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OVERVIEW

Dear BIS, Your Idea Is BS 🙄

Before we dive in, here’s today’s crypto market heatmap:

And here’s a look at crypto’s total market and altcoin market cap charts:

TECHNICAL ANALYSIS
BTC Dominance Still Dipping 📉

Whether you want to chalk the following to BTC weakness or altcoin resilience, that’s up for debate:

 What isn’t up for debate is the fact that BTC’s Dominance, despite being slightly up at the moment (+0.45%), made a new 6-month low today.

We’re in mid-August, a month that is historically the second worst performing month Bitcoin and most of the crypto market. And we’re entering the weekend.

Prepare for some shenanigans. 😐️ 

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NEWS
BIS Wants A Credit Score For Your Coins. Hard pass. 😐️ 

The Bank for International Settlements (BIS) put out a report that wants an “AML compliance score” stapled to your money. Off-ramps would read the meter, then block you, surcharge you, or shave your balance if your coins look insufficiently holy. 🙏 

This stupid idea rewards gatekeepers and compliance vendors, not users. Pay for “purity checks,” or watch your crypto trade at a discount because a dusting attack brushed you two years ago. Perfect racket if you love captive markets and soft monopolies.

So. Many. Problems.

I get it. I do. They want a way to combat bad people doing bad things in crypto. Maybe the authors behind the paper are alltruistic, but this is the BIS we’re talking about.

There’s so many problems with this idea: Fungibility gets wrecked. One token equals one token until an oracle says otherwise. False positives pile up. Attackers grief wallets with tainted dust while real criminals route around it in minutes.

Whitelists turn permissionless rails into permissioned rails by stealth. Off-ramps become bouncers with quotas. Fewer exits, higher fees, more surveillance. A two-tier market where your cashout price depends on who touched your coins three hops ago.

There’s a grown-up path. Target crimes with receipts. Enforce at fiat rails with clear, auditable rules. Keep fungibility intact so people don’t need to buy a subscription to move value on a public ledger.

The BIS wants knobs to twist and rents to skim. Crypto wants rules that are transparent, predictable, and even-handed. Pick the system that treats citizens like citizens, not suspects. 🦹 

DEFI
DeFi Printed Receipts, CeFi Printed PDFs 📗 

Galaxy Digital’s Q2 State of Crypto Leverage came out yesterday. And it’s kind of crazy some of the stats - especially how DeFi is just dominating CeFi. 📈 

The full report is here, but here’s some TL;DR of the more interesting stats.

The Receipts

• DeFi loans: $26.47B, up $7.84B in Q2, new ATH. +42.11% QoQ. 

• CeFi borrows: $17.78B, +14.66% QoQ and up +147.5% off the Q4 2023 trough.

• CME’s (Chicago Mercantile Exchange) share of total futures Open Interest (OI): 15.48% at quarter end.

CeFi vs DeFi - Who Owned Q2

• DeFi’s lead widened again. Lending app dominance over CeFi moved back toward the Q4 2024 high, sitting at 59.8% at quarter end. CeFi held 40.2% when you strip CDPs, and even less when you include them.

• Top tracked CeFi lenders by book: Tether $10.14B, Nexo $1.96B, Galaxy $1.11B. That trio controlled 74.3% of the tracked CeFi market.

• Binance held 20.8% of perps OI, Bybit 15.4%, Gate 12.9%, Hyperliquid 6.9% (honestly, I thought this would be higher).

• The CME’s slice of BTC OI climbed to 26.3% while the ETH share printed 10.8%.

Rates Check

• Stablecoin borrowing barely budged. Weighted average on-chain stablecoin APR ticked from 4.7% to 4.96% by July 31.

• BTC borrow stayed cheap on-chain and higher OTC.

• ETH borrow spiked mid-July after big withdrawals from Aave. Looping went unprofitable, exit queue times ripped from hours to multiple days, and unstaking delays touched cycle highs.

There is some ‘gotcha’ math due to CeFi desks borrowing on-chain then lending off chain, which is part of this letter-salad word called Rehypothecation.

Rehypothecation

Rehypothecation is like this:

Let’s say there’s a crypto company called FTX, and users deposit $1M in BTC as collateral. FTX, wanting to engage in it’s own shenanigans, decides to use the $1M in BTC on a DeFi lending protocol to borrow stablecoins, which they’ll then lend to another DeFi platform for higher yields and so on.

