Who Is Building the Future of Ethereum: Treasury Companies Take Over, Could Be the Best Thing for ETH in Years
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Who Is Building the Future of Ethereum: Treasury Companies Take Over, Could Be the Best Thing for ETH in Years
Unlike MicroStrategy, which solely accumulates Bitcoin, ETH-holding companies are channeling yields back into protocol development.
Navigating Web3 tides with focused insightsAuthors: Edgy, Yayya
Compiled by: TechFlow
TechFlow Intro: The Ethereum Foundation is contracting due to fiscal issues, but treasury companies like Bitmine and SharpLink are taking over development funding. These companies hold nearly 5% of the circulating ETH supply and are now using staking yields to pay for protocol R&D. Unlike MicroStrategy, which only hoards Bitcoin, ETH treasury companies are flowing yields back into protocol development—this could allow all ETH holders to free-ride.
Key Points
- 80% of JTX platform fees go to the DAO; all shares received by the DAO will be used to buy back and burn JTO on the open market, executed at least until Q4 2027, when token holders will vote again on whether to continue.
- The real difference between Jito and Venice is the "pipeline": whose address the revenue falls into, who can turn off the burn mechanism, whether governance can replace the executors, and whether the project has truly ceded company revenue to the token in the past.
- After ETH treasury companies' mNAV fell below 1 and positions faced deep floating losses, the old flywheel of issuing shares to buy coins failed, so Bitmine, SharpLink, etc., began directly funding protocol R&D; this improves alignment of interests but also exposes development funds to coin price and company fragility.
The Crypto World Went in a Circle and Returned to TradFi
Crypto traders spent many years convincing everyone to escape the traditional financial system.
Hyperliquid's HIP-3 market—stocks, commodities, and indices—reached $3 billion in volume over the last 7 days; the platform's native crypto perpetual contract volume was $3.1 billion, almost equal.
We escaped TradFi, only to end up trading TradFi with 20x leverage, lol.
In This Issue:
- Jito's latest proposal, and why JTO holders should be happy.
- New direction for ETH development funding: Treasury companies taking over funding, is it actually bullish?
- Network updates: Polymarket launches combo bets, Plasma One releases Android version, Jito's JTX goes live, etc.
JIP-38: Making Jito a "Token-Centric" Network
"We have equity, but we will direct value to the token."
When Venice said this two weeks ago, Crypto Twitter (CT) roasted them badly; when Jito said the same thing this week, CT is cheering.
Below is the real difference between the two projects. (We discussed Venice on July 2, so we won't repeat the background.)
What Happened?
On July 13, the Jito DAO released JIP-38, officially defining Jito as a "token-centric network": all major project revenue flows to the DAO and is governed by the token; tokens have hard economic rights over the use of this revenue.
The specific commitment is: 100% of the revenue share brought to the DAO by JTX will be used to buy back and burn JTO on the open market. JTX is Jito's new self-custodied trading application for professional traders, opened to waitlist users the day after the proposal was released. The above arrangement will be executed for at least one year and continue until Q4 2027.
What JTO Holders Get:
- 80% of JTX platform fees flow to the DAO; the other 20% is retained but can only be reinvested into the platform that generated this revenue.
- All shares received by the DAO are used to buy back and burn JTO. The result is a reduction in supply, rather than leaving money in the treasury for number games.
- Execution is done by the "Rev Splitter": it collects fees and executes buybacks, and fee, buyback, and burn records for each epoch will be disclosed on-chain.
- In Q4 2027, token holders will vote again on the entire arrangement using at least one year of real data.
Sounds familiar, right? This is almost the defense essay Erik Voorhees wrote for Venice. Venice sold $65 million in equity and promised to increase burns; Jito raised $50 million from a16z last October, with cash on hand reportedly "far exceeding $100 million." Both are companies with an equity layer, simultaneously claiming they will direct revenue to the token.
Why do I evaluate the two differently? There are three reasons.
1. Revenue Falls into Different Pockets
Venice's revenue belongs to the Venice team. Except for a small portion of automatic burns—about $166,000 in April—the rest of the burn quota is decided monthly by the board, and the board has a fiduciary duty to shareholders, not to token holders.
