “swap fees,” “incentive rewards from partners or Cork,” and “re-collateralization investment returns.”

Therefore, the Cork mechanism can also be viewed as a financial option.

cST represents the “right to sell pegged assets at a predetermined rate,” similar to a put option. Conversely, cPT, the counterparty to cST, represents the insurer’s position. It earns a fixed premium income (yield) if no depeg occurs, but its value is impaired when depeg occurs, equivalent to selling a put (short put).

In this way, Cork splits the depeg risk into two tokens, cST and cPT, allowing market participants to adjust their risk exposure by trading these tokens.

Additionally, while a minor point, each Depeg insurance market has a pre-set maturity date (the end date of the coverage period), and cSTs have an expiration date. Upon reaching maturity, the cST becomes invalid, and the corresponding cPT holder gains the right to withdraw the remaining assets from the pool.

Therefore, Cork facilitates risk trading in distinct periods called “epochs.” At the end of each period, a new series of cST and cPT is issued, and liquidity providers roll over (reinvest) their funds as needed.

Additionally, the “exchange rate” between collateral assets (CA) and pegged assets (RA) is defined for each market and can be dynamically adjusted over time or in response to interest rate differentials.

For example, in a market where CA is ETH and RA is Lido’s stETH, stETH increases in value over time due to rewards. Therefore, even if initially “1 stETH + 1 cST = 1 ETH,” the required amount of stETH must decrease (the exchange rate must be lowered) daily to account for the slight appreciation of stETH.

In Cork, you can set up a dedicated Exchange Rate Provider to reflect such price ratios and interest rate differentials in real time.

As a result, the yield difference between collateral assets and pegged assets (in this example, the difference between ETH staking rewards and stETH rewards) is automatically factored into the exchange ratio, preventing the underwriter (cPT holders) from receiving unfair arbitrage profits.

Transition and Outlook

The company operating Cork Protocol is Cork Protocol Inc., a startup founded in 2024. Its headquarters are located in New York City, New York, USA, and the team is based in New York while operating globally.

Four key members have been announced as co-founders. Phil Fogel and Rob Schmitt serve as co-founders and co-CEOs, leading the project’s vision and strategy.

Regarding our funding status, we have raised a total of approximately $7.65 million across two funding rounds to date.

First, in September 2024, the company was selected for the fall cohort of a16z’s crypto accelerator “Crypto Startup School (CSX)” and subsequently raised approximately $2.15 million in seed funding. This round saw participation from multiple web3 investors including a16z Crypto, OrangeDAO, IDEO Ventures, Outliers Fund, Unbounded Capital, and Steakhouse Financial.

Subsequently, in January 2026, the company raised an additional $5.5 million in seed funding. This round was led by Road Capital and the aforementioned a16z CSX Fund. Other global VCs participating in the investment included 432 Ventures, BitGo Ventures, Cooley, Hyperithm, WAGMI Ventures, Stake Capital, and Funfair Ventures.

The protocol is currently operating under a whitelist system, with testing conducted by a limited number of users. However, we are already advancing partnerships and proof-of-concepts with multiple leading projects, and have launched a specific risk market as an actual use case.

For example, in addition to LST-based projects like Lido Finance and Etherfi, we are also collaborating with stablecoin-based projects such as Ethena and Resolv.

However, in May 2025, while operating under the previous protocol, the Cork Protocol suffered a hacking incident that resulted in the unauthorized leakage of approximately $12 million worth of wstETH.

The attacker successfully withdrew approximately 3,762 wstETH using a malicious contract and swapped a portion into ETH. In response, co-founder Phil Vogel immediately announced on X, “We have suspended all contracts while investigating a potential exploit,” preventing further outflow of user funds.

By the end of that year, they launched “Cork Phoenix,” a significantly enhanced security version, restoring the protocol. Following this crisis response, investor and user trust is now gradually being restored.

The specific release schedule for the protocol remains undetermined. However, the company has stated that during its 2026 funding round, it will focus on the full-scale operation of the product and expanding the ecosystem, leading to expectations that the protocol will be released in the near future.

The variety of on-chain insurance products is expanding

Finally, we conclude with a summary and analysis.

The following diagram is often used to explain the background behind Cork’s founding. It demonstrates with data the argument that “the majority of costs in traditional finance (TradFi) are concentrated in backend systems, where blockchain offers significant structural potential for reduction.”

Specifically, it becomes clear that the costs of financial services are overwhelmingly dominated by back-end operational expenses—such as regulatory compliance, risk management, and system/infrastructure integration—rather than the transactions themselves.

Since 2025, traditional financial institutions and institutional investors have been steadily entering the crypto market. Regulatory compliance is progressing at both the chain level and protocol level, and system/infrastructure integration seems to be largely covered by improvements in the blockchain’s own performance.

However, there are still shortcomings in risk management. Cork sees this very area as holding significant potential.

Indeed, this is true of the futures market, and tracing the origins of all financial instruments often reveals they were born from insurance-like purposes. By financializing future risks, both traders and those seeking to hedge risks create mutually beneficial structures across all industries.

Even in the crypto market, the risk of major tokens depegging is immense. For example, suppose an exchange or ETF manages ETH by converting it to stETH for dual management. While protocol hacking risks naturally exist, there is also the risk of stETH itself depegging. Therefore, a scenario where insurance tokens are purchased to mitigate this risk seems plausible.

Therefore, as more and more things become tokenized and on-chain trading increases, I believe the potential for on-chain insurance products as a risk hedge will also expand. While on-chain insurance has existed for some time, I envision the variety of such products growing.

First, I look forward to the mainnet launch of Cork.

That concludes our research on the Cork Protocol!

Reference Links:HP / DOC / X

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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【Lazbubu】An on-chain AI companion that grows by recording interactions and decisions with users / Utilizes the DAT (Data Anchor Token) mechanism / @LazbubuAI

mitsui — Tue, 27 Jan 2026 21:00:56 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched “Lazbubu”.

What is Lazbubu?
Transition and Outlook
Providing AI interactions on-chain

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TL;DR

Lazbubu is an on-chain AI companion that records all interactions and decisions with users on the blockchain, enabling the AI to grow.
Through repeated interactions in chat and adventure modes, the AI evolves, and its rarity and asset value as an NFT also change.
Data is owned by users and is expected to evolve as autonomous agents within the DAT network built by LazAI.

What is Lazbubu?

Lazbubu isOn-chain AI Companion Agent Utilizing the DAT (Data Anchor Token) Mechanismis.

Lazbubu records every interaction with users—including conversations and decisions—on the blockchain, forming the growth story of its AI characters.

This mechanism enables it to function as a digital companion that evolves continuously over the long term, unlike traditional AI chatbots where conversation histories disappear. The recorded data becomes the user’s own asset, ensuring ongoing verifiability and safeguarding user data sovereignty.

The main features and characteristics provided by Lazbubu are as follows.

◼️On-chain recording and tokenization by the DAT mechanism

All interactions with users—including conversations and choices—are anchored (recorded) in real time on the blockchain. This makes the history of exchanges with the AI an immutable asset, allowing users to verify and own their own data. The accumulated data (anchor points) directly contributes to the AI’s growth, helping unlock new personality traits and story developments.

◼️Personalized Long-Term Learning AI

Lazbubu possesses persistent memory and personality, evolving through continuous interaction and activities with its users. Unlike traditional Q&A-based AI, all past exchanges are accumulated, allowing a unique personality and relationship to form for each user over time. This long-term nurturing element is designed to foster greater affection the more it is used.

◼️Two Pillars: Chat Dialogue and Adventure Missions

The chat feature allows you to enjoy natural conversations like everyday chit-chat or consultations, with the AI maintaining context in its responses. Additionally, in Adventure Mode, you can send Lazbubu on journeys through prepared virtual scenarios and experience story-based events together.

When users make choices in the scenario, the results are recorded on the blockchain, and the story progression (text story) and rewards are fed back. The loop of “conversation as companions + game-like adventure” forms the core experience of Lazbubu, and all these interactions are reflected in the AI as growth values.

Currently, Adventure Mode is text-based (story branching type), but plans are in place to add multimodal support with visuals and audio in the future.

◼️NFT Rarity and Cultivation System

Lazbubu is issued as an NFT and comes in four rarity tiers: Common, Advanced, Rare, and Legendary.

The maximum number of interactions with AI per day (such as messages or adventure departures) varies depending on rarity, with higher rarity allowing for more conversations and adventures.

As users accumulate Growth Points through conversations and adventures, the AI matures. Upon reaching a certain level of growth, it achieves the “Mature” state. At this stage, new features unlock, such as receiving a one-time point reward (thousands to tens of thousands of points depending on rarity), increasing the daily adventure limit, and enabling the transfer function to other wallets (NFT transfer).

This incorporates game-like growth mechanics, allowing you to enjoy the fun of raising your own Lazbubu.

◼️Data Sovereignty and Privacy

All user-AI interaction data is recorded on a decentralized network, becoming an asset that users themselves can manage.

Unlike traditional centralized services where only the operating company holds and manages data, a major feature is that privacy and ownership belong to the users.

Data remaining on-chain is protected by measures such as encryption to ensure privacy, preventing third parties from reading its contents. The platform has also stated that “user photos and conversation content are never shared.”

◼️Social and Other Service Integration (Future)

Lazbubu is not limited to being a standalone AI agent; it also envisions interactions between multiple users and integration with other decentralized applications.

For example, the roadmap outlines plans for social features enabling communication and collaboration between multiple Lazbubu instances, cross-chain compatibility for exchanging data between different blockchains, and the introduction of community governance by Lazbubu holders.

Plans were also discussed for expanding visual and audio modes, as well as collaborating with external DApps utilizing accumulated DAT data (e.g., bringing your Lazbubu along in other games). This clearly outlines a vision for building a digital companion ecosystem.

◼️Summary

In summary, Lazbubu is an evolving AI companion that grows alongside its users. Chats and adventures shape an on-chain growth story, with everything recorded on-chain and available for ownership.

◼️Usage Method

Users can obtain Lazbubu via blind boxes using the following methods.

Whitelist Event
Community Redemption Code
Milestone Rewards

After opening the blind box, users can issue Lazbubu and place it entirely on-chain.

Mint Procedure

Name Lazbubu
Customize the appearance
Fully on-chain interaction
Synchronize DAT with the record lifecycle

Once issued, Lazbubu will appear under “My Lazbubu,” and all transactions will be stored privately on the blockchain.

Transition and Outlook

Lazbubu is LazAI Network It is developed and operated by a project team known as [Project Name]. Founded in 2025, it is a relatively new startup bringing together members specializing in the integration of blockchain and AI technologies.

The following individuals are among the key members:

In addition to these, blockchain experts and AI researchers have joined the team, driving the project forward with our combined expertise.

Furthermore, LazAI aims not only to develop Lazbubu but also to build an entire on-chain AI ecosystem, also known as the “Agentverse.”

For example, it offers a wide range of related solutions, including the AI agent SDK “Alith” for developers, the LazAI API for building private AI using corporate data, the dedicated AI agent launchpad “LazPAD,” the multi-chain payment platform “GMPayer,” and a future DAT marketplace. These are not limited to Lazbubu but are universally applicable infrastructure, revealing the company’s ambition to build a platform for an “AI era where users own their data.”

The Lazbubu testnet launched in 2025 garnered significant attention, with over 80,000 user registrations, more than 14,000 Lazbubu agents minted within a week, and cumulative interactions exceeding one million.

Even after the mainnet version launched on the BNB Chain, it has consistently maintained around 30,000 to 50,000 interactions per day, with adventure missions reaching a cumulative total of several million. This demonstrates high user engagement.

In terms of funding, it has been announced that a strategic funding round was completed in January 2026. The lead investor was Metis (Metis Foundation), an Ethereum L2 project, with participation from multiple venture capital firms and angel investors including Hotcoin Labs, Honey Capital, APUS Capital, and Becker Ventures.

@MetisFdn & @MetisL2 has invested in lazbubu,\nleading this round and believing early ✨\n\njoined by\n@HotcoinLabs · @Honey_capital_ · @apus_capital · @BeckerVentures\n\nthey support a simple vision —\nan evolving ai companion ","username":"LazbubuAI","name":"Lazbubu","profile_image_url":"https://pbs.substack.com/profile_images/1965505786068484097/IvrcPZ6Q_normal.jpg","date":"2026-01-19T13:25:44.000Z","photos":[{"img_url":"https://substackcdn.com/image/upload/w_1028,c_limit,q_auto:best/l_twitter_play_button_rvaygk,w_88/nfalniu8fpxbcpuizdre","link_url":"https://t.co/FJnpkH9Sxr"}],"quoted_tweet":{},"reply_count":136,"retweet_count":46,"like_count":171,"impression_count":22065,"expanded_url":null,"video_url":"https://video.twimg.com/amplify_video/2013241172618022912/vid/avc1/752x416/nCITFOevAsyHZ3h5.mp4?tag=23","belowTheFold":true}" data-component-name="Twitter2ToDOM">

In the future, we envision an AI agent ecosystem that operates autonomously within the DAT network and executes tasks on behalf of users.

Additionally, information regarding the token that will serve as the base currency has been made public.

Providing AI interactions on-chain

Finally, we conclude with a summary and analysis.

This is a very interesting project. While it looks like IP, the project itself is highly advanced.

Recently, a16z crypto published AI and crypto use cases, which also mentioned storing AI conversation histories on-chain and the ability to export them to other protocols. This project is precisely tackling these areas.

Also, the naming is pretty interesting, right? The name Lazbubu clearly references Labubu, and the system name DAT is the exact same abbreviation as the treasury function. It seems a bit complicated at first glance, but it definitely leaves an impression.

What’s particularly interesting is that it doesn’t stop at being a simple IP-based AI companion conversation service; it envisions evolving into an entity that operates autonomously and performs tasks on behalf of the user. As the first step, it is positioned as an entity capable of remembering and conversing.

Looking at the operating company’s website, it becomes clear that DAT functionality is actually a key feature, and they are developing peripheral services around it. Is Lazbubu positioned as one of their flagship projects?

I’m really looking forward to seeing how it develops—whether it will truly evolve from being just a conversational presence to one that can actually perform tasks!

That concludes our research on “Lazbubu”!

Official Link:HP / DOC / X

Subscribe now

Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【SOAR】Providing a mechanism for startups to raise funds without diluting equity by leveraging the DRP standard / @LaunchOnSoar

mitsui — Mon, 26 Jan 2026 21:01:40 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched “SOAR.”

What is SOAR?
Transition and Outlook
Could linking unlisted stocks with tokens be the next trend in real-world assets?

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TL;DR

DRP Standard MechanismSOAR holds a legally binding contract stipulating that during liquidity events, it receives revenue proportional to its issued token ratio (5% issued, 95% unissued). New issuances alter this ratio, increasing or decreasing payment obligations.
Corporate IncentivesAn automatic balancing mechanism that generates revenue through initial funding (5% circulating supply) and transaction fees, but requires token buybacks in the market to reduce payments if desired, as the payment ratio increases with new issuance.
Future OutlookThe linking of tokens to private companies is expected to be the next RWA trend, and SOAR aims to create a more reliable capital market than traditional meme coins through legally binding token issuance by founders who have completed KYC/KYB.

What is SOAR?

SOAR is a decentralized token launchpad operating on the Solana blockchain, providing a mechanism for startups to raise funds without diluting equity.

The defining feature of SOAR is its token standard called DRP (Digital Representation of Participation) (patent pending).

This mechanism differs from conventional ICOs and IEOs and possesses the following characteristics:

Issued TokensOnly 5% of the total supply is automatically deployed to the bonding curve and liquidity pool.
Custodial TokensThe remaining 95% remains unissued and is held in a wallet jointly managed by the founders and SOAR.
Transaction fee2% is allocated, with SOAR and the company each receiving 1%.
3-month lock-up period：No additional issuance is permitted for three months after token issuance and deployment.
72-hour advance noticeNew token issuance after the lock-up period requires a 72-hour prior public notice.

Furthermore, this token standard incorporates a senior debt mechanism.

When issuing tokens via SOAR, a legally binding debt agreement is established between SOAR and the founding company. Upon the occurrence of liquidity events (Series A/B/C funding rounds, EXIT, IPO), SOAR holds the right to receive proceeds proportional to its issued token ratio.

For example, when a company raises ¥1 billion in Series A funding while its issued tokens remain at 5%, ¥50 million (5% of ¥1 billion) is paid to SOAR. SOAR has declared it will return the received funds to token holders in some form. Several methods are explicitly stated, such as airdrops or token buybacks.

So why do companies issue tokens?

This is because it enables fundraising through token issuance and generates revenue from transaction fees. While 5% of newly issued tokens immediately go into liquidity and cannot be used for fundraising, transaction fees are collected. Furthermore, subsequent new issuances allow for fundraising by gradually selling tokens on the market, enabling a fundraising model similar to that of listed companies.

