Authors: Edgy, Yayya
Compiled by: TechFlow
TechFlow Guide: The Ethereum Foundation is contracting due to treasury issues, but token-holding companies like Bitmine and SharpLink are taking over development funding. These companies hold nearly 5% of circulating ETH and are now using staking yields to pay for protocol R&D. Unlike MicroStrategy, which just hoards Bitcoin, ETH-holding companies are returning yields to protocol development—potentially allowing all ETH holders to enjoy a free ride.
Key Takeaways
- 80% of JTX platform fees go to the DAO; all proceeds received by the DAO will be used for open market buybacks and JTO burns, at least until Q4 2027, after which token holders will vote on whether to continue.
- The real difference between Jito and Venice is the 'plumbing': where the revenue lands, who can shut off the burn mechanism, whether governance can replace the executor, and if the project has genuinely redirected company revenue to the token in the past.
- When DAT companies' mNAV dropped below 1 and their holdings were underwater, the old flywheel of issuing stock to buy coins stalled. Companies like Bitmine and SharpLink then began directly funding protocol R&D; this improves incentive alignment but also exposes development funding to token price and company fragility.
The Crypto World Has Come Full Circle Back to TradFi
Crypto traders spent years urging everyone to escape the traditional financial system.
Hyperliquid's HIP-3 markets—stocks, commodities, and indices—reached $3 billion in volume over the last 7 days; the platform's native crypto perpetuals volume was $3.1 billion, almost equal.
We fled TradFi, only to trade TradFi with 20x leverage, lol.
In This Issue:
- Jito's latest proposal, and why JTO holders should be pleased.
- The new direction of ETH development funding: Are treasury companies taking over funding actually a good thing?
- Network-wide updates: Polymarket launches combo bets, Plasma One releases Android version, Jito's JTX goes live, and more.
JIP-38: Making Jito a 'Token-Centric' Network
"We have equity, but we will direct value to the token."
When Venice said this two weeks ago, it was slammed by Crypto Twitter (CT); when Jito said the same thing this week, CT cheered.
Here are the real differences between the two projects. (We discussed Venice on July 2nd, so we won't repeat the background.)
What Happened?
On July 13th, Jito DAO released JIP-38, officially defining Jito as a "token-centric network": all major project revenue flows to the DAO and is governed by the token; the token has hard economic rights over how this revenue is used.
The specific commitment: 100% of the revenue share JTX brings to the DAO will be used to buy and burn JTO on the open market. JTX is Jito's new self-custody trading app for professional traders, opened to waitlist users the day after the proposal. This arrangement will run for at least a year and continue until Q4 2027.
What JTO Holders Get:
- 80% of JTX platform fees go to the DAO; the remaining 20% is retained but can only be reinvested into the platform generating that revenue.
- 100% of the DAO's share is used to buy and burn JTO. The result is a reduced supply, not money sitting in a treasury for accounting games.
- Execution is handled by a "Revenue Splitter": it collects fees and performs the buybacks, with fee, buy, and burn records for each epoch disclosed on-chain.
- In Q4 2027, token holders will vote again on the entire arrangement, using at least a year of real data.
Sounds familiar, right? This is almost exactly Erik Voorhees's defense for Venice. Venice sold $65 million in equity and promised increased burns; Jito raised $50 million from a16z last October, reportedly with "well over $100 million" in cash on hand. Both are companies with an equity layer, also claiming to direct revenue to the token.
Why do I view them differently? Three reasons.
1. Revenue Lands in Different Pockets
Venice's revenue belongs to the Venice team. Apart from a small automatic burn—about $166k in April—other burn amounts are decided monthly by the board, which owes fiduciary duty to shareholders, not token holders.
Jito's fees go on-chain to the DAO treasury. JIP-38 explicitly states the token has "hard economic rights" over fund deployment. When money enters an address governed by token holders, burning is no longer a project's goodwill; it's institutionalized.
2. Token Holders Can Replace the Treasury Executor
I checked who exactly controls Jito's buyback machine. The honest answer: it's still managed by people for now.
The Revenue Splitter is actively managed by a Dev Council, a small committee authorized by the DAO; the proposal only promises gradual automation and decentralization in the future, with no concrete plan yet.
But the "leash" is real. The council's mandate is bound by JIP-36's revocable authority structure: a single governance vote, plus a 12-hour timelock, can revoke its permissions.
If Venice's board reduces burns to zero, VVV holders can only tweet complaints; if Jito's council misbehaves, JTO holders can remove them within 12 hours.
3. Money Has Already Flowed From Company to Token Twice
Before August 2025, Jito's 6% Block Engine fees were split 50/50 between Jito Labs and the DAO, each getting 3%. JIP-24 then directed the full 6% "permanently" to the DAO, with Labs actively giving up its revenue source.
JIP-38 extends the same model to JTX from day one of the new product's launch. Venice's Series A added an equity claim on top of token holders; Jito's equity layer is continuously reducing its own claim.
This history makes Jito more credible. If Venice wants similar credibility, it should also set up automatic buybacks for recurring revenue from subscription services.
