The CLARITY Act failed its Senate procedural vote today. 🔨

Judging by some of the headlines, you might assume someone wheeled crypto behind the Capitol and shot it. “Major setback.” “Crucial defeat.” “Blow for the industry.”

There is only one small problem: almost nobody seriously expected this thing to pass.

A month ago, TD Cowen put the odds of CLARITY becoming law in the near term at 25%. As recently as Monday, prediction markets had its chances of passing this year around 22%, briefly jumping to 32% after Republicans released another revised draft.

By this morning, bipartisan talks had effectively collapsed. Democrats weren't on board. Republicans needed Democratic votes to reach the 60-vote threshold.

Then it failed 49-50. Which is news. It just isn't much of a surprise.

Reuters called the vote a “blow for industry.” Axios called it a “major setback.” CoinDesk said crypto's biggest Senate push had “flamed out.”

Fair enough. Congress failing to establish durable crypto market structure matters. But this wasn't Lucy suddenly yanking away the football (some of you probably have no idea what that reference is about and I weep for you). The football had been sitting in a congressional committee for months with a handwritten note saying, probably not happening. 🤷

Some of the funniest things in life are, well, real things that happen - or could happen. And crypto is just one of the most fertile environments for shenanigans. Also, we could all use some smiles. Hell, we’re less than 30 days from the one year anniversary of the F*cktober The 10th crypto crash. 📆

Let me tell you about this thing I came across called LONG. LONG is a launchpad for stock-linked memecoins. You launch a coin and pair it with a tokenized stock on $HOOD ( ▼ 3.39% ).

Normally, a memecoin might trade against USDC or USDT. So, let’s say you launched a memecoin called $BONER ( ▼ 19.42% ) (yup, it’s a thing already. Actually, this whole scenario is a thing that exists and happened). You create your BONER token and you’re like, ‘Bro my BONER coin is going to outperform even the USD, I need to put my BONER against something else, there’s got to be something else, right?’

Well, hot skippity bippity there is something else, there’s a lot of something-elses out there. LONG let’s you pair with a tokenized stock. So (again, this is a thing that happened already), naturally, you think to yourself, ‘self, why don’t I pair my BONER against the telehealth company best known for ED, hair loss, and men’s health: $HIMS ( ▼ 3.33% )?’ So… BONER/HIMS. Think EUR/USD or ETH/BTC. But BONER/HIMS.

If your BONER rises faster than HIMS, BONER/HIMS goes up. Your BONER is outperforming. If HIMS outperforms BONER, BONER/HIMS goes down. If someone else believes your BONER is going to outperform HIMS, they will will need to buy and load up on your BONER.

LONG says it crossed $1 billion in tokenized-stock volume in five weeks. Finance has completed another lap around the sun. 🏃

^{*this is not an endorsement of LONG, in fact, I might not even be describing correctly how LONG works, but I just worked off the information I had, I’m 89% certain the mechanics of what I wrote about are correct. If not, someone from LONG can email me about it.}

More than $50,000 each. That’s what prosecutors say $HOOD ( ▼ 3.39% ) engineers Hefu Chai and Huaisong Xiang made using confidential listing information to trade crypto perpetuals on Hyperliquid. Both now face commodities-fraud and wire-fraud charges. 🤦

Guess they missed the memo. You’re supposed to be in for Congress before developing this level of investment talent.

The particularly insulting part for everyone refreshing their news feed: prosecutors say Xiang sometimes finished his trades before Robinhood publicly announced the listings. In one alleged POPCAT trade, he closed his longs at a profit after trading opened on Robinhood but before the announcement went out.

His alleged research advantage? A private Slack channel containing upcoming listing details. The complaint says he received advance messages identifying the listing date and time.

Both men are presumed innocent. Robinhood cooperated with the investigation. 🏹

🪄 Midnight Moves Wallet Chores Into The Background

The goal is privacy without making users assemble IKEA furniture in the dark. Midnight’s abstraction stack lets users sign in with email or social accounts, receive shielded and unshielded addresses, and transact without first buying gas tokens. Dynamic handles wallets, VIA Labs handles cross-chain messaging, and DApps or the Capacity Exchange can cover DUST costs. Midnight.

🤖 Algorand’s AI Agents Found Their Own Checkout Lane

Indian hackathon teams built x402 prototypes on Algorand where AI agents buy data, research, travel services, code help, and other machine-priced work. BlockHacker and ContractLens charge $0.50 USDC per request, while other projects enforce budgets and approval rules before agents spend. Algorand.

📊 THORChain Gets An Investor Dashboard With Actual Numbers

THORChain now has a dedicated DeFiLlama dashboard tracking fees, revenue, volume, wallets, nodes, bonded RUNE, protocol-owned liquidity, burns, and token supply. It also breaks out affiliate economics and provides monthly, quarterly, annual, and cumulative income statements. Crypto investor relations usually means a thread and three rocket emojis; this is closer to something an analyst can use. THORchain.

🏦 Quant Gives Banks Three Jobs For Tokenized Deposits

Quant identifies three near-term uses for tokenized deposits: delivery-versus-payment settlement, programmable corporate treasury, and cross-border bank flows. The tokens remain liabilities of issuing banks, giving institutions on-chain cash without pushing deposits outside the regulated perimeter. Banks get round-the-clock settlement and automation while keeping the balance sheet. Quant.

🏗️ Optimism Offers Exchanges Their Own DeFi Assembly Line

Optimism says exchanges can add settlement, lending, yield, and stablecoin products through OP Mainnet or a dedicated OP Stack chain. The stack supports 50-plus production chains, roughly $17 billion secured, and 6.8 billion transactions through August. Dedicated chains add custom economics and sequencer-level screening, while the exchange keeps the compliance homework and product risk. Optimism.

♻️ 1inch Aqua Lets Leveraged Collateral Work Several Shifts

Aave loops can enlarge a supplied position through repeated borrowing, while 1inch Aqua lets the resulting aTokens support several liquidity strategies from one wallet balance. SwapVM can deliver incoming collateral before removing outgoing collateral, preserving Aave’s health checks during atomic swaps. Borrow rates usually exceed supply rates, so the strategy starts with negative carry and adds health-factor and liquidation risk. 1inch.

📡 Stellar Adds Live Prices To Its $4 Billion RWA Pile

Stellar now hosts $4 billion in tokenized real-world assets, up roughly 360% this year, and Pyth has brought more than 3,500 price feeds to mainnet. Smart contracts can verify signed updates onchain for lending, vaults, payments, and liquidations. SDF recommends independent checks and redundant providers, a sensible warning when yesterday’s NAV meets a market trading all night. Stellar.

📅 XDC’s Weekly Update Was Heavy On Rooms And Roundtables

XDC Foundation and Plug and Play opened Cohort 4 in New York with founders, investors, and enterprise teams discussing AI agents, payments, identity, tokenization, and finance. XDC USA also hosted a governed-data panel, while the MENA podcast covered RWAs, staking, stablecoins, and native USDC. Plenty of institutional conversation; no major network release or usage milestone made the roundup. XDC.

Email me, Jonathan Morgan, feedback; I’d love to hear from you. 📧
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