A major multi-university study finds faster AI means fewer people working.
Economists now see real job losses alongside strong economic growth.
The debate has shifted to whether AI will replace the need for new jobs entirely.
For years, economists were the professionals most likely to tell you to calm down about any fear related to technology. ATMs didn’t replace cashiers, Excel didn’t replace bookkeepers and robotic vacuums didn’t replace maids. “Augment, not replace” was the consensus.
Well, that consensus is cracking.
A new paper from researchers at the Federal Reserve Bank of Chicago, the Forecasting Research Institute, Yale, Stanford, and the University of Pennsylvania surveyed 69 economists, 52 AI specialists, and 38 superforecasters about how AI will reshape the U.S. economy.
All three groups agree on one thing: Faster AI progress means lower labor force participation. That’s the polite way to say “fewer people working.”
The numbers are staggering. Under what the researchers call the “rapid” scenario—where AI surpasses human performance across most cognitive and physical tasks by 2030—economists forecast the U.S. labor force participation rate dropping from its current 62% to 54% by 2050.
About half of that drop, roughly 10 million lost jobs, would be directly attributable to AI rather than demographics or other trends.
The rapid scenario isn’t science fiction. It’s the world where AI can negotiate book contracts, assist in any factory or home, and replace all freelance software engineers, paralegals, and customer service agents.
Anthropic CEO Dario Amodei has already warned that the disruption is accelerating faster than most expect—and the study’s rapid scenario effectively validates that framing. GDP tells the other half of the story.
Under the same rapid scenario, economists project annual GDP growth hitting 3.5% by 2045-2049—approaching post-WWII boom levels. AI experts are even more bullish, forecasting 5.3% growth. Tremendous aggregate wealth creation, concentrated at the top, with a thinner workforce to share it. The researchers flag that under rapid AI, the wealthiest 10% of households could hold 80% of total wealth by 2050—higher than pre-WWII inequality.
But there’s a nuance that often gets lost in the AI jobs debate. The paper finds that expert disagreement isn’t mainly about whether powerful AI will arrive, but about what happens to the economy once it does. That’s a meaningful shift. The previous pro-tech arguments assumed that even transformative automation would eventually create new categories of work. The new question economists are wrestling with is whether AI, unlike ATMs, automates the task of inventing new tasks.
For now, the aggregate employment data still looks mostly stable. A Yale and Brookings study from late 2025 found no mass unemployment signal nearly three years after ChatGPT’s launch. But research cited in the new paper documents a 13% relative employment drop among workers aged 22-25 in the most AI-exposed occupations. The macro is stable. The leading edge is not.
On policy, economists and the general public part ways sharply. Economists favor targeted retraining programs (71.8% support) and largely reject job guarantees (13.7%) and universal basic income (37.4%). The general public is far more open to structural interventions. The paper’s authors note that optimal policy depends heavily on which scenario plays out—and right now, nobody knows which one will.
So, the “augment, not replace” parable isn’t dead, but it’s on life support, and the economists running the numbers have enough data to be worried.
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Crypto asset manager Bitwise has filed an amended registration statement with the U.S. Securities and Exchange Commission for a proposed exchange-traded fund (ETF) tied to Hyperliquid’s HYPE
The updated S-1 for the fund, which would hold HYPE directly and list on NYSE Arca, said it would trade under the ticker BHYP. The fund aims to track the token’s price, offering investors exposure to it without leveraging crypto exchanges or wallets.
The proposed product includes a staking component. Bitwise said the fund would stake a portion of its holdings to earn additional tokens, with about 85% of staking rewards retained after fees.
The filing also details a 0.67% annual management fee and custody arrangements with Anchorage Digital, a federally chartered crypto bank.
The price of Hyperliquid’s HYPE token has surged over the past year. The token is up around 200% over the last 12 months, as it became the go-to decentralized trading platform for perpetual contracts, including those tied to traditional financial products.
Other asset managers have also moved to list HYPE-linked exchange-traded funds. These include Grayscale, which filed last month to list under the ticker GHYP on Nasdaq, as well as 21Shares and VanEck.
NatWest and Sainsbury’s have unveiled a new strategic agreement designed to bring a fresh suite of financial products directly to the grocer’s customer base. Set to roll out in the second half of 2026, the partnership will offer tailored savings, loans, and credit options, complete with exclusive benefits integrated into the Nectar loyalty programme.
This latest collaboration builds directly upon NatWest’s 2025 acquisition of Sainsbury’s Bank plc’s core personal loan, credit card, and retail deposit portfolios. By joining forces, the two retail giants aim to deliver financial products that support everyday consumer needs while explicitly rewarding loyalty through the established Nectar ecosystem. Nectar members will be able to access tailored rates on savings and loans as a core feature of the partnership.
Powered by Banking-as-a-Service
Solange Chamberlain, CEO of retail banking at NatWest
The new product rollout will include:
A new NatWest Nectar credit card: Provided directly by NatWest Retail, this card will allow shoppers to collect Nectar points on everyday purchases, with built-in opportunities to earn bonus points.
Instant access savings and unsecured personal loans: These products will be accessible entirely through Sainsbury’s digital channels and will be powered by NatWest Boxed, the bank’s cloud-native Banking-as-a-Service (BaaS) platform.
Solange Chamberlain, CEO of retail banking at NatWest, highlighted the strategic value of combining forces.
Patrick Short, managing director of financial services at Sainsbury’s
“Partnering with Sainsbury’s enables NatWest to help many more families with their financial needs, combining our expertise and financial know-how with a seamless digital experience and Sainsbury’s scale,” Chamberlain stated. “This ongoing partnership is a great example of our focus on exceptional customer service and accelerating growth in our Retail Banking business through innovative partnerships that deliver for our customers where they are.”
Patrick Short, managing director of financial services at Sainsbury’s, echoed the mutual benefits of the agreement.
“We’re committed to working with trusted partners who share our values and dedication to delivering outstanding service for our customers,” Short commented. “Building on our success together, we are pleased to extend our agreement with NatWest, whose deep expertise and customer-first approach continue to make them an ideal partner for our evolving financial services offering.”
Expanding the embedded finance footprint
The ongoing alliance with Sainsbury’s represents NatWest’s third major foray into the embedded finance space. In 2025, the bank announced similar strategic partnerships with The AA—providing instant access savings and unsecured loans to its motoring members—and with Saga, delivering tailored savings products specifically for its over-50s customer demographic.
Currently serving one in three families in the UK, NatWest views these strategic collaborations as a vital avenue to drive organic growth, diversify income, and ultimately support customers through critical financial milestones.
Ron Hammond, head of policy at crypto market maker Wintermute, has a cautious outlook on the Clarity Act, putting its chances of passage this year at around 30% even as momentum builds in Washington.
“There are a lot of moving parts,” Hammond said, pointing to a legislative process that is advancing, but unevenly. The Clarity Act aims to create rules around crypto market structure regulation in the U.S., including codifying how the Securities and Exchange Commission and Commodity Futures Trading Commission can oversee digital assets in the U.S.
Hammond’s estimate broadly aligns with other signals in the market. A recent Punchbowl survey of lobbyists and staffers put the odds at 26%, while prediction market Kalshi has hovered just above even odds. The spread underscores how uncertain the bill’s trajectory remains.