But Questions Remain
JTX just opened to 1,000 users, so its cash flow rounds to roughly zero. For now, it's just a signal about "where future value will flow," not existing value. The proposal also doesn't specify who ultimately gets the 20% development share; clearly, it will likely go to Jito Labs, responsible for developing JTX.
One year isn't long. Forum members have already requested extending the deadline to five years. Labs, the Foundation, and its investors also hold substantial JTO, so part of "token holders decide" actually means "insiders decide."
To be fair, revenue from existing products like JitoSOL and BAM already flows to the DAO, which is a strong positive signal.
Why This Isn't Just About Jito?
Because most crypto projects have both an equity layer and a token layer. Everyone says "value will accrue to the token," but you can't just trust it.
Don't grade the pitch, grade the plumbing. Just ask three questions:
- Where does the revenue legally end up: a company account, or an address governed by the token?
- Who can turn off the burn mechanism? Can token holders replace this person?
- Has money ever actually flowed from the company's pocket to the token before?
Venice fails the first two, and CT noticed. Jito passes all three but gets an asterisk on "human-controlled."
Sponsored Content | stBTC: Bitcoin Now Has Liquid Staking Too
Liquid staking is one of the most validated sectors in crypto. Lido alone has over $17 billion TVL; for years, ETH holders could earn staking yields without giving up liquidity.
Bitcoin holders have lacked a counterpart because Bitcoin previously had no reliable, native staking mechanism that could be wrapped.
Now that's changing. Stacks is about to launch Bitcoin Staking, and StackingDAO's stBTC is a liquid token built on top: BTC can earn staking yields while remaining freely movable within the Stacks ecosystem.
The expected base yield at launch is about 2.6%. That's not huge, but it's better than Bitcoin's native 0% yield since 2009.
This also isn't a new team risking your BTC. StackingDAO has operated STX stacking infrastructure for over two years, managing peak staked capital over $150 million, serving more than 40,000 stakers, with zero security incidents.
stBTC isn't live yet; it will launch shortly before Stacks releases Bitcoin Staking, meaning very soon.
ETH Has a New 'Management Team'
The Ethereum Foundation is stepping back due to treasury sustainability concerns.
Meanwhile, new players are stepping up. Treasury companies are beginning to fund Ethereum's next phase, and this could be the best thing to happen to ETH in years.
What Happened?
First, the timeline:
- June 22: ETH Labs is founded. It's a nonprofit R&D institute formed by five former Ethereum Foundation researchers; they worked on finality, scaling, and protocol economics.
- June 23: The Ethereum Foundation lays off 20%, cuts its 2026 budget by 40%, and restructures into five work clusters.
- July 1: Ethereum Institutional is founded as a nonprofit "front door" for banks and asset managers into Ethereum; its focus also includes ecosystem marketing and ETH asset marketing. Yes, direct marketing of the asset.
- July 14: EthSystems is founded. It's a for-profit company building confidential transaction systems for banks, operated by the original team from the Foundation's "Institutional Privacy Working Group."
Three entities in a month, and each press release has the same three names behind it: Bitmine (NYSE:BMNR), SharpLink (Nasdaq:SBET), and Joe Lubin.
Who Are These Funders?
Bitmine is Tom Lee's Digital Asset Treasury (DAT) company, holding 5.77 million ETH, about 4.8% of the total circulating supply. That means roughly one in every 21 ETH in the world is on this company's balance sheet, and its public goal is to hold 5% of the total supply.
SharpLink holds about 876,000 ETH, the second-largest corporate holder. The company's Chairman, Joe Lubin, also founded Consensys (MetaMask, Linea) and is an Ethereum co-founder.
The question isn't whether these companies matter, but why they suddenly started writing checks for protocol research.
Why Are DATs Becoming Ethereum's Venture Arm?
Frankly: because their old playbook isn't enough anymore.
The lifeblood of treasury companies is one number—mNAV, the multiple of the stock price relative to the net value of its crypto assets. When the market cap is higher than the value of its ETH holdings, the company can issue more stock, buy more ETH, increasing the assets per share. This was the flywheel Bitmine used to build its massive position.
Now the flywheel is frozen. The entire ETH treasury sector's mNAV is below 1, meaning the market values these companies at less than their holdings themselves. Issuing below NAV dilutes and hurts existing shareholders, so no new stock, no new ETH, no flywheel.
And the existing holdings are deeply underwater. Bitmine's average cost basis is around $3,883; the ETH price mentioned in the article is less than half that. SharpLink's average cost is around $3,609, with unrealized losses exceeding $1 billion during the last dip.
Waiting for the Ethereum Foundation to pump ETH back up didn't work, so these companies are taking matters into their own hands.
This isn't blind donations; they're building a system that can re-inflate the value of their own balance sheets.
The Bull Case: Finally Someone Pays for the Roadmap
From this perspective, ETH holders get to enjoy the spillover benefits of all this investment for free.
The Foundation is proactively contracting. Vitalik described the cuts as an intentional shift toward an "endowment model": the Foundation's annual spending ratio will drop from ~15% to 5% by 2030 to survive any winter. Noble, but it leaves a funding gap just as Wall Street is preparing to enter.
