The Breakdown - MegaETH, the DeFi United Bailout, Meta’s USDC Push, and Blockworks Reaches $192M Valuation | The Breakdown

Episode Date: April 30, 2026

DeFi just raised $302 million to cover losses from the Kelp DAO hack. David calls it what it is: a bailout. David runs through four stories from the week — MegaETH, DeFi United, Meta’s stablecoin payouts, and the Blockworks rebrand. We unpack why MegaETH’s points campaign is the 2021 playbook in 2026, why stablecoin income doesn’t equal crypto adoption, and what happens when the house money runs out. Enjoy! TIMESTAMPS: (00:00) Introduction (01:14 MegaETH) (13:34 Nexo Ad) (14:11 DeFi United) (21:20 Nexo Ad) (22:12 Meta Stablecoins) (30:14 Blockworks Valuation) FOLLOW THE SHOW › David — https://x.com/dcanellis › The Breakdown — https://x.com/TheBreakdownBW SPONSORS › NEXO Nexo is the premier digital wealth platform. Receive interest on your crypto, borrow against it without selling, and trade a range of assets. Now available in the U.S with 30 days of exclusive privileges. Get started at http://nexo.com/breakdown Get top market insights and the latest in crypto news. Subscribe to the Blockworks Daily Newsletter: https://blockworks.co/newsletter/ DISCLAIMER As always, remember this podcast is for informational purposes only, and any views expressed by anyone on the show are solely their opinions, not financial advice.

Okay, welcome everybody to The Breakdown. I'm your host David Connellis. The sun is shining. I'm a little bit sick, so if my voice is a little bit more nasally and sniffly than usual, I do apologize. Hopefully you can bear with me. We are looking at interesting stuff happening across crypto this week. We're going to be looking at the launch of mega-Eath and points campaigns and airdrops and everything of that nature. We're going to be looking at the state of the, defy bailout, Defy United Initiative to plug the losses associated with the Kelpdow attack. We're also looking at meta stable coins, enabling stable coin payouts for certain creators. And we're also going to be

touching on the Blockworks Fundraise and a rebrand. So without further ado, let's get to it. Okay, so let's start with MegaEath. When I've talked to people, I mean, this is one of the most projects that people are the most excited about to see to see what happens with the, with the market response to mega-Eath.

And for those who aren't really familiar, mega-Eath is a layer too, but it's really taking the centralization aspect and really running with it and making a point of it in that there's just one sequencing node, so there's just one machine that's processing all the transactions. And there's some other things about the block architecture

that allow it to process transactions ultra-quically, but it is really centralized. But that's kind of the point. If we can't run a lot of these consumer-grade apps on at least Ethereum as it is, then you might as well just throw decentralization to the wind and just go all in on one machine and be able to process transactions super quickly.

They're marketing it as the first real-time blockchain, which, again, it's just one of those things. If you're a developer that's developing an app, outside of the crypto context, why would you bother adding a blockchain if it is just going to restrict your ability to scale to hopefully hundreds of millions or even billions of users? You might as well just use the existing Web2 stack, especially if you also are a corporation that needs control over that stack. But Mega-Eath is at least presenting an option that says,

well, you can still access the crypto ecosystem to crypto liquidity or the crypto users, but you can do so on a network that will support or is claiming that it can support up to 100,000 transactions per second, which I don't think that there is a chain out there at a moment that even has that level of adoption in order to warrant that throughput. But hey, we're thinking about 10 years in the future when the whole world is chain enabled. let's say that. So what Mega-Eath is doing, it's running the, I guess I want to say the 2024 playbook or even the 2021 playbook that was, you know, pioneered by blast and all that.

And just ram incentives down the throat of potential users. And hopefully that there is some kind of Pavlovian response to users receiving points and then a token and then, hey, all of a sudden, we're just using Mega-Eath for everything. And I can't even remember why. It was the points. That's the idea. So the points program launched yesterday or the day before, so earlier this week. And you can see on my screen that they have this mega-Eath terminal thing.