Jito's fees enter the DAO treasury on-chain. JIP-38 explicitly states that tokens have "hard economic rights" over capital deployment. When money enters an address governed by token holders, burning is no longer the project's goodwill, but an institution.
2. Token Holders Can Replace Treasury Executors
I checked who is actually controlling Jito's buyback machine. The honest answer is: it is still operated by humans.
The Rev Splitter is actively managed by the Development Committee. This is a small committee authorized by the DAO; the proposal only promises gradual automation and decentralization in the future, with no specific plan yet.
But this "reins" is real. The committee's authorization is constrained by the JIP-36 revocable permission architecture: one governance vote, plus a 12-hour time lock, can remove their permissions.
If the Venice board reduces burns to zero, VVV holders can only tweet complaints; if the Jito committee behaves improperly, JTO holders can remove them within 12 hours.
3. Money Has Flowed from Company to Token Twice Already
Before August 2025, Jito's 6% block engine fees were split equally between Jito Labs and the DAO, each getting 3%. JIP-24 subsequently directed the full 6% "permanently" to the DAO, and Labs voluntarily gave up their revenue source.
JIP-38 extends the same model to JTX from the first day the new product goes live. Venice's Series A added another layer of equity claim on top of token holders; Jito's equity layer is continuously cutting its own claims.
This history makes Jito more credible. If Venice wants to gain similar credibility, it should also set up automatic buybacks for the recurring revenue of the subscription business.
But Problems Remain
JTX has just opened to 1,000 users, so its cash flow is almost zero after rounding. It is currently just a signal about "where future value flows," not existing value. The proposal also does not specify who ultimately receives that 20% development share; obviously, it will most likely flow to Jito Labs, responsible for developing JTX.
One year is not long. Forum members have already requested extending the term to five years. Labs, the Foundation, and their investors also hold a large amount of JTO, so "token holder decision" partly means "insider decision."
Fairly speaking, revenue from existing products like JitoSOL and BAM has already entered the DAO, which is a strong positive signal.
Why Is This Not Just About Jito?
Because most crypto projects have both an equity layer and a token layer simultaneously. Everyone will say "value will accrue to the token," but you cannot blindly believe it.
Do not grade the pitch deck, grade the capital pipeline. Ask only three questions:
- Where does revenue legally end up: company accounts, or addresses governed by tokens?
- Who can turn off the burn mechanism? Can token holders replace this person?
- Has money ever actually flowed from the company's pocket to the token?
Venice failed the first two questions, and CT noticed. Jito passed all three, but still needs an asterisk on the point of "control held by humans."
Sponsored Content | stBTC: Bitcoin Also Has Liquid Staking
Liquid staking is one of the most validated sectors in the crypto market. Lido's TVL alone exceeds $17 billion; for years, ETH holders have been able to earn staking yields without giving up liquidity.
Bitcoin holders have never had a corresponding version because Bitcoin previously lacked a reliable, encapsulable native staking mechanism.
Now the situation is changing. Stacks is about to launch Bitcoin Staking, and StackingDAO's stBTC is the liquid token built on top: BTC can earn staking yields while still flowing freely within the Stacks ecosystem.
The expected base yield at launch is about 2.6%. This isn't exaggerated, but it's better than BTC's 0% native yield since 2009.
This is not a new team taking your BTC to gamble. StackingDAO has operated STX stacking infrastructure for over two years, managing peak staked capital of over $150 million, serving more than 40,000 stakers, with zero security incidents.
stBTC is not yet live; it will launch shortly before Stacks releases Bitcoin Staking, which is very soon.
ETH Has a New "Management Team"
Due to concerns about treasury sustainability, the Ethereum Foundation is stepping back.
Meanwhile, new players are filling the gap. Treasury companies are starting to fund the next phase of Ethereum, and this could be the best thing to happen to ETH in years.
What Happened?
First, the Timeline:
- June 22: ETH Labs established. This is a non-profit R&D institution composed of five former Ethereum Foundation researchers; they previously participated in finality, scaling, and protocol economics research.