The amount of money floating in this tinder box of borrowing and leverage went from $101M on June 22, 2025 to $176M on August 13, 2025. 🤯 

NEWS IN THREE SENTENCES
AI, Stablecoins, & Privacy News 🕵️

🧠 ASI Chain Bets On MeTTa - Smart Contracts That Reason, Not Just Run

Your dApps can now explain itself while it executes, which is exciting and slightly threatening. MeTTa treats computation like rewrite systems with lambda calculus, Atomspace, and concurrent reasoning, not just scripts. Interpreters compile through Rholang to a sharded substrate so agents can adapt logic at runtime. Artificial Superintelligence Alliance.

NEWS IN THREE SENTENCES
Real World Asset Tokenization (RWA) News 🪙

📈 Dinari Launches L1 Orderbook On Avalanche For Tokenized Equities

I swear this chain never is doing nothing - Dinari’s new chain coordinates omni-chain liquidity and settlement for 1:1-backed dShares with sub-second finality. Over 150 U.S. stocks are live and validators include Gemini, BitGo, VanEck, and WisdomTree. Think DTCC energy with DeFi ergonomics. Avalanche.

🎁 Philanthrify Turns Donors Into Onchain Auditors on MultiversX

Philanthrify logs every donation onchain and pushes live impact updates so donors stop guessing. The team touts 120k followers, $900k+ revenue, and Growth Games backing while MultiversX eats the micro-donation throughput without choking. Nonprofit can’t pass a block-explorer check? Enjoy fundraising with vibes only. MultiversX.

🏛️ Polymesh Taps Republic For Nodes And KYC - RWAs Get Adult Supervision

Rails first, narratives later - yes please. Republic will validate Polymesh, serve as an identity provider, and plug into a wallet used by millions. The firm brings 50+ tokenized assets and $2.6B+ in facilitated investments to a chain built for regulated RWAs. Polymesh.

NEWS IN THREE SENTENCES
DeFi, DEX, & Lending Protocol News 🏦

🔗 XRPL EVM Brings Solidity To Ripple Without Touching The Payments Core

After years of throughput flexing, XRP finally gets composability. Ripple shipped an EVM sidechain using the Cosmos stack and IBC so XRPL stays fast while devs get smart contracts. Testnet ran 10M+ txs and 75+ dapps before the June 30, 2025 mainnet launch, followed by 160+ tokens and 17k+ wallets. Cosmos.

NEWS IN THREE SENTENCES
Protocol News 🏦

🧪 UMA Adds Proposer Whitelists For Polymarket - Fewer Bad Takes, Same Open Disputes

Cleaner resolution flow, same decentralized backstop, fewer forum meltdowns. UMA now lets integrations restrict who can propose answers while keeping disputes open to everyone. Polymarket starts with 37 vetted addresses, each with 20+ recent proposals at 95%+ accuracy, cutting the junk that burns bonds and time. UMA.

🚨 Reactive Network: Common Web3 Scams

Rule one - if the button promises free money, the product is you. Open networks make it trivial to launch tokens you can buy but not sell, dapps that slurp approvals, and mints that sneak setApprovalForAll. Crime stats keep stacking while security guides repeat the same red flags because newcomers ignore them. Reactive Network.

🧾 Akash Provider Console Adds Earnings API - Operators Get Clean P&L

Providers can query daily, weekly, and monthly revenue with chain-checked totals and scoped, revocable keys. The API came from AEP-69 and targets dashboards, forecasting, and automation. Fewer spreadsheets, more GPUs paying rent. Akash Network.

LINKS
Links That Don’t Suck 🔗

🥷 $1.6M vanishes in a week as crypto address poisoning scams surge

🤔 $12,000 to be handed out per family as guaranteed income pilot program unveiled in US county

⛏️ Galaxy closes $1.4 billion debt facility to retrofit its Helios Bitcoin mining center for CoreWeave AI deal

🎰 "Our game made €4 million," says Rise of Industry's creator. "Three years later, I was broke"

🤖 “They fold like they’ve done it forever”: Figure’s Helix AI humanoid shows off human-like precision in laundry task, sparking ethics debate

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Author Disclosure: The author of this newsletter holds positions in ADA, IMX, COPI, MIN, AGIX, ALGO, ZEC, XLM, and NEAR. 📋