And how they're doing is they're rolling out unlocked apps over time. So I jumped here on here last night and I'm just going to click through the apps that are available. There's a launch pad and a Dex, which is cool. There is also arcade finance. This is hit one. High leverage money games built on top of real markets. So a super degenerate arcade, which we love. There is Monster, which is kind of like an Afti play, I'll say.

A real graded Pokemon cards, so you can buy Pokemon cards and have them unlock. There's a few platforms out there like that. Next Rare loot boxes is a Pokemon card on here so I'm not really too sure the difference between Next Rare and Monster but in any case trading cars and Fidgetal seems to be a big deal for at least the first wave of Mega-Eath apps top strike um it looks to be a uh I guess an NBA top shot competitor but just for football not too shabby and then the last one is it looks to be like a trading card game it's the season

the copy on this is fantastic I think MEV mechanics plus pyramidal card pricing plus collectibles plus epileptic experience plus cultural appropriation adrenaline rush Ponzonomics that's only possible on a real-time blockchain

that sounds like a lot of fun and then they're going to phase in the next wave of apps what does this say later today actually so it's like encouraging you to explore all the apps that you know over time and hopefully earn points now you know I jumped on this last night and just

I'm reminded how painful the UX of crypto can really be so there's a a bridge here so we're now entering the rabbit hole and so already i mean it's a little bit frustrating because we were told that the that the apps are rolling out you know over time but here it says that a bunch of different apps that didn't show on that screen in our lives like bricks showdown uh a vee forge and chasino um i tried to use some of these but they weren't actually live but it seemed that that way anyway and then i mean if anyone can tell me what's going on here because i actually

Actually, as you can see here, this is with my Phantom wallet connected to the Mega-Eath rabbit hole. I have 50 USDM, which is the stable corner of Mega Eeth, and a little bit of ETH. But I can't actually send this to anybody. So if anyone, I believe it's a problem with Phantom and that Mega-Eath is not a supported chain on Phantom, but I can't for the life of me, at least last night when I was doing this at 9, 10 p.m. I could not see a way to transfer these tokens to anybody because Phantom effectively wouldn't let me. So if anyone has a walk around for that,

please reach out to me and then maybe I can jump on and use some of these mega-eth apps. But I mean, more generally, yeah, I mean, this is, I will say that Mega-Eth is interesting just because of the sheer degeneracy of the whole thing. You know, I'm not trying to detract from what Mega-Eathes. is doing what mediaeath is doing is it's very design heavy and there's a lot of like ecosystem specific language like if we pull up the mediaeith website you'll see what i mean uh the first real-time

blockchain um you know it has all these great things uh but then it's like it just it just collapses into stuff that i'm not really sure how anyone is meant to know what any of these things are showdown, lemonade, pump party, euphoria, nectar, Dorado, hunch hop. But okay. And what is curious is that it is running this old playbook. And I'm going to print up, bring up this tweet from Blockworks co-founder Mike Ippolito. Running your points program is extreme negative signal in 2026. Now this is about a different project liquid, but I suppose it relates to mega ether as well. not sure how much data we need to see here. It's a bad, expensive way to purchase your worst customers,

not up for debate anymore. Dumb. And I do sympathize with that take. What is interesting, though, is that, I mean, I ran through the stats from the major, major airdrops of the past few years related to points campaigns. The projects with big points campaigns, there was blur, blast.

These really, like, really, I would say perfected the playbook as much as it could do in the early beginning in terms of massive points campaigns tied to air drops that really did convert to a lot of usage in the beginning and then we of course saw that usage drop off as soon as the points campaigns concluded and the air drops were distributed. There's Athenae, Eigenlayer, Tenor, Camino and Drift. In all those cases, the token is. now down at least 85% something like that. In some cases like 98% in the cases of blur and blast.