Still, Hammond, who will be speaking at CoinDesk’s Consensus Miami conference next month, sees incremental progress. Lawmakers are pushing to move the bill through committee, with some aiming for a vote as early as April 20, though he cautioned that such timelines have been fluid for months.
“These dates are moving,” he said. “There’s light at the end of the tunnel, but there are hurdles along the way.”
Passage of the Clarity Act is widely seen as a key unlock for institutional adoption of crypto because it would establish clear rules around which digital assets are securities versus commodities, and define how they can be traded, custodied and otherwise regulated in the U.S.
Today’s fragmented and uncertain framework has kept many large asset managers, banks and pension funds on the sidelines due to legal and compliance risks. A comprehensive market structure law would reduce that ambiguity, giving institutions the confidence to scale exposure, launch new products, and integrate crypto more fully into traditional financial systems.
Hurdles
At the center of those hurdles: banks.
According to Hammond, traditional financial institutions remain the biggest obstacle, particularly around the issue of whether stablecoins should offer yield. A recent report from the Council of Economic Advisers has pushed back on bank opposition, but negotiations remain stuck.
“There have been attempts from a number of sides: Coinbase (COIN), the White House, the bill’s drafters, to find a solution,” Hammond said. “But at every turn, the banks refuse to give way.”
The dispute has already derailed at least one compromise. Hammond said a proposed “yield deal” floated roughly two weeks ago failed to satisfy either side, sending negotiators back to the drawing board. A new version is now circulating, but expectations are tempered.
“Even with broader macro pressures, it’s hard to see how the banks get happy here,” he said.
Democrats
That resistance is shaping the politics around the bill, particularly for Democrats. Hammond noted that some lawmakers who have accepted crypto industry funding are now navigating a difficult balancing act.
“If you’re a Democrat who took crypto money, where do you stand on this issue?” he said, pointing also to unresolved concerns around decentralized finance (DeFi) and anti-money laundering compliance.
Additional political headwinds could emerge in the coming months. Hammond flagged ongoing scrutiny around former President Donald Trump’s crypto-related dealings as a potential flashpoint that could complicate Democratic support if it intensifies around June.
“All of that becomes another headache,” he said.
Despite the friction, Hammond believes the bill still has a viable, if narrow, path forward. Progress in committee and continued negotiations could keep it alive into midyear, when political incentives may shift.
“There will be some progress soon,” he said.
U.S. expansion
For Wintermute, the stakes are high. The firm, one of the largest crypto market makers globally with roughly $10 million in daily trading volume, is expanding its U.S. footprint, and growing its New York team.
Hammond said that reflects a broader industry commitment to the U.S. market, particularly under what firms see as a more favorable regulatory environment. “Wintermute has expanded operations since the election by establishing a U.S. office in NYC and we have been actively hiring,” he added.
That makes the outcome of the Clarity Act all the more consequential. While Hammond sees “light at the end of the tunnel,” he emphasized that passage in 2026 will require breakthroughs that have so far proved elusive.
For now, 30% remains his number, and a reminder that progress in Washington does not always translate into results.
Read more: Bitcoin is stuck in a rut but JPMorgan says new legislation could be the ultimate spark
Shipping firms that turn to cryptocurrency to pay potential transit fees to Iran could face significant sanctions exposure, according to Kaitlin Martin, senior intelligence analyst at Chainalysis.
Martin told Cointelegraph that under the current sanctions framework, any payments made to the Iranian regime, including those tied to passage through key waterways, could be interpreted as “material support,” putting companies at risk of violating US and international restrictions.
“Doing so could carry significant sanctions violation risk, as the Iranian Revolutionary Guard Corps is sanctioned by multiple jurisdictions and Iran is subject to comprehensive sanctions by the United States,” she said.
The warning comes amid reports that Iran may seek to collect transit fees in cryptocurrency. While there has been no official confirmation, US President Donald Trump has said he would not accept any attempt by Tehran to impose tolls on shipping through the vital waterway.
Related: White House warns staff as Iran bets add to growing insider trading concerns
Iran expands crypto use
Tehran has already expanded its use of digital assets, particularly stablecoins, to facilitate trade in oil, weapons and commodities, based on publicly available data, Martin said.
However, she noted that cryptocurrency is not a foolproof workaround for sanctions. While it enables cross-border transfers outside the conventional financial system, blockchain transactions are inherently transparent and leave a permanent record.
Source: Arkham
“In many ways, cryptocurrency is actually easier to trace than traditional methods of sanctions evasion,” she said, pointing to the ability of investigators to follow funds to cash-out points where assets can be frozen or seized.
Other sanctioned states have also explored similar approaches. Russia, for instance, has used digital tokens such as A7A5 to facilitate cross-border trade following sanctions imposed after its 2022 invasion of Ukraine.
Related: Bitcoin community weighs in on reports of Iran’s crypto toll for oil ships
Iran’s Bitcoin hashrate drops sharply
As Cointelegraph reported, Iran’s Bitcoin (BTC) mining power has dropped significantly over the past quarter, losing around 7 exahashes per second and falling to roughly 2 EH/s, amid escalating tensions with the United States and Israel.
Despite the regional disruption, the global Bitcoin network remains stable, with total hashrate holding near 1,000 EH/s. Notably, the impact has been contained within Iran, with neighboring countries such as the United Arab Emirates and Oman unaffected.
Magazine: Bitcoin may take 7 years to upgrade to post-quantum — BIP-360 co-author
Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy https://cointelegraph.com/editorial-policy
Six weeks of war have split the bitcoin BTC$72,648.27 market into two camps. The institutional buyers who keep accumulating regardless of conditions, and everyone else, who is leaving.
The result is a market that looks stable on the surface, with bitcoin holding a $65,000 to $73,000 range through five weeks of conflict headlines, $600 million liquidation events, and the worst sentiment readings since the 2022 bear market, but is narrowing underneath in ways that matter for what comes next.
Here is who is on each side and what their behavior tells us about where conviction actually sits.
The mandated buyers
Three entities account for nearly all of the sustained buying pressure in the bitcoin market right now, and all three are buying because their business model requires it rather than because they’ve made a discretionary call on price.
Strategy has been the most visible. The company disclosed its latest purchase on April 5, adding 4,871 BTC for approximately $329.9 million at an average of $67,718 per coin.
Total holdings now stand at 766,970 BTC acquired for $58.02 billion at a blended cost basis of $75,644. The position is underwater by roughly 8% at current prices, but Strategy continues buying below its average, pulling the breakeven lower with each purchase.
A CoinDesk report last week showed Strategy’s 30-day accumulation holding steady at approximately 44,000 BTC through March.
Strategy’s STRC preferred equity product saw hundreds of millions in new inflows around its recent ex-dividend date, providing the capital for continued accumulation. As long as investor appetite for that yield product holds, Strategy keeps buying. If STRC inflows slow, so does the bid.
Meanwhile, U.S. spot bitcoin ETFs absorbed approximately 50,000 BTC in March’s 30-day rolling window, the highest monthly pace since October 2025.
