October 13, 2025

Welcome to the Meridian Update, your daily on-chain report. We took Thursday night and Friday off, so of course it was a wild day on-chain. Let’s dive in.

What happened on Friday?

What. Happened. Friday. Wow. Wow.

We avoid talking too much about asset prices here on the Meridian Update. You can check price charts for that. However, the best way to really feel what happened Friday is through market prices. The short of it is that a ton of market cap went poof on Friday afternoon. Said otherwise, people were selling. Prices went down.

We avoid explaining why asset prices moved here on the Meridian Update. Anyway:

“*TRUMP: US TO IMPOSE 100% TARIFF ON CHINA STARTING NOV 1”

For our high-brow readers, so all Meridian Update readers, you can read some Bloomberg reporting here.

A crude look would say there are two schools of thought when it comes to investing on-chain. School of thought one is that investing on-chain is a way to get uncorrelated returns, or maybe to hedge against something that off-chain investing can’t hedge against, or something to this effect. The school of different returns. School of thought two is that investing on-chain might have some moments of divergence, but on the whole it is extremely correlated to investing off-chain. The school of on-chain assets move with the real world, when stocks go up crypto goes up.

School of thought two looked more correct on Friday. The President of the United States said something about tariffs on China and all investors, off-chain and on-chain, many of whom were the same people we would guess, sold. US stocks went down, on-chain assets went down.

There was a wrinkle. Perpetual futures. How have we not yet talked about perpetual futures? Do we really want to talk about perpetual futures? You may have heard them called perps. We will get back to Hyperliquid, the push for perps markets on Solana, Coinbase’s basically-perps, and the regulatory landscape another day.

For today, we’ll keep it simple. A simple model of perps is they are, basically, a way to borrow money. With that borrowed money, you can increase how much you are investing in an asset. That is, if you believe the price of an asset will go up, you can put more money than you currently have toward that belief. This is “going long” with a perp. Or, with that borrowed money, you can increase how much you are investing in an asset going down. That is, if you believe the price of an asset will go down, you can put more money than you currently have toward that belief. This is “going short” with a perp.

So what happens when prices move a lot, really fast? A lot of peoples’ perps run into issues. When the price goes down a lot, really fast, the people who chose to go long are not in a good spot. The person, or entity, that provided the perp comes calling. They say, “Hey, the price went down a lot, I can no longer provide you this perp, your money is gone now.” Basically. This is “getting liquidated.”

This is what happened on Friday. People had perps. A lot of those perps were people who thought prices would go up. Prices went down. Really fast. A lot of people got liquidated. This made on-chain markets even more skittish. Prices went down even more.

As of Monday morning, on-chain markets had recovered a bit from their Friday low. The Solana Index, managed by our friends at Meridian Research, showed a flatter weekend of trading and a slight rebound.

Something to keep an eye on. Here’s an interesting perspective on perps regulation for all who are interested.

And what we would’ve covered Friday morning

Crypto Twitter was not particularly happy about some things happening in Washington, D.C. on Thursday:

“…In short, these Senators need to wake up and start taking this process seriously if they want to keep claiming they are pro-crypto…”

We talk often about regulation in the on-chain world here at the Meridian Update. The on-chain world is rapidly developing and changing. It proposes novel, reframed, and reworked approaches to markets (and more!). Regulation seems to matter quite a bit for this sort of thing.

We have talked about the US Securities and Exchange Commission (SEC) and the US Commodities Futures Trading Commission (CFTC). They are two relevant regulatory bodies. We have talked very little about how the SEC and the CFTC are downstream of the law. That is, they are downstream of what makes it through the United States Congress and the President of the United States’s desk.

On Thursday, Crypto Twitter caught wind of a group of Senators’ decentralized finance regulatory proposal. Crypto Twitter did not like it.

What should you take away here as a reader of the Meridian Update? First, there is a lot of conversation about decentralized finance regulation happening in Washington, D.C. Second, the House of Representatives already passed something it liked. Members of the Senate are working on their own legislation. Third, who knows if anything will make it all the way through the Congress. Fourth, if you see people talking about Senate decentralized finance talks, just know that Crypto Twitter did not like the regulatory proposal from Thursday, but it’s just a proposal.

That’s a wrap

On-chain market cap went down a lot on Friday afternoon. It’s a good time to talk about perpetual futures for the first time. Also, some discussions in Washington, D.C. made Crypto Twitter upset.

Think we missed something today? Email email@meridianupdate.com.