Rate options traders are reworking their Federal Reserve bets after a run of weaker U.S. economic data. While long-dated Treasury yields remain near multi-year highs, investors have started positioning for future rate cuts and using options to hedge against a slowdown. Recent data showed softer July inflation and consumer demand, an unexpected drop of 23,000 jobs in the nonfarm payrolls report, the biggest decline in retail sales in more than a year, and weaker consumer sentiment. That shift is showing up across rate markets. Some investors are unwinding earlier wagers on Fed hikes in September and December and moving into trades tied to cuts before mid-2027. In the SOFR options market, recent activity has included contracts betting the Fed will leave rates unchanged in September, along with call options expiring in March and June 2027. Swaps now imply only about 9 basis points of tightening at the September meeting and roughly 40 basis points of cumulative tightening by June 2027. Prediction markets Polymarket, Kalshi, and Myriad are also clustered around a 74% to 75% chance that the Fed stands pat in September.

Bitget UEX’s latest daily market report said interest-rate options in the U.S. Treasury market are increasingly being used to position for Federal Reserve rate cuts in 2027, while expectations for a September hike have eased sharply from levels seen two weeks ago. The note tied that shift to softer July inflation, retail sales and consumer sentiment, along with a surprise decline of 23,000 in nonfarm payrolls. Swap pricing now implies only about 9 basis points of tightening at the September meeting. The report also pointed to a separate macro driver: U.S. officials said Donald Trump had told his negotiating team, including Vice President Vance, envoy Witkoff and Kushner, to pause contact with Iran. That kept uncertainty around Hormuz-related supply channels in focus and helped support crude prices. In parallel, tighter power-use oversight for data centers in Pennsylvania, Texas and New York has added pressure to the AI infrastructure trade, which Bank of America strategists now view as a midterm-election variable. Across markets, BTC traded around $64,600 and ETH at $1,915, while U.S. spot Bitcoin ETFs saw $298 million in net inflows the previous day. U.S. equities fell, led by AI hardware, semiconductors and optical networking names, with Nvidia, Meta, Coherent and Lumentum among the laggards. Apple was one of the few large-cap tech names to close higher.

A busy week across crypto projects brought updates in protocol design, governance, lending products, wallet security and payment infrastructure. Robinhood Chain posted $3.13 million in daily NFT volume, overtaking Ethereum, while its average daily transactions hit 11.6 million and TVL rose to $473 million. ENS token holders passed and executed the “Next Era of ENS DAO” proposal, turning ENS Foundation into a formal operating body with a full-time executive director, staff and a five-member board. On Solana, Jupiter rolled out Lend v2, a lending upgrade that lets deposited and borrowed assets also serve as trading liquidity. Other notable developments included Ethereum Foundation researcher Justin Drake saying Ethereum L1 will stop pursuing Poseidon and instead move toward SHA or BLAKE-based hashing options; Hyperliquid outlining a plan to route idle HLP USDC into its native lending pool; Uniswap redirecting creator fees tied to a test token into an automatic buyback-and-burn contract; UniSat raising the default seed phrase length for new wallets from 12 words to 24; a USENIX study finding security-rule violations across 15 x402 payment providers; MegaETH’s native stablecoin USDm dropping to roughly $18 million in supply from a peak near $600 million in May; and World Liberty Financial delaying a yield-token launch tied to a Trump-branded Maldives resort project.

A TechFlowPost feature traces the history of offshore dollars from the birth of the eurodollar market to the rise of stablecoins and self-custody wallets, arguing that the core question has never gone away: who actually owes you $1? The article says the dollar has moved through several institutional containers over the past seven decades, from New York bank ledgers and London bank balance sheets to fintech databases and the reserve structures behind stablecoin issuers. At the same time, the relationship between users and their accounts has also shifted, moving from full institutional custody toward direct user control over onchain assets. The piece links three historic fault lines in the offshore dollar system to three forms of power: settlement, last-resort liquidity, and pricing. It points to the 1974 Herstatt failure, the 2008 global dollar shortage, and the eventual shutdown of the U.S. dollar LIBOR panel in June 2023. It then places Revolut, Wise, stablecoins, and Bitget Wallet along the same continuum. In that framing, stablecoins did not invent a new dollar. They separated redemption from transfer, keeping reserves in traditional finance while moving transfer onto public blockchains. Self-custody wallets, meanwhile, did not replace the issuer’s redemption promise, but changed who controls the movement of assets. The article argues that this is where the latest shift in dollar infrastructure becomes most visible.