But the broader ETF industry data tracked on a weekly basis tells a less bullish story. CoinShares reported only $22 million in U.S. spot ETF inflows last week out of $107 million in total bitcoin ETP flows globally. Meanwhile, most flows came from one country – Swiss-listed products pulled in $157 million alone, accounting for 70% of the global ETP inflow of $224 million.
The institutional channel is open but the flow tis highly concentrated and is slowing on a weekly basis.
Meanwhile, Bitmine Immersion Technologies, while primarily an ether play, represents the same structural dynamic on the ETH side.
The company bought 71,252 ETH last week, its largest single-week purchase since December 2025, and now holds 4.8 million tokens worth roughly $10 billion.
Chairman Tom Lee called the stock market bottom this week while his company was actively spending hundreds of millions accumulating the asset he was publicly talking up.
The discretionary sellers
Everyone with a choice is running for the exit.
Whales holding 1,000 to 10,000 BTC have turned from the market’s largest buyers into its largest sellers. The one-year change in whale holdings has swung from roughly positive 200,000 BTC at the 2024 bull market peak to negative 188,000 BTC, a nearly 400,000 BTC reversal that CryptoQuant described as one of the most aggressive large-holder distribution cycles on record. The 365-day moving average continues to decline, confirming the selling is structural rather than reactive to any single event.
Mid-tier holders, wallets with 100 to 1,000 BTC, are still technically accumulating but the pace has collapsed more than 60% since October 2025, from nearly 1 million BTC in annual additions to 429,000. They have not flipped to selling yet, but the trajectory points that direction.
Listed bitcoin miners are liquidating treasury. Riot Platforms, MARA Holdings, and Genius Group disclosed selling more than 19,000 BTC from their treasuries in a single week earlier this month.
Some are facing operational strains, with bitcoin near $70,000 and difficulty at all-time highs and rising energy costs. The likes of Core Scientific, Iris Energy, and Hut 8, are pivoting capacity to AI hosting where contracted revenue replaces the volatility of mining income.
Bhutan, the only sovereign nation that built a bitcoin position through its own hydropower-backed mining operation, has sold 70% of its holdings since October 2024, from roughly 13,000 BTC to 3,954. The kingdom moved another 319.7 BTC to exchange-linked wallets this week. Its last mining inflow exceeding $100,000 was recorded over a year ago, suggesting the operation may have stopped entirely. Strategy now buys more bitcoin in a typical week than Bhutan has left.
The sentiment gap
The gap between what mandated buyers are doing and what the rest of the market feels is historically unusual.
The Fear and Greed Index spent over a month pinned between 8 and 14, the most sustained period in extreme fear territory since the 2022 bottom. It only climbed out of single digits this week after the ceasefire was announced.
Santiment data showed five bearish social media posts for every four bullish ones last weekend, the most negative skew since the war began.
Yet through all of that, ETFs were buying 50,000 BTC a month, Strategy was buying 44,000, and bitcoin never broke below $65,000. The floor held because the mandated buyers were absorbing what the discretionary sellers were dumping. The question is whether that absorption is sustainable.
What the ceasefire changed and what it didn’t
The ceasefire announcement Tuesday produced the sharpest single-day rally in over a month, with bitcoin surging past $72,000 and $427 million in shorts getting liquidated. Open interest in BTC and ETH perpetuals expanding by $2.1 billion and $2.2 billion respectively in 24 hours, with coin-denominated OI also rising, confirming net new long positions rather than just short liquidations.
The Coinbase Premium turned positive for both bitcoin and ether for the first time since October’s all-time high, reversing months of persistent negative readings. If it holds, that is the first sign of genuine U.S. buyer re-engagement since the war began.
But the ceasefire has not changed the structural dynamics underneath. Whether it converts into a trend reversal depends on whether the two-week truce becomes permanent, and whether the institutional flows that held the floor through the war can push through the $73,000 ceiling that has rejected every rally since late February.
In conclusion, a read across all of the data is that bitcoin’s buyer base has been narrowing for months.
The number of entities providing sustained buying pressure can be counted on one hand. Strategy, ETFs, and to a lesser extent Morgan Stanley’s new channel. Everyone else is either selling, slowing down, or leaving.
Georgia’s fintech story has always been one of positioning. Situated between Europe and Asia, the country has leveraged its geographic and regulatory flexibility to build a financial ecosystem that is agile, outward-looking, and increasingly digital.
By 2026, that positioning is becoming more deliberate – anchored in digital economic transformation, regulatory modernisation, and a growing fintech ecosystem.
With a population of approximately 3.7 million and gross domestic product (GDP) per capita of over $6,000, Georgia remains a relatively small market. Yet its fintech trajectory is less about domestic scale and more about its role as a regional connector.
Digital Transformation as an Economic Pillar
Georgia’s digital economy ambitions are closely tied to its broader economic development strategy, which prioritises innovation, connectivity, and integration with European markets.
Government initiatives, supported by organisations such as the World Bank and the EU, have focused on expanding broadband infrastructure, digital public services, and e-governance platforms. The country consistently ranks highly in ease of doing business and digital government readiness, reflecting sustained reform efforts.
Internet penetration exceeds 80 per cent, and mobile usage continues to grow, providing a solid foundation for digital financial services. Importantly, Georgia’s digital transformation is not confined to urban centres, with efforts underway to extend connectivity and digital services into rural areas.
Financial Services Sector
Georgia’s financial services sector is among the most developed in the Caucasus, characterised by strong competition and rapid adoption of digital banking.
Leading banks such as TBC Bank and Bank of Georgia have been at the forefront of digital transformation. Both institutions have invested heavily in mobile banking platforms, data analytics, and customer-centric digital services.
These banks operate more like technology companies than traditional financial institutions, offering integrated ecosystems that include payments, lending, and lifestyle services. Their innovation has set the tone for the broader financial sector, pushing smaller players to adopt digital-first strategies.
At the regulatory level, the National Bank of Georgia (NBG) has played a proactive role in fostering innovation while maintaining financial stability. Its approach balances openness to fintech experimentation with prudent oversight.
Financial Inclusion
Tbilisi Downtown, Georgia, taken in April 2019 IMAGE SOURCE GETTY
Georgia has made significant progress in financial inclusion, with account ownership rates exceeding 70 per cent, according to the World Bank Global Findex. Digital banking and widespread ATM and point of sale (POS) networks have contributed to improved access.
However, challenges remain. This is noticeable in rural areas and among small businesses. Access to affordable credit continues to be a constraint for small and medium enterprises (SMEs), while financial literacy gaps persist in certain segments of the population.
Fintech presents an opportunity to address these issues. Digital lending platforms, alternative credit scoring models, and mobile-based financial services are expanding access to underserved groups.
At the same time, policymakers are increasingly focused on ensuring responsible lending and consumer protection, particularly as digital credit grows.
A Growing Fintech Ecosystem
Georgia’s fintech ecosystem is still emerging but gaining momentum. As of this year, there are an estimated 50+ fintech firms operating in the country, primarily focused on payments, digital banking, remittances, and financial infrastructure.
While Georgia does not have a standalone national fintech strategy yet, fintech development is embedded within broader digital economy and financial sector strategies led by the NBG.