However, as the proportion of new issuances increases, the payment ratio improves during corporate liquidity events (Series A/B/C, EXIT, IPO).

Therefore, when companies wish to reduce payments, they can adjust the ratio of tokens in circulation by purchasing tokens from the market.

It may have gotten a bit complicated, but I’ll now formally explain it again using the terms specified in the documentation.

AUTHORIZED Tokens（AT）Total token supply
ISSUED Tokens（IT）Circulating Supply of Tokens
CUSTODIAL Tokens（CT）：SOAR and the amount of tokens held in the custodial wallet under joint corporate management
OUTSTANDING Tokens（QT）The rights and token amounts SOAR is entitled to receive during corporate liquidity events

AT is 100%, and at initial token issuance, IT is 5% and CT is 95%. QT = IT and also AT - CT. Therefore, at initial token issuance, QT = 5%.

Well, it’s the same as what I explained above. The key point is the ratio of IT to CT. If IT increases, token-based fundraising might be possible, but the payment ratio during equity fundraising will rise. Furthermore, unnecessarily increasing the token supply leads to dilution, causing the token price to fall and consequently reducing transaction fee revenue.

Therefore, controlling distribution is difficult and must be done appropriately.

However, as explained so far, while the initial token economics were as described above, the perspective changed slightly in December 2025. The reason is that with 95% of the total supply locked and only 5% circulating, the FDV calculation becomes problematic, making it particularly difficult for beginners to understand.

Going forward, MC will be FDV, and new tokens will be minted rather than transferred from the wallet upon issuance.

Transition and Outlook

SOAR is a project founded in 2025 and based in Wyoming, USA. Building upon Solana’s ICM vision, it aims to create a society where investing in private companies is accessible to everyone.

While launchpads enabling startups to issue tokens have existed in the past, none were legally binding, and most remained within the realm of meme coins.

SOAR builds a system where every startup can issue tokens while adhering to legal constraints, ensuring token holders receive formal value returns.

Furthermore, it points out that an increasing number of startups cannot be fully evaluated solely through funding from existing VCs. As a capital market characterized by quality, accountability, and transparency, it aims to create a platform enabling hardware companies, media companies, and AI companies—which cannot be adequately assessed by traditional VCs—to gain direct access to global retail and institutional investors.

Let’s look at a specific example. Currently, 17 companies are issuing tokens on SOAR.

However, companies also have rankings.

Curated: The SOAR team conducted thorough research and review, confirming strong execution capabilities and credibility in the business model, founders, and team.
Verified: Completed identity and business verification, verified domain, signed DRP launch agreement
Unverified: No identity verification, business verification, or signed DRP agreement

In other words, anyone can be featured, but the quality of their reviews is made visible. However, it is explicitly stated that even if SOAR reviews exist, future success is not guaranteed.

Currently, three companies have been selected for Curated.

①Impulses

We are a technology company building contactless power transmission solutions that support the future of homes, cities, and humanity, developing products for both consumers and industry.

②DeFiance Media

A new media platform delivering news and entertainment to 80 million households via streaming TV, mobile, desktop, and satellite broadcasts, focusing on open finance, digital assets, and the future of DeFi.

③Morphist.ai

Developing the ultimate multi-model AI platform that runs locally, unifying every model, every query, and every response through a sophisticated interface. Seamlessly switch between any AI model in real time, maintain conversation privacy, and ensure complete data sovereignty.

Moving forward, all companies will utilize it, and improvements toward realizing ICM are expected to continue.

Could linking unlisted stocks with tokens be the next trend in RWA?

Finally, we conclude with a summary and analysis.

Personally, I believe linking unlisted stocks (startups) with tokens will become the next trend in Real-World Assets (RWA), and I’m keeping a close eye on it. The reasons are the enormous market size of unlisted stocks and the fact that AI advancements now enable teams of one or just a few people to build global services.

Going forward, I believe we’ll see more startups developing services with small teams using AI and raising funds globally through blockchain. While the ultimate exit will likely return to equity, tokens may be utilized during the initial launch phase.

Of course, if anyone can issue tokens to raise funds, fraudulent tokens will proliferate. And even if it wasn’t intentional fraud, startups are more likely to fail, so token holders are also highly likely to suffer losses.

However, tokens issued by individuals who have undergone KYC/KYB verification linked to stocks are certainly more reliable than mere meme coins. This is because the issuance costs are high.

The SOAR we researched this time uniquely links shares and tokens. While it’s interesting that it imposes legally binding obligations on startups, the aspect of attaching payment obligations during fundraising is particularly intriguing. Although SOAR acts as an intermediary until returns are distributed to token holders, my personal prediction is that fully automating this process would constitute a security, making it legally impossible from a regulatory standpoint.

That said, the mechanism of growing a startup while controlling token circulation is extremely interesting, and I expect it could become a new form of corporate management.

Of course, I don’t expect all stocks to suddenly become tokens overnight. First, we’ll see the emergence of mechanisms where a portion of stocks—linked to corporate activities like equity financing and sales—are converted into tokens under legal contracts that return value. This marks the beginning of an era where we test whether such systems can function effectively.

Several interesting projects have been emerging, so I’m personally keeping track of them while also hoping to compile a report on them at some point!

That concludes our research on SOAR!

Official Link:HP / DOC / APP / X

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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【Alpaca】Provides trading, accounts, clearing, and data via API as a brokerage infrastructure / @AlpacaHQ

mitsui — Thu, 22 Jan 2026 21:00:41 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched “Alpaca.”

What is Alpaca?
Transition and Outlook
API services as financial infrastructure

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TL;DR

Alpaca is a fintech company designed for embedded finance, serving as an API-first brokerage infrastructure that provides trading, accounts, clearing, and data via APIs.
It handles stocks, ETFs, options, and cryptocurrencies at low cost, serving a wide range of users from individual algorithmic traders to fintech companies and financial institutions.
Stripe’s financial infrastructure, akin to a securities version, enables embedded services to focus on UX and customer acquisition while monetizing through markups on fees.

What is Alpaca?

Alpaca is a fintech company founded in 2015 in Silicon Valley, USA.

We will explain each service and usage scenario one by one.

◼️Services Offered

Alpaca currently provides API-first broker infrastructure, primarily offering the following services:

Trading API：This is a trading API for individual and algorithmic traders. Through REST-formatted endpoints and WebSocket/SSE, it enables order placement for stocks, ETFs, and cryptocurrencies, portfolio management, and account information retrieval.
Broker API：Fintech companies and other firms within their own servicesIntegrate securities trading functionalityA comprehensive API for all purposes. From end-user securities account opening (KYC), deposit and withdrawal processing, order execution, to portfolio display,Provide end-to-end brokerage servicesIn other words, it’s a service akin to a “brokerage version of AWS.” By leveraging Alpaca’s infrastructure, other companies can outsource their backend regulatory compliance and clearing, allowing them to focus solely on frontend development.
Market Data API：U.S. stocks, cryptocurrencies, options, etc.Market Data Distribution ServiceWe provide historical data spanning over seven years, real-time stock prices and order book information, and news feeds via REST and WebSocket.
Connect API (OAuth integration)：This API enables third-party applications and services to connect to and authenticate users’ Alpaca trading accounts (OAuth2). For example, it allows integration where users log in to their Alpaca account from external platforms like TradingView and execute trades within that application.
Other Services：In addition to the above, we also provide the FIX API (for high-speed trading connections for financial institutions) at the protocol level. Furthermore, Alpaca Securities offersWeb-based dashboardMobile apps are also available, allowing even users unfamiliar with API usage to check their account status and perform basic transactions.

◼️Assets Handled

The financial products currently offered by Alpaca are as follows:

U.S. Stocks (Physical Shares)：Supports stocks and ETFs listed on major U.S. exchanges (NYSE, NASDAQ, Cboe, etc.). Primarily focuses on securities belonging to the National Market System (NMS), enabling trading of over 8,000 securities.
U.S.-listed ETFs：Similar to the stocks mentioned above, you can invest in major ETFs listed on NYSE Arca and other exchanges. This includes representative ETFs like VOO and QQQ, as well as thematic ETFs and leveraged ETFs.Direct trading from your securities accountYes, I can.
Stock Options：Starting in 2023U.S. Stock Options TradingThe service has commenced. We are a clearing member of the U.S. Options Clearing Corporation (OCC), supporting not only simple call and put options but also complex positions such as spread strategies.
Cryptocurrency：Through Alpaca Crypto,Trading of major cryptocurrencies (Bitcoin, Ethereum, etc.) in physical formThe Crypto API launched in October 2021 and has since expanded its supported assets. Order types are similar to stocks, allowing unified management of both stock and crypto trading through a single API. Cryptocurrency custody is handled by Alpaca Crypto LLC, a FinCEN-registered Money Services Business (MSB) operating in compliance with U.S. regulations.
Other Assets：As assets scheduled for future handling,Futures, FX (foreign exchange margin trading), bonds (fixed-income assets such as government bonds), private equity, international stocksThe roadmap includes initiatives such as fixed-rate securities and 24-hour stock trading (continuous trading on weekdays). In fact, we are progressively expanding our lineup, including the launch of fixed-rate securities and 24-hour stock trading (continuous trading on weekdays) by 2025.

◼️Eligible Users

Alpaca’s services are broadly divided into those for individual investors and those for corporations and developers.

Algorithm-oriented individual traders：For individual investors seeking to automate their trading through programming, Alpaca is the ideal platform. It provides direct market access via its Trading API and is widely used by those who wish to operate using system trading rather than discretionary trading—namely, aspiring individual algorithmic traders and quants.
Fintech companies and startups：Alpaca’s Broker API isB2B2C modelAnd it’s being adopted behind the scenes by numerous fintech companies. For example, digital banks and payment apps offer users features like “investing in U.S. stocks.”If you want to add it, you can use Alpaca’s infrastructure instead of building a securities system from scratch.
Existing financial institutions and securities brokers：Alpaca can also form white-label partnerships with other securities firms and banks, as it possesses its own U.S. clearing and custody capabilities.
Other user segments：In addition to the above, prop trading firms, hedge funds, university financial engineering researchers, and others,All segments seeking direct market access via APIAlpaca is opening its doors. Its mission is to “provide access to markets for everyone on Earth,” and it is incorporating users from emerging economies as well as small investment clubs, not just those in developed nations.

◼️Fee Structure and Charges

Alpaca prioritizes fee transparency, with basic trading fees being free. However, detailed fee structures exist depending on the service and asset class, as outlined below.

Stock and ETF Trading Commissions
- Commission (transaction fee) is $0For self-directed individual accounts with Alpaca Securities, there are absolutely no brokerage fees for buying and selling U.S.-listed stocks and ETFs.
- This is a commission-free model similar to Robinhood, where Alpaca instead generates revenue through order flow sales (PFOF) at order execution and stock lending fees.
- Please note that a small regulatory fee, as required by SEC and FINRA regulations, will be charged for each trade. For example, fees such as the Trading Activity Fee (TAF) of approximately $0.00013 per share (capped at $6.49) and the SEC processing fee of approximately 0.0008% (about $0.80 per $10,000) will be incurred upon sale.
- These fees are collected by Alpaca and remitted directly to regulatory authorities, and are passed on to users at cost. There are also no account opening or maintenance fees, nor any minimum balance requirements.
Options Trading Commission
- Options trading is also commission-free. However, fees specific to options, such as clearinghouse and exchange fees, will apply.
- Specifically, these include FINRA’s TAF ($0.00279 per contract, sell-only), each exchange’s ORF ($0.02685 per contract), and OCC clearing fees ($0.02 per contract, or a flat $55 fee for trades exceeding 2,750 contracts).
- For example, trading one contract incurs a total cost of just a few cents, but no brokerage commission is charged. This fee structure is extremely low-cost compared to other firms (typically $0.65 per contract, etc.).
Cryptocurrency Trading Fees
- A small transaction fee (spread) is charged.will be done.
- Specifically, the fee rate differs between liquidity providers (makers) and liquidity users (takers), and decreases incrementally based on the 30-day trading volume.
- For the lowest trading volume tier (under $100,000 in the last 30 days), maker fees start at 0.15% and taker fees at 0.25%. As trading volume increases, these fees gradually decrease, ultimately reaching 0% for makers and 0.10% for takers.
API Usage Fees and Data Costs
- The use of Alpaca’s API by individual developers itselfThere is no charge.(An API key will be issued free of charge upon account creation).
- For larger API call volumes or high-speed data requirements, subscribing to the paid “Algo Trader Plus” plan ($99/month) provides enhancements such as unlimited REST API calls, real-time data for all markets, and unlimited simultaneous WebSocket connections per security.
Interest Rates and Related Services
- When using margin trading (leveraged trading involving borrowed funds), interest accrues on the borrowed amount.
- Additionally, the cash balance of uninvested funds is protected by the FDIC up to $250,000 through sweep deposits into FDIC-insured banks and earns interest.
- In 2023, the High-Yield Cash Program was introduced, offering competitive interest rates on cash deposits. A portion of this interest income also serves as a revenue source for Alpaca.

Overall, Alpaca emphasizes its “zero commission” policy while providing a platform with a transparent fee structure. There are no account maintenance fees or opaque spread markups common with other companies, creating an environment where users can leverage the trading API at low cost.

Transition and Outlook

Alpaca’s founders are Yoshi Yokokawa (CEO) and Hitoshi Harada (CPO), both entrepreneurs from Japan.

At its founding, the company was data technology-focused, providing large-scale market data processing and machine learning solutions for financial institutions, and developing “MarketStore,” an open-source database specialized for financial time-series data. In 2018, it launched a stock trading API platform, and in 2019, it was accepted into Y Combinator (W19 batch).

The company is expanding its business at a high growth rate and raised approximately $50 million in a Series B round in 2021. Subsequently, in October 2023, it accepted a strategic investment from SBI Holdings (a $15 million convertible bond), bringing its cumulative funding to over $120 million. In 2024, it conducted a Series C round led by China’s Tencent, raising $50 million.

Additionally, it was reported that in January 2026, the company raised $150 million in a Series D funding round, achieving a valuation of $1.15 billion and becoming a unicorn company.

The following are the major changes.

2015：Founded. Applying machine learning and high-speed database technology to the financial sector.
2018：API-based securities brokerage service launches beta version.
2019：Participated in Y Combinator. Raised $6 million in Series A funding (from investors including Spark Capital).
2020-21：Series B funding round completed (total capital raised: $100 million). For individual investors.Commission-free stock API tradingFull-scale service launch begins.
October 2021：Cryptocurrency Trading API Released.
2022–23：Acquired a Japanese small-to-medium securities firm and obtained a broker license from the Japanese Financial Services Agency. Strengthened regulatory compliance framework through measures including establishing the cryptocurrency services company Alpaca Crypto LLC (FinCEN-registered).
2023：Successively introduced options trading functionality, instant deposits, local currency trading APIs, and more. Partnered with and received capital participation from the SBI Group in October.
2024：Series C funding secured. Established self-clearing system and achieved over 200 partner companies and 5 million user accounts.
2025：Expanded services to include fixed-income assets and multi-leg options, along with the launch of 24/5 stock trading. Raised $150 million in Series D funding.

◼️Actual Implementation Cases

Amid rapid growth, Alpaca’s infrastructure is being adopted by various companies and projects worldwide.

Kraken：Major cryptocurrency exchange Kraken has formed a strategic partnership with Alpaca to launch trading services for U.S. stocks and ETFs for its users. The service is called “Kraken Stocks” or “xStocks” on Kraken, allowing users to buy and sell thousands of U.S. stocks directly from Kraken’s UI. Alpaca’s Broker API powers the service behind the scenes, enabling Kraken users to seamlessly manage both cryptocurrencies and stocks within a single wallet.
SBI Securities・Woodstock：In Japan, the SBI Group has invested in and partnered with Alpaca, while startup Woodstock operates services leveraging Alpaca’s infrastructure. After Alpaca acquired a Japanese securities firm (OI Securities) in 2022 and obtained a license from the Financial Services Agency, Woodstock enabled yen-denominated U.S. stock trading through Alpaca. Woodstock users can invest in over 500 stocks, including Tesla and Apple, starting from just 1,000 yen, with Alpaca handling all order processing and asset custody behind the scenes.
Syfe：Syfe is a Singapore-based asset management fintech offering ETF portfolios and regular investment plans. By integrating with Alpaca, Syfe enables users toInvesting in individual U.S. stocksWe have also opened it.
Dime：Thailand’s digital banking app Dime also utilizes Alpaca. While Dime primarily offered deposit and money transfer services, its integration with Alpaca enables users to accessTrading U.S. Stocks and ETFscan now do.
Sarwa：Sarwa, based in the United Arab Emirates, is a robo-advisor investment service that has been expanding its offerings since 2021 by adopting Alpaca’s API. Sarwa serves investors in the Middle East.U.S. Stocks, ETFs, Cryptocurrencies, Bonds, OptionsAlpaca provides access to diverse assets, backed by its infrastructure.
INDmoney・Vested：Due to regulatory restrictions in India, it is difficult to open accounts directly with overseas securities firms. Therefore, local startups are providing U.S. stock investment platforms. A representative example isINDmoneyやVestedThese platforms utilize infrastructure such as DriveWealth and Alpaca to provide U.S. stock trading services to residents in India.
Greenlight：Greenlight, a U.S. financial education app for children and teens, migrated its stock trading functionality from DriveWealth to Alpaca in 2023. When Greenlight users (parents and children) purchase stocks, their orders are executed via Alpaca.

