ArkStream Capital: Game of Thrones of WLFI and CEX-DEX Fusion

Industry Overview

At the beginning of 2025, the 暗号currency market kicked off with a complex mix of optimism and uncertainty. The industry had multiple expectations for the new year: the potential dividends of the Federal Reserves monetary policy shift, the second outbreak of the AI technology revolution, and the crypto-friendly regulatory framework promised by the new US government were all seen as catalysts for industry breakthroughs. However, when the dust settled in the first quarter, the market presented a clear picture of macro narratives with strong fluctuations and micro innovations in deep dormancy.

The global macro-economy has become the core variable that dominates the market rhythm. The Federal Reserve has a difficult balance between repeated inflation and recession risks. The unexpectedly hyped recession rate cut expectations in March boosted risk appetite briefly, but failed to offset the liquidity panic caused by the bursting of the US stock valuation bubble. The Trump administration has fulfilled its campaign promises, promoted the national strategic reserve of Bitcoin and the strategic reserve of digital assets, and implemented the Digital Asset Regulatory Clarity Act, which has released structural benefits for the industry. However, the parallel of policy dividends and SEC enforcement has also intensified the markets controversy over the compliance transformation cost. After Bitcoin broke through the historical high of $100,000 again in January, it suffered a 30% deep correction, exposing the phased profit-taking of market funds on the halving narrative; the overall performance of the altcoin market was flat, but the birth and delivery of products such as RWA and user portals that increase funds and users still injected underlying innovation momentum into the industry. It is worth noting that CEXs such as Binance are accelerating the layout of the DEX ecosystem. Through on-chain liquidity aggregation and account abstraction technology, they promote users seamless access to dApps scenarios such as DeFi, and for the first time allow CEX users to trade and buy DEX assets directly within their accounts. This paradigm shift of integration of centralization and decentralization may become a key fulcrum for growth and breakthroughs in the next cycle.

Macroeconomic environment and impact

In the first quarter of 2025, the US macroeconomic environment had a profound and complex impact on the cryptocurrency market. For the cryptocurrency market, starting from the ETF through BTC spot, the positive correlation between the entire crypto market and the US stock market has become increasingly stronger, and the trend of the Nasdaq has directly determined the direction of the cryptocurrency market to a certain extent. Although BTC was dubbed digital gold in the early years, cryptocurrencies are currently more inclined to risky assets rather than safe-haven assets, and are more affected by market liquidity. ArkStream will continue to pay attention to changes in macroeconomic trends in the future. The core of the macro economy lies in the balance between inflation and economic strength. The market trades expectations for the future: if inflation is too high or the economy is too strong, the Federal Reserve will tend to postpone interest rate cuts, which is not good for the capital market; on the contrary, if the economic performance is too weak, it may trigger a recession risk, which is also not conducive to market confidence and capital flows. Therefore, the macro economy needs to find a delicate balance between strength and weakness in order to provide a favorable environment for the capital market. The DOGE department laid off a large number of government agency staff, which directly caused the increase in unemployment. At the same time, Trumps tariff policy has exacerbated inflationary pressure and made the US economy likely to fall into recession by directly pushing up the prices of affected goods and the costs of related service industries.

This series of policies has increased market instability and capital market volatility. Considering the high gains brought by the 2024 Q4 election and the risk of retracement caused by the potential huge market fluctuations in the short term, ArkStream Capital has reduced its investment plan in the 2025 Q1 quarter and put more time and energy on business exploration and channel expansion of OTC strategies. However, considering that such policies may not be a simple means of economic regulation, but a means for the Trump administration to increase its bargaining chips in political negotiations with other countries, or deliberately create chaos to achieve special political and economic goals, that is, by creating signs of economic recession to force the Federal Reserve to quickly make emergency defensive interest rate cuts, thereby achieving a win-win situation in alleviating the US national debt problem and stimulating economic growth and capital market performance, we are still optimistic about the subsequent performance of the cryptocurrency market.