The central bank has introduced regulatory sandboxes and innovation frameworks to support fintech experimentation. In parallel, efforts to align with EU financial regulations, under the EU–Georgia Association Agreement, are shaping the regulatory environment.
This alignment enhances credibility and facilitates cross-border financial activity, reinforcing Georgia’s role as a regional hub. One of Georgia’s defining strengths is its regulatory approach. The NBG has positioned itself as both a regulator and an enabler of innovation.
Georgia’s fintech future is closely tied to its ability to scale beyond its domestic market. With a small population, growth will depend on regional integration and cross-border activity.
The country’s strategic location, regulatory alignment with Europe, and strong banking sector provide a solid foundation. Its strategic location being in Asia and acting as a bridge between both continents is another strength of the country. The next phase will likely see increased focus on exportable fintech solutions and regional partnerships.
Georgia’s fintech ecosystem may be modest in size, but its ambition is clear. In 2026, the country is positioning itself as a digital bridge, which is connecting Europe with the wider Eurasian region.
Its progress reflects a broader truth about fintech in smaller economies: success is not defined by scale alone, but by strategic clarity and execution. In that sense, Georgia is not trying to replicate larger markets. Instead, it is carving out its own role; this is one built on agility, connectivity, and a steadily maturing digital financial ecosystem.
Richie is a global economic development advisor and Managing Partner of Santos-Diaz LLC, specializing in international trade and foreign direct investment across the UK, Middle East, and North America. With over 15 years of experience and a Masters from SOAS University of London, he has advised high-level governments and multinational corporates while contributing to major outlets like Forbes and the World Economic Forum. Currently based in Dubai, he leverages his background in emerging markets and RegTech to bridge the gap between global policy and private sector growth.
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In the beginning there was only Satoshi Nakamoto and a powerful idea. Nakamoto started working on Bitcoin as far back as 2007[1], and as far as we know worked on it entirely himself, until a few weeks after his release of the Bitcoin white paper on October 31st 2008[2], when Nakamoto took on the first Contributor to the project, Hal Finney[3].
Finney, it turns out, was critical to Bitcoin’s early success. According to recently surfaced emails[4] Nakamoto’s node was unable to receive “incoming connections” for a couple of days after the minting of the genesis block, resulting in Finney being the only node other users could connect to. Nakamoto told Finney in a private email “Your node receiving incoming connections was the main thing keeping the network going the first day or two.”
Finney was also one of the first known reviewers and contributors to Bitcoin, Nakamoto shared the software with him and a few other cypherpunk legends before it was shown to the world. Finney even contributed code to the project before its first release, as revealed by Ray Dillinger who Nakamoto also shared pre-released versions of the code with.
In an interview conducted by Nathaniel Popper published on Dillinger’s blog, he said[5]; “It was when we started talking about floating-point types in accounting code that I learned Finney was involved in the effort. Finney was reviewing the transaction scripting language, and both the code he had, and the code I had, interacted with the accounting code.”
The timeline roughly matches the activity page of the oldest Sourceforge web archive we have of the Bitcoin project page, where Nakamoto added Finney to the project on December 18, 2008. This decision by Nakamoto marks the first instance of Maintainer level permissions possibly being held by anyone other than Nakamoto. It is possible and likely that Finney gained developer status within the Sourceforge Bitcoin project, allowing him to download, modify and upload versions to Bitcoin to the site.
So, besides being a Contributor, reviewer, and a node runner, was Hal Finney also a Bitcoin Maintainer?
The strictest definition of a Maintainer is someone who has ‘commit access’ or write access to the primary development branch of a software project. Contributors to a project like Bitcoin may ‘commit’ code to development branches of the project, and submit ‘pull requests’ to have the code integrated to the master branch, but those updates can only be ‘merged’ into the master branch by its Maintainers[6] through “commit access”..
By that definition, Finney may very well count as the first Maintainer after Nakamoto, but being a Bitcoin core Maintainer is arguably a lot more than just having commit access. Maintainers must also have a good reputation among the developer community and be frequent, producing Contributors.
Bitcoin Maintainers have in some cases been active developers of the project, who were well known enough by other Maintainers and seemed to be a good fit for the role. In other cases, they have been active reviewers and auditors of the code, merging code contributions that appear to have consensus, and refusing to merge code that does not.
The Maintainer role in turn carries a high status within the Bitcoin industry, and it is vulnerable to reputation ending mistakes. In some cases, famous Maintainers have had their access revoked, when considered by other Maintainers to be compromised, as seen in the case of Gavin Andresen[7] when he endorsed scam artist Craig Wright as Satoshi Nakamoto. In other cases, Maintainers have quit the role, in response to targeted harassment as seen with Gregory Maxwell[8].
Generally, the Maintainer role in Bitcoin is expected by Contributors to be an engineering role and not a political one. Discussions on Github pull requests for example are expected to be about the technical and implementation details of a particular commit, rather than the person making the commit, their particular politics, allegiances. Discussions that touch consensus and are controversial or hotly debated are generally relegated to the Bitcoin mailing list and other forums, as do topics of a political nature.
It is important to note that whatever power there is embedded in the Maintainer role has arguably diminished over Bitcoin’s history, as the project has grown from the early days of Nakamoto. There are even examples of code getting merged to the master branch, only to be removed again[9] after further review, making decisions by Maintainers far from final.
Maintainers throughout Bitcoin’s history have at times been accused of being gate keepers, refusing to merge updates to Bitcoin that factions of the community support, often in part because other factions of the community oppose them. In this sense, the Maintainer role does carry a certain kind of ‘taste making’ power, the permission to discern whether a commit has consensus or not, something not easy to quantify.
This exclusive permission to merge or not to merge may be an unavoidable necessity of open source development, as no project would be considered safe or stable if anyone could merge any code into it at any time. In an adversarial environment, a meritocracy that filters code suggestions based only on the content of the ideas and their merit is arguably the best model we can strive for, anything else is a centralizing political system.
As such, the Maintainer role has persisted across Bitcoin development history, often held by multiple people, expanding and contracting in responsibilities. The role often draws the attention and curiosity of the broader Bitcoin community, as Maintainers as well as Contributors earn, enjoy and suffer the burdens of an emergent kind of leadership, especially in technical matters.
Unfortunately, data about the very early stage of Bitcoin development is scarce, leaving us only with glimpses into what role Finney played before the Genesis block. Maintainer permission history is actually quite opaque across open source development. Hubs like Sourceforge and Github fail to expose commit access history or detailed membership permissions to the public. Records like Nakamoto adding Finney to Sourceforge are actually a rare sight in Bitcoin Maintainer history.
Nevertheless, version control systems like SVN and Git which were implemented weeks after the first release of Bitcoin, do track commits across time and branches for the public to review, giving us public insights into what has happened. As a result, our knowledge of Bitcoin Maintainer history tends to come from first and last commits made to the master repo, announcements on Bitcointalk, or other forums, and confirmation of access revocation by active Maintainers at the time —in rare cases. A significant portion of the research on this article comes from Bitcoin Core Maintainer Ava Chow’s documentation of the relevant history[10].
The tracking of commit access or Maintainers was improved in 2014 with the addition of the trusted-keys system,[11] which adds a white list of PGP public keys into the master branch of Bitcoin Core. Keys can only enter and exit the list via commits merged by active Maintainers, and all commits to the master branch should be signed, by the corresponding private keys, a process that anyone in the public can verify and audit, comparing the software signature to the corresponding PGP keys.