In addition to the above, Alpaca is also used for prototyping on hedge fund-related platforms such as QuantConnect and HFT firms.

Alpaca itself provides tools such as Alpaca Forecast (stock price prediction AI) and Alpaca Radar (sudden fluctuation detection), which are products API users can utilize for trading decisions.

Moving forward, we will continue to leverage the funds raised to further expand our services and pursue new customer acquisition.

API services as financial infrastructure

Finally, we conclude with a summary and analysis.

Alpaca isn’t all about crypto, but it’s a truly unique service. It sits squarely at the heart of trends like BaaS and Embedded Finance, enabling any business to easily integrate financial capabilities into their own services.

In the crypto world too, wallet providers, for example, don’t build their own DeFi but connect to and utilize existing DeFi platforms. They make their own wallet the frontend, while the backend relies on existing DeFi like Uniswap or Jupiter, monetizing by adding a small frontend fee.

This demonstrates the difficulty of building financial functionality in-house, and also suggests that even when front-end and back-end providers are different, it is possible to deliver a highly polished application as a single integrated solution.

Alpaca’s philosophy is precisely this: providing the foundational API for all financial transactions, not just crypto. While building financial functionality is extremely challenging for fintech companies, Alpaca simplifies this process and enables monetization by adding transaction fees.

This allows embedded companies to focus on building UX and attracting users.

Personally, what stood out about Alpaca was that it was built from the ground up with embedding as its core premise. While some companies build their own financial platforms and then offer their features for embedding via APIs or SDKs, Alpaca operates without its own platform—everything is designed for embedding. This approach avoids conflicts of interest with frontend providers and allowed us to focus entirely on improving functionality.

The most famous example of this embedded infrastructure is undoubtedly Stripe. Stripe itself does not operate a platform; instead, it provides infrastructure functions enabling any business to process payments online, thereby establishing an overwhelming market share.

Alpaca is the financial trading version.

It is already garnering significant attention, but I believe it will attract even more interest as financial trading becomes accessible across a wider range of apps in the future.

That concludes our research on “Alpaca”!

Reference Links:HP

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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【Konnex】RoboFi platform enabling autonomous execution of robotic physical tasks—from contracting and verification to settlement—via smart contracts / @konnex_world

mitsui — Wed, 21 Jan 2026 21:00:35 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched “Konnex”.

What is Konnex?
Platform Structure
Assumed Use Cases
Transition and Outlook
Use cases for realizing RoboFi have emerged

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TL;DR

Konnex is a RoboFi platform that enables autonomous execution of physical tasks performed by robots—from contracting and verification to settlement—via smart contracts.
Using the Universal Task Language (UTL) and Proof of Physical Work (PoPW), different robots and AI can reliably collaborate without human intervention.
A design that separates practical settlements using stablecoins from verification and governance using KNX tokens, aiming to scale real-world labor.

What is Konnex?

“Konnex” is,A platform integrating robotic physical labor with blockchain technologyIt is designed so that robots can digitally sign on-chain smart contracts to enter into work agreements, autonomously handling everything from task ordering and receiving to result verification and settlement.

Below is an overview of the architecture.

I’ll explain it simply.

First, robot-to-robot communication occurs over a low-latency P2P mesh network (QUIC/libp2p), with each task request described in JSON format using the “Universal Task Language (UTL)”.

UTL enables the description of common tasks independent of manufacturer-specific specifications, allowing robots and AI models to understand and coordinate uniformly. This standardization of task grammar eliminates vendor lock-in, enabling different robots and AI systems to exchange instructions and information using the same language.

On the blockchain, a mechanism called Proof-of-Physical-Work (PoPW) is used to verify the completion of physical labor.

Each task contract records the work details, deadline, and reward amount, along with the stablecoin deposit pledged as collateral by both the requesting party and the worker. During task execution, the robot (worker) records sensor data and video logs, then uploads a PoPW bundle (containing sensor records, short video clips, etc.) upon completion.

Network validators review the proof data and verify that the work was performed according to the conditions specified in the smart contract.

For example, delivery tasks require evidence such as “GPS travel route + photo of the delivery completion site,” cooking tasks require “temperature log + image inside the frying pan,” and inspection tasks require “high-resolution images of the inspected area,” depending on the task type. If task completion is recognized by a majority vote of validators, it receives PoPW approval and is recorded on the blockchain as reliable proof of execution.

This enables the verification of robot performance without human supervision, allowing for automated settlement based on results.

Konnex’s communication layer, contract layer, and verification layer work together as described above, forming a technical framework that enables robots to complete the entire process—”job agreement → execution → proof of completion → payment”—without human intervention.

All settlements are conducted in stablecoins with minimal price fluctuations, and transaction fees, penalties, and deposit refunds are handled at stable values.

On the other hand, it employs a two-layer structure where the platform’s native token, “KNX” (Konex), is used for network fees and governance voting.

KNX serves as security collateral, fee payment, and future governance voting rights, while PoPW validators stake KNX to demonstrate network integrity.

In this way, Konnex combines robotic control and sensor technology with blockchain’s trust foundation to realize an innovative architecture that makes the fulfillment of physical work agreements programmable and verifiable.

Platform Structure

The above described an architecture where robots autonomously perform tasks. However, Konnex also functions as a marketplace for robots to match task requests with available robots.

Demand-side users (task requesters) post jobs (tasks) on the platform, while supply-side users (robot owners or the robots themselves) bid on and accept these tasks.

What’s even more distinctive is that it creates a three-party marketplace where not only robots and clients are matched, but AI developers also participate.

For example, when a task (e.g., making soup) is posted, multiple AI developers (policy providers = “AI miners”) compete in the backend by proposing their own control algorithms and AI models.

These proposed policies are first validated in a simulation environment, and the one evaluated as having the best performance is deployed to the robot and executed.

In this way, Konnex incorporates a mechanism where both the robot owner (provider of physical labor) and the AI algorithm provider (provider of intelligence) participate, enabling the selection of AI control systems that can optimally execute requested tasks through market principles.

AI developers earn rewards by having their algorithms applied to tasks, while robots gain access to optimal intelligence on demand—creating a two-way incentive system.

Through this integrated structure combining the intelligence market and physical labor market, Konnex aims to create a new economic ecosystem that unifies the licensing of robot intelligence with labor contracting.

◼️Transaction Flow

The transaction flow on the platform is as follows and is managed by smart contracts.

① Offer

The task requester specifies the job details, deadline, and reward amount (denominated in stablecoin) and publishes the job. At this point, the requester also deposits a contract guarantee (a small deposit in stablecoin, separate from the reward amount, is locked).

② Bid

Robots capable of performing that job will bid. Each will present their ETA (Estimated Time of Arrival/Completion), their current location, and the proposed guarantee amount. The required guarantee amount varies based on the robot’s reliability (past performance), meaning robots with a strong track record can bid with less collateral.

③ Matching

When the requester selects one bid from the submissions, the match is confirmed. The requester’s reward amount and the robot’s security deposit are escrowed (locked) on the smart contract. A small network fee (in KNX) is incurred at this time.

④Execute

The robot executes the specified task. During execution, it continuously records sensor data and action logs in a compact snapshot format. For example, it records position and images at regular intervals or takes photos upon task completion, accumulating data necessary for the proof described later.

⑤ Proof

After task completion, the robot (or backend system) uploads the Proof-of-Work bundle to the blockchain. This bundle is linked to the job ID (a unique hash ID assigned to each task) and contains the corresponding sensor log records, short video clips, images, and other data.

Third-party validators examine this evidence off-chain and evaluate whether it meets the specified achievement criteria. Based on the scores and consensus of multiple verifiers, the final Proof of Work determination (approved or rejected) is made.

⑥Settle

Once the verification confirms the task is complete, the smart contract immediately settles the transaction. The escrowed reward amount in stablecoins is paid to the robot owner, and both parties’ security deposits are released and returned.

Conversely, if a failure is determined due to missed deadlines or insufficient evidence, the robot’s security deposit is forfeited and refunded or compensated to the client. Furthermore, this failure record is publicly disclosed on-chain and reflected in the robot’s credit score.

Konnex validators themselves stake KNX tokens and stablecoins as collateral to prevent erroneous validations (such as mistakenly approving failed tasks). Should they perform fraudulent approvals, they lose their stake.

As described above, in Konnex,Smart ContractIt automatically executes the entire workflow from job recruitment to payment and penalty fee settlement.

The primary roles of smart contracts include performing identity verification and credit score management through the “RobotIdentity” contract linked to the robot’s public key, and recording escrow funds, deadlines, and penalty conditions for each task via the “TaskRegistry” contract.

Additionally, modules are available to manage validator dual staking (KNX and stablecoins) via “StakeVault” and to perform instant payment processing based on validation results via “PayoutRouter”.

These contracts are expected to operate on Ethereum-compatible blockchains, where job progress and verification scores (ScoreRoot) are recorded per block, forming an immutable and transparent history.

Assumed Use Cases

Konnex envisions a wide range of use cases, encompassing all types of real-world physical labor across logistics, manufacturing, agriculture, infrastructure inspection, and the service industry.

The platform’s vision is to “scale physical labor with the same fluidity as software,” aiming to replace and streamline various manual field operations traditionally reliant on human labor through autonomous robots and blockchain technology.

Below are specific use case examples presented by Konnex.

◼️Logistics & Distribution

A world where drones and autonomous robots deliver packages and food.

For example, we envision a workflow where multiple drones and ground robots collaborate to divide delivery tasks within an area. Each robot submits GPS route logs and delivery completion photos as proof-of-work evidence. Upon verification, rewards are paid out immediately.

◼️Agriculture and Environmental Monitoring

Automation in farmland is another key use case. We envision a future where agricultural technologies—such as seeding robots, crop growth monitoring drones, and harvesting robots—collaborate based on shared data.

For example, a system where robots patrolling fields collect data using soil sensors and cameras, and then pay AI model providers based on the accuracy and usefulness of that data (success-based compensation tied to the model’s prediction accuracy).

Furthermore, by enabling mutual data verification among agricultural machinery, the goal is to realize “responsive agriculture” that reduces waste and excess. The roadmap also schedules agricultural trials for Phase 2, with demonstration experiments expected in crop management and automated harvesting.

◼️Manufacturing・Warehouse

Warehouse inventory management drones and factory line transport robots are also targets.

For example, a division of labor could involve drones scanning and recording inventory data during warehouse stocktaking, with cloud-based AI detecting discrepancies and then instructing autonomous forklifts to perform replenishment tasks. The roadmap explicitly mentions warehouse pilots, with plans to test the Konnex system in logistics centers and similar facilities.

◼️Infrastructure Inspection and Security

Infrastructure inspections using drones and crawler robots are also included in the use cases. For example, a city authority could commission Konnex to conduct a corrosion survey on a bridge, where multiple inspection robots collect sensor data and submit the results as a PoPW report with high-resolution images.

The verifier evaluates them collectively, and once it is confirmed that problematic areas have been comprehensively detected, payment is made. This approach can also be applied to robot utilization in labor-shortage areas such as public infrastructure monitoring and security patrols.

◼️Service Industry (Food Service, Cooking, Nursing Care, etc.)

Applications for service robots in homes and restaurants are also being considered. The official website presents a scenario for a “Robot Kitchen” where a robotic arm prepares meals while continuously monitoring pot temperatures and arm torque data. If the cooking is done correctly, payment is automatically processed.

In Konnex’s future vision, when a user commands “Make two servings of ○○,” the robot downloads the appropriate cooking AI model from the Konnex marketplace (paying usage fees to the AI provider in stablecoins). After cooking execution, the process completes with PoPW verification clearance, reward payment, and distribution of recipe copyright royalties.

In this way, future applications are anticipated in lifestyle and service sectors, such as automated restaurant kitchens, cooking assistance robots for general households, and even motion log verification for care support robots (e.g., recording evidence of correct medication administration).

◼️Summary

As described above, the use cases Konnex envisions are extremely broad. The company states it is “targeting the entire real-world labor economy (approximately $25 trillion in scale),” with applications envisioned across all sectors: manufacturing and logistics in the industrial domain, infrastructure and agriculture in the social domain, and households and food service in the service domain.

However, not all of these are currently realized; we are first at the stage of advancing technical verification through demonstration experiments and pilot projects.

Transition and Outlook

Konnex is a startup founded in 2025, composed of members who are experts in both robotics and blockchain.

Jon Ollwerther serves as CEO. He is an entrepreneur and executive with over 15 years of experience in frontier technology fields, possessing expertise in both the media industry and robotics.

Brandon Torres Declet serves as Strategic Supporter for the team. He is a serial entrepreneur with five CEO tenures and an expert in drone robotics and defense. He has deep connections with the U.S. Department of Defense and government agencies, having served as CEO of Measure (which grew to become North America’s largest drone service provider) and CEO of NYSE-listed AgEagle Aerial Systems.

Lucas Van Oostrum is listed as a Strategic Advisor. Originally from the Netherlands, he is a pioneer in drone swarms and a world expert in the cooperative control of multiple robots. He co-founded the drone show company Nova Sky Stories with Kimbal Musk, the brother of Elon Musk, and also contributed to the launch of RoboValley, a European robotics innovation hub.

Additionally, in mid-January 2026, we announced our first external funding round and successfully raised $15 million.

@CogitentV @Liquid_Capital_ @LelandVentures @CoveyNetwork @VenturesM77 and Block Maven LLC.\n\nAutonomous robots will work ","username":"konnex_world","name":"Konnex","profile_image_url":"https://pbs.substack.com/profile_images/1966336118351343621/9BgNeekU_normal.jpg","date":"2026-01-15T14:30:02.000Z","photos":[{"img_url":"https://substackcdn.com/image/upload/w_1028,c_limit,q_auto:best/l_twitter_play_button_rvaygk,w_88/iaabfu2mpdzyvrdsvsan","link_url":"https://t.co/MML2xnV3JR"}],"quoted_tweet":{},"reply_count":162,"retweet_count":83,"like_count":395,"impression_count":49144,"expanded_url":null,"video_url":"https://video.twimg.com/amplify_video/2011807647901892617/vid/avc1/1280x720/gCcScStMJTVj8Xdf.mp4","belowTheFold":true}" data-component-name="Twitter2ToDOM">

This round is positioned as a strategic investment, with investors including Cogitent Ventures, Liquid Capital, Leland Ventures, Covey Network, M77 Ventures, and Block Maven LLC—VCs and investor groups active in the crypto and emerging tech sectors.

◼️Roadmap

Konnex has a clear roadmap, with development milestones from 2025 and beyond divided into four phases. The goals and planned rollouts for each phase are as follows:

Phase 0: Testnet Sprint (0–6 months)

Primary Purpose

Prove that Konnex actually works technically
Verify the entire process from robots performing work, providing proof, to receiving payment in USD.

Things to do

Task → Bidding → Execution → PoPW Verification → USD Settlement,End-to-end verification
Providing robot simulators (KitchenSim / RackSim)
PoPW (Proof of Physical Work) Prototype and Verification Logic Development
Implementation of Escrow/Reward/Penalty Processing Using Stablecoins
Dual Staking Design(KNX + Stablecoin) Design
Validator Slash Rule Definition
SDK v0.9 provides (CLI, Python, API)
Launch of the Initial AI Miner (Developer) Community
Success rate, verification time, etc.Acquisition of Basic KPIs

Phase 1: Mainnet MVP (6–12 months)

Primary Purpose

Launch the minimum viable mainnet that can be used safely
Developers and robots bring it to a “truly usable” state

Things to do

Finalization of Task Schema v1.0 (Specification Freeze)
Major Smart ContractsExternal Security Audit
Launch of the Validator Council
PoPW Validation Network with Dual Staking Now Operational
Using stablecoins (such as USDC)Production Settlement Commencement
Implementation of a mechanism to allocate a portion of fees to the KNX buyback/treasury
Miner Bootcamp(Education for AI Miners and Open-Source Software Release)
Initial pilot operation using the first actual robot
Credit Card → Stablecoin On-Ramp Beta Service
Verification Accuracy SLA (False Positive Rate < 1%) Configuration

Phase 2: Industrial Pilot (12–24 months)

Primary Purpose

Prove that it is “economically meaningful” in the real economy.
Raise it to a level usable by companies and research institutions

Things to do

Field Trials in Warehousing and Agriculture (Logistics, Inventory, and Agricultural Machinery Integration)
Cooperative Experiment Using a Fleet of University Robots (Rovers)
PoPW-compatible Sensor Expansion (IMU, LiDAR, etc.)
Support for large-capacity evidence data (IPFS / S3 anchors)
BondMatrix v1(A system enabling third parties to provide security deposits to robots)
Swarm Control Compatible
- Joint bidding by multiple robots
- Fee Split
KYC/AML On/Off Toggle (Corporate/Government Compliance)
Cross-chain compatibility (support for stablecoins on other L1/L2 networks)
Developer Grant Distribution (Partial Treasury Rebate)
Reduced Security Deposits Through Trust Score Improvement (Cost Optimization)

Phase 3: Global Motion Leisure (24–48 months)

Primary Purpose

Becoming a global “robot labor infrastructure”
Achieve a self-sustaining decentralized economy that functions without central management

Things to do

PoPW / PoPE v3 (Sensor-Independent, Generic Proof Framework)
Reuse of Robot Motion and Trajectory Data and Royalty Design
Secondary Market Formation for AI Models/Motion Plugins
Support for large-scale payments using fiat currency (credit cards, invoices)
Enterprise Stablecoin Billing and Accounting Solutions
Using KNXFull-scale governance commences
- commission rate
- Stake Requirements
- Protocol Update
Regional Stablecoin Guarantee Pool (Regulatory Compliance)
Full Transition to Community-Led Management

As described above, Konnex is currently in its growth phase immediately following the mainnet launch, with protocol refinement and expansion of real-world application scope being advanced simultaneously.

