GM, frens! ☕️

Some people seem to know what they want to do from day one. For everyone else, it usually takes years of trying things, getting some of them wrong and noticing what keeps pulling them back.

Our space is especially good at sending people down weird paths like that. You come in for one thing, try five others and eventually find the corner where you actually belong.

Sometimes you have to bump into it a few times before you recognize it 👀

Here’s what we’re looking at this week in a 60-second version:

• 🇺🇸 Crypto went all in on US politics and got rugged

  • _{After spending hundreds of millions backing politicians who promised to support it, the industry watched its biggest US crypto law fall ten votes short. More}

• 🪖 Every serious chain eventually meets “the trenches”

  • _{Degens immediately filled Circle’s serious new Arc chain with memecoins, proving that ridiculous financial games still get people testing new onchain tools faster than almost any sensible use case. More}

• 🪰 Fly entering the market (and keeping most of its money)

  • _{A simulation built from a fruit fly’s mapped neurons received $100 to trade crypto and finished its first day down less than 1%, already beating a worrying number of humans. More}

• 🤖 “Yoink” robs the robber

  • _{Some guy tried to drain $7.7 million in rsETH from an Ethereum wallet, only for an MEV bot called Yoink to front run the transaction and take most of the loot. More}

+ Other worthy reads & your weekly dose of memes

And you’ve found your corner of this industry already, or you’re still figuring it out, come compare notes in our Discord 🤠 

Crypto went all in on US politics and got rugged

For a crypto company operating in the US, the rules have often depended on which agency picked up your case. One might treat a token as a security, another might see it as a commodity and companies sometimes learned which answer mattered only after getting sued 🔨 

That started to look less hopeless when Trump returned…. At first.

He called himself “the crypto president”, the agencies dropped several major cases and a stablecoin law was passed fairly quickly. Crypto groups had also poured huge amounts of money into backing friendly candidates, so the industry finally seemed to have enough support to get proper rules in place 🤝 

The next step was the CLARITY Act. It was meant to settle the bigger questions, give companies something they could actually plan around and stop the rules changing every time somebody new took charge.

When the big vote came this week, the law fell ten votes short 👆️ 

• CLARITY would decide which regulator handles different parts of crypto and set rules for exchanges, brokers and companies launching tokens. It would not fix every problem, but companies would at least know where the walls are instead of waiting for another lawsuit to explain them 👨‍⚖️ 

• The law had already cleared an earlier round, but it needed 60 votes in the Senate to move forward. It got 50.

• Four Republicans also voted against it. One supporter changed his vote at the end so the law could technically be brought back later, though this was more of a trick to keep the door unlocked than a real comeback plan. Cynthia Lummis, one of its biggest supporters, was asked whether another vote was coming and answered: “Nope” 🤷‍♂️ 

There may be one final attempt after the November elections. That would leave politicians very little time to settle the same arguments that already killed it, so the chances do not look great. If nothing happens, regulators will continue making many of the rules themselves and the next government can start changing them again.

But it looks even worse when compared with what crypto paid to get here.

Industry groups spent more than $300 million backing candidates across the last two election cycles 💰️ 

Plenty of people took that money, promised to support crypto and then failed to deliver the main law the industry wanted. The money bought “access” but mostly campaign promises and speeches about innovation that didn’t really go anywhere. It wasn’t enough to buy 10 more votes.

• That’s mostly because of the opposition that came from banks. They don’t want stablecoins offering rewards that could pull money away from regular bank deposits 🪙 

• Crypto companies argue that people should be allowed to earn those rewards, while banks have suddenly discovered a deep concern for “financial safety” right around the point where customers might get a better deal elsewhere 🙄 

• Other politicians wanted tougher rules around money laundering and “stronger protection” for users. In turn, supporters made 126 changes before the vote, but the two sides still could not agree 😶 

The KO (arguably, but a point mentioned by many opponents) was delivered by Trump himself, standing in the middle of the whole debate with both hands in the crypto cash register 🙄 

Trump wanted credit for supporting the law, but his own crypto business gave opponents one of their best reasons to block it 🤦‍♂️ 

• His 2025 financial disclosure showed more than $1.4 billion in income from crypto ventures. Around $635 million came from the TRUMP memecoin (rugged) and nearly $800 million came from World Liberty Financial 💵 

• Reuters separately estimated that the Trump family made about $2.3 billion from four crypto businesses between mid 2024 and April 2026. And obviously because crypto is zero-sum - outside investors lost roughly the same amount. The family risked little of its own money but still kept the profitable side of nearly every deal 💲 

The family’s memecoins deserve their own spotlight, because this shows who received the better end of Trump’s “crypto presidency” 👇️ 

• TRUMP climbed above $70 after its launch and now trades around $2. MELANIA reached almost $14 and is now worth less than ten cents, both down more than 96% 🤡 

• Both were sold as a way to support Trump and join his political movement. In practice, buyers joined a trade where the people behind the tokens collected money while everyone else watched the price fall apart. No other benefits were gained.