The trusted-keys system was added as a security safeguard by Matt Corallo[12], who told Bitcoin Magazine the feature was the result of a general process of improvements and optimizations, and not a response to any particular catalyst or event.
On January 3rd 2009, Nakamoto minted the genesis block[13], effectively launching the digital currency into public beta. He added a message to the block that anchored and time stamped Bitcoin’s launch to the physical world with a headline from the British daily national newspaper, “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”. The headline is forever embedded in Bitcoin’s blockchain, a subtle yet immutable reminder of Bitcoin’s purpose and birthright.
On the night of January 8th 2009[14] version 0.1.0 of Bitcoin was released to the public, announced on various forums including the cypherpunk mailing list, on it Nakamoto wrote; “Announcing the first release of Bitcoin, a new electronic cash system that uses a peer-to-peer network to prevent double-spending. It’s completely decentralized with no server or central authority.”
The installable windows version of Bitcoin in this first release had been compiled by Nakamoto and the source code made available as part of a .rar file published on SourceForge.net. This act made Nakamoto the founder and Lead Maintainer of Bitcoin by default, a role built into the very nature of open source development. Nakamoto would take code commits from other developers during his time building Bitcoin, download them to his local machine, review and merge the code bases, and produce new version releases, a key task and work flow that differentiates Maintainers for Contributors throughout Bitcoin history. This process would continue until Nakamoto’s departure in December of 2010 and would impact versions 0.1.0 to 0.3.19 of Bitcoin.
Multiple updates followed the first release of Bitcoin and by the end of January 2009, a third developer had officially become a Contributor to the project. Marti Malmi going by the username of “sirius-m” made the “First commit”[15] to Sourceforge, bringing online the SVN source version control system — a kind of git, popular at the time. Malmi committed to the ‘Trunk’ comparable to a master branch on Github, making Malmi the second official Maintainer in Bitcoin’s open source development history. Malmi would make a variety of contributions throughout 2009 including the first Linux version of Bitcoin, with the 0.2.0 release[16].
It wasn’t until the August of 2010 that Lazloh Hanyecz — famous for having paid 10,000 bitcoins for a pizza in 2010[17] — would join as Maintainer[18], a month after contributing the first iOS version of Bitcoin to the 0.3.0 release.
Part of Nakamoto’s role as Lead Maintainer of Bitcoin was the stewardship of the network. Nakamoto went as far as to personally ask Lazloh — who was one of the first to mine bitcoin with GPUs — to slow down his production for the sake of the network. “The longer we can delay the GPU arms race, the more mature the OpenCL libraries get, and the more people will have OpenCL compatible video cards,” Nakamoto said to Lazloh in 2009[19], looking to prolong the CPU mining era of Bitcoin, which was a major incentive to run Bitcoin nodes at a time when the future price of the coins was entirely uncertain.
On July 17th 2010 on version 0.3.2[20][21] Nakamoto added the check pointing system, a security safeguard that hard coded a certain block height as valid and its corresponding winning hash. Its purpose was to protect the chain from miner attacks that could theoretically reorganize the chain well beyond what the “widely accepted block chain” was, Nakamoto said on the announcement, adding that “there’s no point in leaving open the unwanted non-zero possibility of revision months later.”
The checkpointing system would result in a new responsibility for future bitcoin Maintainers, who would have to hard code a new block height and its corresponding hash on future releases, well into Gavin Andresen’s era of Bitcoin development[22]. The checkpointing system was eventually phased out, as the proof of work made deep reorgs unfeasible.
The height of Nakamoto’s power as Lead Maintainer and project founder would be demonstrated during the value overflow bug event of October 2010[23], where three transactions created 184 million bitcoin that did not and should not exist. The number of coins the transaction attempted to move was so large that the transaction validation code at the time “overflowed when summed”, breaking consensus.
This is historically Bitcoin’s most famous bug, sometimes called the ‘inflation bug’ and was likely the most dangerous to the project’s survival. Various community members started noticing the transactions hours after they were mined into the network, springing Nakamoto into action, who, with the help of a few Contributors[24] including Andresen[25], created a patched version of Bitcoin[26] changing the relevant validation code.
Nakamoto asked miners to move to the patched version and resync the chain[27], resulting in a roll back of the network to a state before the invalid transactions were confirmed. This was a hard fork that rolled back 19 hours of Bitcoin blocks, and probably represents the peak of Bitcoin’s centralization under Nakamoto’s leadership, as well as the peak of power that has ever been concentrated in the Lead Maintainer role.
Following the events of the Value Overflow Bug, Nakamoto implemented the Alert System on version 0.3.11[28]. The feature — which was somewhat controversial — would make nodes at risk of a critical bug, show a warning and would disable essential features. This Alert System used messages that would have to be signed by a key only held by Nakamoto. He justified the feature saying that “getting surprised by some temporary down time when your node would otherwise be at risk is better than getting surprised by a thief draining all your inventory.” Months later Nakamoto disabled the Alert System in his final version release.
Per the SVN records, only Nakamoto ever merged the code of other Contributors and pushed new official release versions of the Bitcoin, at least until Gavin Andresen became Lead Maintainer in December 19th 2010[29]. Andresen had been contributing code to Nakamoto directly as early as February[30] that year, as seen in the release of 0.3.1, and would make his first commit to the SVN Trunk on October 11th[31], a couple of months before Satoshi Nakamoto published his final version on Bitcoin, 0.3.19[32], disappearing into history.
At the time of writing, over 1200 individual people have contributed code to the Bitcoin Core project.
The Gavin Andresen Era
With Nakamoto no longer contributing to the project, Gavin Andresen was left as one of the only active contributors to the project with commit access. Malmi had slowed down contribution as Andresen’s accelerated, so when Nakamoto left, Andresen was left as the default Lead Maintainer. While Nakamoto never made a public statement, granting the role to Andresen, he did send an email to Mike Hearn — a frequent Contributor at the time — famously saying “I’ve moved on to other things. It’s in good hands with Gavin and everyone.”[33]
“With Nakamoto’s Blessing”[34] Andresen would take the mantle of Lead Maintainer of Bitcoin and would go on to expand the Maintainer team while also initiate the official migration from Sourceforge to Github[35], a process which would take some time. It wasn’t until July 14th of 2011 that we would see the first commit merged to Bitcoin from a branch on Andresen’s official github account[36].
Unlike the Nakamoto era of development, this merge was done by the Github platform, putting some trust on Github.com to not do something shady with the code, a process previously done by Nakamoto manually and on his local machine. It’s important to note that the differences between versions of the code are auditable anyway, Github merge or not, since the project is open source. Code merges in this era could and should have been reviewed by developers on both sides of the process, before Github merge and after, though an abundance of caution eventually led to the creation of the trusted-keys system. Nevertheless, this began a new trend in how code was merged into Bitcoin that would last for at least three years.
On September 13th, 2011, the Sourceforge Bitcoin project was officially shut down, favoring Github as the new collaboration platform, leaving the old Bitcoin page there as an archive. Since both Malmi and Lazloh were Contributors on Sourceforge primarily without Github accounts at the time, their commit access effectively ended with the official migration, as well as their slow down in contributions around Nakamoto’s departure.
