Every great financial infrastructure begins with a speculative frenzy?

Original Author: Prathik Desai

Original Translation: Saoirse, Foresight News

"When the capital development of a country degenerates into a byproduct of casino trading activities, the endeavor of capital construction is likely to fail." ------ John Maynard Keynes, 1936

The cryptocurrency industry has been heavily criticized, with the general perception being that it is entirely driven by speculation, with many calling it a casino devoid of fundamental support. However, many fail to realize that speculation is often a leading signal in the evolution of markets. A group of speculators, scorned by the mainstream, come together to create liquidity, and the mature and compliant businesses that emerge later are built upon this liquidity.

In this article, I will analyze this evolutionary path in conjunction with recent phenomena in the cryptocurrency market: a public chain initially intended to serve stock trading launching a Meme coin issuance platform; a perpetual contract trading platform transforming to build commodity trading infrastructure; and a brokerage relying on funds from a frog-themed token to support its on-chain stock trading system.

The story unfolds…

In the crypto space, speculation has many synonyms: market noise, bubbles, casinos. Yet people have rarely confronted one point: in the process of the industry maturing, speculation can become the cornerstone upon which higher-level business models grow.

However, it must be clarified: not all bubbles can be transformed into a foundation. Bubbles that remain purely speculative for a long time will ultimately burst quickly. But if a bubble can combine with sustainable trading scenarios and continuously generate trading activity, it can become a foundation that supports more business implementations.

This is not a new phenomenon; it has been repeatedly played out in the long history of financial development.

Let’s revisit the Chicago grain market of the 1840s. The Chicago Mercantile Exchange launched the futures market with the original intention of helping farmers, whose harvests were filled with uncertainty, lock in prices in advance to minimize losses. However, every farmer wanting to sell grain forward needed a counterparty willing to take on the long position and bear the price risk. Speculators filled this gap. The essence of the risk transfer market functioning is that speculative capital actively takes on the price risks that farmers want to shed.

The key to the birth of the futures market was the separation of "physical grain" from "grain as a trading commodity." American historian William Cronon referred to this process as the abstraction of grain. Once grain trading was simplified to warehouse receipts, ownership could flow freely, and speculators participated in trading on a large scale. The massive speculative trading created ample liquidity, allowing farmers to find counterparties at any time. The abundant liquidity ultimately enabled Chicago to grow into the global pricing center for wheat.

Interestingly, at that time, a large number of people resisted and detested such trading. The Grange movement publicly criticized exchange speculators, accusing them of profiting from the labor of farmers. However, this mechanism eventually evolved into an indispensable price discovery infrastructure for the global agricultural economy. If there had been no speculators acting as counterparties in the 1870s, the global wheat market would not have a mature pricing system today.

Economist John Maynard Keynes's discussions on speculation are well-known, and his complete viewpoint more clearly reveals the dual role of speculation. Keynes divided market activities into two categories: real investment, which anticipates the returns generated over the long-term existence cycle of an asset; and speculation, which anticipates the subsequent trading behavior of the market at large. He worried that in a market with ample liquidity, speculative behavior could backfire on real investment.

A deeper reading of his discourse reveals the dual nature of speculation.

"If speculators are merely bubbles that rise above the waves of real industry, they do not cause serious harm. But when real investment becomes a bubble above the whirlpool of speculation, the situation becomes very dangerous. When the capital development of a country degenerates into a byproduct of casino activities, the endeavor of capital construction is likely to fail."

Speculation that exists independently of underlying assets is highly risky; however, if speculation is anchored to valuable underlying assets, it can play a positive role.

As early as the first known work on the securities market—Joseph de la Vega's "Confusion de Confusiones," written in 1688—the author mentioned that the Amsterdam Stock Exchange attracted both investors and gamblers. Most existing exchanges started this way. However, over time, this history has gradually been forgotten, and a stereotype has formed: that serious investment demand was the original intention behind the establishment of exchanges. This is not the case.

Looking Back at the Present

On August 5, the largest decentralized exchange in the crypto industry, Uniswap, launched the Pools issuance platform, allowing users to issue and trade Meme coins on the Robinhood Chain. This blockchain was created by the brokerage of the same name, with the initial goal of serving the platform's 30 million deposit accounts and facilitating tokenized stock trading.

The story does not end there. Before the official launch of the Pools platform, traders discovered an unpublished smart contract, completing over $150 million in transactions through the contract. This forced Uniswap to simultaneously accommodate both the beta and official versions of the contract and delay the launch plan. The platform's top token, FRONG, named after the filename of a frog video used in Uniswap's pre-launch marketing, was minted six days in advance using the same contract; on the day the platform officially opened, the number of token holders reached 12,141.

