How Ethena's L1 Shows Fat Apps Could Someday Take On Fat Protocols

Apps like Ethena are launching their own blockchains, raising the question: Do blockchains actually capture value, or do apps?

Blockchains were supposed to capture the majority of the value in crypto. But what if that’s wrong?

For years, the Fat Protocols Thesis argued that blockchains would be the biggest winners. But new data suggests that apps like Uniswap, Ethena, and others are now out-earning many networks.

Are we watching the rise of “Fat Apps” instead?

On this episode, Ryan Watkins, Co-founder at Syncracy Capital, talks about: 

• Why the biggest apps are generating more revenue than many layer 1s

• Why Ethena is launching its own blockchain

• What this means for Ethereum, Solana & other L1s

• How blockchains can compete on value capture

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

Now, let’s get into this week’s news! In today’s edition:

• ⚖️ SEC backs down on Ripple, but the $125M fine still looms.

• 🚀 Solana’s ad misfire sparks backlash and a swift deletion.

• 🔄 Raydium unveils LaunchLab while Pump.fun launches Pumpswap.

• 🛑 DOJ keeps the heat on crypto crime, with Tornado Cash’s Roman Storm in the crosshairs.

• 🏛️ White House crypto summit hears big ideas.

• 🔥 Crypto.com’s surprise 70B CRO re-mint vote sparks community outrage.

• 📉 Solana futures launch flops, with weak institutional demand on CME.

• ❌ Aave scraps new token plans after community pushes back.

• 🔍 Coinbase’s Verified Pools fuel debate over KYC in DeFi.

• 🎲 Robinhood enters prediction markets, letting users bet on key events.

• ✈️ Telegram’s Pavel Durov flies free, sending TON soaring.

• 🏦 EOS rebrands to Vaulta, pivoting to Web3 banking.

SEC Drops Appeal Against Ripple

The U.S. Securities and Exchange Commission (SEC) has decided to drop its appeal against Ripple Labs, according to a statement from Ripple CEO Brad Garlinghouse. The long-running legal battle, which began in December 2020, revolved around the SEC’s claim that Ripple unlawfully sold $1.3 billion in XRP as an unregistered security.

Garlinghouse hailed the development as a “resounding victory for Ripple”, adding that it represents a broader win for the cryptocurrency industry. However, Unchained reported that while the SEC has abandoned its appeal, a $125 million fine imposed on Ripple for institutional XRP sales remains unresolved. Ripple has indicated that it will continue its own appeal to challenge the penalty.

The SEC, under acting Chairman Mark Uyeda, has dropped several lawsuits against crypto firms in recent months. The decision follows Ripple’s multi-million-dollar donations to pro-crypto political initiatives, though a White House spokesperson dismissed speculation that the contributions influenced the SEC’s decision, calling such claims “outlandish.”

Solana Pulls Controversial Ad

On Monday, Solana released a patriotic-themed advertisement to promote its Accelerate conference, but the campaign quickly sparked controversy for its political messaging. The ad depicted a personified America in a therapy session, where the therapist advised him to focus on pronouns instead of innovation. The character ultimately rejects the advice, declaring, “I want to invent technologies, not genders.”

The video immediately drew backlash, with critics labeling it “cringe,” “tone-deaf,” and “divisive.” Many in the crypto space accused Solana of alienating users and attempting to appeal to right-wing figures like Donald Trump and Elon Musk. Base Product Lead Anneri van der Merwe criticized the ad, saying, “Base is for everyone.”

Facing widespread criticism, Solana deleted the ad just nine hours after posting it, but not before it had racked up over 1.2 million views and 1,400 reposts.

Solana co-founder Anatoly Yakovenko commented on X, “The ad was bad, and it’s still gnawing at my soul. I am ashamed I downplayed it instead of just calling it what it is - mean and punching down on a marginalized group. I am grateful for the ecosystem devs and artists that immediately called it what it is both publicly and privately.”

Raydium and Pump.fun Intensify Rivalry Over Solana’s Token Trading Market

The competition between Raydium and Pump.fun, two of Solana’s largest DeFi platforms, is escalating as both launch new products aimed at dominating the token launch and trading sector.