So, okay, the incentives, the incentives programs did a thing, did its thing. It attracted users, but those users didn't hang around, which is exactly the point that MIPO is making here. An outlier is, of course, hyperliquid. And hyperliquid had a truly massive points campaign and an AirDrop. I have some of the stats here. Let's have a look. This was in earlier 2024. The Hype Genesis AirDrop distributed 310 million hype, which was about a third of the total supply. That's way more than what we would usually see, whether it would be a 5 or 15% air drop in terms of the supply. The AirDrop went to nearly 100,000 users, so 94,000 active addresses. We don't know how many of those are unique users, of course, but

I mean, close to 100,000 addresses. So that was huge. And of course, hyperliquid has become a massive success story within, a massive success story within the crypto space. So there is a, there is a roadmap here that at least megaeth is, I believe they, I would have to believe they have looked at and said, well, the air drop really worked out for at least hyperliquid. And now hyperliquid is really changing the face of markets,

especially with RWA perps and weekend price discovery. So there's a huge utility here for hyperliquid. And I have to wonder whether or not that usage would have been found so quickly and formalized as easily, apparently as it has, if there was no massive incentives campaign and airdrop in order to start that groundswell of interest. You know, the question then is is whether mega-Eath is equal to, Hyperliquid and of course Hyperliquid is very focused in in its mission in terms of markets

and really focusing on the trading aspect. Mega-Eath, if we go back to the Mega-Eath featured apps, it is basically the same as any other alt-L-1 or even L2 in that there are launch pads, there are Dexas, there are NFT trading apps, there's casinos, there's, you know, digital collectibles. It's basically the same. You could have launched Mega Eath in 2021 and it would have looked exactly at home. I would question whether the market has moved on from this type, from trying to inspire this type of activity.

We are really in the era right now of payments for merchant payments, FinTech going crypto through stable coins. We're in the midst of RWA's coming on chain, stocks coming on chain, 24-7 trading, price discovery, when markets are closed or over the weekend, all happening on-chain. We're not really seeing the widespread adoption of some of these use cases that mega-ethys positioning itself for. That said, I know Pokemon,

cards and fidgetal stuff is also popping off too. So I don't want to discount that too much too yet, but this is just one of those things that we're going to have a real thermometer about where the crypto interest is in 2026 at least for the first half by mega ether's a proxy. So TBD on how this is going to play out. If anyone has a fix, on how to get my money out or how to get my my tokens on mega-eath out into some of these apps when I have, when they're all currently on Phantom, please let me know I'm probably screwing something up that is very obvious. But hey, you only have so much time in the day to figure out how to wrangle some of these bridges and apps and especially on new networks. So

let me know. Step into a new era of digital wealth with Nexo, the premier digital assets wealth platform. Earn interest on your digital assets, borrow against them without selling, trade a wide range of cryptocurrencies, all in one place. Nexo is now available again in the US with an evolved product suite tailored to today's market. For a limited time, new US clients can unlock 30 days of exclusive wealth club premier benefits, including enhanced interest rates, reduce borrowing costs, and up to 0.5% crypto cashback on trades. Get started today at nexo.com slash breakdown. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research. Okay, next we're going to jump into DFI United, which is addressing the fallout

of the bad debt on Avey as a result of the Kelpdow attack. I mean, there's been plenty written on the subject already. If you do need a refresher on essentially what happened with Kelpdow in that there was a bunch of, I mean, not a bunch, hundreds of millions of dollars worth of liquid staking token, RS-Eath, was drained from a kelpdow smart contract. And because it was borrowed in such a way that it was not truly collateralized, that resulted in Avey potentially having a bunch of bad debt. So a lot of defy operators that had exposure to that kind of contagion have kind of collected together and also some people that were directly connected also.

have banded together to raise more than $302 million to date, much of it from DAO's and crypto businesses within the blast radius of the hack. That's enough to fully cover the April 18 exploit. This is from DL News in which hackers affiliated with North Korea stole some $293 million in RSI from Kelpdow. And some of that was recovered because of an arbitram clawback, which is really cool. But what I will say is that, I mean,

And it's really been said before as well in that this is really, I mean, they're dressing it up as a as a defy united initiative, but it is a bailout fundamentally. And it is a bailout specifically of the Ethereum defy space. Arveh is obviously one of the biggest platforms in the Ethereum ecosystem when it comes to defy. If the space had truly let that bad debt work its way through Arveh and and end up actually affecting users at some point, it would be very hard to then inject a sizable amount of liquidity again and capital into the DeFi space

to bring it back to standing from before the hack. And I'll read this quote here from Haseeb Qureshi from Dragonfly. I might have to take everything back, I said, criticizing Ethereum, rainbow and unicorns, referring to the vaguely utopian and communal ethos among many prominent Ethereum developers. Sometimes rainbows and unicorns are exactly what a community needs. Very surprised this all came together through donations. I mean, there's a few things going on here.

