Top Stories of the Week
In this week's newsletter, Lucas Tcheyan unpacks Uniswap’s decision to activate the fee switch amid a broader trend of protocols returning value to tokenholders via buybacks and burn mechanisms. He explored this topic in greater depth in an exclusive Galaxy client note this week. Also, Alex Thorn analyzes the Czech central bank’s historic (if modestly sized) purchase of bitcoin on the open market and separately reflects on how the industry recovered from the FTX debacle.
🗓️ Three Years After FTX Collapse, Crypto Has Matured
This week marks the third anniversary of the FTX collapse. On Nov. 8, 2022, FTX halted client withdrawals and Binance founder and CEO Changpeng Zhao (“CZ”) indicated he would buy FTX before backing out the next day. Within days, the once-high-flying FTX's founder, Sam Bankman-Fried, resigned as CEO, and the exchange declared bankruptcy. SBF was later convicted of fraud and, in March 2024, sentenced to 25 years in federal prison and ordered to forfeit ~$11 billion.
The bankruptcy estate under turnaround specialist CEO John J. Ray III ultimately recovered and monetized assets sufficient to make customers whole on a petition-date basis. In May 2024, the debtors proposed paying 100% of allowed customer and creditor claims plus interest (up to ~118% for smaller claims), a plan the court approved that October. Initial distributions began this year through agents including Kraken and BitGo, though some creditors remain frustrated that recoveries are pegged to November 2022 prices.
In the wake of FTX’s collapse, the Biden administration pursued a tougher stance on crypto, most visibly via the Securities and Exchange Commission’s 2023 lawsuits against major exchanges and joint prudential-banking statements warning of crypto-asset risks. The hostile environment persisted until President Trump’s inauguration in January.
These days, the policy environment is much more favorable for digital assets. Congress held hearings in early 2025 on what the industry dubbed “Operation Chokepoint 2.0,” acknowledging a debanking problem whose very existence regulators denied under Biden. In parallel, market structure reform has gained traction: the House passed the CLARITY Act, though the Senate continues its work there. The President signed the GENIUS Act stablecoin bill into law this summer, and the Presidential Working Group on Digital Assets produced the most comprehensive government report on the crypto ecosystem in history.
Even before Trump's return to the presidency, and despite the long shadow cast by FTX, institutional rails deepened: spot bitcoin ETFs launched on Jan. 10, 2024; spot ether ETFs followed in July 2024; CME’s regulated futures complex set new records; and FASB’s 2023-08 standard moved corporate crypto accounting to fair value beginning in 2025. In the absence of FTX’s famous cross-margin perpetual futures market, new entrants like Hyperliquid have launched to fill the void.
Our Take
FTX’s collapse was a wild event that feels almost like a fever dream in retrospect. (I wrote earlier this week about where I was during the collapse). Three years on, crypto is healthier precisely because FTX isn’t here. The industry has built durable and deeper plumbing to replace FTX and the other firms that blew up around it. The vacuum FTX left has been filled by onshore, regulated access points (including spot BTC and then ETH ETFs), and much more transparent decentralized exchanges. Ongoing changes in the SEC’s approach to crypto exchanges will also bring more transparency now that firms don’t feel the need to relocate to offshore jurisdictions. None of those changes solves every problem, but they’ve raised the floor on market integrity and institutional participation.
There’s also a Newtonian arc to the last three years. FTX’s blow-up triggered a political equal-and-opposite reaction: scandal led to crackdown led to counter-mobilization, which resulted in policy reset. The collapse catalyzed the Biden-era enforcement wave (SEC cases, bank-risk guidance, pressure from the White House) and, in response, the most muscular political organizing and spending this industry has ever mounted. That push (along with shifting voter coalitions) met a Trump campaign that explicitly embraced crypto (donations, rhetoric, conference appearances, appointees) and culminated in Trump’s 2024 win and a major policy turn in support of the U.S. crypto industry. (Read this report for a catalog of regulatory changes just in the first half of 2025). Agree or disagree with the politics… but the sequence is hard to miss.
The upshot: the post-FTX era is less about one firm and more about system design: Separation of functions, higher-quality custody, on-ramp products that institutions can actually buy, and a policy climate tilting toward rulemaking over regulation-by-enforcement. All of that makes this market sturdier.
Prices will still swing; leverage will still overheat; bad actors will still attempt mischief. But the core architecture is stronger, and that’s a big reason why we’re constructive on the next 3 years. – Alex Thorn
🎁 You Get a Buyback, You Get a Buyback, Everyone Gets a Buyback
On Monday, Uniswap Labs and Uniswap Foundation submitted a “UNIFication Proposal,” including recommendations to activate the Uniswap fee switch, burn 10% of the UNI supply, and merge the two organizations.
UNI rose 50% following publication of the proposal, adding more than $1.5 billion to its market cap in a matter of hours. Traders rushed to long following the news, adding an additional $130 million in perpetual futures open interest (OI), nearly 50% of outstanding OI at the time of announcement. UNI has since retraced to around $7.60, still 10% higher than when the proposal was published.
The proposal calls for Uniswap to:
- Turn on protocol fees and use these fees to burn UNI
- Send Unichain sequencer fees to this same UNI burn mechanism
- Build protocol fee discount auctions (PFDA) to increase LP returns and allow the protocol to internalize MEV
- Launch aggregator hooks, turning Uniswap v4 into an onchain aggregator that collects fees on external liquidity
- Burn 100 million UNI from the treasury, representing the approximate amount of UNI that would have been burned if fees were on from the beginning
- Focus Uniswap Labs on driving protocol development and growth, including turning off interface, wallet, and API fees and contractually committing to only pursue initiatives that align with the interests of DUNI, the community’ Wyoming legal entity
- Move ecosystem teams from the Foundation to Labs, with a shared goal of protocol success, with growth and development funded from the treasury
- Migrate governance-owned Unisocks liquidity from Uniswap v1 on mainnet to v4 on Unichain and burn the LP position, locking in the supply curve forever.