• Trump later invited the 220 largest TRUMP holders to a private dinner. Buyers spent an estimated $148 million competing for those seats and more than half came from outside the US. Justin Sun was the largest known buyer 🍽️ 

That turned a memecoin into something uncomfortably close to paid access to the president. It also handed opponents of the law an easy argument. Why should they help crypto while the president is unapologetically max extracting (including collecting money from foreign buyers) through his own token?

Trump says he is not involved in the daily running of these businesses. His family handles them and he remains the beneficiary, which is a wonderful arrangement if you can convince everyone that receiving the money does not count as involvement 🤐 

• Crypto did not get absolutely nothing from him - there’s that stablecoin law and it’s clear that regulators became less aggressive with several cases against crypto companies that were dropped. So the upside is that companies now have more room to operate than they did under the previous government.

• But the problem is that most of this still depends on who is in charge. Another president can appoint different regulators/agencies and start changing the rules again and nobody would be able to stop them. CLARITY was meant to provide something harder to undo, the most important part and that is the exact part crypto didn’t get at all 📑 

A smaller tax proposal is also making progress. It would clean up how staking, mining and lending are taxed, change how wash sales are handled and create a small exemption for crypto used to pay network fees under $10. A political committee approved it by 38 votes to five, but it still has several more steps to survive before becoming law 📜 

Some of these small things could help, but it’s not the ‘clear set of rules’ the industry spent all that energy and money chasing after. There’s now plenty of “friendly” politicians and one extremely well paid crypto president, yet the biggest law is back in the drawer.

Our industry wanted a seat at the table and ended up paying for dinner: politicians ate through the funds, Trump kept the bags he made and now crypto gets invited back next year with another check 👋 

For all the talk about cutting out middlemen, our space has found a particularly expensive and scummy set of them.

Every serious chain eventually meets “the trenches”

Every new chain launches for some sort of purpose. Payments will become better somehow, real world assets will come onchain and major financial companies will finally get comfortable using the technology 🤤 

Then the degens kick the doors in and ask where they can launch a coin named after some sick raccoon 🦝 

Circle opened Arc mainnet this week with about as respectable a guest list as crypto can produce. BlackRock, Visa, Mastercard, DTCC, Standard Chartered and several other major companies are part of its validator group. Arc uses USDC for gas, settles transactions in under a second and launches with more than 100 apps and ecosystem partners 💱 

Circle named it “an economic operating system for the internet”. Memecoin traders are arleady calling it the next set of trenches.

Traders had already spent some time building Arc launchpads, tracking coins created before the public launch and preparing to rush the first pools. Circle’s own day one list includes Pump.fun, fomo and Uniswap alongside banks, payment companies and asset managers 🤔 

That gave Arc traders a template. You’ve found the chain - now bridge over before everyone else, launch the first set of stupid coins and hope one becomes the local mascot before the banks finish setting up their dashboards 🏇 

The “shitcoinify all chains” approach is an interesting development.

• Degens keep showing up to each new chain launch, poke every button and try to work out what a new network can actually do.

• Nobody needs to organize them. They don’t wait for a conference panel to explain why the chain needs to exist. They arrive with USDC and start trying things, which is more agency than the industry has shown in plenty of other areas lately.

That doesn’t mean every new token will be useful, most of them will most likely be disposable garbage created by people hoping to sell first 🤫 

• The uncomfortable question is why this remains one of crypto’s most reliable ways to get people to use new technology. Many constantly ask whether everything boils down to shitcoins, but perhaps the stronger clue is that financial gain remains the only incentive powerful enough to make large groups of people try unfamiliar onchain tools right away for some reason. Privacy, ownership and the future of finance and access sound good but pales in comparison to a possible 20X 🤷‍♂️ 

Yes, crypto could offer so much more, but the pattern keeps returning. Freshly launched chain on new infrastructure but the first real rush still comes from people trying to trade quick rugs faster than everybody else 🐸 

Circle may eventually get the top of the line global payments / tokenized finance or whatever it built Arc for. In the meantime, degens are getting the first proper taste.

Fly entering the market (and keeping most of its money)

Science does not stay smart for long once the internet gets access to it. Researchers can dedicate insane resources to understand something incredibly complex, then within days somebody will ask whether it run doom on it can it somehow be used to ape coins 🥸 

• So there is this thing making the rounds on social media right now: scientists recently uploaded a detailed map of an adult male fruit fly’s nervous system, including its brain and ventral nerve cord, which is basically the fly version of a spinal cord.