One, yes, it's amazing that all of these operators are willing to backstop these losses in order to keep everything chugging along, especially at a time. I mean, you know, I know that some people are starting to become more bullish, slowly but I would hesitate to say that we aren't headed for more pain and bear market ahead. So to have a hack of this magnitude go unaddressed as we are maybe heading into perhaps the middle of crypto winter again, you know, something had to be done. The cynic in me would say that a lot of the money that has been contributed was effectively, I don't know for sure, but I would presume that it is house money in that, you know,

a lot of, you know, it's money that was contributed in ETH that was maybe bought a long time ago and held that is now appreciated in value. So, you know, contributing the funds, it's not the same as reaching into your life savings and donating it for the good of defy. It is effectively house money. So there's that. But at the same, same time, we have to assume that these instances are going to get worse. There are going to be more hacks, hopefully not of a bigger magnitude. So if this bailout does formalize and does go through to the degree that it seems to be happening right now, let's just hope that there is a lot more house money to go because I think even even in the last two days or last day there has been a

couple more hacks and incidents on defy protocols you know 50 million dollars here 10 million dollars here that stuff will add up and if we are being you know if we are picking and choosing which protocols and which instances we do bail out for one that will create disparity between people who are connected as insiders and friends within the DeFi space and the smaller protocols that are just getting off the ground, that gap will widen. But also I have to imagine that we are just in the early innings of at least this current wave of attacks. So in a year, are we still going to have $300 million to bail out the next one? Perhaps. But at this point, I'm a little concerned.

And it is addressed in this piece. Let's read it here. But some members had concern. Tokadex founder Robbie Greenfield noted that it asked much of the Dow without requiring as a precondition any systemic reform to prevent the exact same failure from occurring. Other members had similar qualms. Still, token logic advanced the proposal to the voting stage, arguing that changes to Arve's risk management practices

were a separate parallel conversation. Conditioning disbursement on deliverables in a separate work stream would introduce delays and ambiguity at a moment that requires broader industry-wide aligned action. It wrote on the forum, voting began today. And, yeah, I mean, there does need to be reform. You know, I caught up with C.O 9-1-1 responder and chain investigator Nick Bax earlier this week to discuss the state of DFI cybersecurity. So if you miss that, please go back and take a look at that chat.

I believe that we are very far from some kind of consensus across Defi of best practices and all of that kind of stuff. And instead, we do seem to be relying on bailouts, which eventually I have to say that that stream will run dry. And perhaps I'm underestimating just how much house money there is out there. maybe I'm too small in my thinking but I would hate to see another hack happen and then there'd be no funds left for that bailout. So let's wait and see how this goes as well. But at least for now, what is the biggest existential question? Haining over defyce seems to be being addressed by the people who are building defy.

So there's something to be said for that. Let's take a moment to talk about NXO. NXO delivers a premier digital assets wealth platform designed to help clients build, manage and preserve their wealth. Earn interest on your digital assets. Access crypto-backed credit without selling your holdings. Trade with advanced tools, all supported by 24-7 client care. Now back in the US, NXO offers new clients 30 days of exclusive Wealth Club Premier access. That means enhanced interest rates, reduce borrowing costs, and up to 0.5% crypto cashback on trades.

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Terms and conditions apply. Do your own research. Okay, what have we got next? We have meta. enabling USDC stable coin payouts for certain creators I believe just in Colombia and the Philippines for now

yeah stable coin payments are currently available to select creators in Colombia and the Philippines and this is just one of those things I mean it's the same kind of thing as DoorDash partnering with tempo to allow partners and merchants and stuff like that to accept payment in stable coins.

