GM ☕️ Here’s what we’re getting into this week:

Plus:

That being said, our industry is terrible at staying dead. Things go wrong all the time, sometimes badly, but crypto keeps going anyway. At this point, the “it’s over” attitude is getting harder and harder to accept somehow.

Do you enjoy reading Web3 On Fire every Friday? You know someone else who would like to get their weekly dose of crypto news and analysis straight to their inbox?

Finance is a complicated business, even if social media mostly shows its bosses speaking at conferences and enjoying the money. Running a company worth billions also means making sure it can survive without the person at the top.

Ondo Finance is now in a succession crisis because that small part was not thought out at all 👇

Its founder, Nathan Allman, died unexpectedly on May 25 at only 32 years old. He had no will and was serving as Ondo’s CEO, sole director and controlling shareholder. The company built to bring serious financial assets onchain but after his death suddenly had no clear answer for who was actually in charge.

Then somebody apparently tried to sell it 🤨

The problem is when Allman died, his controlling shares became part of his estate and could not be used until the probate process appointed a representative.

De Bode says the allegations are meritless and that the current leadership has support from major investors and the Ondo Foundation. The court has not decided who is right.

The estate also claims that De Bode began arranging a compensation package worth around $11 million within a week of Allman’s death. It allegedly included a $1 million signing payment, 26 million restricted ONDO units and enough company shares to increase his ownership from 0.33% to 8% 😲

According to the complaint, the package was due to begin vesting on May 25, the day after Allman died. De Bode disputes the estate’s whole case, but that date alone makes the whole arrangement look horrible.

Once Kathleen gained control of the estate’s shares, she attempted to remove De Bode and install herself as chair and interim CEO. He rejected her authority and the fight ended up in the Delaware Court of Chancery 👨‍⚖

What’s way worse is that this is not some tiny project arguing over some scrap tokens. Ondo has more than $3.8 billion across its products and works with tokenized U.S. Treasuries and stocks. Its OUSG fund holds investments in BlackRock’s BUIDL fund, while its equity backers include Pantera Capital, Founders Fund, Coinbase Ventures and Tiger Global 🫢

That is also why buyers might be interested. Crypto acquisitions reached $12.9 billion during the second quarter, with tokenized finance becoming one of the main areas companies were buying into. Ondo had the products and institutional connections that could attract serious offers, although nobody knows what price was reportedly discussed.

The confusion itself is undeniable. Within four months of Allman’s death, Ondo became trapped between an ownership lawsuit, an $11 million compensation grab, a family fight over the estate and reports that (possibly) the team members themselves were looking for a buyer 🤐

Interesting how Ondo described its products as institutional grade - you’d think those standards had to apply to the company too, considering that the most important thing missing from its setup was something basic, like appointing a vice manager 🤔

If you have been around Twitter/X for any length of time, you have seen these bot farms everywhere:

A proper hard working researcher or news account posts a useful piece of info and within minutes the same information appears across a dozen pages that had nothing to do with finding it.

They usually remove the source and change just enough wording to pass the post off as their own. Plenty of them appear to use ChatGPT for that part, which is why the same big of data/info often comes back slightly weirder looking and full of wording no normal person would use. These accounts are also the ones constantly replying under someone else’s posts so they can grab views 🙄

And when there is nothing ready to copy, they just make stuff up. Gotta have those views.

This is where all those wild unsourced posts about secret announcements and executives saying incredibly bullish things come from. This garbage only needs to survive long enough to collect engagement before the next one replaces it 🤷‍♂

Someone at Twitter/X has finally decided this trash has gone far enough 👇

The company has sued bot runners Vivek Kumar Sen and Zmyang Sherpa in London, accusing them of running nine fake bitcoin news accounts and collecting at least $277,000, from its creator program.

The network did not limit itself to recycling real news. X says it also spread invented claims, including stories that the Goldman Sachs CEO was pushing a crypto bill and that Citibank had bought $12.6 million in BTC 😐

That money explains why reply farming became so aggressive on that platform. These accounts were not chasing numbers on a screen for fun. Every stolen post and useless reply created another chance to get paid 💵

X removed the nine accounts in August for coordinated revenue sharing fraud and platform manipulation. It is now asking for the creator payments back, as well as further damages for alleged fraud and conspiracy 🔨

A suspended account is easy to replace. Losing more than $200,000 and having to defend the scheme in court is slightly harder to shrug off. If X manages to recover the money, these farmers may finally learn that creator payouts are not quite as easy to keep as the posts they stole to earn them.

