Welcome to this week’s update on the latest developments in crypto tech. Here’s a breakdown of the key stories you need to know:

**Bitcoin Miners Face New Challenges in a Changing Market**

Bitcoin mining is no longer just about hash rate and halving cycles. Industry leaders at the recent SALT conference in Jackson Hole explained how the landscape is evolving fast. Exchange-traded funds (ETFs), growing energy demands, and the rise of artificial intelligence (AI) are changing how mining companies think about their business models.

Matt Schultz, CEO of Cleanspark, highlighted how miners now focus more on how to use and sell electricity effectively, not just mining bitcoin. Cleanspark, for example, operates 800 megawatts of power and is developing 1.2 gigawatts more. With 33 sites, they’re exploring ways to make money from power infrastructure beyond bitcoin.

The traditional four-year halving cycle, which used to define miner revenue, is becoming less relevant. The adoption of bitcoin as a strategic asset, especially with ETFs buying more bitcoin than what’s being mined, is shifting the game.

Patrick Fleury, CFO of Terawulf, added that bitcoin mining remains a tough business. With electricity costing around $0.05 per kilowatt-hour, it can cost up to $60,000 to mine one bitcoin. Even if bitcoin trades at $115,000, nearly half of that goes to power bills. When you include other costs, profit margins shrink fast. For miners to survive, they must secure very cheap electricity and consider diversifying their income streams.

**Bitcoin Liquid Staking Is Growing**

Bitcoin is starting to play a bigger role in decentralized finance (DeFi), thanks to liquid staking. For years, bitcoin was seen as “digital gold”—something you hold but don’t use. That’s changing.

Liquid staking lets people stake their BTC to help secure networks while still using it elsewhere through a tokenized version. Lombard Finance is leading this trend with its product LBTC. Users deposit bitcoin into the Lombard system, which stakes it via Babylon (a trustless staking protocol). In return, they get LBTC, which earns rewards and can be used across DeFi platforms.

LBTC can be used for lending, borrowing, and providing liquidity in protocols like Aave, Morpho, Pendle, and Ether.fi. It works across Ethereum, Base, BNB Chain, and more—making sure bitcoin stays useful in a multi-chain DeFi world. This innovation helps turn bitcoin from a passive asset into something that can earn yield while being actively used.

**Optimism Partners with Flashbots to Improve Ethereum Layer-2 Networks**

Optimism is teaming up with Flashbots to improve how transactions are processed on its OP Stack—the software behind many of Ethereum’s popular layer-2 networks like Base and Unichain.

The focus is on sequencing—the process that controls transaction speed, order, and fees. Flashbots already helps build over 90% of Ethereum blocks. Now, its tech will boost Optimism’s ecosystem by offering near-instant confirmations and better transaction handling.

Until now, only the biggest chains could afford features like ultra-fast settlements or protection against frontrunning (where bots jump ahead of your trade). This partnership will bring those advanced tools to all projects using OP Stack. It’s a major upgrade for the Superchain—a group of interconnected layer-2 chains built on Optimism.

**Hemi Labs Secures $15 Million to Build Bitcoin Smart Contract Platform**

Hemi Labs has raised $15 million to grow its Bitcoin-based smart contract network. The company wants to bring borrowing, lending, and trading features to the Bitcoin ecosystem.

The funding round included big names like YZi Labs (formerly Binance Labs), Republic Digital, Crypto.com and others. The money will help develop Hemi’s Virtual Machine (hVM), a new layer that blends Bitcoin with Ethereum’s smart contract tech. This setup allows developers to run decentralized apps using Bitcoin as the base layer.

Hemi aims to make Bitcoin more programmable and useful beyond simple transactions—paving the way for more complex financial tools built on the Bitcoin network.

**Key Takeaways:**
– Bitcoin miners are shifting focus from just mining to monetizing energy infrastructure.
– Liquid staking brings yield and DeFi utility to idle bitcoin.
– Optimism and Flashbots are making Ethereum layer-2 networks faster and smarter.
– Hemi Labs wants to unlock smart contracts on Bitcoin with $15 million in funding.

These developments show that crypto tech is quickly evolving—merging old systems with new ideas to create more powerful and flexible blockchain ecosystems.