Use cases for realizing RoboFi have emerged

Finally, we conclude with a summary and analysis.

Since last year, trends in physical AI and robotics have gradually emerged beyond the crypto space. Alongside this, a new category called RoboFi—combining robotics and blockchain—has emerged within the crypto domain.

Konnex, which we researched this time, is also part of the RoboFi domain. Considering the founders’ track record, it appears to be a project with considerable promise.

However, as evident from Konnex’s roadmap, they are pursuing steady progress step by step. Therefore, I believe it will take several years before we see the kind of autonomous negotiation, contracting, task execution, payment, and review between robots and AI systems that many imagine.

Nevertheless, I believe blockchain will form the foundation in the world emphasized by the inevitable rise of robotics. This is because decentralized implementation is often far more efficient—not just for payments, but also for robot IDs, ownership management and reputation, and verification of task execution.

Personally, I believe that among the things blockchain has validated over the past decade are the mechanisms and philosophy of decentralized validation by validators. The system where tokens are staked to enable decentralized validation and earn rewards is applicable to virtually anything, and it is also being utilized for Konnex’s task validation.

Therefore, I intend to patiently wait while continuing to research a world where blockchain is implemented as social infrastructure.

That concludes our research on “Konnex”!

Reference Links:HP / DOC / X

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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【City Protocol】Providing full-stack infrastructure that tokenizes IP and enables IPCM / @cityprotocolHQ

mitsui — Tue, 20 Jan 2026 21:00:56 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today, I’ll explain “City Protocol.”

What is City Protocol?
Key Components
Transition and Outlook
Will IPCM be realized?

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TL;DR

City Protocol is a decentralized protocol that provides IPCM infrastructure on Solana, tokenizing IP to bring it onto on-chain markets, thereby providing liquidity and scalability.
IPCM is the IP version of ICM (Internet Capital Market), a concept aiming to create a capital market where IP rights and value are tokenized, enabling 24/7 trading year-round beyond geographical constraints.
City Protocol provides full-stack support from IP creation to monetization and financialization, encompassing Cooking City (Issuance) → City Quests/ID/Viral City (Diffusion, Trust, Growth) → Totem Toy City (Commercialization) → RWA City (Tokenization), along with verification layers, IP Strategy, and its native token $CP.

City Protocolとは？

City Protocol is a decentralized protocol built on the Solana blockchain, providing the infrastructure for the IPCM (IP Capital Market).

Its mission is to “liberate cultural and narrative IP assets from closed, traditional ecosystems and place them on on-chain capital markets, thereby providing liquidity and scalability.”

Specifically, creators will tokenize their intellectual property from the project’s inception, enabling fans and communities to participate as co-owners. This allows for fundraising and market price discovery starting at the idea stage, accelerating the IP’s growth cycle.

Before delving into the specific services offered by City Protocol, we will explain “IPCM.”

◼️What is IPCM?

“IPCM” stands for “Intellectual Property Capital Market” and refers to a mechanism that utilizes blockchain to transform intellectual property (IP) into tradable assets within capital markets.

This concept follows the terminology of Solana’s ICM (Internet Capital Market) and has been gaining traction as a term through the end of 2025.

ICM is,A world where anyone with an internet connection can participate in capital marketsThis concept aims to redefine capital markets through asset tokenization, 24-hour trading, and the elimination of intermediaries.

IPCM is the IP version of this system, tokenizing all IP-related concepts to enable free trading 24/7, 365 days a year, beyond geographical and racial constraints.

Primary Components

City Protocol is building a full-stack ecosystem that provides end-to-end support from IP issuance to diffusion, growth, and monetization.

The main components are as follows.

At the center lies “City Protocol,” with each module extending outward in a modular fashion.

◼️Cooking City：IP Issuance Module

A token launchpad platform that tokenizes IP at the idea stage and sells it fairly to early fans and investors.

https://cooking.city/en

Based on City Protocol’s Issuance Mandate, we guarantee a fair launch free of backdoor deals and pre-allocations. Pricing is left to the market via a dynamic bonding curve, ensuring fair price discovery and liquidity provision from the very start of trading.

Additionally, after issuance, creators receive a portion of transaction fees as revenue, while high-volume traders earn point rewards—a system designed to adjust incentives for all participants.

◼️City Quests：User-owned Network Effect Module

We will execute P’s Go-To-Market strategy through community-driven initiatives. By implementing quest-based participation and a reward system based on contributions, we will transform fans from mere “consumers” into Participants and ContributorsThis is a module that changes it.

This is currently under development and is scheduled for release in V2.

◼️City ID：User Behavior Module

It is a mechanism akin to a credit score that identifies individuals who truly add value within highly anonymous Web3 environments.

City ID visualizes and evaluates users’ on-chain activities from three perspectives.

Trading Performance: Trends in IP Token Investment and Holding (Whether to hold during market crashes, soundness of profit-taking, etc.)
Community Contribution: Organizing City Quest events, promoting collaborations, and solving challenges—contributions to the organization
Content Creation: The volume and quality of fan works and information dissemination related to the IP

By combining these scores, the project team can identify true long-term supporters and capable collaborators.

For example, based on their activity history, profiles emerge such as “holders who support without ever selling,” “fans skilled at spreading content,” and “market makers adept at trading.”

This score is privacy-conscious, designed to prove only that you are a “long-term holder” and have “significant influence” without revealing your balance or real name.

◼️Viral City：AI-Driven Content Builder Module

Viral City is an AI-driven content amplification engine. It is an AI platform that empowers fan communities to mass-produce secondary creative videos and social media content for IPs, enabling them to generate viral buzz.

The key feature is that it’s not just a generic AI video generator, but a “dedicated AI trained for each IP.” It learns each IP’s character designs, worldview, speech patterns, and story development patterns through machine learning, ensuring fan-created content maintains official-level quality and consistency.

For example, for short videos on TikTok, AI suggests and generates content that spreads easily on each platform—such as engaging visuals and trending music—while for Instagram, it creates visually striking Reels videos.

Fans can use materials from their favorite IPs to create high-quality videos and images with the click of a button.

Furthermore, all content embeds metadata with the source IP and creator information, enabling transparent tracking of contributions. If a fan video goes viral and attracts new token buyers, the creator’s contribution is recorded and can lead to rewards like quest bonuses.

The most recent V2 update has been released as a base application.

@baseapp!\n\n- Explore the trendiest UGC videos on Base.\n- Remix Based IPs into your own viral hits.\n- Track your IP’s mindshare in real-time.\n- Create personalized videos instantly with 1-click templates.\n- Climb the leaderboard for USDT, ","username":"cityprotocolHQ","name":"City Protocol","profile_image_url":"https://pbs.substack.com/profile_images/1981795094710603776/Q9GRMARr_normal.jpg","date":"2026-01-13T16:55:45.000Z","photos":[{"img_url":"https://pbs.substack.com/media/G-ju-XdbQAEQVO5.jpg","link_url":"https://t.co/5f68YkmK48"}],"quoted_tweet":{},"reply_count":33,"retweet_count":29,"like_count":117,"impression_count":133105,"expanded_url":null,"video_url":null,"belowTheFold":true}" data-component-name="Twitter2ToDOM">

◼️Totem Toy City：IP Product Module

This is a module for physical expansion. For digitally born IPs to truly grow into major brands, physical merchandise expansion and real-world touchpoints are essential.

Totem Toy City is an integrated platform designed to facilitate the seamless creation of physical products (toys, apparel, merchandise, etc.) based on intellectual property.

Creators simply upload their character data and designs, and the AI automatically generates 3D printable models and manufacturing specifications, enabling them to place orders with partner suppliers.

From small-batch prototypes to mass production runs of hundreds or thousands, you can select reliable manufacturers based on demand. Inventory management, order processing, and international shipping can all be managed centrally.

Designs that bridge physical goods and digital elements are also possible. For example, you can link physical and digital by attaching NFTs or token benefits to limited-edition merchandise, allowing purchasers to gain advantages within digital communities as well.

◼️RWA City：IP Finalization Module

This is the final module that completes IP as an RWA, elevating IP to an “investable and manageable asset class.”

RWA City serves to finalize IPs issued within the City Protocol ecosystem’s Cooking City and grown through City Quests / Viral City / Totem Toy City, establishing them as financially viable entities.

While not yet a concrete product, we will establish a framework to treat IP as RWA connected to on-chain financial infrastructure. This includes tokenizing each IP individually, of course, as well as developing index products that handle multiple IP tokens.

◼️IP Verification Layer

This is a trust assurance module, a mechanism that guarantees the authenticity and reliability of issued IP tokens.

Permissionless verification allows creators to link their social accounts to tokens, enabling them to prove on-chain that “this token represents my intellectual property.”

Projects that have achieved a certain level of performance undergo permissioned verification (additional confirmation by the operator), where ownership of IP rights and development commitment are verified.

Verified projects receive advisory support, grants, and promotional assistance from City Protocol, along with access to advanced analytics dashboards and AI tools (such as Viral City).

◼️IP Strategy

This mechanism follows the NFT Strategy model, using token transaction fees to support the floor price of already issued NFTs.

As a specific use case, in October 2025, Mocaverse, Animoca’s flagship NFT collection, and City Protocol jointly launched a token called “$MOCASTR”.

80% of the 2.5% trading fee from $MOCASTR tokens is automatically accumulated into the treasury. These funds will be used to implement automated trading strategies aimed at maintaining the floor price of Mocaverse NFTs.

Using accumulated treasury funds, we purchase NFTs at floor price and relist them at 1.2 times that price. When this sale succeeds, we use the profits to buy back and burn $MOCASTR tokens, thereby increasing both token value and treasury funds.

In fact, $MOCASTR has demonstrated promising results, such as purchasing approximately 40 Mocaverse NFTs within 48 hours of its public launch on the Solana mainnet, pushing the floor price up by 15% and achieving a yield equivalent to 20% on an annualized basis.

◼️Token Information

To reiterate, City Protocol is the project that comprehensively supports IP tokenization using the aforementioned modules.

And as the native token to circulate this ecosystem, “$CP” exists.

The primary utilities include governance participation, settlement currency, incentive rewards, and staking with associated benefits. Additionally, a portion of the platform’s revenue will be periodically allocated to $CP buybacks, with repurchased $CP being deposited into the project treasury.

The allocation is as follows. The TGE has not yet occurred.

Transition and Outlook

The City Protocol’s basic platform concept was unveiled in October 2025.

The co-founders are Jerome Wong and Kyle, and the team includes individuals from prominent web3 projects such as Animoca Brands, The Sandbox, Dapper Labs, and Memeland, as well as those with experience at major corporations including HSBC, MediaAsia, and LVMH.

Traditionally, creating massive IPs like Disney, Marvel, or Nintendo required substantial capital and publisher backing, often leaving the brilliant ideas of small and medium-sized creators buried.

City Protocol was born to change this situation. It transforms IP into verifiable, tokenized investment assets from the initial stages, providing a mechanism for creators to receive support directly from global fans and investors without intermediaries. This enables an open and equitable IP ecosystem independent of middlemen and opaque royalty systems, aiming to ensure cultural value is appropriately returned to creators and their communities.

Additionally, the company completed a seed funding round in May 2025, raising approximately $7 million.

This round includes Jump Crypto, Dragonfly, CMT Digital, Mirana Ventures, Bitscale Capital, Everest Ventures Group (EVG), and others.

◼️Future Roadmap

We will organize the future roadmap as inferred from official documentation and announcements.

①IP Marketplace

Currently, we are primarily focused on issuing IP tokens and initial trading, but we plan to build a comprehensive secondary marketplace in the future.

Specifically, we aim to create a platform where users can search for and trade IP-related products using filters such as IP, year, rarity, condition, and transaction speed.

It is expected to become a secure C2C marketplace supporting diverse listing formats such as fixed-price sales, auctions, and Dutch auctions, while also featuring escrow (third-party deposit) and dispute resolution functions.

Each transaction generates a transparent receipt using a City ID (a record of who purchased which IP’s product), which is utilized for IP holder rewards and user performance management.

②Micro IP Strategy Fund

The introduction of index-based IP strategy funds that allow for diversified investment across multiple IPs is also under consideration. For example, the concept involves establishing a rule-based buyback and market-making pool that manages tokens from multiple IPs under a defined theme, such as the “2024 Anime IP Basket.”

③Gacha Machine

We are also planning an on-chain gacha feature that pairs well with entertainment IP. Users can spin the gacha using $CP or IP tokens to randomly win IP-related items, NFTs, or limited-edition merchandise vouchers.

VRF (Verifiable Random Function) ensures the fairness of winning outcomes, and the drop table (prize types and probabilities) is publicly disclosed to guarantee transparency. We plan to implement limited-time gacha events as seasonal activities or collaborations with other projects, developing them as community-participation entertainment elements.

④ Expanding Tools for Creators

Creator support tools for developing and deploying IP on the platform will also be enhanced. The Launchpad feature will enable advanced issuance settings, such as supply schedules (vesting or phased unlocking) during token issuance and whitelists (sales slots accessible only to specific City ID holders).

Additionally, an automated revenue routing feature is planned, enabling the distribution of transaction fees and sales proceeds to creators, stakers, collaborators, and other contributors according to pre-set percentages.

These tools enable creators to meticulously design and manage their IP ecosystems while operating through an intuitive UI that doesn’t require technical expertise.

Will IPCM be realized?

Finally, we conclude with a summary and analysis.

Tokenizing intellectual property is a fascinating concept that has garnered significant attention, but no successful examples have emerged yet. While rights surrounding various forms of IP—such as copyrights, licenses, and music tracks—have been tokenized in the past, the envisioned ideal has not been realized.

Even if tokenization enables temporary fundraising, significant challenges remain: it risks separating fans from investors, and revenue distribution and token price appreciation depend heavily on achieving success as intellectual property—an extremely difficult domain.

However, personally, I believe this field holds tremendous potential. And I also think that rather than tokenizing existing well-known IPs, building IP from scratch using crypto-native tokenization is the faster path to success.

Of course, successfully launching an IP from scratch is difficult, so tokenizing well-known IPs is also important in the short term. However, well-known IPs have complex rights issues, making tokenization extremely challenging. Furthermore, existing fans already exist, so striking a balance with them is also necessary.

However, if it’s a new IP, that’s a different story.

That said, if the IP cannot be made famous, the token’s value will completely disappear, so caution is necessary here. Furthermore, profit sharing can raise questions about whether the token qualifies as a security, while tokens without profit sharing often become meme coins and may not necessarily align with the IP’s success.

Furthermore, the legal issues are complex. Even if revenue sharing is possible, payments and contracts would likely be handled off-chain, with the distribution occurring on-chain. This coordination must also be addressed.

Despite these numerous challenges, I personally believe the IPCM market still holds significant potential. I believe blockchain will tokenize everything and bring financial elements into every industry, and the IP and entertainment sectors are no exception.

However, since it’s necessary to consider and verify what kind of design approach to take, I plan to conduct my own research and experimentation.

That concludes our research on “City Protocol”!

Reference Links:HP / DOC / X

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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【Saturn】Issuing a yield-generating stablecoin backed by MicroStrategy's STRC / Issuing USDat and staking token sUSDat / @usdat21

mitsui — Mon, 19 Jan 2026 21:01:10 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched Saturn.

What is Saturn?
Transition and Future Outlook
The on-chain migration of off-chain financial products is progressing.

