Written by: Prathik Desai
Compiled by: Saoirse, Foresight News
"When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done." – John Maynard Keynes, 1936
The crypto industry is often criticized, with many outsiders viewing it as purely driven by speculation, labeling it a casino with no fundamental support. However, what many fail to realize is that speculation is often a precursor signal to market evolution. A group of speculators, scorned by the mainstream, gather together, coalescing into liquidity. It is upon this foundation of liquidity that mature, compliant businesses are later built.
In this article, I will analyze this evolutionary path in light of recent phenomena in the crypto market: a public chain originally intended for stock trading launches a Meme coin issuance platform; a perpetual futures trading platform pivots to building commodity trading infrastructure; and a brokerage firm uses capital generated by a frog-themed token to support its on-chain stock trading system.
Thus, the story unfolds...
In the crypto space, speculation goes by many names: market noise, bubbles, casinos. But one point is rarely acknowledged: speculation can become the bedrock upon which upper-layer business models grow as the industry matures.
However, it must be clarified: not all bubbles can transform into foundations. Bubbles that remain purely speculative will eventually burst quickly. But if a bubble can combine with a sustainable trading scenario, generating ongoing trading activity, it can become a foundation, capable of supporting the establishment of more businesses.
This is not a new phenomenon; it has played out repeatedly throughout the long history of finance.
Consider the Chicago grain market of the 1840s. The Chicago Board of Trade established a futures market with the original purpose of helping farmers, whose harvests were full of uncertainty, lock in prices in advance to minimize losses. But for every farmer wanting to sell grain forward, there needed to be a counterparty willing to take on the long forward position and bear the price risk. Speculators filled this gap. The risk transfer market functions precisely because speculative capital willingly absorbs the price risk that farmers seek to shed.
The key to the birth of the futures market was the separation of "physical grain" and "grain as a tradable commodity." American historian William Cronon termed this process the abstraction of grain. Once grain trading was simplified into warehouse receipts, ownership could be freely transferred, allowing speculators to participate in trading on a large scale. Massive speculative trading created ample liquidity, enabling farmers to always find counterparties. This abundance of liquidity ultimately allowed Chicago to grow into the global wheat pricing center.
Interestingly, at the time, a significant portion of the populace resisted and despised such trading. The Granger Movement openly criticized exchange speculators, accusing them of profiting from farmers' labor. Yet, this mechanism eventually evolved into an essential price discovery infrastructure for the global agricultural economy. If there had been no speculators acting as counterparties in the 1870s, the global wheat market today would not have a mature pricing system.
Economist John Maynard Keynes' discourse on speculation is widely known, but his complete view more clearly reveals the dual role of speculation. Keynes divided market activities into two categories: enterprise, which is forecasting the prospective yield of assets over their whole life; and speculation, which is forecasting the psychology of the market. He worried that in markets with ample liquidity, speculation would cannibalize enterprise.
A deeper reading of his arguments shows the two-sided nature of speculation.
"Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done."
Speculation detached from any underlying asset is highly risky; but if speculation is anchored to valuable underlying assets, it can play a positive role.
As early as the first known work on securities markets – Joseph de la Vega's *Confusión de Confusiones* written in 1688 – the author noted that the Amsterdam Exchange attracted both investors and gamblers. Most existing exchanges started this way. But over time, this history faded, and a stereotype formed: that serious investment needs were the original purpose of exchanges. This is not the case.
Looking at the Present
On August 5th, the crypto industry's largest decentralized exchange, Uniswap, launched the Pools platform, allowing users to issue and trade Meme coins on Robinhood Chain. This blockchain was built by the brokerage firm of the same name, with the initial goal of serving its 30 million funded accounts for tokenized stock trading.
The story goes much further. Before the official launch of the Pools platform, traders unearthed the unpublished smart contract and executed over $150 million in trades through it. This forced Uniswap to support both the test and official contract versions and delay the launch plan. The platform's top token, FRONG, named after the filename of a frog video used in Uniswap's promotional material, was minted using the same contract six days early; on the day the platform officially opened, the token had 12,141 holders.