On April 27 of 2011, version 0.3.21 was released, the first under Andresen’s leadership. It was also the first to include a Readme file a PGP signed[37] message that detailed the update, contained hashes for the released installables and gave shout outs to Contributors. Among the 16 Contributors named are well known bitcoin core developers like Luke Dashjr, Matt Corallo, Pieter Wuille and Jeff Garzik.
The next couple of years saw a flurry of new Maintainers, perhaps in an attempt to decentralize what ever perceived power and responsibility Gavin held via the Maintainer role, and to fill in the gaps left by Nakamoto, Malmi and Lazloh. Chris Moore[38] with the username “dooglas” gained commit access for a couple of months from January 21st[39] until March 31st 2011[40] and still contributes to the project from time to time[41].
A few months later on the first of June of 2011, Pieter Wuille gained commit access[42]. Wuille discovered Bitcoin in November of 2010 and soon started contributing to the project. After gaining commit access, Wuille would become a renowned Bitcoin core developer, generally credited with many small performance optimizations that sum up over time to large improvements in user experience among many other contributions[43]. Today Wuille holds the third most commits to Bitcoin core, under the “sipa” username according to Github.
Jeff Garzik would join as Maintainer a few days later on June 6th, 2011[44]. Garzik started contributing to Bitcoin as early as version 0.3.21 that year and would also become renowned Bitcoin developer, bringing his extensive experience from the Linux open source ecosystem[45] to the Bitcoin project. Garzik is generally credited with helping improve the stability of the Bitcoin client.
Years later in the summer of 2016 Garzik had his commit access revoked after “several months of inactivity” according to Chow. During these years the Bitcoin block size war had begun to heat up and Garzik was on the side of the big blocks update[46], leading to lots of debate, and friction with some factions of the Bitcoin community, a likely cause of his drop in development activity. Garzik would go on to lead one of the failed forks of that war a year later, version Segwit2x.
A month later on July 5th of 2011, Mara van der Laan (who identified as Wladamir at the time) was granted commit access, becoming the eighth official Maintainer of Bitcoin Core. Van der Laan started engaging in the Bitcointalk forum as early as November 2010 and started contributing to Bitcoin by May 2011[47] initially focusing on the GUI of the Bitcoin QT client and bringing deep academic experience in computer graphics[48].
On September 19, 2011 Nils Schneider going by the username “tcatm” gained commit access after frequent contributions focused on optimising the Bitcoin client for working in the background. During his time as a Maintainer, he made big contributions helping to internationalize the client, adding multiple language related updates[49], and oversaw the removal of the Crypto++ library, protecting the client from unnecessary dependencies[50]. Nils worked as a Maintainer for almost a year with his last commit made in May 31st, 2012[51].
In February 11 of 2012[52] Gregory Maxwell with the username “gmaxwell” merged his first commit to Bitcoin after various code contributions and a full year of active technical commentary on the Bitcointalk forum[53], starting off a three year career as a Bitcoin Maintainer. During this time, Maxwell focused largely on the P2P networking layer of the client as well as consensus and validation related work. To date he is held in very high regard by many in the broad Bitcoin community and occasionally contributes to technical discussions and debates. Maxwell gave up commit access in December of 2015[54] as the Bitcoin block size war was heating up, due to internet harassment and other related concerns, as he took the small block position.
After a year or so of expanding the Bitcoin core Maintainer team, on September 27th, 2012 Gavin announced the next step in his vision for Bitcoin’s future, the Bitcoin Foundation[55]. Made in the image of the Linux foundation, which Gavin saw as a great example of a successful large open source project, the foundation attracted a great deal of attention and support as well as criticism. In his announcement post Gavin said; “I want the Bitcoin Foundation to be an open, member-driven organization, and hope that you or your organization will not only become a member but will help the Foundation accomplish its mission”. Over the next few years, the foundation would help pay the salaries of a variety of Bitcoin core Contributors and Maintainers.
The Mara van der Laan Era
In April 2014, Mara van der Laan was chosen by Gavin Andresen as his successor to the Lead Maintainer role, as Andresen had decided to move towards a more academic role he labeled “Chief Scientist”. In a blog post, published by Andresen on the Bitcoin Foundation website[56] he wrote; “Wladimir van der Laan has been paid to work on Bitcoin Core full-time for several months now – again, thanks to all of you Foundation members for stepping up and helping to fund core development – and has been doing a fantastic job. He has agreed to take over for me as the ‘Bitcoin Core Maintainer.’”
Under the usernames “Laanwj” and “wumpus”, Ven der Laan would oversee 9 years of Bitcoin Core developments, today holding the crown as having made the most commits to the Bitcoin repo[57] according to Github graphs, with 7,419 commits — most of them merges — to date. Van der Laan gave up the role in February 2023 for “personal reasons” according to Chow.
One of the first and most notable changes to the Maintainer role under Van der Laan was the implementation of the trusted-keys system, which was committed by Matt Corallo[58] on December 20th of 2014. The system helped solve the opaque nature of the Maintainer role, by adding a file with PGP public key fingerprints to the master bitcoin repository, as well as a series of related tools[59]. One of the tools makes sure that Maintainer commits are correctly PGP signed, another script can be used to verify commit signatures against the trusted-keys list of PGP keys.
By having these keys inside the master repo, only Maintainers are able to add and remove keys to the list with valid signatures, leaving a record on Git’s version control system, while giving us pull requests for the addition and removal of Maintainers, which Contributors and commit members can comment on.
According to Corallo, the main role of the trusted-keys system was “to avoid trusting Github” to merge developer code, a practice normalized during Andresen’s era of development. Instead, Maintainers merge the code locally and update the repository.
On November 13, 2015, Jonas Schnelli was granted commit access, with the username “jonasschnelli”. He was granted the role of GUI Maintainer by Van der Laan, who announced it in the bitcoin mailing list[60]. Schnelli who started contributing in 2013 to Bitcoin would go on to reach the top 10 of Bitcoin Contributors by commits on github, many also likely being merges during his role as Maintainer, which lasted 6 years. Schnelli gave up commit access in October 21st, 2021 for personal reasons, writing a thread on Twitter reflecting on his experience and expressing strong confidence in the bitcoin developer community that proceeded him[61].
On April 13, 2016, Marco Falke was given commit access under the username “maflcko” [62]. Van der Laan announced the decision on the Bitcoin mailing list[63], saying “Hereby I’m announcing Marco Falke as the new Testing & QA Maintainer for Bitcoin Core.” Falke contributed to core all the way until 2023, when he decided to give up commit access and the Maintainer role, for personal reasons[64].
Less than a month later, on May 6th 2016, Gavin Andresen had his commit access removed. The decision made by Van der Laan came after Andresen endorsed now known Satoshi Nakamoto impersonator Craig Wright[65]. Many in the Bitcoin community were already skeptical of Wright’s claims and Andresen’s position at the time was quickly revealed to be based on deception by Wright. Months earlier, Mike Hearn, a Bitcoin Contributor who was seen as close to Andresen, advocated on a podcast that Andresen should revoke commit access from all Maintainers and become a “Benevolent Dictator” of Bitcoin[66], as is done in many other open source projects. Andresen did not follow Hearn’s advice, but the event demonstrated the levels of tension the Bitcoin community was under, as the block size war raged on, which Wright was also a part of.
