Rex

| @1kxnetwork Venture Scout | Deal Sourcing | Early-Stage Investor | Fintech & Digital Assets | Ecosystem Builder

[Elefund @ElefundVC]

Congratulations to Patrick Hogan, Chris Woodard, Blake Robertson and the rest of the amazing @HandleUS team on successfully raising their $27M Series B round!

Construction needs its own financial workflow �� especially right now, as critical infrastructure is scaling fast across the country, from factories and hospitals to data centers. Handle is building the Construction Data Graph to power construction finance, and we are excited to be early investors and partners on that journey. Godspeed! 🚀

https://t.co/CNzLf9ReGd

[1kx @1kxnetwork]

35% of US employment is spent creating trust.

Auditors, notaries, attorneys, courts, custodians, compliance officers. Trust-establishing work is the single largest category in the modern economy.

It is also being repriced.

The repricing started in financial infrastructure. Custody costs heading to zero. Cross-border settlement collapsing from days to seconds. Aave hit $44B in custody at peak (late 2025) at zero fixed cost.

It hit AI a second time. The Hong Kong CFO who got on a Zoom call with deepfakes of his CEO and the board, and wired $20M. AWS outages caused by AI agents managing production clusters without human oversight.

AI is the most powerful trust-eroding technology we have built. Trust intermediaries built on human schedules cannot keep up with fraud produced on machine schedules. The cost of creating fakes goes to zero. The value of verified trust goes up exponentially.

And it is opening categories that were not possible before. Permissionless conversion-based advertising. Hallucination-proof knowledge graphs. Programmable insurance.

Eight years of investing. One argument.

Cost of Trust 2.0, our 2026 thesis. Read it: https://t.co/Y0qgmqHN9u

35% stat: "The Cost of Trust: A Pilot Study," SSRN.
Aave peak TVL: DefiLlama.
AWS outages: The Guardian, February 2026.

[1kx @1kxnetwork]

Total crypto revenues fell 23% YoY in H1 2026, to $47B.

The decline is what you'd expect in a bear market. Most crypto revenue still tracks prices and volumes: exchanges, brokerage, wallets, staking, mining. Two drivers behind most of the $14B drop:

1) Finance-related income fell below 2024 levels. CEX, derivatives and market maker income was down $5.2B, onchain DeFi down $1.8B (-32%), ETF and fund management fees down $1.1B.

2) Blockchain revenues kept grinding lower. Staking and mining rewards fell $6.2B, transaction fees and MEV halved. Blockchains are down to 25% of industry revenue, a historical low.

What didn't follow the cycle: stablecoin and RWA issuance, prediction markets, DePIN. Such less cyclical segments grew 14% YoY to $12B. That's 26% of the industry now, and the number we're watching most closely.

Stablecoin and RWA issuer income added $0.7B. Stablecoin cards and payments added $0.1B, in line with what @a16zcrypto shared a few days ago. Prediction markets roughly 10x'd fee income, an estimated +$0.3B. DePIN fees nearly doubled. Middleware onchain fees rose about 70%, most of that @chainlink.

DeFi/Finance fell in dollars but its share of industry revenue climbed to 64%. Consumer onchain fees held up better than average, down 20%.

Some perspective: the last bear bottomed at $28B in half-year revenue (H2 2022). This one is running at $47B, with about a quarter of it coming from the segments that grew through the bear.

What counts as revenue here: onchain-traceable fees, other income like staking yield, and offchain fees, either publicly reported (Coinbase) or estimated (Binance). The mix of the three barely moved YoY. Full methodology is in our 2025 revenue report. The 2026 edition is in the works.

[1kx @1kxnetwork]

Congrats to @cantinasecurity on the launch and the raise. We’ve backed this team from their earliest days, and this is why: their agents take a vulnerability all the way through to a verified fix. Live at https://t.co/ZCGLqfaiHz

[1kx @1kxnetwork]

Some yield replaces a fee someone was already paying: a bank spread, a broker's cut, settlement float. Some comes from markets that legacy finance structurally can't serve. Everything else is repackaged risk. Our founding partner @lalleclausen brings that lens to @Yield_Summit Singapore, Oct 6.

[1kx @1kxnetwork]

Onchain fees fell 33% in Q2, year over year. Value returned to token holders barely moved.

That second number is the more interesting one.

The decline itself is what a bear market looks like. DEX fees dropped $625M (-57%), led by @MeteoraAG, @Raydium and @PancakeSwap, three protocols that generated $1.5B in fees in H1 last year. Blockchain and MEV fees fell $362M (-40%). Launchpads fell 57%, with @Pumpfun accounting for nearly half of that.

Not everything fell, though:

Perps and prediction markets grew fees 22% YoY, led by @edgeX_exchange and @HyperliquidX. @Polymarket did close to $100M in Q2 alone. Lending and asset management kept compounding, with @Morpho, @USDai_Official and @maplefinance each adding $9-19M. @CantonNetwork added $179M in L1 fees, though much of that is incentive-driven, and we treat it accordingly. Two of these names, Canton and Polymarket, are new entrants to the fee top 20.

And through all of it, distributions to token holders held nearly flat. @binance's burns still account for a meaningful share, but the more telling shift is protocols like Hyperliquid routing revenue into buybacks and burns as deliberate policy. Payout ratios went up in a quarter where revenue fell by a third. Whether that discipline survives a longer bear is one of the things we'll be watching closest into H2.