One can interpret this as they wish: approximately $150 million in capital traded a frog-themed token on infrastructure not yet officially operational, on a public chain originally built for securities trading. FRONG has now also become the unofficial mascot of the Pools platform. It's hard not to suspect this was a deliberate action to drive traffic to Uniswap's latest V4 version chain. Even if not planned, the on-chain Uniswap V4 daily trading volume surged from $86.2 million to $228.3 million, nearly tripling.
But as stated at the beginning of the article, not all bubbles and speculation can foster sustainable business models. Whether a speculative venture can endure depends crucially on what it is speculating on. We can look at shturl.c as a reference.
For years, shturl.c has made speculation its core product and is now one of the largest Meme coin issuance platforms. On this platform, 70% of Meme coins have a lifespan of less than a day, with only a tiny fraction surviving more than a month.
@Coingecko
From January to July 2026, the protocol's fee revenue nearly halved compared to the same period last year, reaching only $420 million. Despite this, it remains one of the highest-revenue-generating protocols in crypto, with full-year 2025 revenue of $620 million and a net profit of $584 million.
A similar platform is Hyperliquid. It initially focused on high-leverage cryptocurrency trading, catering to traders' directional bets. Later, the platform extended its leverage trading model to various assets for all-weather trading, unrelated to crypto. Under the HIP-3 governance framework, the platform has now launched perpetual contracts for tracking instruments of Nvidia, Tesla, Nasdaq, gold, crude oil, silver, stock indices, and more. When oil-related news breaks on a Sunday, traders can immediately establish positions, while traditional markets wait until Monday to open.
In early July, for the first time in the platform's history, trading volume for real-world asset perpetual contracts surpassed that of cryptocurrencies, accounting for 52% of total volume.
Although Hyperliquid's overall trading volume has shrunk by nearly half from its 2025 peak, growth in real-world asset trading has offset the decline in crypto pairs. This is precisely the value speculation can create: Hyperliquid migrated the leverage trading model that attracts native crypto users to assets like gold, pre-IPO company equity, and stock indices, building a new all-weather pricing layer. Many traditional trading platforms are now emulating this model.
Robinhood Chain is replicating this development path in real-time.
Although the team positions this public chain as the underlying infrastructure for on-chain stock trading, CEO Vlad Tenev is quite pleased with the traffic brought by Meme coin traders.
"We built Robinhood Chain with the goal of being the best public chain for real-world asset trading... but it's also great for trading Meme coins."
Riding the wave of Meme coin trading, the chain surpassed Base chain in daily active users just three weeks after launch. The traffic and capital generated by Meme coin speculation are the seed capital for the future development of the on-chain stock trading system.
Of course, this doesn't guarantee that speculation will ultimately upgrade into a mature business. Whether this transformation is completed depends on the platform's own choices.
Robinhood, with its 30 million funded users and multiple business lines, has powerful distribution capabilities that could potentially convert the traffic from Meme coin trading into a user base for on-chain securities trading. We can see that its Q2 prediction market revenue skyrocketed over tenfold year-over-year to $156 million, accounting for 20% of the platform's total trading revenue.
The Nature of Speculation
Many people never truly understand speculation. Speculation itself is neither inherently good nor bad. Stripped of all labels, it is simply one of humanity's oldest instincts.
Speculation naturally arises when people convert their views into financial bets.
In its most primitive form, speculation is about seeking liquidity for a pricing instrument; wherever liquidity flows, it prices that instrument. The instrument can be a sack of wheat, Nvidia stock, a frog video named frong.mp4, the outcome of a football match, or the probability of a presidential candidate winning.
The nature of the underlying asset determines the direction and boundaries of speculation. Once speculation loses the support of a valuable underlying asset, the same capital-fueled hype ultimately struggles to precipitate long-term, valuable outcomes. This rule runs through the history of finance, and the crypto industry is walking the same path.
Hyperliquid bound leverage trading to assets like gold, building a new pricing system in just two years; Robinhood leverages the unexpected traffic from Meme coin speculation to simultaneously construct the underlying channels for on-chain securities trading.
What kind of system speculation ultimately builds depends on how much value the underlying asset can bear.