- June 23: Ethereum Foundation laid off 20% of staff, cut 2026 budget by 40%, and reorganized into five work clusters.
- July 1: Ethereum Institutional established, serving as a non-profit "front-door entry" for banks and asset management institutions to enter Ethereum; its focus also includes ecosystem marketing and ETH asset marketing. Yes, directly marketing this asset.
- July 14: EthSystems established. This is a for-profit company building confidential transaction systems for banks, operated by the original team from the Foundation's "Institutional Privacy Working Group."
Three institutions appeared within a month, and behind every press release are the same three names: Bitmine (NYSE: BMNR), SharpLink (Nasdaq: SBET), and Joe Lubin.
Who Are These Funders?
Bitmine is Tom Lee's Digital Asset Treasury (DAT) company, holding 5.77 million ETH, about 4.8% of the total circulating supply. That means roughly 1 in every 21 ETH in the world is on this company's balance sheet, and its public goal is to hold 5% of the total supply.
SharpLink holds about 876,000 ETH, making it the second-largest corporate holder. The company's chairman Joe Lubin also founded Consensys (MetaMask, Linea) and is an Ethereum co-founder.
The question therefore is not whether these companies are important, but why they suddenly started writing checks for protocol research.
Why Did DAT Become Ethereum's Venture Capital Department?
Frankly: because their old playbook is no longer sufficient.
The life or death of treasury companies depends on one number—mNAV, the multiple of the company's stock price relative to the net value of its crypto assets. When the market cap is higher than the value of the ETH held, the company can issue more shares, continue buying ETH, thereby continuing to increase the assets corresponding to each share. This is the flywheel Bitmine used to build its massive position.
Now the flywheel is frozen. The mNAV of the entire ETH treasury sector has fallen below 1, meaning the market values these companies even lower than their holdings themselves. Issuing shares below net value would dilute and harm existing shareholders, so there are no new shares, no new ETH, and thus no flywheel.
Moreover, the existing positions themselves are deeply underwater. Bitmine's average build price is about $3,883; the ETH price at the time described in the text was less than half its average. SharpLink's average cost is about $3,609, and unrealized losses once exceeded $1 billion during the previous correction.
Waiting for the Ethereum Foundation to lift ETH did not work, so these companies decided to get involved personally.
This is not blind donation; they are building a system that can re-raise the value of their own balance sheets.
Bull Case: Finally Someone Pays for the Roadmap
From this perspective, ETH holders can enjoy the spillover benefits of the entire investment for free.
The Foundation is actively contracting. Vitalik described the spending cuts as an intentional transition to an "endowment model": the Foundation's annual spending as a percentage of funds will drop from about 15% to 5% by 2030, in order to survive any winter. The intention is noble, but it also left a funding gap just as Wall Street was preparing to enter.
Treasury companies filled this gap with money that can sustain itself. According to forecasts, Bitmine's annual staking yield of $284 million is equivalent to an R&D budget that automatically replenishes every year without selling any tokens. Tom Lee's statement is: corporate stakers will provide funding assurance for Ethereum's future development.
If it works, the flywheel will spin in the right direction: institutional roadmap implementation, banks bring real capital flows, ETH demand is repriced, and R&D personnel also receive multi-year funding.
MicroStrategy only holds Bitcoin but does not fund any Bitcoin development; ETH treasury companies are reinvesting staking yields into the protocol. For ETH, this is a significant bullish signal.
Bear Case
But the other side must also be seen.
No specific amounts are disclosed anywhere. As of writing, we do not know how much funding is actually allocated to ETH development. Perhaps the market overestimates the impact of these funds, and the actual investment may be very limited.
DAT companies themselves are fragile. Pantera warns that crypto treasury companies may undergo a round of "cruel elimination" in 2026. If ETH continues to fall, the dollar value of staking yields will shrink, mNAV will compress further, and these companies will also stop funding ETH.
My conclusion is: the Ethereum Foundation stepping back does not mean Ethereum development is dead, but rather a passing of the baton.