Years later Andresen would express his regrets about the events saying “I now know it was a mistake to trust Craig Wright as much as I did. I regret getting sucked into the “who is (or isn’t) Nakamoto” game, and I refuse to play that game any more.”
It would be a couple of years until the next Bitcoin Contributor would gain commit access. On December 4th of 2018, Samuel Dobson known by the username “MeshCollider” was made wallet Maintainer by Van der Laan[67]. Dobson had been making contributions to Bitcoin since at least the summer of 2017[68] and would go on to make over 300 commits throughout his Bitcoin developer career, focusing on the wallet side of the Bitcoin code base. Dobson gave up commit access and the Maintainer role in February of 2023 to focus on his PHD[69].
A year later on June 7th 2019, Michael Ford would gain commit access, the first in the latest generation Maintainers who works on the role to date. Wielding the username “Fanquake”, Ford might have been the first Contributor to gain commit access by Contributor consensus, having been nominated during a core developer meetup in Amsterdam[70][71]. Nomination by Contributor consensus would become a trend after this period, demonstrating Bitcoin development’s trend towards decentralization, with meetings taking place in various locations and environments, and even via IRC.
Ford started contributing to Bitcoin in February of 2012[72] and would thereafter become one of the most prolific Maintainers in Bitcoin history, locking in second place for the most commits according to Github with 4920 to date, many of them merges and maintenance related updates to the work of other Contributors.
The Contributor Consensus Era
On January 21st, 2021 Van der Laan published a blog[73] that would break with the tradition started by Nakamoto and Andresen, of having a Lead Maintainer for Bitcoin core development. In it, Van der Laan explained that she would start delegating many of her roles as Lead Maintainer, that Bitcoin was too large of a project now to use the model setup by Nakamoto and Andresen, and effectively that it was time to decentralize Bitcoin core development.
Van der Laan made explicit a series of duties that needed to be done by others and laid a road map for making the software release process of Bitcoin more censorship resistant, such as moving the Bitcoincore.org website to the ownership of an organization rather than be under her control, while encouraging mirrors. The setup of release distribution via torrents and possibly IPFS, skepticism towards Github.com and a call out to start looking for alternative code contribution platforms, and a threshold signing scheme for Maintainers to be able to sign releases via some kind of cryptographic consensus, rather than having one person be the final PGP signer of a release, among other ideas.
The blog post effectively marked the end of Van der Laan’s role as Lead Maintainer, and symbolized a maturation milestone in Bitcoin, which came months after the release of version 0.20.0 and only days after the version 0.21.0 release[74].
Hannadii Stepanov known by the username “hebasto” gained commit access in March 19th 2021 to be GUI Maintainer[75] for the Bitcoin client. Stepanov began contributing code to Bitcoin core in August 2018[76], with over a thousand code contributions before becoming a Maintainer, placing him at 5th place in Github’s commits ranking for the project with 2070 locked in to date. Stepanov remains a Bitcoin Maintainer as of the time of writing.
Ava Chow gained commit access in December 12, 2020[77] as the wallet Maintainer, after contributing since January 2016[78]. Wielding the username “achow101” Chow is a well known Contributor whose efforts in the Bitcoin development community go beyond github contributions, including a significant portion of the historical research in this history of core Maintainers. Chow is also know to do Bitcoin core review livestreams on Twitch[79] which gathers an active audience, helping further technical Bitcoin education. Chow ranks on Github as number 4 with most commits at 2198, and still has commit access as of the time of writing.
Gloria Zhao gained commit access in August 7th 2022 after being nominated by Contributor consensus[80], for the role of mempool and policy Maintainer[81]. Zhao started contributing in March of 2020[82] and had at least 200 commits in Bitcoin core before gaining commit access. Today she ranks at number 9 according to Github with 777 commits in the repo. Zhao is a Maintainer to this day.
Russ Yanofsky gained commit access in June 10th of 2023[83] after being nominated by Contributor consensus[84], to the role of interface Maintainer. Russ specializes in modularization and multiprocess work which earned him the role, after contributing to the project since October 2016[85], with 970 commits for 7th place in Github ranking. Yanofsky is known by the username “ryanofsky” and remains a Maintainer to this day.
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This piece is the Letter from the Editor featured in the latest Print edition of Bitcoin Magazine, The Core Issue. We’re sharing it here as an early look at the ideas explored throughout the full issue.
The DEX aggregator’s $415K treasury will be transferred to the protocol’s development company, along with future revenue.
Cross-chain DEX aggregator Velora has become the latest protocol to see its decentralized autonomous organization (DAO) vs. Labs structure come under pressure.
Today, April 10, Velora, formerly known as ParaSwap, passed PIP-77: Governance Evolution & Operational Alignment, a proposal to wind down its DAO and consolidate operations under Laita Labs, the development company that built the protocol. The proposal passed with 65.8% of voters for and 16.78% against the shift. 17.41% of voters abstained. Voting began on April 5, with Shutter shielding results until voting ended today.
The proposal transfers the roughly $415,000 remaining in the DAO treasury to Laita Labs to settle outstanding infrastructure costs. It also discontinues the DAO’s 20% protocol fee routing, retires the staking program with the exit lockup set to zero so stakers can withdraw immediately, and closes the futarchy governance pilot with approximately $19,000 remaining from its original $50,000 allocation.
Per the proposal, going forward, VLR becomes a governance-only token, with Snapshot reserved for structural decisions such as token migrations, new chain deployments, or activation of the contract’s 2% annual minting mechanism. Meanwhile, protocol operations, infrastructure, and revenue flow exclusively through Laita Labs.
Laita Labs framed the proposal as an alignment with existing reality: staking rewards and fee routing had already been inactive for months, governance participation had declined, and the DAO had primarily functioned as an off-chain signaling layer while the development team kept the protocol running.
Per DefiLlama data, Velora ranks eighth among DEX aggregators by 30-day volume at $2.06 billion, compared to category leader Jupiter’s $11.2 billion.
VLR, which launched in September of last year, is down 99% from its high of $0.06 just after launch.
Community Response
The proposal didn’t pass without community pushback. In the proposal discussion, community member VeloCryptor, who said they have been staking since day one, proposed three compromises, namely a smaller 5-10% revenue share, a treasury buyback reserve, or a conditional sunset tied to revenue staying low for another 6-12 months.
Laita responded by rejecting all three suggestions, saying even a partial share “brings back the same complexity we’re trying to move away from.”
Another community member, 12342, argued the proposal “shifts the token from something that had a clear economic alignment with the protocol’s success into a pure governance token with no direct value capture.” Supporter citizen42 backed the team, calling it “not a sunset, it will be a sunrise.”
Another community member, 12342, said in the proposal discussion that they are “strongly against this proposal,” arguing that it “shifts the token from something that had a clear economic alignment with the protocol’s success into a pure governance token with no direct value capture.”
A separate response to the proposal from citizen42 was more positive: “I have faith in Laita that when time comes value will return to token holders, in the meantime all in for operational simplicity.”