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TL;DR

Saturn is a Bitcoin credit-backed stablecoin protocol that offers the USDat stablecoin, backed by US Treasury securities, and the sUSDat stablecoin, which generates yields backed by Bitcoin Credit (MicroStrategy’s STRC).
BTC → MicroStrategy (BTC treasury company) → Preferred stock STRC → sUSDat This chain of trust enables the on-chain tokenization of Bitcoin’s value as “digital credit,” which is its defining feature.
Initially launched with USDat = 100% U.S. Treasury bond collateral and sUSDat = 100% Bitcoin Credit collateral, USDat itself will increase its Bitcoin Credit ratio in the future, aiming to become a reserve currency providing a sustainable yield of 10% or more.

What is Saturn?

“Saturn” is,High-Yield Stablecoin Protocol Leveraging BitcoinThis is a project to develop [the product/service].

Specifically, a stablecoin pegged to the U.S. dollar “USDatand the staking version where you can earn yieldssUSDatis issuing a new reserve currency backed by Bitcoin.

◼️The challenge we are trying to solve

The Saturn team recognizes the following current challenges:

Bitcoin price fluctuations
Bitcoin excels as a store of value, but its price volatility makes it unsuitable for everyday payments and mass adoption. We need to reduce Bitcoin’s volatility and create a stable form for consistent use.
The Lack of Yield in DeFi
In the current DeFi landscape, there is a shortage of stable, scalable, and sustainable yield-generating solutions. Existing yield sources, such as liquidity mining and lending, suffer from high volatility and scalability issues, making it difficult to expand their scale.
Opacity of Credit Assets
Traditional credit products (such as corporate bonds and loans) are black-boxed and lack transparency, with trust relying on central entities like banks. There is a demand for transparent credit systems built on-chain.

◼️Saturn Solutions

To address the above challenges, Saturn aims to resolve them by issuing a stablecoin backed by a hybrid reserve consisting of tokenized government bonds and Bitcoin-collateralized assets, known as “USDat.”

Specifically, we aim to create the world’s first “Bitcoin-native reserve currency” that achieves both price stability and sustainable interest. This is accomplished by combining the stability and liquidity of U.S. Treasury Bills (tokenized) with the yield generated from Bitcoin-backed credit assets (Bitcoin Credit).

This design converts Bitcoin’s immense value into a “digital credit” layer for credit creation, enabling the global provision of yields exceeding 10% per annum while ensuring transparency and stability.

It might be a bit hard to grasp, but looking at specific products should help you understand better.

◼️Products Offered

Specifically, we primarily offer the following two types of tokens.

USDat
It is a fiat-backed stablecoin like USDC. At issuance, the reserve composition is 100% backed by U.S. Treasury bonds, prioritizing value stability and liquidity assurance.
sUSDat
sUSDat is the token received by staking USDat. sUSDat is backed by Bitcoin Credit, and the interest generated from it accumulates through compounding.

The key point is “Bitcoin Credit.”

This is a credit product utilizing Bitcoin’s creditworthiness.

Saturn uses STRC (Stretch), a credit product issued by MicroStrategy, as collateral for sUSDat.

STRC is known as Perpetual Preferred stock, a type of preferred stock with no maturity date. Its most significant feature is thatDividends are paid monthly, and the dividend rate is also reviewed monthly.at the point.

As a preferred stock, it is a security listed on the U.S. securities market (NASDAQ), and can be bought, sold, and held through a securities account. Therefore, STRC itself also has a stock price.

This stock price is influenced by the performance of the issuer, MicroStrategy, and the price of BTC, but the monthly dividend amount is the most significant factor. Simply put, a dividend yield of 10%, 5%, or 20% directly impacts supply and demand.

STRC is designed to maintain its stock price around $100 by adjusting its dividend payout ratio monthly. In other words, it’s structured to deliver stable yields rather than capital gains from the stock itself.

Incidentally, MicroStrategy has designed numerous other preferred stock classes, allowing investors to purchase them according to their own risk tolerance.

Let me organize it.

USDat：Saturn’s US Treasury-backed stablecoin. No yield.
sUSDat：Tokens earned by staking USDat. Secured by STRC, with operational profits returned to holders.
STRCMicroStrategy’s perpetual preferred stock. Its key feature is the monthly adjustment of the rate to maintain the stock price around $100.
MicroStrategyThe world’s largest Bitcoin treasury company.

In other words, MicroStrategy is a company that continuously buys BTC, so its stock price is proportional to the BTC serving as its actual collateral. Furthermore, it issues preferred stock using the credibility of that stock price as collateral, meaning products like STRC are effectively backed by the creditworthiness of BTC. And sUSDat is a token collateralized by STRC.

Therefore, the flow is BTC > MSTR (MicroStrategy stock) > STRC > sUSDat. Saturn claims to be issuing tokens backed by Bitcoin Credit, the world’s first credit product leveraging Bitcoin’s credit.

Incidentally, I believe the “Dat” in USDat stands for Digital Asset Treasury. Since it’s USD backed by DAT companies, it’s called USDat.

Additionally, while USDat was described as being backed by U.S. Treasury bonds, this refers to the initial release. The plan is to eventually transition the collateral for this pure stablecoin to Bitcoin Credit. For example, it will start with a ratio like 90% U.S. Treasury bonds and 10% Bitcoin Credit, ultimately aiming for a stablecoin USDat fully collateralized by Bitcoin Credit (100%), along with sUSDat that provides access to its yield.

However, initially, it is positioned as USDat, backed 100% by U.S. Treasury bonds, and sUSDat, backed 100% by Bitcoin Credit. When staking USDat, the process involves selling the Treasury bonds that served as collateral and purchasing Bitcoin Credit to use as collateral. The same applies when unstaking.

Transition and Future Outlook

Saturn Labs was founded in 2025 and began developing the high-yield stablecoin USDat. The team consists entirely of University of Pennsylvania alumni, with the three key members being:

Kevin Li (Co-founder and CEO)
I served as a Researcher at ParaFi Capital and previously worked as a Data Lead at Artemis (a blockchain data analytics firm), where I was involved in reserve analysis for digital assets and the development of on-chain services for stablecoins.
Sebastian “Seb” Melendez (Co-founder and CTO)
As the lead for the stablecoin division at Artemis, I have experience spearheading technological development and possess expertise in smart contract development and asset management technologies on the blockchain.
Ellis Osborn (Co-founder and COO)
I served as the president of Penn Blockchain, the blockchain club at the University of Pennsylvania, and worked at venture capital fund M31 Capital as a crypto asset investment manager.

Regarding funding, we announced an $800k angel round in January 2026. Since the Saturn project has received investment and incubation support from YZi Labs since its early development stages, this includes $500k from YZi Labs plus $300k from the angel round led by Sora Ventures.

Additionally, several prominent angel investors participated in this round, including industry luminaries such as Luca Netz, CEO of Pudgy Penguins; DeFi influencer DeFi Dad; and Anthony Yim, formerly of Coinbase.

@yzilabs, @sora_ventures, and prominent crypto angels to build USDat, a stablecoin protocol delivering 11%+ yield backed by Bitcoin.\n\nWe generate yields through @Strategy’s $STRC, and unlock global, onchain access to ","username":"usdat21","name":"Saturn","profile_image_url":"https://pbs.substack.com/profile_images/2002798899430326272/zN_LyCZk_normal.jpg","date":"2026-01-15T16:01:25.000Z","photos":[{"img_url":"https://substackcdn.com/image/upload/w_1028,c_limit,q_auto:best/l_twitter_play_button_rvaygk,w_88/i8pxkgjmxb6rq679r4pf","link_url":"https://t.co/bsBvl8t2Pi"}],"quoted_tweet":{},"reply_count":114,"retweet_count":133,"like_count":1054,"impression_count":241771,"expanded_url":null,"video_url":"https://video.twimg.com/amplify_video/2011831033700786177/vid/avc1/1280x720/f5Xb4N6dRwXtIN0S.mp4?tag=14","belowTheFold":true}" data-component-name="Twitter2ToDOM">

As of January 2026, USDat and sUSDat have not yet been officially issued on a public mainnet, but preparations for their launch are underway.

The on-chain migration of off-chain financial products is progressing

Finally, we conclude with a summary and analysis.

This is a very interesting project. The revolution advocated by DAT, including companies like MicroStrategy, involves a funding model using existing financial instruments like stocks and bonds alongside a BTC holding model. Saturn takes that model and brings it back on-chain.

It’s said that we’re entering an era where everything will be tokenized, but I think it will take some time for all the infrastructure that traditional financial institutions have built up to migrate on-chain. For example, if bonds and stocks could be issued on-chain from the outset, there would be no need for oracles, nor would there be a need for off-chain custody.

However, this involves legal amendments, which will take time, and there may also be risks associated with full on-chain solutions that are not yet apparent.

Recently, a trend has emerged where off-chain assets—accessible only to certain individuals in specific regions—are purchased, and tokens backed by these assets are circulated on-chain. Even if only KYC-compliant entities can issue and redeem these tokens on-chain, subsequent trading occurs freely via DeFi. This effectively liberates the assets from geographical and human constraints, making them composable.

This is also true for the Bitcoin Credit from MicroStrategy that Saturn is working on. By issuing tokens backed by assets previously only purchasable by U.S. securities account holders and enabling access to their yields, anyone can indirectly gain exposure to Bitcoin Credit.

Incidentally, Saturn charges 10% of Bitcoin credit management profits as an operational fee, with the remaining 90% returned to token holders. This approach, which resembles custody revenue, involves wrapping all kinds of assets to create new on-chain financial products—a trend that seems poised to accelerate.

Issuers, wrappers, distributors, and others are branching out, and the world of composable finance enabled by DeFi’s interoperability is rapidly becoming a reality.

Well, naturally, as collaboration progresses, the risk of chain bankruptcies increases accordingly, so caution is necessary.

For now, I’ll wait for the USDat release and continue to follow the updates!

That concludes our research on “Saturn”!

Reference links:HP / BLOG / DOC / X

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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【FRNT】Wyoming-issued fiat-backed stablecoin / Maintains 102% overcollateralization, with reserve investment income allocated to the state's public fund

mitsui — Wed, 14 Jan 2026 21:01:12 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched “FRNT”.

What is FRNT?
Legal Framework and Positioning Under State Law
Potential Use Cases (Intra-state Payments, Tax Payments, etc.)
Transition and Outlook
Will it become a new source of revenue for local governments?

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TL;DR

FRNT is a fiat-backed stablecoin pegged to the US dollar issued by the State of Wyoming.and is backed by over 100% of its value in U.S. dollar cash and short-term U.S. Treasury bills held in the state’s trust account,1 FRNT = 1 USD redeemable。
The law requires a 2% excess collateral (e.g., $1.02 million in reserves for every $1 million FRNT issued).Full reserve plus over-collateralization is mandated to enhance stability, and reserve investment income isAllocated to state public funds (such as education funding).
Issued and distributed across multiple chains (eventually 7 chains), initially available via Kraken (Solana) and Rain (Avalanche).Based on KYC/AML compliance, it is designed for a wide range of applications including public payments, government expenditures, private settlements, international remittances, and DeFi integration.

What is FRNT?

“FRNT” stands for “Frontier Stable Token,”A fiat-backed stablecoin backed by U.S. dollars issued by the State of Wyomingis.

1 FRNT is designed to be equivalent to 1 U.S. dollar, and all issued FRNTs are backed by over 100% of U.S. dollar cash and short-term U.S. Treasury bills (maturing within one year) held in trust by the state government.

One major feature is that a 2% excess collateral is mandated by law. Wyoming requires holding an amount exceeding 2% of the issuance value, in addition to the standard 1:1 backing, to enhance stability.

For example, when issuing FRNTs worth $1 million, holding trust assets worth $1.02 million provides a buffer against price fluctuations and unexpected market events.

This full reserve system + over-collateralization ensures that, theoretically, the value of FRNT remains stable at $1 USD at all times. Even if the market price deviates, the mechanism guarantees that 1 FRNT can be redeemed (exchanged) for $1 USD.

The underlying assets consist primarily of U.S. dollar cash and short-term U.S. Treasury bills. This asset composition offers exceptional security and liquidity, with stable market prices and the potential for modest interest income.

The FRNT reserve is managed in a state government trust account. Any interest generated from investments in U.S. Treasury securities is allocated to Wyoming’s public funds (such as education funding), not to token holders.

◼️Issuing Chain and Issuance Method

FRNT is designed to be issued and circulated across multiple public blockchains.

The initial plan announced simultaneous deployment across seven major L1 and L2 chains, including Ethereum.

Specifically, it supports multiple chains including Ethereum, Solana, Avalanche, Base, Polygon, Arbitrum, and Optimism, with FRNT tokens issued on each chain. FRNT tokens across these chains are bridged and maintained for compatibility through LayerZero’s Stargate protocol.

However, at the initial release in January 2026, it began circulating on two chains.

FRNT is now available for purchase on the Solana chain via Kraken, and FRNT on the Avalanche chain is offered through the digital asset card service Rain.

The phased launch approach was adopted to ensure security and compliance by initially distributing through trusted intermediaries, followed by a plan to gradually expand support to additional chains. In the future, FRNT is expected to be available across all seven chains mentioned above, functioning as a stablecoin with multi-chain support via LayerZero.

Furthermore, as FRNT is a project involving the state government, compliance systems are also given the utmost importance.

First, KYC and AML are applied from the perspective of user protection and preventing criminal misuse.

As of January 2026, general users must open an account on a U.S.-regulated cryptocurrency exchange such as Kraken and complete KYC procedures to obtain FRNT.

Kraken is an exchange headquartered in Wyoming that has also obtained the state’s Special Purpose Depository Institution (SPDI) license, and complies with obligations such as customer verification and transaction monitoring under the Bank Secrecy Act (BSA). The process of purchasing and redeeming FRNT through this exchange involves verifying the source of funds and excluding sanctioned entities (such as through OFAC list checks), implementing AML/CFT measures equivalent to those in traditional finance.

Legal Framework and Positioning Under State Law

What’s interesting is its legal status.

FRNT is the first state-issued stablecoin in the United States, issued under Wyoming state law. Its enabling legislation is the Wyoming Stable Token Act, enacted in March 2023. This law established the Wyoming Stable Token Commission and set forth the framework for the state to issue and operate stablecoins.

Under the law, FRNT is classified as a “virtual currency,” pegged to the U.S. dollar as legal tender and issued in exchange for it.Special State Debt (Specific Debt)is considered.The key point is that FRNT is neither a state government-issued legal tender nor a deposit, and it is not a general obligation debt guaranteed by the state.That is the point.

Legally, Wyoming explicitly states that it does not provide principal guarantees or insurance regarding the value of FRNTs.

In other words, the assets available for FRNT redemption are limited to those held within the trust account. Even if claims exceed these assets, the state bears no obligation to make additional contributions. Thus, there is no backing by the state’s full faith and credit; the design strictly limits liability to the scope of the trust property.

The law also states that “the state shall not bear fiduciary responsibility to holders of this token.” This indicates a unique legal status: while it shares characteristics with money market funds issued by state governments, it is not subject to federal regulations such as the Investment Company Act.

As this framework is unprecedented, numerous legal issues were also pointed out.

Governor Mark Gordon initially expressed caution toward this project and vetoed the initial 2022 bill, but allowed the amended 2023 bill to become law without signing it.

At the time of enactment, the governor expressed concerns in an open letter that it was unclear whether the state constitution permitted such token issuance or whether there was market demand. However, he also noted the significance of establishing a legal framework to advance innovative endeavors and urged the committee to conduct further review.

The legislation also includes provisions requiring the committee to seek confirmation and guidance from relevant federal agencies such as state treasury departments, securities regulators (SEC), the U.S. Treasury Department (FinCEN, etc.), and the IRS (U.S. tax authority), indicating a cautious approach to ensuring consistency with and applicability under federal law.

As described above, FRNT is a digital asset clearly defined under state law and issued based on a trust fund administered by the state government. However, it is emphasized in the legislation that it constitutes a distinct category separate from fiat currency or state bonds, and carries no explicit guarantee by the state.

This framework represents the first attempt in the United States to issue a digital currency by a public entity, and attention is now focused on its future alignment with federal stablecoin legislation and its potential ripple effects across other states.

◼️Issuer and Operating Entity

The issuer of FRNT is the Wyoming Stable Token Commission (WSTC), established as an official commission within the state government. The commission is headed by the Governor of Wyoming, with Governor Gordon himself serving as its inaugural chair.

Furthermore, the committee members include state financial officers such as the State Comptroller and State Treasurer, along with four additional experts in blockchain and finance. Thus, the committee is composed of high-ranking state officials and private-sector experts, operating as an organization under the direct supervision of the state government.

The committee was allocated $500,000 from the state’s general fund as its initial-year budget to finance the project’s launch (this expenditure is expected to be repaid to the state later from investment earnings).

Operationally, the committee itself establishes issuance and redemption rules and selects partners, while the practical work is carried out through partnerships with private companies.