Some projects grow into their own infrastructure. Others build the infrastructure first and hope the growth eventually comes later somehow.

The second approach was popular for a long time. You’d want your own chain, token, validators, explorer, ecosystem fund and of course your own foundation to mimic big chains - as soon as possible. Having a dApp was fine, but having an entire layer 1 made the project look more important 🧐

Then the users never came to use any this, but the chain still needed to be maintained 🤷‍♂

ZetaChain holders have now approved a plan to wind down the project’s Cosmos based layer 1 and turn ZETA into a regular Solana token. Proposal 68 passed with 99.4% support and 58% participation, comfortably clearing the required quorum 👇

DefiLlama currently shows around $442,000 locked across ZetaChain DeFi, roughly $160 in daily DEX volume and less than $4 in chain fees. ZETA itself was usually trading around 98% below its high - though for the moment, the news got it a fat temporary pump.

TVL looks better than some projects out there, but idle TVL and a coffee cup pay worth of activity per day won’t help with your bills 🪙

Keeping a full L1 running is not cheap, infrastructure costs like AWS are increasing every year, validators need incentives or you aren’t going to produce any blocks, constant security upgrades (it’s the age of AI after all) still have to be tested even when barely anyone is using the result, and that’s just a few among many other untold things.

ZetaChain also suffered a $334,000 cross chain exploit in April after previously dismissing a bug report about a vulnerability 🫣

The holders may be right. If the useful part of the project is becoming one LLM API call, that application probably does not need to drag an entire blockchain behind it.

There are also options between owning a layer 1 and becoming another Solana token. A project can run directly on an existing chain, launch an appchain or use an L3 that settles through a larger network. Those arrangements can still provide custom rules and dedicated space without requiring the team to maintain its own validator economy from the ground up 👨‍🔬

Moving to Solana makes sense because Solana has plenty of people willing to gamble on whatever appeared five minutes ago. But this creates another question. If those traders move to Base, Robinhood Chain, Arc or the next popular place, does the project pack its bags again?

Following users might be sensible but rebuilding around every new shitcoin season is definitely not. A chain can’t its entire plan around finding whichever casino currently has the longest line outside 🧑‍🤝‍🧑

So Zeta may be making the correct call for the situation it is in, but this doesn’t mean every weak chain should pack and move to Solana.

Easy money can keep even a weak idea alive for much longer than it deserves. There is always another round, another token sale or another promise that the real product is coming soon.

A bear market takes those extra chances away. Projects have to find users, find revenue or find somebody willing to keep paying the bills. A few more teams reached the end of that process last week 👇

# 1 - Linera was an a16z backed layer 1 that raised $12 million across two seed rounds.

The app is being switched off and the Discord server is closing. The team says it will preserve user points in its records, although it cannot promise those points will ever become anything.

It also says the protocol could still be completed one day, which is possible but in the same way that any abandoned construction site could theoretically become a hotel 😶

#2 - Switchboard - at least had a working product.

Some of that is fair. Infrastructure companies live or die based on the projects around them, and there is less work available when everybody is cutting costs 🔪

Still, a working product needs people willing to pay enough to keep it working. If cheaper alternatives remove the business, the technology alone does not save it.

#3 - CoinEx reached the same decision from a very different position.

CoinEx said it was cutting off Iranian users and tightening its identity checks. Founder Haipo Yang maintains that the closure had been under consideration for years and was not caused by the Iran issue. Even so, it shows what rising compliance costs can mean for an exchange already dealing with lower volume 🪙

Overall, RootData has placed more than a hundred projects on its dead project list this year. That number includes bankruptcies, official closures and websites that have simply stopped showing signs of life, so they are not all the same type of ‘dead’ 💀

The bear market did not make those situations inevitable, but it for sure impacted the money that allowed the verdict to be postponed. At least some of them finally said the thing thousands of dead projects refuse to admit: the product is not coming back next week, so users should stop waiting outside 🙅

“Beginners Guide to the Bull Cycle of 2026” - 0xJeff:

“Safety First” - an essay by Arthur Hayes:

“Everything Will Be a Token” - Raoul Pal:

That’s it for this week, frens.

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We’ll be back next week with another round from this … very normal industry. Until then, take care.

Yours, The 🔥 Team

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