Treasury companies fill this gap with self-replenishing money. Projected annual staking yields of $284 million for Bitmine equate to an R&D budget that replenishes automatically without selling a single token. Tom Lee's argument: corporate stakers will provide guaranteed funding for Ethereum's future development.
If it works, the flywheel spins the right way: institutional roadmap delivery, banks bringing real cash flow, ETH demand gets repriced, and developers get multi-year funding.
MicroStrategy holds Bitcoin but funds zero Bitcoin development; ETH treasury companies are reinvesting staking yields into the protocol. This is a clear net positive for ETH.
The Bear Case
But the other side must be seen too.
No specific amounts are disclosed anywhere. As of writing, we don't know how much money is actually earmarked for ETH development. Maybe the market overestimates these funds' impact; actual contributions could be very limited.
DAT companies themselves are fragile. Pantera warns of a possible "brutal shakeout" for crypto treasury companies in 2026. If ETH keeps falling, the dollar value of staking yields shrinks, mNAV compresses further, and these companies stop funding ETH.
My takeaway: The Ethereum Foundation stepping back doesn't mean Ethereum development dies; it's a handover.
The new funders hold more ETH than almost anyone else on Earth. They can't dump without hurting themselves. It's not perfect governance, but it creates real incentive alignment.
DeFi Catalysts
Polymarket: Brings "parlays" to prediction markets with Combos: users can combine multiple sports outcomes into a single all-or-nothing position, priced by market makers via RFQ auctions.
Aave: Launches Stable Vaults, converting floating lending rates into fixed-rate stablecoin yields any business can embed; Aave's mobile savings feature already uses it.
Plasma One: Its new banking app is live on Android. Download before July 18 for six months free Core tier access.
Ethena: Minting users can now mint and redeem USDe with USDC for free. Expected instant liquidity should reduce value leakage in secondary markets.
Jito: Trading platform JTX is open to some waitlist users, offering Solana meme coins, tokenized stocks, and major asset spot markets.
Lido: wstETH launches on Robinhood Chain, bringing Ethereum staking yields to a new ecosystem.
Maple: syrupUSDG's launch on Robinhood Chain pushes assets under management past $200 million; Steakhouse has approved it as collateral for Robinhood Earn vaults.
Jupiter: New product Gacha brings graded Pokemon and One Piece collectible cards on-chain; draw value can be multiples of the payment, with top prizes up to $100k.
Tempo: Receive Policies let accounts reject unwanted tokens and restrict senders; rules are enforced at the protocol layer, not the application layer.
RHEA Finance: Launches Perp Confidential Deposit on July 15, allowing users to keep trading with existing accounts and Hyperliquid liquidity while hiding deposit information.
Jito JIP-38: Commits to using 100% of the DAO's share of JTX revenue for programmatic buybacks and JTO burns until at least Q4 2027; the DAO's share is 80% of platform fees.
Hyperliquid: HIP-3 markets' share of platform perpetual volume rose from ~2% in January to nearly 50%; on-chain stock perps are approaching crypto asset trading volume.
Securitize: While listing on the NYSE, tokenized $295 million of its own SECZ stock, becoming the first U.S. public company to do so at listing.
Galaxy: Launches Galaxy Onchain Financing Rate (GOFR), providing DeFi credit to institutions via a single, continuously rebalancing rate, without managing wallets or private keys; minimum loan $1 million, with native BTC as collateral.
Airdrop Alpha
Lighter: Airdrops $11 million worth of LIT to Robinhood Chain traders. Perpetuals trading earns points convertible to LIT, with a 2x multiplier via Robinhood Wallet.
Kamino: Launches a $300k rewards campaign around three-month USDG deposits, with partners Steakhouse and Global Dollar Network.
GRVT: Airdrop registration closes July 17, TGE scheduled for July 21. Users can claim at TGE or delay for up to a 4x multiplier; choice is irrevocable.
Jupiter: Stakers can claim 50 million JUP from Q2 Active Staking Rewards. Eligibility is a quarterly average stake of 50 JUP; claim window closes October 8.
Industry News
Transatlantic Taskforce: U.S. Treasury and UK Treasury release a joint ten-point roadmap to advance tokenized asset and cross-border stablecoin rule coordination.
Swift: Announces its blockchain ledger is ready for initial use; 17 banks from six continents are preparing for pilot transactions with tokenized deposits.
Kaito: Kaito Pro launches stock data, tracking sentiment, price, investment theses, and more for over 3,000 global stocks in one interface.
SBI Holdings: Partners with Solana Foundation to build Japan's first on-chain financial market, including JPY stablecoin JPYSC, tokenized RWAs from corporate bonds to real estate, and cross-border settlement infrastructure.
Bonzo Lend: Hedera's largest lending protocol attacked due to Supra oracle verifier vulnerability, losing ~$9.05 million; protocol paused, TVL down 77%.
Circle: Receives final OCC approval to establish First National Digital Currency Bank, N.A.; USDC custody and future reserve management will fall under direct federal supervision.
Meme
Text in image: Top – "I sold"; Bottom – "I increased my USD reserves."
Until next time,
Edgy
