Progress™ No.1
A monthly snapshot of the KR1 onchain infrastructure landscape.
Progress™ is KR1's monthly snapshot of onchain fundamentals — a detailed look at the infrastructure protocols and their associated network tokens that KR1 holds and operates, and how we interpret developments against our long-term thesis: that a majority of global assets and economic activity will migrate onchain, and that the networks enabling that migration will become the essential infrastructure of a programmable, verifiable digital economy.
Why does “crypto” matter? The internet proved that once information became easy to replicate, it reorganized how the world operates. Today, the same dynamic is affecting value. Economic assets will move and interoperate as freely as information—instantly, globally, with minimal friction. Onchain networks are the infrastructure making that possible.
Ethereum (ETH)
Recent Progress
Ethereum’s core development team delivered a meaningful infrastructure upgrade on 7 January, increasing the network’s blob data capacity by 2.3×. The upgrade raised the blob target from 6 to 14 and the maximum limit from 9 to 21. In practical terms, this means the Layer 2 networks that settle transactions on top of Ethereum (high-throughput express lanes above the main road) can do so more cheaply and at greater scale.
Two major upgrades are scheduled for 2026, Glamsterdam in H1 and Hegota in H2, targeting further efficiency improvements, reduced hardware requirements for network participants and structural moves toward a leaner, more capital-efficient settlement layer.
The Ethereum Foundation also began formal work on post-quantum cryptography, launching a dedicated team and two $1 million research prizes.
On the institutional side, UBS is reportedly preparing to offer crypto trading to private banking clients and Morgan Stanley filed with US regulators for an Ethereum investment trust that would incorporate staking rewards into the fund's Net Asset Value (NAV).
Network Analysis
Of the networks in the KR1 portfolio, Ethereum most closely approximates what mature digital infrastructure looks like.
The January upgrade directly strengthens two of the most important indicators of network health simultaneously. Rising transaction throughput expands fee volume and daily active usage — clear signals of measurable demand. Lower per-unit settlement cost for rollups broadens the set of activities that can economically settle on Ethereum, which sustains fee intensity as usage scales rather than diluting it. Ethereum’s base fee burn mechanism, where a portion of every transaction fee is permanently removed from supply, has no direct equivalent in traditional infrastructure assets and creates a structurally deflationary accrual dynamic. The Fusaka upgrade cycle is expected to materially improve the ratio of fees generated to new supply issued, moving Ethereum closer to self-funded security.
The January upgrade forms part of a broader milestone: Ethereum co-founder Vitalik Buterin stated in early January that the blockchain trilemma—the historical trade-off between decentralization, security, and scalability—has been solved, marking the network's transition to what he called "a fundamentally new and more powerful kind of decentralized network."
At ~$55 billion in total value locked (TVL) and accounting for approximately 60% of all DeFi TVL, exceeding the combined share of all other major chains, Ethereum is increasingly perceived as the default, institutional-grade settlement layer.
Lido (LDO)
Recent Progress
Lido is the largest staking platform on Ethereum, currently managing approximately 9.4 million ETH, a ~25% share of all ETH committed to securing the Ethereum network. On 30 January 2026, Lido launched a major upgrade: stVaults, a system that allows institutions, financial applications and network operators to create customised, private staking arrangements while still accessing Lido’s shared liquidity infrastructure.
Previously, all Lido stakers used the same standardised product. stVaults allows institutional clients to specify their preferred node operators, compliance configurations and risk parameters — while their staked ETH still generates stETH (Lido Staked ETH), the liquid token accepted as collateral across 100+ financial protocols on Ethereum.
Day-one participants included Linea, an Ethereum L2 from Consensys, data analytics firm Nansen and several institutional staking operators including P2P.org, Kiln, Chorus One and Everstake. Governance improvements confirmed in January include a dual-veto mechanism giving the DAO meaningful oversight of protocol decisions and an automated token buyback programme that activates whenever Ethereum trades above $3,000.
Network Analysis
Lido operates as a yield-generating layer within Ethereum's economic system, converting staked ETH into productive, liquid capital. Users deposit ETH with Lido to help secure the Ethereum network and earn staking rewards. In return, they receive stETH—a liquid token representing their staked position that can be used across DeFi protocols for lending, collateral, or trading while continuing to accrue staking rewards.
The Lido protocol generates approximately $80 million in annualised revenue, with stETH representing around $9 billion in active DeFi usage, reflecting recurring economic flows from a protocol that has become essential load-bearing infrastructure within the Ethereum ecosystem. The deeper stETH embeds itself across lending, derivatives and yield protocols, the more structurally durable Lido's revenue base becomes, independent of any single market cycle.