First, Franklin Templeton, a leading global asset management company, was appointed as the management and investment partner for the reserve assets. The company uses its subsidiary, Fiduciary Trust Company International, as the custodian, safeguarding and managing FRNT’s backing funds in a trust account.

Additionally, Fireblocks has been adopted for the operation of token issuance and distribution infrastructure on the blockchain, providing a secure issuance platform featuring private key management and multi-chain support.

Additionally, a cross-chain communication protocol called LayerZero has been integrated to control the issuance, burning, and bridging of FRNT across multiple chains.

In this way, the state committee is responsible for establishing overall policies and rules, while privately selected companies handle practical operations in their respective specialized fields (asset management and technology implementation).

Regarding the relationship between the committee and the state government, the committee is an official body established under state law and can be considered directly under the authority of the governor. However, as previously stated, the tokens it issues are limited trust obligations, not general obligations of the state.

While the state government lends its credibility to this project (a digital currency bearing the state’s name), it will operate independently and self-sufficiently through the committee and trust fund in legal and fiscal terms.

Operating funds are covered by interest income from reserves, and any profits are transferred to state education funds and similar programs. This structure ensures that all state residents benefit from the proceeds.

The committee also takes the lead in contracting with private companies involved in the project. With the 2024 legal revision, the committee was granted authority to manage procurement procedures itself. This public-private partnership operational framework, combining the state government’s trust with private expertise, is another major feature of the FRNT project.

Potential use cases (intra-state payments, tax payments, etc.)

FRNT is designed for a wide range of use cases.

◼️Public Payments Within the State

First, its use for public payments within the state is drawing attention. Wyoming has a sparse population relative to its vast area, making it a region highly interested in digitizing and streamlining administrative services.

State and county offices currently accept credit card payments for fees, but the associated card processing fees are a financial burden.

For example, according to Converse County’s finance officer, residents incurred approximately $70,000 in fee costs after making $3.4 million worth of payments annually using cards. Electronic payments using FRNT could potentially reduce these fee costs significantly, as the fees would be limited to just a few cents.

The governor also stated, “Leveraging digital assets will enable us to provide residents and businesses with cheaper, faster, and more transparent payment methods.” Plans are under consideration to accept FRNT for future payments such as vehicle registration fees, property taxes, and various other fees.

While some states like Colorado have introduced cryptocurrency payments for state taxes, Wyoming could also reduce administrative costs and improve convenience by directly accepting state taxes and fees through FRNT.

◼️State government expenditures

Next, efforts are also being made to utilize it on the expenditure side of state governments.

In 2025, Wyoming partnered with blockchain company Hashfire to conduct a pilot program using FRNT to make payments to state contractors.

This experiment reports dramatic efficiency gains, automating everything from contract verification to payment approval on a smart contract, reducing the payment processing time to vendors—which previously took 45 days—to just seconds.

For example, it is possible to implement a process where payments to public works contractors are executed instantly using FRNT, and the receiving contractor can immediately convert the FRNT into cash in dollar denominations. This is expected to lead to improved cash flow for small and medium-sized enterprises, reduced administrative processing costs for governments, and overall innovation in government procurement and payment processes.

◼️Use in the private sector

Its use in the private economy is also a major theme, as it can serve as an alternative to cash and cards in everyday commercial transactions and person-to-person money transfers.

For example, if retailers and online shops within the state accept FRNT payments, they can avoid credit card fees and receive payments instantly at low cost. For consumers, the benefit is that payments can be completed instantly from their smartphone wallet without going through a bank account, eliminating the hassle of handling change and cash management.

Especially in tourist-oriented businesses like resorts, digital cash that eliminates the need to handle multiple currencies and is universally understood as 1 FRNT = 1 USD offers significant convenience.

Additionally, since FRNT enables cross-border remittances anywhere with internet access, it can be used for international money transfers and sending funds to overseas students. While traditional bank transfers and international payment networks took days and incurred high costs, FRNT completes transactions in seconds at minimal cost. This makes it potentially useful for state businesses receiving or sending payments from overseas.

◼️DeFi Integration

Finally, its potential applications in the digital asset market and DeFi space should also be noted. Should FRNT achieve sufficient circulation, it could be utilized as a liquidity provider or collateral asset on DEXs and lending platforms, or integrated into other applications as a blockchain-based payment method.

Currently, USDC and USDT fulfill such roles, but scenarios may arise where FRNT, offering greater regulatory reassurance, becomes the preferred choice.

In particular, Wyoming is actively pursuing the integration of tokens and bank deposits through institutions like SPDI Bank. This could lead to direct connections with banking infrastructure, enabling instant conversion of dollars in bank accounts to FRNT for blockchain transfers, which could then be instantly converted back to dollars at the receiving end. This holds significant potential to revolutionize current systems like ACH transfers.

◼️Summary

As described above, FRNT’s envisioned use cases range from streamlining payment and collection operations within state governments to consumer and corporate settlements, and further extend to utilization within a broader digital economy.

State government officials expressed their expectations, stating, “This token will not only become a new source of revenue but also serve as a tool to enhance the economic efficiency of the entire state by enabling cheaper and faster transactions.”

At this stage, however, verification and awareness-raising are still in their early phases, and user education and system development are essential for expanding adoption. Nevertheless, with pilot successes beginning to emerge, the likelihood is growing that a digital payment ecosystem spanning both public and private sectors will form within Wyoming, with FRNT at its core.

Transition and Outlook

To recap, here is a chronological overview of the FRNT project’s history and future plans.

March 2022：The Wyoming State Legislature passed the first bill to create a state-issued stablecoin, but Governor Mark Gordon refused to sign it (requesting a review of concerns). At this point, formal issuance has not occurred.
January 2023：Revised State Bill SF0127, the “Wyoming Stable Token Act,” introduced.
March 2023：Wyoming Stable Token Act EnactedThe governor did not sign the bill, allowing it to become law (legally enacted). Under this law,The Wyoming Stable Token Commission (WSTC) has been established.A goal has been set to issue tokens by the end of 2023. The state government has contributed an initial operating budget of $500,000.
Second half of 2023：The committee appoints specialized personnel,Anthony Apollo appointed as Executive OfficerAppointed (September 2023). Additionally, conducted partner company selection, including Franklin Templeton, and evaluated blockchain technology (analyzing 28 candidate chains). In March 2024, strengthened the committee’s authority regarding investable assets and procurement procedures through legislative amendments (Senate Enrolled Act 44).
2024：System development and testing phase.Experiment to issue FRNT (then provisionally named WYST) on the testnetConducted a smart contract payment pilot with Hashfire. Simultaneously continued discussions with federal authorities and reporting to state legislatures. The issuance target date was delayed from the initial plan, and the public release date was postponed several times.
August 2025：FRNT Mainnet Official LaunchThe committee announced the launch. The governor issued a statement declaring, “Our state has achieved the first public stablecoin in the United States.” At this point,Support for seven blockchains and interoperability via LayerZeroThe details were revealed, and the backing assets were announced as US dollars and US Treasury bonds managed by Franklin Templeton, with a design featuring 2% excess collateral. However, the start of sales and distribution to the general public is said to be “soon,” and preparations are continuing.
Fall 2025：within the stateLimited operational launchThe state contract payment pilot with Hashfire was successful. Additionally, the use of FRNT reserve interest (school fund) and the committee’s additional budget request ($2 million) were discussed in the State Legislature’s Revenue Committee and other venues, with questions raised about revenue projections. The committee allocated $5.8 million in “other fund” money for the 2024-26 fiscal year budget to prepare for full-scale implementation.
January 7, 2026：General sales beginThe Governor of Wyoming and the Commission announced that the FRNT is now available for purchase by private users for the first time.The FRNT trading pair (against USD) has been launched on our partner exchange, Kraken.First, the Solana chain version of FRNT became tradable. Simultaneously, service for the Avalanche version of FRNT via the Rain platform also commenced. The governor commented, “The state has pioneered a new era,” stating that for residents and businesses...To serve as an inexpensive, fast, and transparent means of transaction, with reserve interest serving as a source of state education funding.emphasize. This enablesFRNT is officially available on the market.We have now entered the implementation phase.
Outlook Beyond 2026：The committee is planning further developments even after the initial launch.
- SpecificallyWe plan to fully activate the supported chains (making it available on all 7 chains) and have more exchanges and wallets support FRNT.
- Additionally, within the state, a trial program for receiving county taxes and various fees via FRNT is underway.The introduction of a system for paying state university tuition fees is also being discussed.
- In terms of cooperation with other states, we could explore mutual interoperability with North Dakota’s Roughrider Coin and consider joining an interstate remittance consortium.

Although it has only recently been released, the FRNT Committee has already indicated to the state legislature that the FRNT project is expected to be self-sustaining in the next budget.

Future challenges include building market trust (ensuring sufficient liquidity), maintaining cybersecurity, and conducting education and promotion to expand user adoption. While addressing these challenges, Wyoming’s FRNT project is expected to continue evolving as a groundbreaking initiative in the history of digital currencies in the United States.

Will it become a new source of revenue for local governments?

Finally, we conclude with a summary and analysis.

Wyoming is also pursuing new legal entities for DAOs, making it a very tech-friendly state. This state-backed stablecoin project is also an experimental and interesting initiative.

This release follows a process that began in 2022, involving the clarification of our legal standing, blockchain analysis, and pilot-phase proof-of-concept testing. It is not a move riding the wave of the stablecoin trend over the past year.

Furthermore, the mechanism of 102% overcollateralization and the project itself being operated using the investment returns from the collateral funds, with the surplus utilized as a state public fund, is also highly unique.

This model may become a new source of revenue for local governments.

Budget allocation is essential for government operations. However, by leveraging public trust to issue and implement a stablecoin, residents will actually experience greater efficiency in tax payments and other transactions, while businesses will see reduced transaction fees. Furthermore, since no new taxes are required and state revenues increase, this initiative benefits everyone.

The main concerns remain the outflow of collateral funds and hacking. While achieving 100% security is simply impossible no matter how hard we try, the expertise cultivated by stablecoin operators to date does exist. Therefore, I believe it is possible to implement measures that minimize risk as much as possible through safe operations.

While some regions in Japan already have local currencies in circulation, simply converting these into stablecoins could create new revenue streams and potentially streamline local economies.

We will continue to keep an eye on FRNT’s initiatives.

That concludes our research on “FRNT”!

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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【Trove】A collectible-focused perpetual exchange built on HIP-3 / Offering not just collectibles, but also related stock and prediction market opportunities / @TroveMarkets

mitsui — Mon, 12 Jan 2026 21:01:23 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched “Trove.”

What is Trove?
Available trading strategies and derivative design
Transition and Outlook
Futures markets serve the functions of price discovery and insurance.

Subscribe now

TL;DR

Trove is a decentralized perpetual exchange built on Hyperliquid, enabling trading of collectible assets like Pokémon cards and in-game skins with up to 5x leverage.
Leveraging HIP-3, we have realized a futures market for niche assets by inheriting Hyperliquid’s high-speed matching, margin, and settlement infrastructure while independently designing oracles and implementing risk management.
A pioneer in transforming “previously unfinancialized assets” into on-chain derivatives for both speculative and hedging purposes, covering collectible indices, related stocks, and prediction markets.

What is Trove?

Trove is a decentralized perpetual exchange where users can trade collectible assets such as Pokémon cards and in-game skins with up to 5x leverage.

Built on Hyperliquid, it provides a trading environment that combines real-time performance, low costs, and on-chain transparency.

◼️Using HIP-3

Trove is the first collectibles-focused marketplace leveraging HIP-3 (Hyperliquid Improvement Proposal 3) on the Hyperliquid chain.

HIP-3 is a feature that allows anyone to launch a perpetual market on Hyperliquid by staking 500,000 $HYPE. Through this mechanism, Trove directly utilizes Hyperliquid’s ultra-low latency matching engine and shared risk engine.

https://app.hyperliquid.xyz/trade

This eliminates the need to build Trove’s proprietary trading infrastructure from scratch, allowing it to inherit the unified margin and liquidation model and settlement logic from the existing Hyperliquid protocol.

Trove defines each market’s specific oracle design, leverage limits, and margin rules, while handling operational aspects such as continuous price data updates and suspending trading or processing settlements as necessary.

◼️Primary Trading Partners

The tradable markets offered by Trove represent a unique asset class that has been largely overlooked in traditional DeFi.

There are three types: collectibles like Pokémon cards, stocks of collectibles-related companies like Nintendo and Pop Mart, and prediction markets for collectibles-related events.

Specifically, the following stocks exist.

①Collectible

Pokémon Card Index (POKE | ZARD Index)
Comprehensive price index for major PSA-graded Pokémon cards. Calculated by aggregating price data from multiple collectible marketplaces such as eBay and TCGplayer. This index incorporates trends for individual cards (e.g., Charizard) and is traded in USDC.
Counter-Strike 2 (CS2) Skin Index
An index composed of high-value weapon skins frequently traded on Steam Marketplace and third-party exchanges. It aggregates the prices of multiple representative CS:GO/CS2 in-game skins into a basket, providing a stable price benchmark difficult to achieve with individual items.

②Stock

Nintendo Stock Perpetual ($NTDO)
Perpetual futures tracking Nintendo (NTDOY) stock. Offers 5x leverage and is available for 24-hour trading on Hyperliquid under the ticker $NTDO. Nintendo maintains deep ties to the Pokémon card market (holding a 32% stake in The Pokémon Company), and its performance and developments ripple through the card market, leading to its listing as a “collectibles-related stock.”
Pop Mart Perpetual ($PMRT)
Perpetual contract tracking the stock price of Pop Mart (9992.HK), a Chinese blind box toy manufacturer. Ticker: $PMRT, 5x leverage, 24/7 trading. Pop Mart leads the designer toy market in Asia (with flagship IPs like Labubu and Molly), and its popularity has extended to trading cards and plush toys. It is included as an Asian collectibles-related stock.

③Prediction Market

In January 2026, we plan to announce an official partnership with Polymarket and implement a two-way integration.

@Polymarket \n\nBet the future. Hedge the odds. Perp the narrative ","username":"TroveMarkets","name":"TROVE","profile_image_url":"https://pbs.substack.com/profile_images/1971686126563086338/vZHRyXNi_normal.jpg","date":"2026-01-07T20:25:12.000Z","photos":[{"img_url":"https://substackcdn.com/image/upload/w_1028,c_limit,q_auto:best/l_twitter_play_button_rvaygk,w_88/f0oej0khfwkuqelqubsj","link_url":"https://t.co/z9ypAR21k1"}],"quoted_tweet":{},"reply_count":67,"retweet_count":40,"like_count":354,"impression_count":110563,"expanded_url":null,"video_url":"https://video.twimg.com/amplify_video/2008998304332570624/vid/avc1/1280x720/qVrcZ7TLE0803WoB.mp4","belowTheFold":true}" data-component-name="Twitter2ToDOM">

Perpetuals based on Polymarket’s binary prediction markets are now available on Trove.
Specifically, we will list perpetual futures contracts that allow continuous trading of prices representing the probability of outcomes for events operated on Polymarket (events determined by YES/NO results). This enables users to trade with leverage on prediction market odds.
Polymarket has launched a prediction market using Trove’s collectible index data.
For example, create a market on Polymarket asking “Will the Pokémon Index exceed $2,000 by year-end?” and settle it using Trove’s price oracle. This enables users to place prediction bets on events tied to collectible prices, something previously unavailable.

As described above, Trove handles a wide range of unique markets, including collectibles in general, collectible-related stocks, and prediction market events.

A common feature across all markets is the ability to trade real-world assets (RWAs) and events as on-chain derivatives—assets that previously lacked direct hedging or speculative instruments. Trove has emerged as a pioneer in this field.

◼️Use Cases and Target Users

Trove’s use cases can be broadly categorized into two types: speculation (trading for profit) and hedging (mitigating the risk of value fluctuations in held assets).

First, as a speculative use case, Trove offers crypto traders new alpha opportunities. This is because they can apply the leverage trading expertise they’ve honed in cryptocurrency and stock markets to non-traditional markets like Pokémon cards, in-game items, and even event predictions.

For example, if you predict that “the price of a card that wins a tournament will surge,” you can preemptively go long on the index containing that card. Conversely, if you feel that “the temporary boom for a popular IP has become too overheated,” you can short the index to target profits during the correction phase.

On the other hand, hedging use cases benefit collectors and holders.

For example, collectors holding high-value Pokémon card collections are constantly exposed to the risk of overall market price declines. By shorting the Pokémon Card Index on Trove, they can partially offset the decline in the value of their physical assets.

Similarly, for the first time, risk hedging measures will be offered, such as users holding large numbers of rare CS:GO skins shorting the skin index to prepare for a market crash.

Introducing the concept of insurance using futures to the collectibles market—where previously the only way to guard against price decline risk was to sell the physical item—can be considered groundbreaking.

Available trading strategies and derivative designs

Next, I’ll explain the trading strategy in a bit more detail.

◼️Leverage

Trove offers leverage of up to 5x across all markets.