Activation for the proposal will bypass Uniswap’s traditional governance process by not requiring a request for comment phase, allowing the fee switch activation to proceed directly from forum discussion to a Snapshot temperature check and then an onchain vote. The RFC period can normally take weeks to gather broad community feedback before advancing. UNIfication explicitly states that “fee parameters skip the RFC process” to accelerate execution and begin capturing protocol revenue immediately. Given the accelerated timeline, it’s likely that fee switch activation could come before the end of 2025.
Our Take
Uniswap’s decision to activate the fee switch marks a broader structural shift across the altcoin space. Growing U.S. regulatory clarity is enabling protocols to explicitly link the value they generate to the tokens they issue. Pure governance rights, once the default design for tokens, are no longer sufficient to sustain value.
Initial governance discussions around turning on protocol fees date back to 2021, but formal attempts in 2022 and 2023 failed to advance. Regulatory uncertainty, the absence of a formal operating entity, impact on Uniswap liquidity providers’ profitability, and the lack of a clear mechanism for collecting and distributing fees further discouraged implementation.
Uniswap is not alone in capitalizing on the more friendly regulatory environment. Token buybacks and supply-reduction mechanisms have become increasingly common among leading protocols. Hyperliquid and Pump. Fun has already demonstrated the market appeal of real yield and burn-based value capture, but many established projects like Aave, Raydium, PancakeSwap, and many others have already integrated similar mechanisms. In 2025 alone, protocols have conducted more than $1.5 billion in buybacks. Uniswap’s move reinforces this trend and may catalyze a broader reevaluation among protocols that have yet to establish credible economic models. In the immediate days following the announcement, other protocols like Lido, dYdX, and Magic Eden announced buyback schedules, underscoring how quickly the shift is rippling through DeFi.
Still, Uniswap’s model faces meaningful tests. The durability of LP incentives, competitive responses from rival DEXs, and the market’s willingness to assign value to buyback-driven scarcity will determine whether this approach becomes a new industry standard or remains an experiment. Whether buybacks ultimately prove the optimal method of value accrual remains to be seen, but their growing adoption signals a long-overdue maturation, where tokens trade more on fundamentals than hype and speculation. For investors, the shift reframes UNI from a governance token to one that offers token holders exposure to onchain trading growth, marking a clear step toward fundamental, revenue-linked valuation frameworks in crypto. – Lucas Tcheyan
🇨🇿 Czech Central Bank Cuts a Check for Bitcoin
The central bank of the Czech Republic has purchased as much as $1 million of bitcoin. According to a statement, the Czech National Bank (CNB) has “created a test portfolio of digital assets based on blockchain,” which includes “in addition to bitcoin… a test investment in the form of a USD stablecoin and a tokenized deposit on the blockchain.” The CNB emphasized that the “purchase was made outside its existing international reserves” and “the total amount invested will not be actively increased.”
In January, CNB Governor Ales Michl floated the idea that the Czech central bank would consider including bitcoin in its reserves with a weighting of up to 5%. European Central Bank (ECB) President Christine Lagarde panned the idea, saying at a press conference that she was “confident that bitcoin will not enter the reserves of any of the central banks of the General Council,” of which the CNB is part.
The CNB’s move marks the first time in history we’re aware of that a central bank has directly purchased bitcoin. Some, including the ECB and the Swiss National Bank, have explicitly rejected the idea. In 2019, Venezuela’s central bank tested whether it could add BTC or ETH to its reserves, but never appears to have done so. El Salvador holds BTC in its sovereign treasury (but not at the central bank), while Bhutan’s state investment arm Druk Holding & Investments mines and holds BTC.
Our Take
Though the Czech central bank stressed repeatedly that the purchase was about testing blockchain technology and not about establishing a strategic bitcoin reserve, it nonetheless is a watershed moment. Shortly after Bitcoin launched in 2009, Satoshi wrote, “the root problem with conventional currency is all the trust that’s required to make it work… the central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.” Endowments, banks, sovereign wealth funds, and even national treasuries have purchased bitcoin over the years, but central banks have been a steadfast holdout. Perhaps it’s because they feel threatened – after all, bitcoin challenges the very foundation of money, an area that has been the sole purview of central banks for more than 100 years.
When the CNB floated the idea of adding BTC in January, it used language much closer to a strategic reserve. Today, though, the central bank is taking pains to assure the world that the acquisition is strictly for educational and “testing” purposes. But given the CNB’s prior language, we have to wonder if the Czechs are flouting Lagarde and the ECB and adding bitcoin as a reserve asset in all but name. Even if these purchases – both of bitcoin and stablecoins and tokenized deposits – were made solely for the purposes of learning, it is a prudent and admirable goal for a central bank to familiarize itself with custody, transactions, and the other various intricacies of using blockchains. But while $1 million is a tiny amount for an entity like a central bank, it’s still much more than you need to simply learn how to use a bitcoin wallet.
Whatever CNB’s motivation, testing or reserve accumulation or both, the milestone is real. Bitcoin was scoffed at, dismissed, and hated by the world’s central banks (and it still is by many). Then it was studied, blockchains were explored, and Bitcoin was acknowledged. Nearly a year ago, U.S. Federal Reserve Chairman Jerome Powell described bitcoin as “like gold, it's just virtual and digital,” which was itself a stark admission from the head of the world’s biggest central bank.
The Czech purchase feels like yet another step in the same direction, where bitcoin is not hated, not merely acknowledged, but now held for testing purposes. It doesn’t take a lot of imagination to guess what the next step would be. – Alex Thorn
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