Foresight has published a long-form essay by Bitget Wallet researcher Lacie Zhang tracing a 70-year line from the birth of the eurodollar market to today’s stablecoins and self-custody wallets. The piece argues that stablecoins are not a clean break from the past. Instead, they represent a new stage in the offshore expansion of the U.S. dollar, one that changes how dollar claims move rather than eliminating the traditional financial system behind redemption. Zhang revisits how Soviet and Eastern European entities moved dollars into banks in Paris and London to avoid the risk of account freezes in the United States, how post-Suez British policy helped turn those deposits into a lending market, and how U.S. regulation and later petrodollar flows helped that market grow from millions to trillions of dollars. The essay then uses the 1974 Herstatt collapse, the 2008 dollar funding squeeze, and the fall of LIBOR to show that offshore banks gained the ability to expand dollar credit but never captured final control over clearing, emergency liquidity, or pricing. The article closes by contrasting fintech apps, stablecoins, and self-custody wallets. In Zhang’s framing, stablecoins move dollar balances onto public blockchains while leaving redemption anchored to U.S. Treasuries, bank deposits, and legal claims. Self-custody wallets change something else: who controls the movement of assets.

Selling blockspace is no longer a strong standalone business for blockchain networks, according to a new analysis from Castle Labs Research translated by TechFlow and published by MarsBit. As infrastructure gets cheaper and more interchangeable, the gap between application fees and chain-level fees keeps widening, leaving many networks with growing usage but weaker direct revenue capture. The report groups recent responses into two tracks. One is ecosystem expansion, where chains such as Arbitrum and Polygon try to earn more through infrastructure distribution, payments, and revenue-sharing arrangements. The other is product expansion, where networks such as MegaETH and Sophon move closer to the application layer and try to internalize value that would otherwise accrue to third-party builders. The piece highlights Arbitrum Stack’s revenue share from Robinhood’s L2, Timeboost’s treasury contribution, Polygon’s role in stablecoin payments, MegaETH’s first-party app strategy and USDm stablecoin model, and Sophon’s shift away from operating its own chain. The broader argument is that chains are no longer content to remain neutral infrastructure providers. More of them are trying to become ecosystem operators, application owners, or both, as they search for revenue models that can better support token value and long-term sustainability.

BlockBeats reports that on August 5, Extended, a blockchain-based perpetual futures platform, launched RWA Prime, a market supporting roughly 36 US-listed stocks including semiconductor, foundry, Chinese ADR, cloud software, and Bitcoin miner names. Trading runs 24/5, pausing on weekends and exchange holidays while positions remain open. Funding rates use SOFR as the benchmark, determined by open interest skew instead of order book spread pressure.

The Federal Reserve left its target range for the federal funds rate unchanged at 3.50%-3.75% at its July meeting, but the biggest takeaway for Wall Street was not the hold itself. Analysts zeroed in on Chair Waller’s response to rising long-term Treasury yields and his suggestion that tighter financial conditions delivered by the market may reduce the need for another official rate hike. The meeting statement changed little, yet it featured an unusual three dissents from regional Fed presidents Hammack, Kashkari and Logan, all of whom backed a 25 basis point increase. In the press conference, Waller said the Fed had done little over the past 42 days while markets had already done a lot, a remark that firms including Goldman Sachs, Barclays and Nomura interpreted as tolerance for bond-market tightening in place of policy tightening. Those firms said the stance could keep the bar for another hike high as long-end yields stay elevated, but they also warned of side effects. Barclays said the threshold for further gains in long-dated yields has fallen, while Nomura argued that an unclear reaction function and a dovish bias could weaken the Fed’s inflation-fighting credibility and lift risks around longer-term inflation expectations.