Earlier this week, Raydium announced LaunchLab, a token launchpad designed to offer an alternative to Pump.fun’s existing model. The platform will allow teams to set their own fees, use custom bonding curves, and create liquidity pools within the Raydium ecosystem. This move came after Pump.fun announced plans to launch its own automated market maker (AMM), which could reduce Raydium’s role in the token migration process.

And on Thursday, Pump.fun launched PumpSwap, a native decentralized exchange (DEX) built to bypass Raydium entirely. PumpSwap allows tokens that complete their bonding curve on Pump.fun to migrate instantly and for free, eliminating the previous 6 SOL migration fee. The new platform enables liquidity providers to create pools at no cost, while also integrating a revenue-sharing model for token creators, expected to roll out in the near future.

PumpSwap operates similarly to Raydium v4 and Uniswap v2, using a constant product AMM model, with a 0.25% trading fee—0.20% going to liquidity providers and 0.05% to the protocol. Pump.fun has also announced that select verified partner tokens, such as APT, TRON, and cbBTC, are now available for trading.

DOJ Stands Firm on Crypto Crime

The U.S. Department of Justice (DOJ) remains steadfast in its aggressive approach to crypto-related crime, even as other federal agencies soften their stance on digital assets. As reported by Unchained, the DOJ continues to pursue high-profile cases, including the prosecution of Roman Storm, co-founder of the Ethereum-based privacy protocol Tornado Cash.

Storm, a naturalized U.S. citizen, faces charges of money laundering, unlicensed money transmission, and violating U.S. sanctions under the International Emergency Economic Powers Act (IEEPA). The case, which is set to go to trial in April, has raised alarms among DeFi advocates, who argue that targeting developers of autonomous smart contracts could stifle innovation and weaken financial privacy in the crypto space.

While the SEC and Treasury Department have begun scaling back enforcement actions under President Trump’s administration, the DOJ remains committed to investigating crypto-related national security threats, including those tied to sanctions violations and illicit finance. Legal experts suggest the outcome of Storm’s case could set a precedent for the broader DeFi industry, influencing future regulatory treatment of decentralized finance and privacy technologies.

Five Key Proposals for U.S. Policy

At the White House Crypto Summit on March 7, industry leaders had the chance to pitch policy ideas to top regulators and advisors, including Crypto Czar David Sacks, SEC Commissioner Hester Peirce, and Treasury Secretary Scott Bessent. While President Trump attended only the public portion, the closed-door session revealed at least five major proposals, Unchained reported.

Former CFTC Chair Chris Giancarlo suggested reviving "letters of marque" to authorize private firms to hack foreign adversaries, targeting stolen crypto assets like the $6 billion taken by North Korea’s Lazarus Group. Michael Saylor urged the government to acquire up to 25% of Bitcoin’s total supply, aligning with a growing push for a U.S. bitcoin reserve. Paradigm’s Matt Huang advocated for dropping the DOJ’s case against Tornado Cash developer Roman Storm, warning of its chilling effect on DeFi innovation.

Additionally, Bitcoin Magazine CEO David Bailey called for strategic bitcoin acquisitions, while Robinhood’s Vlad Tenev proposed tokenizing private equity to expand investor access. The White House made no commitments but described the summit as a “success” in engaging industry leaders.

Crypto.com Pushes Through Contentious Vote

Crypto.com has passed a controversial proposal to reissue 70 billion CRO tokens, despite strong opposition from sections of its community. The vote, which took place from March 2-16, was initially struggling to reach the required 33.4% quorum. However, a last-minute surge of 3.35 billion CRO votes—primarily from Crypto.com-controlled validators—pushed the proposal over the threshold.

The final results showed 61.18% in favor, 17.61% opposed, and 20.11% abstaining. Community members expressed frustration, arguing that Crypto.com’s dominance over the validator set—controlling between 70-80% of total voting power—allowed it to force the decision.

With the vote now official, the Cronos blockchain has minted the new tokens to vest over a five-year period, with plans to use them for various initiatives, including a potential CRO ETF. Just one day after the vote, Crypto.com introduced another proposal to burn 50 million CRO, further fueling criticism from discontented token holders.

Solana Futures Launch on CME Sees Tepid Interest

The debut of Solana futures on the Chicago Mercantile Exchange (CME) this week generated low trading volume, signaling weak institutional demand, according to K33 Research. On its first trading day, Solana futures recorded just $12.3 million in volume, with $7.8 million in open interest, a stark contrast to the $102.7 million Bitcoin futures launch in 2017 and Ethereum’s $31 million debut in 2021.

