GC, @Ethena_Labs | Principal, Rosehill Legal | Not your lawyer, unless I am | Tweets are not legal advice
Joined December 2017
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This is a fair callout (and was a big, weirdly quiet problem for a few years after the Tax Cuts and Jobs Act scaled down bonus depreciation over a period to zero, which was fully reversed by the Big Beautiful Bill).
The one caveat is it's not a loss of a "tax credit" as the OP says. Bonus depreciation is a deduction against taxable income (not a tax credit), which means a company needs taxable income to offset with the deduction for a full benefit to be realized in year one. Without taxable income, the deduction becomes a tax attribute carried forward to offset future income rather than a year one benefit.
For unprofitable companies (like OpenAI and many other AI labs), the loss of bonus depreciation is less of an immediate disincentive. Would hit the hyperscalers much harder.
No one seems to talk about the policy risk at the moment, so I'll have a go.
The current AI buildout is strongly supported by OBBB. The legislation includes various incentives in the form of tax credit, tax deductibles, and subsidies. I believe firms can save at least 15% of the AI CapEx in the presence of OBBB. Actually some incentives are too good to be true. For example, IRC Section 168(k), Permanent 100% Bonus Depreciation works like this. If a firm spends $100B on GPUs, it gets $21B tax credit at year 1. No amortisation what so ever. Much better than $4B a year for 5 years, if the firm can utilise the upfront capital in a profitable way. For hyperscalers and neoclouds, it's stupid not to spend as much now than later. Even if you have to pay higher interest payments, you pay them in several years. Besides, it is far less than the corporate tax rate 21%.
While it is meant to last after Trump's term ends, you never know if Dems might want to repeal it or to scale back certain items. OBBB has temporary provisions as well, which can be stopped early too.
Dems chance of sweeping the House and Senate is very high. Dems fought hard to scale it back last year -- they wanted to spend on health care benefits and climate control instead. If they sweep, they will definitely find their way to get some budget for health care benefits, which means scaling back OBBB. Trump can veto, but he will be a lame duck.
If Dems replace 168(k) with standard MACRS depreciation, for example, hyperscalers and AI labs will have far less appetite for spending upfront. If AI CapEx does get 15% haircut, companies in the AI buildout will have 15% less revenue. EPS will shrink and PE will be inflated.
Probably this is priced in at the moment. There is no other way I can explain the current price level.
AI driven productivity boost is a legitimate chance to bring debt to GDP ratio down. Do Dems care? Their argument might be that if the return of the capital is slow, then the spending has to be reduced. The hyperscalers' earnings this time is critical. $SPCX did very well. I hope $META, $GOOG, $MSFT, $AMZN all print out solid growth on their AI business.
Zach Rosenberg (🥩,🥩) retweeted
The total unrealized PNL exposure to Binance is ~$8.8m, far below the excess reserve fund of >$60m.
All information on the backing collateral and reserve fund can be found in the link below:
app.ethena.fi/dashboards/bac…
Our proof of reserve attestation run by several external parties will be provided in the coming hours and published on this thread.
Zach Rosenberg (🥩,🥩) retweeted
We are of a potential security incident related to Binance.
As a reminder all collateral with exposure to exchanges resides in off- exchange custodians, not directly with the exchange themselves.
As we learn more details on the incident we will provide updates here.
Ethena Labs submitted comments to Treasury on its proposed stablecoin rules under the GENIUS Act. We think Treasury is mostly on the right track. Our main point is simple: leave “payment stablecoin” defined the way Congress defined it, no broader.
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Unclear rules push builders offshore. If the lines are drawn clearly, new dollar-adjacent products can be enabled here in the US, with US oversight.
5/
Zach Rosenberg (🥩,🥩) retweeted
Never f*ck with a winning streak...
In this weeks Material Non-Public partner letter, I talk about where all this (new) money is coming from.
read below, txt me thoughts (my cell is in the outro):
materialnonpublic.beehiiv.co…
🫡💸
Zach Rosenberg (🥩,🥩) retweeted
This generation had every chance to fix it and chose the can over the courage, every single time. Now they want to finish the job and rob their own children outright even further. Let them meet the only fair ending: collapse under the weight of everything they stole and hoarded
89% percent of baby boomers back higher taxes on younger Americans as a means to protect their Social Security benefits.
84% of those aged 55 to 64 also support tax hikes on young Americans who, on average, suffer an inferior quality of life to their parents.
This is from a 2025 Cato Institute poll.
Follow: @AFpost
Zach Rosenberg (🥩,🥩) retweeted
Binance Wallet has enabled USDe rewards.
USDe has been selected as one of only three assets eligible for @BinanceWallet's new Hold to Earn - and offers the highest rate available.
Hold USDe and earn rewards automatically, paid by Binance.
Who says you need to stake to earn?
Activate Hold to Earn for U, USDS, and USDe in your #Binance Keyless Wallet and earn automatically. @ethena @sparkfinance @SkyEcosystem @UTechStables
A HOLD new way TO EARN is here. Up to 4.75% APR 👉 binance.com/en/support/annou…
Went to my first local card show since the National and have a few thoughts. Many, many parallels to be drawn with prior crypto (and general market) cycles I think the collectibles industry should learn from.
Recognize this chart? Study it.
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In the last 4 months, I have not been to a local show where most vendors didn't have several 5+ figure cards in their cases. Not just that, but they have been looking to buy, and buy heavy.
On Sunday - the second day of a two day show in Baltimore - there will still many, many cases with huge cards in them. Vendors were buying pretty much everything they could.
I sold several items, and would have sold more - except vendors were completely out of cash. The last sale I made was to a vendor who needed to borrow from a neighboring vendor to complete the transaction.
Many of the sales I made were at last direct comps, which is unheard of. Why? Everything is going to continue going up. Everyone knows it. You're buying high to sell higher; counting your "fake losses" missed out on selling tons of inventory too early, not making that mistake again. You're all in; paper rich, cash poor. Doesn't matter. You're making it.
Thrill; Euphoria
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This is not a top call. If we've learned anything from crypto, it's that things can get way more insane than you think possible.
The sports card market is, unquestionably, closer to a top than a bottom. I have seen several tweets from industry leaders, "KOLs", etc. discussing the "structural" reasons why this time is different, any pullback is temporary, and this run is still early.
It is not different. Complacency is coming. You will best recognize it in your own emotions.
When it comes, be ready to position accordingly...and have plenty of powder ready for anger and depression.
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Zach Rosenberg (🥩,🥩) retweeted
Proud to announce that Ethena has completed a SOC 2 Type II audit based on the Security Trust Services Criteria, receiving a clean opinion from an independent auditor with zero exceptions noted.
SOC 2 is a widely recognized standard for enterprise-grade, operational security assurance: an independent audit of how Ethena actually run access control, change management, monitoring, and incident response.
Unlike a Type I report, which checks that controls are designed correctly at a single point in time, a Type II examination tests that those controls actually operated effectively over time.
The audit covers infrastructure and processes supporting our products. It is distinct from, and complementary to, the smart contract audits and security reviews covering the Ethena protocol.
We believe rigorous operational security should be table stakes for any onchain infrastructure handling billions of dollars, and we intend to maintain continuous SOC 2 coverage into the future.
Ethena joins a very short list of onchain businesses that have completed SOC 2 Type II, including Circle, Chainlink and Aave.
The full report is available to partners on request under NDA.