DAO vs Labs Model Under Pressure
The vote arrives as the DAO vs. Labs governance model shows cracks across DeFi. At Aave, a months-long dispute over fee distribution between tokenholders and Aave Labs spiraled into a full-blown contributor exodus. Most recently, Chaos Labs became the third core contributor to exit Aave in two months, following BGD Labs and the Aave-Chan Initiative, all citing governance misalignment.
At Balancer, a restructuring proposal published in March formalized the wind-down of Balancer Labs OÜ and consolidated all activity under a BVI entity operating as a direct agent of the DAO, slashing the team and cutting the annual operating budget by 34%.
Meanwhile, last month, DAO governance platform Tally shut down after six years, with its CEO citing reduced demand for DAO tooling as regulatory pressure eased.
This article was written with the assistance of AI workflows. All our stories are curated, edited and fact-checked by a human.
Big tech companies are shifting their focus from generating cash to investing in physical infrastructure.
This strategic shift may lead to changes in expected returns for investors in the tech sector.
Foreign investments in US equity markets have significantly influenced the decline in the US net foreign asset position.
The declining labor share of output is linked to rising firm valuations, affecting stock market behavior.
Free cash flow provides a more stable measure of a firm’s value compared to price earnings ratios.
Current market valuations based on free cash flow are not significantly overvalued compared to historical averages.
Economic output distribution is shifting away from labor towards capital owners, impacting income distribution.
Labor share in the corporate sector has declined significantly over the past few decades.
The decline in labor share indicates a shift of income from workers to capital owners, raising policy concerns.
Free cash flow remains a reliable measure of income available to firm owners, regardless of spending classification.
The shift in tech investment strategies reflects broader changes in market dynamics and potential future returns.
Understanding the relationship between foreign investments and US asset valuations is crucial for economic analysis.
The changing dynamics in economic output distribution have significant implications for current economic trends.
Guest intro
Jonathan Heathcote is a monetary advisor in the Research Department of the Federal Reserve Bank of Minneapolis. He co-authored the paper “A Macroeconomic Perspective on Stock Market Valuation Ratios,” which analyzes how free cash flow and declining labor share explain elevated stock valuations. He previously served as an economist in the International Finance Division of the Federal Reserve Board of Governors from 2006 to 2008.
The shift in tech investment strategies
Big tech is redirecting focus from cash generation to substantial investments in physical infrastructure.
It does seem generally true that the big theme both with financials and tech is this incredible ability to generate huge returns with fairly modest capital outlays… but for much of the 2000s the investment was in sort of like tangible… and now we’re switching to really like brick and mortar.
— Jonathan Heathcote
This shift may alter the expected returns for investors accustomed to high returns from tech companies.
The question is like okay they’re still making a ton of money… but can investors expect the same level of returns that they’ve seen in the past if there’s this big switch in terms of strategic decision making in terms of capital outlays?
— Jonathan Heathcote
Understanding historical tech investments helps contextualize this strategic shift.
The implications for future returns are significant as tech companies prioritize physical infrastructure.
This change reflects broader market dynamics and potential shifts in the tech sector’s investment landscape.
Investors need to adjust expectations based on these evolving strategic decisions.
Foreign investments and US net foreign asset position
The decline in the US net foreign asset position is influenced by foreign investments in US equity markets.
We realized that the kind of international gross asset positions have gotten really big and a lot of the decline in the net foreign asset was driven by the fact that foreigners had invested a lot in us equity markets.
— Jonathan Heathcote
Understanding this relationship is crucial for analyzing US market valuations.
Foreign investments have played a significant role in shaping the US’s economic landscape.
This trend highlights the interconnectedness of global financial markets.
The impact of foreign investments on asset valuations is a key consideration for economic policy.
Analyzing these dynamics provides insights into the US’s financial health and market trends.
The influence of foreign investments underscores the importance of international economic relations.
Labor share and firm valuations
The declining labor share of output is linked to rising firm valuations.
One thing macroeconomists have been talking about for a long time for example is the fact that it looks like labor share of output has been drifting down over time… that’s gonna drive up valuations.
— Jonathan Heathcote
Understanding this relationship helps explain stock market behavior.
Rising firm valuations reflect broader macroeconomic trends and labor dynamics.
The shift in labor share affects income distribution and economic growth.
This trend has significant implications for stock market valuations and investor strategies.
Analyzing labor share dynamics is crucial for understanding current economic trends.
The connection between labor share and valuations highlights the importance of macroeconomic analysis.
Free cash flow as a valuation measure
Free cash flow provides a more stable measure of a firm’s value compared to price earnings ratios.
If you look at that ratio, the value of all the firms in the US relative to the total cash flow they’re generating… it doesn’t have like a long term drift… maybe prices are roughly where they… roughly within historical range compared to this ratio.
— Jonathan Heathcote
This measure is a reliable indicator of market valuation.
Current market valuations based on free cash flow are not significantly overvalued compared to historical averages.
If you look at where it was say in 1980… that ratio of value to free cash flow is the same… we’re not wildly overvalued today.
— Jonathan Heathcote
Free cash flow offers a stable perspective on corporate financial health.
This metric is crucial for evaluating investment opportunities and market trends.
Understanding free cash flow dynamics helps investors make informed decisions.
Economic output distribution dynamics
The distribution of economic output is shifting away from labor towards capital owners.
If you look at the price earnings ratio it’s not like earnings haven’t grown they’ve grown pretty fast and they’ve grown pretty fast because the share of the output that’s going to workers has been going down and the share that’s going to owners of firms has.
— Jonathan Heathcote
This shift impacts income distribution and economic growth.
Analyzing these dynamics is crucial for understanding current economic trends.
The implications for labor and capital distribution are significant for policy discussions.
This trend highlights the importance of analyzing economic output distribution.
Understanding these changes helps contextualize broader economic developments.
The shift reflects broader changes in economic and market dynamics.
Decline in labor share and income distribution
Labor share has declined significantly in the corporate sector over the past few decades.
If you look at the corporate sector… those wages and salaries have fallen by about eight percentage points since 1980… that’s a big change.
— Jonathan Heathcote
This decline indicates a shift of income from workers to capital owners.
There has been a big shift with less income going to labor more income going either to capital or just as pure rents to the owners of firms.
— Jonathan Heathcote
Understanding these trends is crucial for discussions on income inequality.
The implications for economic policy and worker welfare are significant.
This trend highlights the importance of analyzing income distribution dynamics.
Free cash flow is a reliable measure of income available to firm owners, regardless of spending classification.
The free cash flow measure is gonna be the same either way so I think that’s a nice thing about free cash flow it is just a measure of the income that’s left over after the firm’s paid all its bills and it doesn’t really matter whether you count those bills as a as an input cost or a capital expenditure.
— Jonathan Heathcote
This metric is crucial for evaluating corporate performance and financial health.
Understanding free cash flow dynamics helps investors make informed decisions.
This measure provides stability amidst changing investment behaviors.
Analyzing free cash flow is essential for understanding corporate financial trends.
The significance of free cash flow highlights its importance as a financial metric.
This insight provides clarity on evaluating corporate financial health amidst market changes.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
