Berachain Evolves, Ethereum Secures: A Week of Protocol Power Plays
Weekly Market Update #70
In partnership with Elementus
Happy start to the week! Welcome back to the Reflexivity Weekly Market Update — your concise rundown of the biggest moves in crypto. If someone forwarded you this, you can Sign up here for free to get it straight to your inbox!
Today’s Market Update is in partnership with Elementus. Delivering preeminent on-chain intelligence, Elementus provides macro- and micro-level visibility for investment, compliance, and DeFi projects.
Illuminate the Blockchain: Elementus provides unparalleled visibility into blockchain data, empowering institutions to navigate the crypto ecosystem with confidence, clarity, and compliance.
Accelerate Investigations: Elementus's powerful query engine enables rapid tracing of on-chain activity-essential for law enforcement, regulators, and businesses combating fraud, hacks & illicit finance.
Unlock Market Intelligence: With Elementus, firms gain actionable insights into transaction patterns - transaction patterns to macro flows.
Before jumping into last week’s action, check out some of the research published last week by the Reflexivity team:
-Dinero: Redefining Staking and LSTs for Retail and Institutions
Major Market Developments:
🤑 Fear & Greed Index: 74 (Extreme Greed)
🗳 Berachain RFRV Batch 7 approved (Spotlight)
⚖️ SEC to draft new token rules
📈 Coinbase to join S&P 500
🤝 Dubai partners with Crypto.com for gov payments
🔄 Synthetix proposes $27M token swap to acquire Derive
🛡️ Ethereum Foundation announces Trillion Dollar Security Initiative
🎯 AbstractChain targeting Q4 TGE
📊 VanEck launches Onchain Economy ETF
🔒 SonicLabs secures liquidation of Multichain Foundation
🛑 Kaito ends Web3Port market-making deal
⏳ Virtuals introduces veTokenomics
💵 Securitize launches $VBILL tokenized T-bill fund
🖼️ Infinite Node buys CryptoPunks IP
🚪 Frank DeGods exits NFT project
Fear & Greed Index:
The crypto Fear & Greed Index sits at 74, firmly in “Extreme Greed” territory. Sentiment is running hot as traders chase gains, which is often a classic overbought signal. Based purely on this index, caution is warranted here – when greed reaches this level, markets can be susceptible to pullbacks.
Note: The index ranges from 0 (extreme fear during capitulations and sell-offs) to 100 (extreme greed during euphoric, overbought conditions).
ETF Flows:
Spot-Bitcoin ETFs drew a hefty +$608 million for the 12-16 May span, with BlackRock’s IBIT alone hauling in +$842 million, more than 100 % of the headline figure, as smaller but persistent outflows from Fidelity’s FBTC (-$122 million) and Grayscale’s GBTC (-$72 million) merely trimmed the surge; momentum built through the week, peaking on 14 May and 16 May when broad buying extended to ARK/21Shares’ ARKB.
In contrast, spot-Ethereum products saw a more modest $41.8m in inflows.
Spotlight 🔦
Berachain’s Batch 7 Governance overhaul is officially live, bringing important tweaks to its Proof-of-Liquidity network. The update expands Berachain’s active validator slots, allowing more validators to secure the chain, i.e., a push for greater decentralization. It also introduces new performance-based incentives: validators with high uptime and robust participation can now earn extra rewards, encouraging reliability. Notably, dual-token emissions are kicking in – block rewards will pay out in both $BGT (governance) and $BERA (gas) tokens, rather than just one asset. Finally, lock ratio changes have been implemented to fine-tune the economics of staking and liquidity provision, making it more attractive to lock up capital without overly diluting existing holders.
These changes should translate into deeper liquidity and a stronger network foundation. By widening the validator set and rewarding good actors, Berachain improves its security and trustlessness. The two-token emission model and adjusted lock parameters aim to make Proof-of-Liquidity more capital-efficient, yielding sustainable rewards in $BGT while still building native $BERA reserves for the protocol. Overall, Batch 7’s approval marks a significant step toward a more resilient, decentralized, and well-incentivized Berachain ecosystem.
Rapid Reflexivity: Quick Market Takes ⚡
SEC – U.S. SEC Chair Paul Atkins is crafting new guidelines for crypto token distributions and exploring rule tweaks to let broker-dealers trade non-security tokens like BTC/ETH.
Coinbase – The crypto exchange will join the S&P 500 on May 19, becoming the first crypto firm included in the blue-chip stock index (replacing Discover Financial Services).
Dubai – Dubai’s government is partnering with Crypto.com to accept cryptocurrency for government service payments, with Crypto.com converting the crypto to dirhams for the state treasury.
Synthetix – The DeFi protocol has proposed a $27 million acquisition of options platform Derive via a token swap (SIP-415), offering Derive holders new SNX tokens at a 27:1 DRV:SNX exchange ratio.
Ethereum Foundation – Unveiled a “Trillion Dollar Security” (1TS) initiative – a multi-phase effort to harden Ethereum’s security (from wallets to core protocols) so the network can safely support trillions in on-chain value.
AbstractChain – Pudgy Penguins CEO Luca Netz revealed that AbstractChain (an Ethereum Layer-2 project by Igloo Inc.) is targeting its Token Generation Event in Q4 2025 to launch the $ABST token.
VanEck – The asset manager launched the Onchain Economy ETF (ticker: NODE), an actively-managed fund giving investors exposure to public companies and instruments driving the blockchain-enabled digital economy.
SonicLabs – Formerly Fantom Foundation, SonicLabs won a Singapore court order on May 9 to wind up Multichain Foundation Ltd., clearing the way to liquidate Multichain’s assets after the cross-chain protocol’s collapse.
Kaito – The AI platform terminated its market-making agreement with Web3Port just days after Kaito’s Feb 20 token launch. Citing poor execution and trust issues, Kaito ended the deal on Feb 27 and emphasized it hasn’t sold any $KAITO since.
Virtuals – Virtuals Protocol introduced a veTokenomics model, allowing users to lock $VIRTUAL tokens for veVIRTUAL governance power and boosted rewards. The move aligns long-term holders with the protocol’s AI agent revenue-sharing ecosystem.
Securitize – Digital asset firm Securitize, in partnership with VanEck, launched $VBILL, a tokenized fund for short-term U.S. Treasuries. It lets qualified investors put money into T-bills on-chain with 24/7 access and cross-chain support (Avalanche, BNB, Ethereum, Solana).
Infinite Node – Non-profit Infinite Node Foundation acquired the CryptoPunks IP from Yuga Labs, taking over the iconic NFT collection’s intellectual property. The deal (reportedly around $20M plus a $25M endowment) positions Infinite Node as steward for CryptoPunks’ future in digital art.
Frank DeGods – The founder of the DeGods NFT collection (pseudonymous Frank, aka Rohun Vora) announced he’s stepping down as CEO of the project. He handed off leadership to a new team, aiming to decentralize development as DeGods enters its next phase.
For the third week in a row, the top gainer has been a meme coin as general bullish market conditions cause market participants to chase right-tail risk.
Notably, the top two losers of the week were L2s. Is it time to pose the question: is the Layer 2 premium starting to fade or is this just a blimp in the grand scheme of things?
Disclaimer: This research report is exactly that — a research report. It is not intended to serve as financial advice, nor should you blindly assume that any of the information is accurate without confirming through your own research. Bitcoin, cryptocurrencies, and other digital assets are incredibly risky, and nothing in this report should be considered an endorsement to buy or sell any asset. Never invest more than you are willing to lose, and understand the risk that you are taking. Do your own research. All information in this report is for educational purposes only and should not be the basis for any investment decisions that you make.