The new funders hold more ETH than almost anyone else on earth. They cannot dump without hurting themselves. This is not perfect governance, but it does form real alignment of interests.
DeFi Catalysts
Polymarket: Brings "parlays" to prediction markets via Combos: users can combine multiple sports outcomes into one all-or-nothing position, priced by market makers via RFQ auction.
Aave: Launches Stable Vaults, converting floating lending rates into fixed-rate stablecoin yields that any enterprise can embed; Aave mobile's savings feature is already in use.
Plasma One: Its new banking app is live on Android. Download before July 18 for six months of free Core tier use.
Ethena: Minting users can now use USDC to mint and redeem USDe for free. Instant liquidity is expected to reduce value leakage in the secondary market.
Jito: Trading platform JTX is open to some waitlist users, offering meme coins, tokenized stocks, and major asset spot markets on Solana.
Lido: wstETH goes live on Robinhood Chain, bringing Ethereum staking yields to the new ecosystem.
Maple: After syrupUSDG went live on Robinhood Chain, assets under management exceeded $200 million; Steakhouse has approved it as collateral for Robinhood Earn vaults.
Jupiter: New product Gacha brings rated Pokemon and One Piece collection cards on-chain; draw value may be several times higher than payment amount, with highest reward of $100,000.
Tempo: Allows accounts to reject unwanted tokens and limit senders via Receive Policies; rules are enforced at the protocol layer rather than the application layer.
RHEA Finance: Launched Perp Confidential Deposit on July 15, users can continue to trade with existing accounts and Hyperliquid liquidity while hiding deposit information.
Jito JIP-38: Commits to using 100% of the JTX revenue share obtained by the DAO for programmatic buyback and burn of JTO at least until Q4 2027; DAO share accounts for 80% of platform fees.
Hyperliquid: HIP-3 market share of platform perpetual contract volume rose from about 2% in January to nearly 50%; on-chain stock perpetual contracts are approaching crypto asset trading scale.
Securitize: While listing on the New York Stock Exchange, tokenized its own SECZ stock worth $295 million, becoming the first US public company to do so at listing.
Galaxy: Launches Galaxy Onchain Financing Rate (GOFR), providing DeFi credit to institutions with a single, continuously rebalanced interest rate, without managing wallets or private keys; minimum loan amount $1 million, native BTC can be used as collateral.
Airdrop Alpha
Lighter: Investing $11 million worth of LIT to Robinhood Chain traders. Perpetual contract trading can earn points redeemable for LIT, participating via Robinhood Wallet gets 2x multiplier.
Kamino: Launching $300,000 reward campaign around three-month USDG deposits, partners include Steakhouse and Global Dollar Network.
GRVT: Airdrop registration ends July 17, TGE scheduled for July 21. Users can claim at TGE or delay claiming for up to 4x multiplier; choice is irreversible.
Jupiter: Stakers can claim 50 million JUP from Q2 Active Staking Rewards. Qualification is quarterly average staking of 50 JUP, claim window closes October 8.
Industry News
Transatlantic Working Group: US Treasury and UK Treasury release joint ten-point roadmap, promoting coordination of tokenized assets and cross-border stablecoin rules.
Swift: Announces its blockchain ledger is ready for preliminary use; 17 banks from six continents are preparing to use tokenized deposits for real transaction pilots.
Kaito: Kaito Pro launches stock data, tracking sentiment, price, investment logic, etc. of over 3,000 global stocks in one interface.
SBI Holdings: Cooperating with Solana Foundation to build Japan's first on-chain financial market, including JPYSC yen stablecoin, tokenized RWA from corporate bonds to real estate, and cross-border settlement infrastructure.
Bonzo Lend: Hedera's largest lending protocol attacked due to Supra oracle validator vulnerability, losing about $9.05 million; protocol paused, TVL dropped 77%.
Circle: Received final approval from the US Office of the Comptroller of the Currency (OCC) to establish First National Digital Currency Bank, N.A.; USDC custody and future reserve management will be under direct federal supervision.
Meme
Text in image: Top—"I sold"; Bottom—"I increased USD reserves".
See you next time,
Edgy
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