In the first quarter, the cryptocurrency market showed a high sensitivity to macroeconomic data. Below is a month-by-month analysis of market performance in January, February, and March.

In January, the overall macroeconomic data of the United States was strong, but the market reaction was relatively stable. On January 10, the seasonally adjusted non-farm payrolls data for December was released, with an expected value of 160,000 and an actual value of 256,000, which was significantly higher than market forecasts; the unemployment rate for December released on the same day was 4.1%, lower than the expected 4.2%, further confirming the strong performance of the economy. On January 14, the PPI annual rate for December was released at 3.3%, slightly lower than the expected 3.4%, which was seen as a signal of easing inflationary pressure in the short term. However, the unadjusted CPI annual rate for December released on January 15 was 2.9%, in line with expectations, but up 0.2% from the previous month, which began to cause market concerns about rising inflation and delayed interest rate cuts. On January 31, the core PCE data for December was 2.8%, in line with expectations, and did not cause significant disturbances to market expectations. Overall, the data in January failed to cause significant fluctuations in the cryptocurrency market. The strong job market and stable inflation data kept the prices of assets such as BTC relatively stable.

Entering February, the cryptocurrency market has experienced dramatic fluctuations due to the deviation between macroeconomic data and expectations. On February 7, the non-farm payrolls data for January was released at 143,000, lower than the expected 170,000; the unemployment rate for January released on the same day was 4.0%, lower than the expected 4.1%. The unclear performance of the employment market has increased market uncertainty in the short term. On February 12, the unadjusted CPI annual rate for January was released at 3.0%, higher than the expected 2.9%. Inflation continued to rise and exceeded expectations, causing the markets confidence in interest rate cuts to drop to the freezing point. Traders generally bet that interest rate cuts may only occur once this year in December, which has dealt a huge blow to market sentiment. BTC fell 2,500 points within 15 minutes after the data was released, a drop of 2.66%. The next day, the annual rate of PPI in January was announced as 3.5%, higher than the expected 3.2%, further exacerbating the markets concerns about the downward adjustment of interest rate cut expectations. This was seen as the fuse for the weakening of buying power. In the following half a month, BTC fell by about 20%, a drop of 20,000 points. It was not until February 28 that the core PCE price index in January was announced as 2.6%, lower than expected, that the market stabilized and formed a bottom. It is worth noting that the weak performance of the financial and medical services parts of the PPI data has provided an early signal for the decline of PCE.

In March, macroeconomic data improved overall and market sentiment warmed up, but the unexpected performance of core PCE caused fluctuations again. On March 7, the seasonally adjusted non-farm payrolls data for February was released as 151,000, slightly lower than the expected 160,000; the unemployment rate for February released on the same day was 4.1%, higher than the expected 4.0%, indicating a slight weakness in the job market. On March 12, the unadjusted CPI annual rate for February was released as 2.8%, lower than the expected 2.9%; on March 13, the PPI annual rate for February was released as 3.2%, slightly lower than the expected 3.3%. This series of data shows that the economy is operating on a solid basis, inflationary pressure has eased, and the process of interest rate cuts is expected to accelerate. Affected by this, the cryptocurrency market saw a short-term rebound in the following 10 days. However, the PCE price index for February, released on March 28, was 2.5% annually, in line with expectations, but the core PCE annual rate was 2.8%, higher than the expected 2.7%. 10 hours before the data was released, the market fell significantly due to concerns about the core PCE exceeding expectations, showing continued sensitivity to inflation data.

In summary, in the first quarter of 2025, the impact of US macroeconomic data on the cryptocurrency market was significant and varied. In January, the economy was strong but the market reaction was flat. In February, inflation exceeded expectations, which led to a sharp drop in expectations for interest rate cuts and a sharp drop in BTC. In March, the improvement in economic data led to a short-term rebound, but the core PCE exceeded expectations and triggered a decline again. Trumps tariff policy has increased market uncertainty by exacerbating inflationary pressures, and may become an important factor forcing the Fed to adjust its policies. Looking ahead, the trend of the cryptocurrency market will still be highly dependent on macroeconomic data and the Feds policy trends. Investors need to pay close attention to the dynamics of inflation and employment data to accurately grasp market trends.