Meta is doing it not on tempo. They're doing it on Solana and Polygon, which I find cooler. I mean, if you caught my little rant last week, my three-pronged test for figuring out if something is interesting within crypto, at least Salana and Polygon, they're a little bit more permissionless, let's say, than tempo. I understand that not everybody. can just easily become a validator on either network,

Solana, because there's quite high demands for resources, internet connection machines, you basically need a server-grade equipment and internet connection in order to become a Solana validator and almost the same as Polygon as well. At least you can gain financial exposure to at least the token on those networks. But anyway, what I will say, I mean, I don't just want to rally it in stable coins all the time because stable coins, you know, obviously they're serving a purpose and matter here is doing something to at least boost the adoption of stable coins in certain parts of the world.

What I will say, and I hate to just beat the drum again, is that, you know, 2015, 2016, 2017, going into 2020 and 2021, we saw a lot of massive companies and corporations start accepting crypto payments. I mean, Tesla accepting Bitcoin was probably the most high-fro profile.

One, you had the Mavericks accepting Dogecoin. And you had a lot of other companies as well start accepting crypto payments. And it was usually through third part payment processes like Bitpay. So, you know, some big company would make a big deal that they would be accepting crypto payments. But when you look closely at what was happening, the money would actually go to BitPay.

And then BitPay would sell, in most cases, sell the crypto in order to get Fiat and then give the Fiat to the company that is supposedly accepting crypto payments. So there's some scruly language that would go on. So there's that. And I just get the same vibe from a lot of these. initiatives to accept stable coin payments in that there is the option there, but one, do the users even want to use stable coins? I would hope that they do, especially if it makes them save money. I would also worry though that a lot of those savings would effectively be null and void to the

point that they would have to sell the USDC for Fiat on the other side in order to pay for stuff, in the real world like pay for rent and all that kind of stuff which would introduce more for x fees and and and off ramp fees that would essentially cancel out whatever savings are are available with the with the us DC and stable coins as well so i'm not too a lot of people talk about the efficiencies that are saved but i'm not too sure how that really works in the real world when someone actually needs to use fiat to pay for rent or or food um The other thing that I will say is that I am still not sure how this is meant to like it's to me it's trickle down economics but the crypto version of it in that okay

we're bringing a lot of people onto stable coin rails the fees collected by these stable coin payments by the chains validateers are relatively small and the cheaper chains become those fees are only going to become smaller. So there is essentially a race to the bottom in terms of serving stable coin rails to the masses. And again, it's one of these things that we are asked to believe that the, you know, there is a logical wall here that I am beating my head against

because USDC, stable coins in general, they are meant to be a substitute for money. So we should not be thinking of stable coins as quote unquote crypto. They are dollar substitutes. And at that point, if a merchant or creator receives USDC, that is money to them, that is income, that is not an investment. So we are still left in the original problem. in terms of inspiring adoption of crypto and investment in crypto and bringing in liquidity

in that if someone in Colombia or the Philippines receives USDC from META for what they're doing on the platform, will that person want to go and buy coins? I'm not too sure. That's their income. We still need to inspire and give those people a reason to then go and then go and invest that money within the crypto space in order for any value to accrue within the crypto ecosystem overall. I have to imagine that people earning money, earning income in stable coins, that will go to their living expenses, that will go to, again, paying rent, buying groceries, saving.

I don't, I still find it hard to believe that there will be a large number of people that are that are willing to go and then convert that USDC into Bitcoin, Ether, Salana and pump the coins. So at that point, I'm not too sure what we are meant to expect from initiatives like meta and stable coins. Perhaps I'm missing something, if I'm missing something, yell at me on Twitter, reach out to me and tell me what I'm missing. because I am still banging my head against this wall. And we also have to remember that we have done tips, content, we've done tips and everything like that already.

I mean, people forget that Twitter in 2020, 2020, 2021 enabled lightning tips for content creators and nobody really did it. I mean, you can send ether to people on Twitter. I mean, maybe they remove those functionalities.

But, you know, we've done this dance before and it hasn't exactly converted into mass adoption of crypto. So I mean, okay, this is meta. Meta is one of the largest tech companies in the world and their platform is truly massive. But I am still unsure what exactly this means

in terms of boosting the overall crypto ecosystem. In terms of like value accrual for the tokens that exist, let's just wait and see on that. But that's my thoughts about meta and stable coin payouts. Okay, next we have, yeah, some stuff about Blockworks. Blockworks is just raised at a $192 million valuation. Yeah, that's up from $135 million in May, 233. CNBC had a great write-up.