K33 analysts Vetle Lunde and David Zimmerman noted that the lackluster reception suggests a muted impact for any potential Solana exchange-traded fund (ETF) approval. While Solana’s futures launch aligns with previous rollouts when adjusted for market cap, the absolute demand remains significantly lower.

In related news, asset manager Volatility Shares has launched two Solana futures ETFs, with SOLZ offering standard futures exposure and SOLT targeting double the daily price movement.

Aave Scraps New Token Plans After Community Backlash

Aave, the largest decentralized lending protocol, introduced Horizon, a new initiative aimed at attracting institutional investors and integrating real-world assets (RWAs) like tokenized U.S. Treasury bonds and stocks into DeFi. As institutional interest in blockchain-based financial products grows—exemplified by BlackRock’s billion-dollar tokenized treasury fund—Aave sees Horizon as a way to expand beyond its traditional DeFi user base.

However, an early proposal suggested creating a new token for Horizon, with 15% allocated to the Aave DAO and a revenue-sharing model, sparking intense debate. Community members opposed the idea, arguing it could dilute AAVE’s value and undermine its role as Aave’s core governance and utility token.

Facing strong backlash, Aave founder Stani Kulechov confirmed on X that no new token would be introduced, stating that the DAO’s consensus would be respected.

Coinbase Launches Verified Pools

Coinbase has introduced Verified Pools, a new set of KYC-authenticated liquidity pools designed to enhance transparency in onchain trading. Available in the U.S., Singapore, the Netherlands, British Virgin Islands, Cayman Islands, and Channel Islands, the pools aim to reduce counterparty risks while maintaining DeFi’s openness. Users can access them through Coinbase Wallet, Prime Onchain Wallet, or other verified wallets.

Built on Coinbase’s layer 2 Base and utilizing Uniswap v4, the initiative has drawn attention for bypassing Aerodrome, Base’s largest decentralized exchange. While some community members saw this as a snub, Aerodrome founder Alex Cutler clarified that the project opted not to prioritize early involvement.

Robinhood Introduces Prediction Markets Hub in U.S.

Robinhood launched a new prediction markets hub within its app, enabling users to trade contracts on events such as Federal Reserve interest rate decisions and the NCAA basketball tournaments. The feature is powered by Kalshi, a CFTC-regulated exchange, and is available to users across the United States.

The platform charges $0.02 per contract, with revenue shared between Robinhood and Kalshi. This move follows Robinhood’s past attempts to enter the space, including a briefly available 2024 election market and a shelved Super Bowl betting initiative.

Prediction markets are still under regulatory scrutiny, with some contracts restricted by state laws. Robinhood has stated that it remains in ongoing discussions with the CFTC to ensure compliance while fostering innovation in derivatives and crypto markets.

Pavel Durov Allowed to Leave France

Toncoin (TON) surged 17% after reports confirmed Telegram founder Pavel Durov was granted temporary permission to leave France following months of legal restrictions. A judge approved his request, allowing him to travel to Dubai for several weeks.

Durov had been detained in France since August 2024, facing allegations that Telegram enabled illegal activities, including money laundering and drug trafficking. Under legal pressure, the platform expanded its moderation team and tightened content policies.

Following the news, TON jumped to $3.50, pushing its market cap above $8.5 billion.

EOS Rebrands to Vaulta Amid Security Concerns

This week, EOS Network announced a rebrand to Vaulta, making a pivot toward Web3 banking. As part of this transformation, Vaulta will integrate the Bitcoin-based digital banking solution exSat, while retaining EOS’ core blockchain architecture, including its C++ smart contract system and decentralized on-chain RAM database. The rebrand will also introduce the Vaulta Banking Advisory Council, tasked with overseeing compliance and strategy. A token swap is tentatively scheduled for late May.

The rebranding news drove a 30% surge in EOS’ native token, which reached a four-week high of $0.65 on Monday evening. However, the transition comes at a time when the network is grappling with security concerns.

On Wednesday, blockchain security firm SlowMist detected an address poisoning attack on EOS. Attackers sent small EOS transactions from a fraudulent address, "oktothemoon," which closely resembled OKX’s legitimate address, "okbtothemoon." This tactic exploits users' habits of copying and pasting transaction addresses, increasing the risk of funds being misdirected.

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