Trump Administration鈥檚 Cryptocurrency Policy and Impact

Trump signed an executive order in March 2025 to establish a strategic Bitcoin reserve, with funds mainly coming from about 200,000 Bitcoins (worth about $18 billion) forfeited in criminal or civil fines, and prohibiting the government from selling Bitcoin in the reserve. The move is intended to elevate Bitcoin to a sovereign reserve asset, enhance its legitimacy and liquidity, and promote the United States leadership in the field of digital assets. Although Bitcoin prices soared by more than 8% in the short term and market confidence increased, the market then believed that the reserve relied only on confiscated assets and there was no plan to purchase new ones, and the price quickly fell back. In the long run, this move may trigger other countries to follow suit and promote Bitcoin as an international reserve asset. In addition, a series of non-Bitcoin digital assets are also likely to be included in the digital asset reserve. In this way, it marks the transformation of cryptocurrencies from marginal assets to national strategic tools. Although the market reaction was frustrated in the short term, its long-term impact may reshape the global financial system: on the one hand, it will promote Bitcoin to become a mainstream reserve asset, and on the other hand, it will intensify the competition among sovereign countries in the field of digital finance.

In terms of regulation, after taking office, Trump pushed for the dismissal of SEC Chairman Gary Gensler and established a crypto asset working group to clarify the classification standards for securities and non-securities tokens and terminate lawsuits against companies such as Coinbase. In addition, the controversial accounting standard SAB 121 was abolished to reduce the financial burden on companies. The regulatory environment has been significantly relaxed, and institutional investors have accelerated their entry; traditional financial institutions such as banks have been allowed to conduct crypto custody business, promoting the compliance process of the industry. This series of regulatory policies has changed the ecology of the US crypto and financial industries by loosening rules, reconstructing frameworks and promoting legislation. In the short term, policy dividends may accelerate technological innovation and capital inflows; but in the long term, we need to be vigilant against systemic risks and the complexity of global regulatory games. In the future, the effectiveness of policy implementation will depend on multiple variables of judicial challenges, economic cycles and political games.

In terms of stablecoin development, the Trump administration has established a federal regulatory framework for stablecoins, allowing stablecoin issuers to access the Federal Reserve payment system and explicitly prohibiting the Federal Reserve from issuing central bank digital currencies (CBDCs) to maintain innovation space for private cryptocurrencies. The application of stablecoins in cross-border payments has accelerated, and the path for the internationalization of the US dollar has expanded; the market share of private stablecoins has expanded, and their integration with the traditional financial system has deepened.

In terms of tariff policy, in February 2025, Trump signed the Memorandum of Reciprocal Trade and Tariffs, requiring the tariff rates of the United States trading partners to be consistent with those of the United States, and to impose tariffs on countries that implement a value-added tax system. This memorandum is a framework document for the adjustment of US trade policy, aimed at reducing the US trade デフィcit and addressing trade inequality and imbalance. Subsequently, Canada, Mexico, the European Union and other countries quickly took countermeasures, resulting in the first spiral of global tariff barriers. On April 2, 2025, Trump signed an executive order on reciprocal tariffs to further refine and implement the policy direction in the February memorandum. The order aims to reduce the US trade deficit, promote the return of manufacturing, and protect the US economy and national security, and requires higher reciprocal tariffs on countries with the largest trade deficits with the United States. This move triggered a rapid counterattack from the main affected countries, especially China, which took corresponding countermeasures at the first time, causing the economic and trade relations between the two sides to officially enter a stage of serious disagreements and frictions.