Blockworks wants to become the crypto equivalent of Morningstar, how it plans to do it. So, I mean, beatups to Mike and Jason, and for those who aren't really familiar with Blockworks in the audience, I understand that a lot of you joined this podcast through NLW and for a while this was a coin desk and now it's under Blockworks. And for the longest time, it was a media operation, media and events operation. And now that's morphed and grown into a data and research and information company. Yano really broke it down here in this article. we're so behind on data and research and information for digital assets. In traditional finance, you have Morningstar,

but also like FACC set and Moody's and S&P Global Reach. Those don't exist yet for assets that are coming onto the blockchain. Blockers is really positioning itself as a way to really eradicate the information asymmetry between protocols, teams, projects, and the investor class. and I really have to believe that that is something that a lot of the Bitcoiners and Bitcoin Maxis that are in the audience will will really will really vibe with because I mean if you're a Bitcoin Maxi and I mean I was for the longest time as well and I've and I've and I've softened my stance on that over the past half decade and that like being a Bitcoin Maxi was a was a catch-all

way to avoid the information asymmetry of the token market because you do not, if you're a Bitcoin maxi, you do not want to have to bother with wondering if, you know, there's, there's unscrupulous things happening behind the scenes of the token that you're investing in or the token that you're buying or the network that you're using. The immaculate conception, quote unquote, of Bitcoin absolves you of the burden of having to analyze, scrutinize, every protocol that comes along that it might be interesting, but it comes from a centralized, there's a lot of issues behind the scenes in terms of centralization, a lack of disclosures, all that sort of thing.

So Blockworks through its token transparency framework and investor relations portals is really pushing to make it much more straightforward to understand what you are buying, the functions of the token and the team behind it. So if you are still holding the crypto space at arm's length because it is just too difficult to deal with, I mean, we get it, Blockworks gets it, we are now pushing into a world where it is possible to solve those issues. And it takes an industry to do it, but it also takes initiatives like what Blockworks is trying to do in order to make there be social pressure and market pressure to operate in a space of full transparency.

and I just want to applaud Blockworks for going out and championing that and really and really putting their money where their mouth is in terms of making it the company mission and very focused on solving this particular problem. And of course this came amid a rebrand. You know, if you're interested in the Blockworth's rebrand and the ideas behind it, please go on and onto Twitter and check out Director of Creative and Brand Rehan. Hanford's articles about the design choices and what inspired the new logo and everything else. I'm going to read some of it here.

The on-chain economy generates an enormous amount of data, blocks, transactions, liquidations, flows, swaps, trades, unlocks, governance votes, bridge activity. Most of it is legible only to the people with the tools to read it and even then only in fragments. Our job across data and software is to make that signal legible, not to simplify it, but to interpret it, to give shape to things that are by their nature hard to see. We began exploring how we might translate these themes into visual language to reflect the new blockworks. The interpretation layer became the phrase we kept coming back to. We were drawn to images of caves, rock formations,

and geological layers. Then a breakthrough came from a different metaphor entirely, sonar. Sonar is what you use where light doesn't reach. You send out a signal, wait for it to come back and you build a picture from what returns. Instead of illuminating the surface, it maps the depth. This is the aesthetic vocabulary of things that are sensed before they are seen, which has culminated in this ultra-cool cube that's constructed out of scan lines. Great optical illusion, great tie in blockworks. The more you look at it, the more clear it becomes, which I think is a really great metaphor and analogy for what Blockworks is as a data and information company that is bridging the gap between the old world and the new.

So please just go in and have a look at it. And yeah, hopefully that gives you a little bit of background as to what's happening behind the scenes of Blockworks as we move into the next phase of what crypto is and what it could be. This is about it for now. I'm going to leave it there for this week. As always, reach out to me. on Twitter, on email, David at blockwurst.co, talk to me about what you would like to see,

discussed, anything that I've missed, how you're viewing mega-eth and whether or not you're able to jump on and have a look or whether you're interested in it at all. I'd love to hear from you. Cool. And as always, look after yourselves. Bye.