We built a public dashboard to track all of this. Link in the first comment.

Deep dive on the dashboard coming soon.

[1kx @1kxnetwork]

The vintages raised when consensus is weakest are usually the ones that outperform, and that is how this moment reads to us. Talent is strong, capital is scarce, and while many crypto funds say deal flow has dried up, we’re seeing more of it than at any point since we started.

1kx Founding Partner @lalleclausen joined @bennypjacobs on Scenius Studio to walk through what that looks like on the ground:

--> Why Web2 founders are finding product-market fit in crypto while crypto-native founders are stalling

--> Where the line falls between what wins as a token network and what wins as a company

--> How Cost of Trust 2.0 holds up in the current cycle

[1kx @1kxnetwork]

Capital markets spend $17 to $24B a year on trade processing alone, the back-office cost of matching up separate ledgers across every party in a deal.

Tokenization compresses that cost.

The savings land in compliance, data, and issuance infrastructure. Those are also the three layers the incumbents end up renting from someone else, which is the strongest place to build in this market and the part @explorerdfa walks through in detail.

[1kx @1kxnetwork]

From @_weidai’s new piece:

"every production system we examined makes local & per-step decisions. In contrast, the highest-risk failures are at the sequence level."

Security and Trust: The Bottleneck of Deploying Agentic AI. The 3rd drop in the Cost of Trust 2.0 thesis series: https://t.co/fPm3V8SvDT

[1kx @1kxnetwork]

1kx Research Partner @_weidai on the $2B+ that moved into AI security M&A in 2025-26, what it priced, and where the next venture-scale category gets built.

Wei covers the Cost of Trust frame, applied to the agent layer - article link in the comments.

[1kx @1kxnetwork]

Only 35 cents of every advertising dollar reaches a real human.

@pet3rpan_ on where the cost of trust gets repriced next. From the full Cost of Trust 2.0 discussion, live today: https://t.co/ZAy2ib39k8

[1kx @1kxnetwork]

"Trust intermediaries built on human schedules cannot keep up with fraud produced on machine schedules."

From the full Cost of Trust 2.0 discussion, live today: https://t.co/ZAy2ib3H9G

[1kx @1kxnetwork]

Cost of Trust 2.0, the full conversation.

Where the frame holds in financial infrastructure. Where it gets repriced at the AI edge. Where the next category gets built.

Plus, where the thesis has evolved since the 2018 paper.

https://t.co/ZAy2ib39k8

[1kx @1kxnetwork]

The Cost of Trust 2.0 framework, applied to a $9 trillion category.

@nichanank on the rewiring of trade finance: stablecoin rails compressing correspondent banking rent (340bps on lower-value flows) and opening dollar access where banks structurally cannot reach.

The seven-layer trade stack, the MLETR regulatory gating analysis, and where we are investing.

https://t.co/mtZ3wVab9m

[1kx @1kxnetwork]

A bank CEO pitched us a consortium chain with editable transactions. The pass took 30 seconds.

If you can delete transactions, you built a database with extra steps.

https://t.co/ZAy2ib3H9G

[Genesis Capital @genesiscapital_]

Robinhood Chain launched July 1st.

Built on Arbitrum. AI-native. 28 million users behind it.

Day one: @Uniswap, @Chainlink, @Alchemy, @BitGo, Morpho.

$HOOD up 8% on launch day.

Then $CASHCAT happened.

718% in 24 hours.
68M+ market cap.
One trader: $838 in → 1M+ out. 1,253x.

Vlad Tenev: "While we're building Robinhood Chain for RWA… it works great for memes too."

Built for institutions. Attracting degens.

Both drive adoption.

Distribution is the hardest problem in crypto.

Robinhood already solved it.

Watch this chain.

[Genesis Capital @genesiscapital_]

Where you'll find us for the rest of 2026:

🇭🇰 @Bitcoin Asia: Hong Kong on 27–28 Aug
🇺🇸 @AVAX Summit: NYC on 16–17 Sep
🇯🇵 @ETHGlobal: Tokyo on 25–27 Sep
🇬🇧 @Solana Breakpoint Week: London on 13–17 Nov

We are actively looking at new investments and love meeting founders and VCs in person.

If you'll be at any of these, DM us now or drop a comment below and let's get in the diary.

https://t.co/gbQL9oXLRZ

[Arbitrum @arbitrum]

Today is the last day to apply to our in-person Founder House in London.

Starting July 10, selected teams will join a 3-day founder program to:

- Receive hands-on technical, product, and go-to-market support
- Demo their products + compete for $300K in prizes & grants
- Bring products onchain via Arbitrum One and @RobinhoodApp Chain

If you're building a product or prototype and want to take it onchain, apply below.

https://t.co/j1AESiZG3J

[Genesis Capital @genesiscapital_]

Dubai. July! 🇦🇪

We're heading there throughout the month and the diary is open.

Looking to meet:

• Founders raising in 2026
• VCs and family offices with Web3 appetite
• Projects wanting advisory or GTM support

We're also actively deploying into new investments right now.

If you'll be in Dubai in July, DM us.

https://t.co/gbQL9oXLRZ

[Genesis Capital @genesiscapital_]

We could name a few 👀