Under the influence of such a tariff policy, global trade costs will inevitably increase, and the scale of international trade may shrink. Production costs have risen sharply, supply chain reconstruction has accelerated, and corporate investment willingness has declined. Most importantly, the United States will have to face the pressure of imported inflation. The Federal Reserves monetary policy is in a dilemma, and the expectation of interest rate cuts has been postponed. The tariff policy also forces companies to transfer production to Latin American countries such as Mexico, but infrastructure and labor shortages in the United States have hindered the return of manufacturing. Industries that rely on global supply chains, such as automobiles and electronics, have been hit hard, multinational companies have increased profit pressure, and the stock prices of US technology giants have fallen. Emerging markets face challenges in taking over the transfer of industrial chains, and it is difficult to fully make up for the demand gap in the United States in the short term. The tariff war has also weakened the trust of the US dollar as a settlement currency for international trade, resulting in a decline in the price of 10-year Treasury bonds and a corresponding increase in yields. Behind this is also the consideration of the Trump administrations plan to reduce debt spending and borrowing costs, so some countries have begun to explore the path of de-dollarization. In terms of financial markets, global financial markets, including US stocks, A shares, and Nikkei, have generally fallen sharply, and market liquidity is facing huge pressure.

Trumps cryptocurrency policy boosted market confidence and attracted capital inflows in the short term through regulatory relaxation and strategic reserves, but in the long term, we need to be vigilant against the risks of computing power centralization and policy reversals. Although the tariff policy is in the name of America First, it has led to the fragmentation of the global trade system, pushed up inflation and exacerbated expectations of economic recession, forcing funds to flow from risky assets to safe-haven assets such as gold. These two major policies together highlight the contradictions and games in the transformation of the digital economy and the real economy in the United States.

Since its launch in 2024, World Liberty Financial (WLFI), a DeFi project supported by the Trump family, has had a multi-dimensional impact on the cryptocurrency industry with its political background and capital operation. WLFI is regarded as the weather vane of the Trump administrations crypto-friendly policies. Its asset allocation and strategic cooperation are interpreted by the market as the Presidents Selected Portfolio, attracting investors to follow suit. In the short term, it may increase the markets dependence on political narratives and drive price fluctuations of specific tokens. In the long term, we need to be vigilant against policy repetitive risks. At the same time, the US dollar stablecoin USD 1 launched by WLFI in March 2025 emphasizes compliance and institutional-level custody. If it successfully penetrates cross-border payments and DeFi scenarios, it may weaken the market share of existing stablecoins, while promoting the digitalization of the US dollar and consolidating the United States dominant position in the global financial system.

In addition, the operation of WLFI has benefited from the policy adjustments of the Trump administration, providing a compliance template for similar projects, lowering the compliance threshold of the industry, and attracting traditional financial institutions to participate in the encryption business, but it may lead to market bubbles due to regulatory arbitrage.

In terms of long-term strategic value, WLFI is heavily invested in various cryptocurrencies, such as BTC, ETH, AAVE, ONDO and ENA, which echoes the strategic crypto reserve policy promoted by the Trump administration. This layout may ガイド more capital to pay attention to cryptocurrency assets, thereby promoting digital asset reserves to become the core narrative of the next cycle. At the same time, WLFIs operating model provides a reference case of political and business linkage for other projects. In the future, there may be more crypto projects relying on political forces, but they need to balance compliance and decentralization principles.

In summary, WLFI has a double-edged sword effect on the cryptocurrency industry. On the one hand, it accelerates the compliance process through political empowerment, promotes the integration of DeFi and institutional capital, and explores the global application of US dollar stablecoins; on the other hand, reliance on policy dividends may lead to market bubbles, opaque distribution of benefits may cause a crisis of trust, and poor project execution may become a negative case in the industry. In the future, we need to focus on the progress of WLFIs product implementation, the market acceptance of USD 1, and the support of the Trump administrations policy consistency.