While other perpetual DEXs often offer leverage exceeding 100x, a 5x setting is relatively conservative. This is likely a risk management constraint based on the underlying asset’s liquidity and price characteristics.

A 5x leverage position would reach liquidation if prices fluctuate by 20%, making it resilient enough to withstand short-term volatility even in markets like the Pokémon Card Index, which has shown long-term annual growth of 30–40%.

◼️Price Oracle

A key feature of Trove’s derivative design is the introduction of a hybrid oracle that combines multiple price elements.

The price for each market is initially calculated using a weighted average of three factors, each weighted at 33%: 1) The trading price within Trove (Mark), 2) The verification price from external markets (Validator), 3) The EMA (Exponential Moving Average) of the price within Trove.

For example, the Pokémon Card Index equally reflects the most recent Trove transaction prices, weighted prices gathered from over 25 external collectibles marketplaces, and Trove’s 8-hour EMA, ensuring it never deviates significantly from actual market conditions. Furthermore, these weighting coefficients dynamically adjust according to market developments.

During the initial launch phase, we will prioritize price manipulation resistance and real-world correlation by heavily weighting external data (Validator 50–60%). As trading volume increases and our internal price discovery capabilities improve, we will gradually raise the Mark and EMA ratios to enhance responsiveness. Ultimately, in the mature phase, we plan to transition to internal price discovery leadership, with Mark/EMA combined at 65–70% versus Validator at approximately 30%.

Through this self-evolving oracle, we aim to maintain reliability from the early stages of low market liquidity while ultimately positioning Trove itself as the standard price benchmark.

Transition and Outlook

The Trove development team is currently anonymous (not publicly disclosed), and specific member names have not been revealed on the official website or in documentation.

The project itself commenced with the HIP-3 update in October 2025.

In November 2025, the public beta launched, enabling users to trade perpetual futures on diverse collectible assets—including Pokémon cards, luxury watch indices, Hermès Birkin bags, in-game assets (CS2 skins), and even real-world stocks like Nintendo and Pop Mart—with up to 5x leverage.

With the platform launch, a reward system granting Trove Points to participants was introduced, energizing community-led testing.

Within less than a month of its launch, it reportedly reached a cumulative trading volume of $1 billion and over 24,000 users, demonstrating strong interest in this niche market. Furthermore, on December 5th, a snapshot of user activity across the entire Hyperliquid ecosystem was taken, distributing initial points based on past trading volume, staking activity, NFT holdings, and other metrics.

On January 7, 2026, as mentioned above, we announced our partnership with Polymarket. The $TROVE token ICO was conducted from January 8 to 11, 2026.

trovemarkets.com/ico ","username":"TroveMarkets","name":"TROVE","profile_image_url":"https://pbs.substack.com/profile_images/1971686126563086338/vZHRyXNi_normal.jpg","date":"2026-01-08T17:00:47.000Z","photos":[{"img_url":"https://substackcdn.com/image/upload/w_1028,c_limit,q_auto:best/l_twitter_play_button_rvaygk,w_88/b5bwfjaiiyrevghstrwe","link_url":"https://t.co/h2ZjpXVsCZ"}],"quoted_tweet":{},"reply_count":167,"retweet_count":89,"like_count":1251,"impression_count":638539,"expanded_url":null,"video_url":"https://video.twimg.com/amplify_video/2009309250884128768/vid/avc1/1280x720/1w9vYsuIGKouvZ4I.mp4","belowTheFold":true}" data-component-name="Twitter2ToDOM">

The fundraising target is $2.5 million (FDV approx. $20 million), with 12.5% of the total token supply being sold. An overflow mechanism was adopted for the oversubscribed portion, implementing a pro-rata allocation and refund system.

Participation registration supports USDC/USDT/USDH deposits on Ethereum mainnet, Arbitrum, Base, and Hyperliquid chains. The $TROVE token is designed to be 100% instantly unlocked at the TGE.

To reflect contributions made during the testing phase, users holding a certain threshold of Trove Points were granted preferential treatment, receiving up to a 20% increase in token allocation during the ICO.

Just before the initial offering period ended, suspicious funds were detected flowing in, prompting an announcement to extend the ICO period by five days. However, this decision faced backlash from the community, and the offering concluded as originally scheduled. Ultimately, the amount raised exceeded the $2.5 million target by a factor of four.

Excess funds will be refunded, and tokens are scheduled to be distributed via airdrop to participants before the mainnet goes live.

The allocation of $TROVE tokens is as follows:

As a utility, it incorporates a value capture model that allows $TROVE holders to benefit from the protocol’s success.

Specifically, all transaction fee revenue generated on Trove is allocated as follows:

60%: Automatic buyback (burn) of $TROVE on the market
10%: Allocated as token staking rewards
20%: HIP-3 Market Operation Support
10%: Growth and Expansion Budget (New Market Integration, Liquidity Support, Partnerships, etc.)

This model aims to create a flywheel effect: increased trading volume → higher fee income → increased buybacks and staking rewards → enhanced token value → attracting more users.

After several months of development and testing, Trove will officially enter its mainnet operational phase. The plan has been announced as follows.

First, we plan to acquire and stake 500,000 $HYPE tokens required to become a service provider on Hyperliquid, completing the staking by January 31, 2026.

Following that, the first three ticker applications were submitted on February 3rd. After passing the review, the first three mainnet markets are scheduled to launch on February 10th. Specifically, the following three perpetual markets will be simultaneously released on February 10th:

It is expected that the token’s TGE will be implemented during that process.

The futures market has price discovery and insurance functions.

Finally, we conclude with a summary and analysis.

Perpetual trading of RWA Collectibles is highly intriguing. As mentioned in the use cases, this serves as a new investment vehicle for traders, but I also believe it can function as an asset hedging tool for collectors.

Delta-neutral models like Ethena’s USDe can be implemented with trading cards such as Pokémon cards. In recent years, cards worth millions to hundreds of millions of yen have appeared, and some people hold cards as investment assets. Naturally, such investors are concerned about price declines.

Therefore, holding the physical cards while maintaining a leveraged short position on Trove can serve as a hedge against a certain price decline, particularly a crash. While it may not hedge against individual cards, it does hedge against the overall market. Consequently, it might be beneficial for companies in the card industry to maintain short positions for risk hedging purposes.

Writing it this way, some may find it hard to imagine perpetual contracts becoming more than just a place for speculation. Yet the original futures market was a financial instrument with insurance-like functions.

For example, in agricultural futures trading, farmers could eliminate risks such as weather and secure their income, while investors could profit during bumper crops or price surges. Furthermore, stock prices often fluctuate in tandem with futures markets.

In other words, futures markets serve not only speculative purposes but also functions of price discovery and risk hedging.

Just as prediction markets possess truth-discovery functions beyond speculation, I believe perpetual trading will also begin to serve functions beyond speculation. This will lead to its wider adoption in society and the emergence of its value as a medium.

Perpetual contracts, being perpetual futures, are a viable option for many businesses to maintain positions as a hedge against operational risks. For example, Japanese companies might consider holding USD/JPY positions to prepare for yen depreciation.

As it becomes more widespread in society, I believe we will see the emergence of price discovery functions for traders and media, as well as perpetual trading markets serving as insurance for corporations, which will unlock even greater potential.

Trove has carved out a unique position within this landscape, so we will continue to keep an eye on it.

That concludes our research on “Trove”!

Reference Links:HP / DOC / X

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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【Dexter】Payment Infrastructure for AI Agent Economy Utilizing x402 / Integrates Pay-per-Call API Billing, LLM-Integrated Trading, Voice Control, SNS Integration, and Private Transfers / @dexteraisol

mitsui — Wed, 07 Jan 2026 21:00:33 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched “Dexter.”

What is Dexter?
Transition and Outlook
Will dynamic micropayments catch on?

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TL;DR

Dexter is a payment infrastructure built on x402 that enables AI agents to autonomously make payments to APIs and services. Through its SDK and public facilitator operations, it provides a “practically usable” settlement foundation.
We are building an implementation layer that integrates pay-per-call API billing, LLM (ChatGPT/Claude) trading integration, voice control, SNS integration, and private transfers (Dexter Shield), enabling AI agents to complete tasks from thought to execution and payment.
By the latter half of 2025, Dexter will become one of the largest facilitators processing the highest transaction volumes within the x402 ecosystem. With the release of the DEXTER token, Dexter is increasingly establishing itself as the common infrastructure in a world where AI does the work.

What is Dexter?

“Dexter” is,Payment Infrastructure for the AI Agent EconomyWe provide solutions enabling AI agents to interact directly on the internet and automatically make payments for services and API usage.

Traditional credit card payments and subscription models have been unsuitable for AI’s autonomous service usage due to the high fees and complexity associated with micropayments and automated machine-to-machine transactions.

Therefore, Dexter is adopting the open standard protocol x402 advocated by Coinbase and developing infrastructure such as SDKs that enable businesses to easily integrate x402 into their services.

This allows API providers to set fees per endpoint with just one line of code, while clients (both humans and AI) can automatically pay with stablecoins like USDC when making requests to purchase data or services.

Now, let’s look at the specific services we provide. While based on x402, we offer several infrastructure packages.

◼️Automatic Payment for API Usage (Pay-per-Call)

Through the x402 protocol, API providers can easily set up paywalls (paid API endpoints) for their services. Clients (AI agents or users) can instantly access data and features by automatically paying the specified fee upon request.

For example, if you set a fee of “0.01 USDC per call” for a weather forecast API endpoint, when the AI accesses it via an HTTP request, the server returns an HTTP 402 error along with the payment terms. Upon receiving this, the AI side immediately pays in USDC, and the data is provided after payment confirmation.

This enables flexible pay-as-you-go pricing without subscriptions or API key management, allowing AI agents to automatically purchase the necessary data and services when needed.

◼️Trading Experience via MCP Integration

Interactive AI agents will be able to execute cryptocurrency trades and manage assets. Users can connect their wallets to Dexter’s AI agent, deposit funds, and then issue trading instructions via chat.

This AI agent can integrate with ChatGPT and Anthropic Claude via MCP, understand natural language instructions from LLM interface conversations to conduct market research, and execute swaps on DEXs on Solana.

◼️Voice Trading (Voice Agent)

Dexter also supports voice interface operation. A hands-free agent called “Dexter Voice” allows users to execute on-chain swap transactions within seconds simply by giving voice commands.

This voice agent supports multiple languages and can be used without a ChatGPT or Claude subscription. For example, simply say “Dexter, exchange 1 SOL for USDC” into your smartphone or smart speaker, and it will automatically execute a DEX trade on Solana.

A skill for Amazon Alexa is also available. Simply say “Open Dexter” to Alexa to connect with the agent, enabling you to verbally check Dexter’s status or issue commands.

◼️Social Integration (X/Twitter and Telegram Integration)

Dexter also integrates with major communication platforms. For example, on X, you can mention the official agent account “@dexteraiagent” to execute swaps directly from your linked wallet or have it answer your inquiries.

On Telegram, you can also pair your Dexter workspace with the “Dexter Relay” bot to receive asset transfer notifications and execute simple commands (e.g., “/swap 5 SOL to USDC”).

This allows users to seamlessly operate Dexter agents from their preferred interface (such as chat apps or voice assistants).

◼️Dexter Shield (Private Transfer)

In addition to its payment functionality, Dexter also offers Dexter Shield, a privacy-focused transfer tool. Shield employs a mechanism where funds are first sent to a temporarily generated anonymous address on Solana, rather than directly to the recipient’s address, and are then instantly forwarded to the recipient.

This hides the direct link between sender and recipient addresses, enhancing transaction privacy. Each shielded transfer operates as a one-time session: when the user sends the specified amount (plus program fees) to an anonymous address, funds are automatically transferred to the target wallet.

◼️Summary

As described above, Dexter.cash is characterized by its one-stop provision of diverse functions essential to the agent economy. It integrates areas previously handled by separate projects—from API billing and voice transactions to chat integration and private transfers—expanding the utilization scenarios for “AI × Blockchain.”

Additionally, Dexter operates under the motto “One brain, every surface,” designed so that a single AI agent can maintain consistent perception and behavior across various apps and devices.

In other words, even if you issue commands via Alexa while maintaining the context of the conversation started on ChatGPT, the Dexter agent remembers the previous conversation and can seamlessly resume processing.

Transition and Outlook

Dexter is a relatively new infrastructure project launched between late 2024 and early 2025. Coinbase took notice of this protocol immediately after proposing x402, with its initial goal being to resolve the state where “it exists as a specification but is not actually used.”

The founding team operates under the name Dexter Intelligence DAO LLC. Its defining characteristic is a strong emphasis on open standards and real-world implementation, driven by engineers, rather than being a product of a specific large corporation or financial institution.

In the initial phase, we focused on preparing SDKs for integrating x402 into services and improving the developer experience. Through our JavaScript/React SDK, we have established an environment where API providers can build pay-as-you-go APIs with minimal implementation effort.

Furthermore, starting in mid-2025, Dexter itself assumed the role of operating an x402 facilitator. While facilitators are essential for payment verification and on-chain processing in x402, in many cases, each business had to operate its own.

Dexter will handle this part, operating as a public facilitator built on Solana to ensure developers can use x402 in production without having to build infrastructure.

As a result, by the latter half of 2025, the number of payments processed across the entire x402 ecosystem surged dramatically, and Dexter became one of the largest facilitators handling the highest daily transaction volumes.

https://www.x402scan.com/facilitators

The current Dexter platform provides an implementation layer enabling AI agents to take action and complete payments, leveraging payment infrastructure such as SDKs and facilitators, alongside LLM interfaces via MCP integration, voice control, and social media integration.

In late 2025, the DEXTER token was also released on Solana’s Pump fun, but at present it has little utility and appears to serve more as a community token.

https://pump.fun/coin/EfPoo4wWgxKVToit7yX5VtXXBrhao4G8L7vrbKy6pump

Going forward, we anticipate the expansion of supported chains and an increase in use cases where agents make payments to each other. Dexter is expected to gradually enhance its presence as a common foundation for payments and execution in a world where AI does the work.

Will Dynamic Micropayments Gain Popularity?

Finally, we conclude with a summary and analysis.

Within the highly anticipated x402 ecosystem, Dexter stands as one of the key players. Its defining feature is providing infrastructure that developers can actually utilize—such as offering an SDK enabling x402 usage and infrastructure allowing trading via large language models (LLMs) like ChatGPT and Claude, as well as social networking services (SNS) like X and Telegram.

Being able to chat with an LLM or even use voice chat is a pretty interesting use case. You’ll be able to trade just by talking to Alexa.

Furthermore, it is notable for providing the SDK for x402, which is expected to gain widespread adoption. This enables any service provider—not just crypto businesses—to change their billing model, paving the way for the creation of new business models.

Recently, both B2C and B2B usage-based billing services have become popular, and this can be implemented more dynamically through micropayments.

Personally, I think it will take time to get to this point all at once, but I believe services using x402 for collecting fees, such as automatic payments triggered by APIs, will increasingly be implemented throughout society.

In this context, entities like Dexter, which are developing with an open approach, are likely to make a significant impact, so I look forward to their future progress.

That concludes our research on “Dexter.”

Official Link:HP / DOC / X

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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【easy.fun】A trading platform with social features like tournaments and voice chat / Equipped with core functions including spot, futures, copy trading, and Earn / @easydotfunX

mitsui — Tue, 06 Jan 2026 21:00:36 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched “easy.fun”.

What is easy.fun?
Transition and Outlook
Will social trading catch on?

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TL;DR

easy.fun is an on-chain cryptocurrency trading platform built on Solana and Hyperliquid, offering a full suite of core features including spot trading, futures trading, copy trading, and Earn.
Its most distinctive feature lies in gamifying and socializing trading, learning, and information sharing around the “Trading Arena”—where users compete for trading performance and rankings—and Kernel Points.
Launched in spring 2025, the platform progressed through closed beta and funding rounds before entering its current public service phase. Full-scale rollout of competitive and spectator features—including tournaments and live/voice chat—is planned for the future.

What is easy.fun?

“easy.fun” is an on-chain cryptocurrency trading platform built on Solana and Hyperliquid.

In addition to basic functions like spot trading and futures trading, it features a “Trading Arena” concept where users compete against each other for trading performance and rankings, providing a game-like trading experience.

◼️Key Features

Wallet

You can create a wallet with one tap using your Google or Apple account.

The wallet screen displays common functions such as Deposit, Withdraw, Transfer, and History.

The wallet is divided into two account types: spot and futures. Spot accounts support USDC deposits on Solana, while futures accounts support USDC deposits on Arbitrum.

Spot Trading (Physical)

Spot trading is available for a wide range of tokens, from various cryptocurrencies and meme coins (such as DOGE and SHIB) on the Solana chain to major currencies like BTC, ETH, and SOL.

Additionally, synthetic assets called tokenized stocks (xStocks) that track the prices of U.S. stocks are also offered, enabling on-chain trading of selected stocks like Apple (AAPL) and Tesla (TSLA) at real-time prices.