• The project took 20 years and mapped around 166,000 neurons with 125 million connections between them. Researchers created it to study how brains process information and control behavior, with hopes that this work could eventually help with conditions such as Alzheimer’s, dementia and schizophrenia 🧠 

• Some posts make it sound like scientists scanned a fly’s brain and uploaded its mind to the internet. That is not what happened. There is no fly consciousness trapped inside a computer and nobody copied an insect’s memories or personality.

• What they uploaded is called a “connectome”. It’s a massive map showing which neurons connect to which. Software can recreate parts of that system and use the resulting neuron activity to control things, but it is still a simulation built from connections rather than a complete alive digital fly 🪰 

Naturally, people started plugging it into increasingly stupid experiments.

One dev put the simulated neurons in control of a Mini Cooper. The fly could apparently parallel park, complete a three point turn and use the horn. Others used the connectome to solve a Rubik’s Cube, play Beat Saber and control another fly inside Minecraft 🤪 

Someone made it doomscroll through a fake social media feed while stimulating its dopamine neurons. Another dev claimed to have made the fly bisexual by blocking part of the simulation and measuring how it reacted to male and female fly brains 🤯 

Then, of course, crypto arrived 👇️ 

Coinbase software engineer Alex Wormuth connected a simulation based on the fly map to Coinbase’s AI agent software. The neuron activity is turned into buy, sell or hold decisions involving BTC, ETH, SOL and USDC 🪙 

Stonkfly was given $100 and access to live prices. When its trades make money, simulated dopamine neurons are stimulated. When the portfolio loses money, other signals tell the system that something went wrong.

After its first day, the fly was down by almost one dollar. It held around $59 in USDC, $5 in BTC, $17 in ETH and $17 in SOL 🥲 

Being down 1% is not impressive until you compare it with what normally happens when a human receives $100, opens a dex and decides that this could become a profitable thing. The fly kept most of the money in USDC and divided the rest between major assets 🧺 

Notably, it did not chase a fresh memecoin, open some insane 10000x leveraged position or send the entire balance to a presale promoted by an account with an anime picture.

How is a literal fly already better than most of us at trading? 🙃 

The honest answer is that it probably is not. One day proves almost nothing and the neurons may simply be producing random signals that have not lost much money yet. The experiment also rewards or punishes the whole portfolio, so the simulation may struggle to understand which decision caused a gain or loss.

Crypto has tried trading hamsters, bots, AI agents and every technical indicator somebody could draw over a price chart. Giving a fruit fly connectome access to Coinbase was unnecessary, but… you can just bet somebody was always going to do it at some point 😬 

“Yoink” robs the robber

Planning a $7.7 million hack probably takes a lot of work. You need to find the weakness, make sure the money lands in your wallet and you have an exit plan, all that. One attacker probably did all of that, only for a bot named Yoink to see the transaction and steal the entire bag first.

• The target was a Safe wallet holding a large amount of rsETH. The Safe itself was not broken and neither were Kelp’s main contracts. The problem came from a custom module the wallet owner had already approved 🥴 

• Modules can act on behalf of a Safe without collecting fresh signatures every time. That makes them useful, but it also means a multisig can have a side door with more freedom than the main entrance 💸 

• The attacker used a public multicall function to point a custom Uniswap v4 liquidity module toward a pool they controlled. That allowed around 2,900 aEthrsETH to be unwrapped into rsETH, worth roughly $7.7 million 👇️ 

The problem for the attacker was that Ethereum transactions waiting to be processed are visible. And MEV bots constantly watch them for anything profitable 👀 

Yoink saw the exploit, overpaid for gas and reached the money before the person who found it. The bot sent about 2,882 rsETH to another address and paid roughly 18.93 ETH, worth around $46,000 worth of gas to the block builder that placed it first 🤖 

This roughly became some dude digging a tunnel into a bank, reaching the vault and finding a lighting fast robot already leaving through his tunnel with his money bags.

Right after that, Kelp froze the address holding the rsETH for 24 hours while the incident was investigated. It said rsETH remained fully backed and that minting, withdrawals and integrations continued as normal. Though as of now, the money had not been returned.

MEV usually gets blamed for making ordinary traders’ day worse. This time it, at least, gave us the rare sight of a robber getting front run during his own robbery 🥷 

Other worthy reads

“GPT-6 and complex mathematical trading agents” - Roan:

“ARC tools for onchain degens” - Amir Ormu:

“The Copycat Trap: Crypto's Lessons for AI” - Jonah:

MEMES

That’s it for this week, frens.

If you enjoyed this edition, share the newsletter with someone who would enjoy it too. It only takes a few seconds and helps more people discover W3OF without us having to beg an algorithm for attention 💜 

We’ll be back next week with more stories from the stranger corners of crypto. Until then, take care and try not to get rugged.

Yours, The 🔥 Team

_{W3oF is brought to you by Ambire Wallet.}