Connectivity and integration of CEX and DEX

交換s and Web3 wallets are important traffic entrances to the crypto world. Users often use fiat currency to complete asset recharges in mainstream exchanges, and conduct financial activities such as cryptocurrency trading, lending, and financial management, or use the Web3 wallets of various public chains to interact with various dApps. In the past, the boundaries between the two were clear. Due to the high threshold and education cost of using Web3 wallets, ordinary users often start their Web3 journey from exchanges, and centralized exchanges retain users through more mature and circulated services than decentralized dApps. Especially in 2025, the exchange business is more mature than the previous cycle. For example, Binance announced in 2024 that the number of users reached 200 million, which doubled compared to the previous cycle. In contrast, Web3 native On Chain users are restricted by various factors, and the daily activity on the chain is only about 10% of that of centralized exchanges.

Since 2023, exchanges have entered the Web3 Wallet product market with the accumulation and precipitation of their own exchange wallet asset management. Among them, OKX Wallet has attracted many users at the product level, and has successfully attracted a large number of users with its excellent product experience, such as asset management, on-chain interaction and transaction optimization. CEX uses its advantages in the exchange Wallet module, such as self-built RPCs of different public chains, to create a more complete and excellent wallet product, which attracts and retains users. However, OKX Wallet is essentially not significantly different from the traditional Web3 Wallet. It is just a better and more convenient multi-chain Wallet, and it does not break the usage threshold of the native Web3 Wallet.

Binance Web3 Wallet is closely tied to the exchange account, and supports the rapid receipt and transmission of assets between the site and the Web3 wallet in the early stage, reducing the security concerns of users when using the Web3 wallet and providing protection from the exchange level. At the same time, Binance Web3 has launched multiple IDOs for ordinary users in conjunction with mainstream DEXs in the ecosystem, attracting more users to participate and learn about the chain. In addition, its latest wallet function allows users to directly purchase Alpha series chain assets, realizing the function of directly purchasing chain assets from CEX, and completely breaking the traditional boundaries between CEX and DEX.

Data source: Dune, https://dune.com/lz_ウェブ3/wallet-war

Unlike Web3 Wallets dominated by mainstream CEX, native crypto projects can focus on the actual and urgent needs of on-chain users in the Wallet field. Particle Network, relying on its years of accumulation in MPC and account abstraction technology, seized the demand for unified accounts brought about by multi-chain transactions and launched UniversalX. This product integrates wallets and trading platforms, effectively solving the problem of asset transfer and trading on different chains, and helping users to achieve convenient management and efficient trading of assets in a multi-chain environment. With this innovative product, Particle Network has gained a good reputation and wide recognition in the market.

Data source: Dune

The integration of CEX and DEX is not only a technological innovation, but also a milestone for the cryptocurrency market to move from opposition and division to cooperation and symbiosis. While this change improves efficiency and inclusiveness, it also gives rise to new challenges in supervision, security and governance. In the future, whoever can better balance the efficiency of centralization with the security and autonomy of decentralized assets will be able to lead the evolution of the next generation of financial infrastructure.

Project Investment

SOON

プロジェクト紹介

Soon reconstructed and launched its own Solana virtual machine, Soon SVM, by removing the voting governance mechanism, improving the efficiency of dApps, integrating the data availability layer, and introducing a fraud proof mechanism, providing efficient and high-performance expansion solutions for mainstream blockchains such as Bitcoin and Ethereum. On this basis, Soon launched InterSOON to support interoperability between different chains and integrated Jumps high-performance Solana client Firedance. Soon will launch its own SVM network SOON based on the SVM framework and deploy it on multiple public chains such as Bitcoin, Ethereum, TON and BSC. Through InterSOONs internal liquidity pool and interoperability functions, Soon has achieved seamless transfer of assets and data between different blockchains.