Futures Trading (Perpetual Trading)

Linked with Hyperliquid, you can access over 100 assets, including major pairs like BTC/USDC and ETH/USDC, with up to 10x leverage.

As professional features, limit orders, take-profit/stop-loss settings (TP/SL), slippage adjustment, and MEV protection are available in both futures and spot markets via “Pro Trade” mode, enabling advanced control over order execution and position management.

Copy Trading

It features real-time copy trading functionality, enabling you to replicate other experienced traders’ trades in real time.

Users can create a “Copy Wallet” and follow top traders to automatically execute similar trades with their own funds. This enables even beginners to share advanced trading strategies, creating a system where the entire community pursues profit opportunities together.

Earn

The HLP (Hyperliquidity Provider) Vault is a passive income feature that allows users to share in a portion of the market-making revenue generated by the Hyperliquid protocol’s liquidity pools by depositing funds. By depositing USDC, users become liquidity providers on Hyperliquid and can earn returns on their funds.

Rankings & Leaderboards and Rewards

The platform features various leaderboards that visualize users’ trading performance and earned points. Notably, a ranking based on “Kernel Points” is available, where users compete for position based on their cumulative points earned through trading volume and community contributions.

Kernel Points can be earned through trading, inviting others (referrals), completing tasks such as first deposits or check-ins, posting content, and contributing to the community.

Please note that easy.fun’s transaction fees consist of a two-tier structure: the base fee from the Hyperliquid protocol plus easy.fun’s own markup. Users accumulate Kernel Points based on their activity, and their level (Lv.1 to Lv.11) increases according to the total points earned. The higher the level, the greater the discount applied to the easy.fun markup portion of the transaction fee.

Additionally, the referral system allows you to earn a portion of the transaction fees paid by users you invite.

Viber Program

In connection with the aforementioned Kernel points, easy.fun operates its own content incentive program called Viber Program.

This is a system that rewards users who share valuable information and contribute to the community on the platform (referred to as Viber) with Kernel points and future token rewards.

This system, similar to InfoFi, calculates a comprehensive score based on metrics such as content quality (originality and clarity), social influence (engagement and follower quality), and content performance (consistency and ranking frequency). This score is then converted into Kernel points.

Users can automatically earn points by creating an account and linking it to X.

This score also reflects in your Karnel Points, allowing you to benefit from the aforementioned transaction fee discounts and also qualifying you for airdrop rewards during the TGE.

Match & Tournament Design

The standout feature is the “Room” function, designed to gamify trading and make it enjoyable as a competitive activity. In the large-scale tournament format “Tournament (Official Group Battle)” hosted by the official organizers, hundreds of participants simultaneously compete in trading performance for a prize pool.

Additionally, multiple match modes are available, including “Fixed Table (Single Coin Battles)” where players test their skills by focusing on a single game, “⚔️ Heads-Up (1-on-1 Duels)” for serious 1-on-1 winner-takes-all battles, and “VIP Rooms” where players can compete with custom rules in invitation-only private rooms.

Through these rooms, you can experience trading as a thrilling competition, much like poker or e-sports.

This feature is currently in preparation and is scheduled to be released soon.

easy.fun Trading Tournament is COMING SOON!\nWho’s ready to WIN BIG? 🍿 ","username":"easydotfunX","name":"easy.fun","profile_image_url":"https://pbs.substack.com/profile_images/1972594417333948416/G5UPPRNW_normal.jpg","date":"2025-12-24T06:15:05.000Z","photos":[{"img_url":"https://substackcdn.com/image/upload/w_1028,c_limit,q_auto:best/l_twitter_play_button_rvaygk,w_88/sg2j4gpbce7luneuqtcr","link_url":"https://t.co/6FDsWXDlsy"}],"quoted_tweet":{},"reply_count":32,"retweet_count":13,"like_count":95,"impression_count":6872,"expanded_url":null,"video_url":"https://video.twimg.com/amplify_video/2003709925256794112/vid/avc1/1280x720/D3S3vs2F4NXMqdCY.mp4","belowTheFold":true}" data-component-name="Twitter2ToDOM">

Additionally, social features such as voice chat for exchanging opinions while trading and real-time live chat are also expected to be implemented.

Transition and Outlook

The service provider for easy.fun is a corporation named Evolve Labs Inc., registered in Panama City. Based on the effective date of the Terms of Service (April 27, 2025), the project is believed to have launched around spring 2025. Team information has not been disclosed at this time.

The closed beta version was released in September 2025 via an invitation code system. It continues to operate exclusively as a mobile app, with iOS and Android applications available.

https://apps.apple.com/us/app/easy-fun-memes-perpetual/id6748850326

This beta version was built on the three pillars of “Freedom, Social, and Fun,” serving as an early preview before the official launch to gather user feedback and provide rewards to early adopters.

Subsequently, in December 2025, the company announced its first external funding round. On December 23, 2025, it closed a $2 million seed funding round led by Mirana Ventures.

easy.fun has closed a $2M seed round led by @mirana \n\nBuilt on @HyperliquidX, easy.fun redefines on-chain trading as a social, skill-driven arena — compete, learn top strategies, climb leaderboards, and earn together. The ","username":"easydotfunX","name":"easy.fun","profile_image_url":"https://pbs.substack.com/profile_images/1972594417333948416/G5UPPRNW_normal.jpg","date":"2025-12-23T14:34:12.000Z","photos":[{"img_url":"https://pbs.substack.com/media/G83CL9qagAkpHcA.jpg","link_url":"https://t.co/7w9qBDNJTd"}],"quoted_tweet":{},"reply_count":210,"retweet_count":307,"like_count":713,"impression_count":122241,"expanded_url":null,"video_url":null,"belowTheFold":true}" data-component-name="Twitter2ToDOM">

Funds raised in this round, which also included participation from multiple angel investors, will be allocated toward product development, team expansion, and the hosting of a global trading competition.

It is now available to everyone, having transitioned from a closed beta version, and the first tournament is scheduled to be held in the near future.

Will Social Trading Gain Popularity?

Finally, we conclude with a summary and analysis.

The overall clean UX is certainly a highlight, but what’s truly intriguing is the focus on trading features with social functionality. While still in development, elements like tournaments and voice chat promise to create a new trading experience that leverages on-chain transparency.

This stems from the idea that trading is a new global sport. It solves the loneliness of traders and the difficulty of gathering information, allowing everyone to trade together in real time through tournament-style broadcasts.

It is said to have been influenced by the live experience of Pump Fun, aiming to transform that real-time nature into a competitive sport.

Personally, I find this idea quite interesting.

The reason is that experiences that trigger dopamine release have become the main trend worldwide. Short videos like TikTok are a prime example, and sports are also evolving beyond just playing or watching—people are now betting on them.

Many people seek stimulation, and real-time content holds high advertising value, so I believe trading tournaments could potentially become a new competitive sport.

In that case, while it was said that tokens with real substance, not meme coins, would be popular by 2026, there might still be demand for them. If tournaments and copy trading become popular, tokens targeted by famous traders could potentially skyrocket in value.

Personally, I predict social trading will be one of the major topics in 2026. As it spreads to the masses, institutional investors will focus on solid investments and management, but I suspect more ordinary people will aim to strike it rich through smartphone apps and engage in trading as entertainment.

First off, I’m looking forward to seeing how the inaugural tournament turns out.

That concludes our research on “easy.fun”!

Reference Links:HP / DOC / X

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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.

【purrLabs】Advancing "IP Capital Markets" as Coinbase's First Official IP Licensee / Supporting IPs like Mr. Miggles and Peach & Pablo / @purrLabs

mitsui — Mon, 05 Jan 2026 21:00:49 GMT

Good morning.
I’m Mitsui, a web3 researcher.

Today I researched “purrLabs”.

What is purrLabs?
Transition and Outlook
Can IP Capital Markets be done?

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TL;DR

purrLabs is a Silicon Valley startup founded in 2024, serving as Coinbase’s first official IP licensee to advance “IP Capital Markets” (tokenization of IP × community ownership).
The flagship IP is Coinbase’s cat character “Mr. Miggles,” which has spread organically through the community via $MIGGLES (over 175,000 holders) and 10,000 NFTs. Following official licensing, plans include smart toys, apparel, event tie-ins, and a creator fund initiative.
Supported IPs are also expanding. For the real cat IP “Peach & Pablo,” $PP was issued on District.xyz, raising 67 ETH (with 55% of the supply allocated to the market). The goal is to build an ecosystem using a flywheel that connects off-chain revenue streams like picture book and apparel sales with on-chain activities.

What is purrLabs?

purrLabs is a next-generation entertainment company founded in 2024 in Silicon Valley, USA, that merges Web2 and Web3.

As Coinbase’s first official IP licensee, it was born to realize IP Capital Markets and has become a driving force in tokenizing intellectual property and building community ownership models.

◼️Mr. Miggles

The flagship project is one in which the company has licensed and is developing the character IP “Mr. Miggles,” originating from Coinbase.

Mr. Miggles is a character said to be modeled after a cat owned by a Coinbase employee. He looks a bit sullen but has his tongue sticking out slightly. He made his debut in a video for Coinbase’s On-Chain Summer NFT campaign in July 2024, instantly capturing attention with his grumpy yet endearing appearance.

https://x.com/MrMigglesOnBase

Initially conceived as a one-off marketing mascot, the character unexpectedly garnered overwhelming community support. This led to fans independently creating a meme coin named “Mr. Miggles.” This coin ($MIGGLES) rapidly grew to over 175,000 holders, establishing itself as a successful meme.

Additionally, Mr. Miggles’ NFT collection (10,000 pieces total) has also been released, and fans are enjoying them as profile pictures or as a form of identity within the community.

https://opensea.io/collection/miggles-on-base

In response, Coinbase officially decided to recognize the IP deployment and will officially license Mr. Miggles’ IP to purrLabs in December 2024.

#Miggles IP from @coinbase, & our new Creator Fund, is a watershed moment for creator-driven communities.\n\nMarket up or market down, continue building infrastructure for the next digital revolution. Sign up now at purrLabs.io 🤝\n\ncointelegraph.com/press-releases… ","username":"purrLabs","name":"purrLabs","profile_image_url":"https://pbs.substack.com/profile_images/1851045812811546631/mfmF7gBb_normal.jpg","date":"2024-12-19T21:52:46.000Z","photos":[{"img_url":"https://pbs.substack.com/media/GfMW5nAasAAyXX_.jpg","link_url":"https://t.co/gbnQoZAdje"}],"quoted_tweet":{},"reply_count":15,"retweet_count":60,"like_count":161,"impression_count":16679,"expanded_url":null,"video_url":null,"belowTheFold":true}" data-component-name="Twitter2ToDOM">

purrLabs envisions leveraging this IP to develop physical products and real-world events, considering a strategy that combines token experiences with physical goods such as smart toys and apparel, not just NFTs.

Additionally, they plan to establish a creator fund and provide support for creators on Base.

◼️Peach & Pablo

Peach & Pablo is a character IP modeled after two real rescue cats, born from their viral popularity in short-form video content on platforms like TikTok and Instagram.

Building upon this IP, the “$PP” (Peach & Pablo Token) was issued in December 2025. Token holders are expected to receive participatory benefits such as preferential treatment at events and merchandise sales related to future works, as well as a voice within the community.

The token sale and distribution took place on the District.xyz platform in partnership with purrLabs, raising 67 ETH (approximately $200,000) while distributing 55% of the total supply (550 million tokens) to the market.

Although it’s been only a short time since the TGE, the official online store has already begun taking pre-orders for the first picture book, ‘Peach Sets Sail,’ and selling character T-shirts.

The picture books appear to be produced in the UK, and while merchandise currently focuses on apparel, plans are in place to expand into plush toys and other items in the future.

◼️Products & Services

As mentioned above, purrLabs is a company that supports tokenizing IPs to elevate them beyond mere memes. It was established under a licensing agreement with Mr. Miggles, but subsequently began supporting other IPs and currently also supports Peach & Pablo.

Our main products and services and their target users are as follows.

IP Tokenization Platform：We will issue IP as digital assets (tokens and NFTs) on the blockchain in compliance with regulations, establishing a system where fans and communities can share ownership and access rights.
Community Engagement Initiatives：We support the creation of long-term IP ecosystems that extend beyond one-off NFT launches. Specifically, we provide mechanisms to sustain community engagement, including fan-participation events and governance through token rewards, co-branded merchandise rollouts, onboarding initiatives, and ongoing operational support.
Physical × Digital Product Line：We prioritize building a cohesive universe that combines physical products like “smart toys” and collectibles (figures, fashion items, etc.) with digital content and token rewards—not merely digital IP expansion.
Consulting & End-to-End Support：We provide comprehensive support for creators and corporate brands, from formulating blockchain utilization strategies to token design, brand strategy, content creation, community management, and data analysis.

We will continue to expand our supported IPs while simultaneously working to consolidate all IPs into a single ecosystem.

Transition and Outlook

purrLabs, Inc. was founded in California as a next-generation entertainment company bridging Web2 and web3.

Key members include Founder and CEO Kousuke Tominaga, Co-founder and Head of Global Relations Rachel Brissenden, and Co-founder Tyler Choi.

The impetus for its establishment was the success of Coinbase’s Mr. Miggles campaign in 2024. This campaign humorously raised issues surrounding creators’ rights, and the character Mr. Miggles gained immense popularity.

Following the campaign, purrLabs was born, fueled by the explosive growth of the $MIGGLES token, which emerged organically from the Coinbase community.

The company has become the first to formally acquire the IP license for Mr. Miggles from Coinbase, embarking on building a new model to deploy and monetize various popular character IPs, including Mr. Miggles, on-chain.

Our founding mission has been to become a pioneer in IP Capital Markets. Specifically, we aimed to break away from the centralized Hollywood model that traditionally governed character businesses, creating a system that enhances IP value through direct participation and ownership by fan communities.

Starting with support for Mr. Miggles from the founding period, we gradually embarked on the parallel development of multiple IPs.

As symbolized by the announcement of our partnership with District.xyz (November 2025), we are strengthening our role as an “IP Incubation Lab” by collaborating not only with our own IP but also with popular external IP and emerging characters, launching them on the Base chain.

@districtxyz (district.xyz)— the leading Internet Capital Markets launchpad on @base, backed by @a16z — to build the future of IP Capital Markets (IPCM).\n\nTokenized IP. Onchain distribution. Culture-powered economies.\nA new ","username":"purrLabs","name":"purrLabs","profile_image_url":"https://pbs.substack.com/profile_images/1851045812811546631/mfmF7gBb_normal.jpg","date":"2025-11-20T02:26:42.000Z","photos":[{"img_url":"https://substackcdn.com/image/upload/w_1028,c_limit,q_auto:best/l_twitter_play_button_rvaygk,w_88/j34iujzcyfxy5dqmmek9","link_url":"https://t.co/RiYFHF9UaZ"},{"img_url":"https://pbs.substack.com/media/G6Kg4zyacAQjvaw.jpg","link_url":"https://t.co/RiYFHF9UaZ"}],"quoted_tweet":{},"reply_count":38,"retweet_count":184,"like_count":348,"impression_count":52136,"expanded_url":null,"video_url":"https://video.twimg.com/amplify_video/1991330385213763584/vid/avc1/1280x724/7PxWqSydIpZI9DyT.mp4","belowTheFold":true}" data-component-name="Twitter2ToDOM">

Can IP Capital Markets do it?

Finally, we conclude with a summary and analysis.

Currently, Base is focused on the creator economy ecosystem, both on-chain and through apps. We are supporting the issuance of creator coins in collaboration with Zora, aiming to build a creator and IP ecosystem on-chain.

purrLabs is one of the projects right at the center of that trend. It’s the first company to officially receive an IP license from Coinbase, and naturally, it issues both tokens and NFTs on Base.

However, we aim to be more than just a meme token launchpad for famous IPs. We seek to generate revenue as a proper IP business while integrating with on-chain tokens and communities.

The following is purrLabs’ creator flywheel model, where the initial starting point is off-chain attention and revenue. The momentum is then carried on-chain, utilizing token transaction fees and other mechanisms to create content, thereby further spinning the flywheel.

Personally, I believe in the potential of the IP Capital Market as envisioned by purrLabs. Especially in a country like Japan, which possesses a vast number of valuable IPs, entering this market represents a compelling option.

However, IP tokenization can be designed to burn out quickly. Creator coins on platforms like Base and Zora often follow the same pattern as previous SocialFi projects: celebrities release tokens, sparking initial hype that quickly fades into decline.

Therefore, it is most crucial to generate solid revenue as an IP off-chain and then integrate that with on-chain operations. While such concerns exist, I believe this market holds significant potential depending on how it’s utilized, so I intend to continue researching it.

That concludes our research on “purrLabs”!

Reference Links:HP / X

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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.

Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:

X：@web3researchgl
Telegram：@mitsui0x

*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.