Ethena Exits USDH Race, Native Markets Now Frontrunner

Hi! In today’s edition:

• 🏁 Ethena exits USDH race, leaving Native Markets in pole position

• 🏛️ SBF heads to appeals court this fall

• 🌀 Aave looks to de-risk Scroll amid DAO shakeup

• 🎙️ Pump.fun: from memecoins to mainstream platform ambitions

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Ethena Withdraws From USDH Bidding Race

Ethena Labs has officially withdrawn its bid to issue Hyperliquid’s USDH stablecoin, clearing the way for Native Markets to become the frontrunner ahead of the Sept. 14 validator vote.

In a Thursday X post, Ethena Labs founder Guy Young said the decision followed direct discussions with the Hyperliquid community and validators, who raised concerns that Ethena is not a Hyperliquid-native project and has product lines outside USDH.

“These are valid and we accept the pushback,” said Young, who went on to congratulate Native Markets.

“While some are complaining about their lack of credibility I think their success here perfectly embodies everything which is so special about Hyperliquid and their community.”

Native Markets is now seen as the clear favorite, with Polymarket reflecting a 93% chance of victory for its bid.

Validator signaling also shows that the majority of stake is in favor of Native Markets, with Hyperliquid’s largest validator run by Nansen and HypurrCollective accounting for 18% of the stake.

Their support comes after Nansen CEO Alex Svanevik said it was “factually incorrect” to say that the validators were not interested in voting for anyone besides Native Markets.

Sam Bankman-Fried Appeal Hearing Set for November 

A U.S. federal appeals court will hear arguments for former FTX CEO Sam Bankman-Fried’s appeal, nearly two years after he was sentenced to 25 years in prison following his conviction in 2023.

A Wednesday notice from the Second Circuit Court of Appeals indicates the hearing has been scheduled for Nov. 4. It will address whether substantial legal or procedural errors at Bankman-Fried’s trial could warrant a new trial or reversal of conviction.

Lawyers for Bankman-Fried filed a 102-page appeal in April 2024, claiming that he was presumed guilty by the judge who presided over his trial.

That filing also argued that the government had presented a false narrative that FTX’s customers, lenders, and investors had permanently lost their money.

FTX’s bankruptcy estate began the process of disbursing $16.5 billion in recovered assets earlier this year.

Aave Seeks to Reduce Scroll Exposure Amid Governance Chaos

DeFi protocol Aave’s community is considering a proposal to immediately adjust risk parameters for all assets on the Aave V3 Scroll instance.

Aave governance delegate Aave Chan Initiative (ACI) proposed reducing exposure to the Scroll ecosystem in response to pronounced instability in Scroll’s governance model.

Scroll’s DAO halted new proposals and initiated a redesign of its governance structure following the resignation of its DAO lead, creating uncertainty around ongoing protocol operations.

The Scroll DAO described the measure as a “thoughtful step” that would help design more efficient processes. But the wider crypto community, including Aave’s governance delegates, did not see it that way.

Aave risk manager Chaos Labs supported ACI’s proposal, noting that Scroll’s onchain activity had also contracted significantly over the last year.

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How Pump.fun Plans to Beat Social Media Giants and Win Beyond Crypto

Bots, buybacks, and a bid to beat YouTube and Twitch: Pump’s plan to go mainstream.

Pump.fun rocketed to revenue, ran a blockbuster token sale, and then hit turbulence: rivals took share, the token slid, bots spammed launches, and critics cried “casino.”

Now the team is fighting back with a dynamic creator-fee model, a liquidity foundation for cult communities, and an unapologetic push into live streaming and mobile.

In this episode, co-founder Noah Tweedale lays out how Project Ascend aims to align creators and communities, why buybacks aren’t a long-term business model, what they’re doing about bots and user losses, and how Pump plans to compete not just with crypto apps, but with YouTube, Twitch, and TikTok.

It’s a candid look at whether a crypto product can become a mainstream platform.

Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform.

• 🔥 The bankrupt FTX estate pulled $45 million worth of solana from staking as part of its ongoing monthly asset sell-off, though it still holds nearly $1 billion in locked SOL.

• 📱 Coinbase demanded court sanctions after accusing the SEC of deleting almost a year’s worth of texts from ex-chair Gary Gensler, calling it a major breach during a key period of crypto enforcement.

• 🗳️ World Liberty Financial is close to approving a plan to use all its protocol-generated fees to buy and burn its own WLFI tokens, in a bid to shrink supply and boost long-term value.

• 📊 Upexi and BIT Mining ramped up their solana holdings — with Upexi’s stash now worth $456 million — as both firms ride the wave of rising SOL prices and position themselves as major players in crypto treasury strategies.

• 🪙 Kraken rolled out perpetual futures trading to retail users in select regions, giving everyday investors access to crypto derivatives as the exchange gears up for a potential IPO in early 2026.

• 🧮 Project 0 launched a new DeFi platform that lets users manage their risk, lending, and trading across multiple protocols from one account, aiming to improve capital efficiency without needing to trust new smart contracts.

• 🧾 Hong Kong’s central bank proposed loosening capital rules for banks holding crypto, aiming to strengthen its role as a global crypto hub while allowing safer participation under clearer regulatory conditions.

• 📈 Shares of crypto lender Figure surged 24% above IPO price in their Nasdaq debut, signaling rising investor confidence in blockchain-backed lending and the growing appeal of real-world asset tokenization.

1. HRF: Financial Freedom Report #89

2. Fortune: Billionaire Barry Silbert says he hasn’t been this excited about a crypto project since discovering Bitcoin