Why invest in Soon

As the blockchain ecosystem is booming, the pursuit of high performance has always been one of the core driving forces for technological innovation. The existing fraud proof Rollup second-layer solution cleverly separates the execution layer from the data availability layer, so that different components can perform their respective duties, laying a solid foundation for improving overall performance. With the increasing maturity of DA technologies such as EigenDA and Celestia, a high-performance execution layer is particularly critical. Among the many projects exploring high-performance execution layers, Monad, MegaETH, etc. focus on the research and development of high-performance EVM, and Movement uses MoveVM to achieve breakthroughs. For Solana, which carries a huge amount of daily activity and transaction volume on the chain, its SVM is also an extremely successful execution layer choice. However, the native SVM previously had some limitations, such as not supporting DA integration, relatively low efficiency, and incompatibility with fraud proofs, which made it difficult to use directly as an execution layer. Soon accurately saw this pain point and successfully added fraud proof support to SVM through the development of Decoupled SVM, achieving efficient DA integration, while optimizing Merkle technology, greatly improving security and scalability, and keeping consistent with Ethereums MPT (Merkle Patricia Trie). This reflects Soons strong technical strength, and also enables it to occupy a place in the high-performance blockchain track, and bring new technical possibilities and application scenario expansion to the Solana ecosystem and even the entire blockchain industry.

Looking back at the past multi-cycle blockchain development process, Solana has built a large and powerful ecosystem with its tenacious vitality. Ample on-chain funds and numerous active users provide a solid foundation for Solanas continued development. As a key component of Solana, SVM is not only the core of its technical architecture, but also a symbol of Solanas ecology. Relying on SVM, the Soon project can provide expansion support for other public chains, activate more on-chain funds, and attract outstanding Solana ecological projects to build. For developers, the high-performance SVM execution layer and mature DA integration solutions provided by Soon will greatly reduce the difficulty of development, improve development efficiency, and enable them to focus more on the development of innovative applications, thereby further enriching the SVM ecology and promoting the development of the entire blockchain industry.

The RD speed of the Soon team is remarkable. It took only six months from the start of the project to the achievement of phased results. During this period, they not only successfully launched SOON Devnet and Testnet, but also successfully launched Mainnet and svmBNB. This series of rapid and solid progress fully demonstrated the teams excellent RD capabilities. In addition, Soons Co-builders Round attracted many well-known project founders to participate, such as Solana Labs co-founder Anatoly Yakovenko, Celestia co-founder Mustafa AI-Bassam, etc. This is not only a high recognition of Soons technical solutions, but also a strong endorsement of its future development.

Soon adheres to the concept of community-based token economy and puts community first throughout the development of the project. This concept deeply binds Soon tokens to the user community, allowing the power and demands of the community to form a synergy with the growth of the project. In the blockchain industry, the community is one of the most valuable assets of a project. An active and loyal community can bring continuous attention, financial support and valuable feedback and suggestions to the project. When community members actively participate in project governance, ecological construction and other activities, their efforts will affect the direction and value of the project.

The strategic investment in Soon is a key step in ArkStream Capitals strategic layout in the Solana ecosystem and SVM field. ArkStream Capital believes that the prosperity of Solana and its SVM ecosystem is one of the trends that cannot be ignored in the blockchain industry. ArkStream Capital looks forward to working closely with Soon to jointly promote the continuous innovation and development of blockchain technology and help the SVM ecosystem move towards a more prosperous future.

Research Report

ArkStream Capital: 4 strategic upgrades behind Particle

ArkStream Capital: Cryptocurrency is breaking ground, welcome to the carnival of 2025

イベントの主催と参加

Offline Activities

Hosted the Hong Kong Consensus: The AI Agent Evolution

Participated as a judge in the Hacker House Demo Day hosted by Movemaker Community under Aptos

Discussing the future of VC with Spartan, Galaxy, Maelstrom, Reciprocal and other funds

Online Activities

Participate in SOONs AMA as a guest [Opening a new era of community priority and fair distribution]

This article is sourced from the internet: ArkStream Capital: Game of Thrones of WLFI and CEX-DEX Fusion

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