The stVaults launch matters because it opens a new and largely untapped accrual channel: institutional staking capital that has historically sat on the sidelines due to compliance and customisation constraints. As this capital enters through stVaults, Lido’s total economic output grows without requiring any increase in Ethereum’s underlying staking yield — a genuine expansion of productive throughput from the same foundational infrastructure. The 0% fee period until March aims to accelerate this onboarding. The automated LDO buyback mechanism, activated above $3,000 ETH, adds a supply-side accrual dynamic that compounds as the protocol’s income base expands.
Celestia (TIA)
Recent Progress
As blockchain networks grow, ensuring transaction data is published and verifiable becomes increasingly resource-intensive. In conventional designs, execution, consensus and data are handled by the same network, creating bottlenecks as usage rises. Celestia separates out the data availability layer. By specialising in publishing and verifying data, it allows other networks to focus on execution without running this infrastructure themselves.
In January, Celestia made two significant announcements.
Fibre Blockspace (announced mid-January) introduces a new parallel data layer capable of processing data at 1 terabit per second — approximately 1,500 times previous capacity — across 500 globally distributed nodes. This targets the next generation of applications requiring extremely fast data throughput: AI trading agents, high-frequency financial markets, real-time gaming and micropayment systems.
Private Blockspace (23 January) allows financial networks to publish encrypted data to Celestia while still enabling public verification that the data exists and is intact — a requirement for institutional and compliance-sensitive applications.
These recent developments follow the Matcha upgrade, which launched on mainnet in November 2025. Matcha increased block capacity to 128MB and enabled nearly 2TB/day of throughput, reduced storage requirements by 77% and cut the network's annual token inflation from 5% to 2.5%.
Matcha also introduced a minimum 10% validator commission and removed token filters, enabling any blockchain to use Celestia for data availability, regardless of which token or ecosystem it uses.
Network Analysis
Celestia sits at an earlier point on the infrastructure maturity curve — consistent demand growth, an improving fee trajectory and a clear economic role within the modular blockchain stack, but not yet at the stage where fee generation offsets the token issuance needed to secure the network through validator rewards.
Blob fees (transaction fees to post raw data) have grown 10× since late 2024. Blob throughput has increased 20% month-on-month, with 160GB+ already processed. The Matcha upgrade's reduction of token inflation from 5% to 2.5% directly improves the ratio of fees generated to new supply issued — the key structural indicator of whether a network is moving toward economic self-sufficiency or remaining dependent on issuance to sustain participation. A 77% reduction in node storage requirements lowers the cost of network participation, which supports decentralised validator economics as the network scales rather than concentrating them.
Fibre Blockspace is the more consequential long-term development. Today, Celestia's fee base is almost entirely derived from rollup networks. Fibre opens AI infrastructure, institutional finance and real-time financial markets as incremental revenue streams — addressable markets that are substantially larger than the rollup ecosystem alone, and where the demand for high-throughput, verifiable data availability is structural rather than cyclical.
Redstone (RED)
Recent Progress
Blockchains are closed systems by design — they cannot natively access external data such as asset prices, interest rates, or credit scores. Oracle networks solve this by securely supplying verified real-world data to onchain applications. RedStone is one of the fastest-growing providers in this market, and January was one of its most consequential month across two distinct growth fronts.
On the institutional data side, RedStone acquired Security Token Market on 21 January, unlocking several years of pricing history across 800+ tokenised real-world assets including equities, real estate, debt and funds, alongside the TokenizeThis conference brand. This positions RedStone as the reference data provider for the $60+ billion tokenised asset market. Canton Network (over $6 trillion in tokenised assets), BlackRock (via Securitize's BUIDL fund), and Credora's credit risk ratings are already live integrations.
On the real-time DeFi side, RedStone's Bolt oracle went live on MegaETH's mainnet in early February, delivering data feeds with sub-3 millisecond latency — fast enough for high-frequency trading and AI-driven financial agents. Eleven or more native MegaETH protocols selected Bolt as their primary data source at launch. RedStone also powers Hyperliquid's permissionless perpetuals infrastructure.
Network Analysis
An important variable for oracle networks is whether they can establish durable, protocol-level fee capture as the applications they serve scale. Both of January's major developments advance this directly. The STM acquisition creates a proprietary data asset, several years of RWA pricing history across 800+ tokenised products, that commands a structural premium in a market where institutional-grade data access cannot be easily replicated.
Bolt's sub-3 millisecond latency establishes a different kind of defensibility. At that speed, RedStone becomes the only viable oracle for a new and growing class of real-time financial applications, including AI trading agents, high-frequency onchain markets, millisecond-sensitive liquidation systems — where slower data feeds create exploitable pricing gaps that protocols cannot accept.
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