Everyone can interpret this event for themselves: a transaction of approximately $150 million on an infrastructure that has not yet officially launched for a frog-themed token, while this public chain was initially built for securities trading. Now, FRONG has also become the unofficial mascot of the Pools platform. It is hard not to speculate that this was a deliberately planned action aimed at driving traffic to Uniswap's latest V4 version public chain. Even if it was not a deliberate arrangement, the on-chain trading volume of Uniswap V4 surged from $86.2 million to $228.3 million in a single day, nearly tripling.

But as mentioned at the beginning of the article, not all bubbles and speculation can foster sustainable business models. Whether a speculative business can endure in the long run fundamentally depends on what it is speculating on. We can refer to shturl.c.

For many years, shturl.c has made speculation its core product and is now the largest Meme coin issuance platform. On the platform, 70% of Meme coins have a lifespan of less than a day, with only a very few surviving for more than a month.

@Coingecko

From January to July 2026, the protocol's fee income nearly halved compared to the same period last year, totaling only $420 million. Nevertheless, it remains one of the most revenue-generating protocols in the crypto industry, with total revenue of $620 million and a net profit of $584 million last year.

Another similar platform is Hyperliquid. The platform initially focused on high-leverage cryptocurrency trading to meet traders' directional betting needs. Later, it expanded the leverage trading model to various all-weather trading and non-crypto-related assets. Relying on the HIP-3 governance framework, the platform has now launched perpetual contracts for assets such as Nvidia, Tesla, Nasdaq-tracking products, gold, crude oil, silver, and stock indices. Whenever oil-related news breaks on Sundays, traders can immediately establish positions, while traditional markets have to wait until Monday to open.

In early July, the trading volume of real asset perpetual contracts on the platform surpassed that of cryptocurrency trading for the first time in history, accounting for 52% of total trading volume.

Although Hyperliquid's overall trading volume has shrunk by nearly half compared to its peak in 2025, the growth in real asset trading has offset the decline in crypto trading pairs. This is the value that speculation can create: Hyperliquid has migrated the leverage speculation model that attracts native crypto users to categories such as gold, pre-IPO company equity, and stock indices, building a round-the-clock pricing layer, a model that many traditional trading platforms are now emulating.

Robinhood Chain is replicating this development path in real-time.

Although the team positions this public chain as the underlying infrastructure for on-chain stock trading, CEO Vlad Tenev is very pleased with the traffic brought by Meme coin traders.

"We built Robinhood Chain to become the optimal public chain for real asset trading… but it performs just as well for trading Meme coins."

Riding the wave of Meme coin trading, this public chain surpassed the Base chain in daily active users just three weeks after its launch. The traffic and funds brought by Meme coin trading are the seed capital for the future development of the on-chain stock trading system.

Of course, this does not mean that speculation will inevitably upgrade to mature business. Whether it can complete the transformation depends on the platform's own choices.

Robinhood has 30 million deposit users and multiple business lines, and its strong distribution capability is expected to convert the traffic brought by Meme coin trading into a user base for on-chain securities trading. We can see that its second-quarter projected market revenue skyrocketed more than tenfold year-on-year to $156 million, accounting for 20% of the platform's total trading revenue.

The Nature of Speculation

Many people still cannot understand speculation. Speculation itself is neither absolutely good nor bad. Stripping away all additional labels, speculation is simply one of humanity's oldest instincts.

When people transform their viewpoints into financial bets, speculation naturally arises.

From its most primitive form, speculation is the liquidity that seeks pricing targets everywhere; wherever liquidity flows, it will price that target. The target can be a bag of wheat, Nvidia stock, a frog video named frong.mp4, the outcome of a football match, or the probability of a presidential candidate winning.

The attributes of the underlying asset itself determine the direction and boundaries of speculation. Once it loses support from valuable underlying targets, the same amount of capital that generates speculation will ultimately struggle to yield long-term, valuable results. This rule runs through the history of financial development, and the cryptocurrency industry is on the same path.

Hyperliquid has bound leverage trading to targets like gold, establishing a new pricing system in just two years; Robinhood is simultaneously building the underlying channel for on-chain securities trading, leveraging the unexpected traffic brought by Meme coin speculation.

What kind of system speculation can ultimately construct depends on how much value the underlying targets can carry.