Bankless - AI ROLLUP #10: 70% AI Market Crash | Fair-Launch Tokens Good or Bad? | Virtuals’ $2M Fiscal Policy | Coinbase AI Hackathon

Starting point is 00:00:06 Welcome Bankless Nation to the AI roll-up where we stay up to speed with the emerging trends and developments in the crypto AI space. I'm David Hoffman here with my co-host, Ijaz. I'm jaz. How you doing, my man? What's up, man? You haven't heard. It's a blood bath out here, David. Oh, I know. I am well aware. Yeah, no, it's time to pack it in. This is actually the final episode. This is the last one. We're wrapping up shop. I'm kidding. But it is. Fair weather fans.

Starting point is 00:00:30 Yeah, it is, the markets are crazy. And I think we're probably at or near the end. of this short-term dip, and you know, don't crucify me if this isn't true. But let's look at the latest dashboard on cookie.fund, David. What are we seeing here, basically? Essentially, we're seeing quite a bit of capitulation from some of these tokens all-time highs. I think the market cap is sitting at, what is it, roughly like $8 billion right now? 7.5 billion. So what was it at its peak when we were doing this episode?

Starting point is 00:01:04 At its peak, it was about 20. No, 20.5, I believe. Yeah, I just wicked to 20.5. And now we're sitting at less than half of that. So a pretty crazy retrace. I saw a tweet somewhere where it said on average, some of these AI coins basically retraced about 60 to 70 percent, which, to put things into context,

Starting point is 00:01:26 it's not abnormal to see 20 to 30 percent corrections during a bull market. And things like Bitcoin and East and ETH and stuff. And we all know that like alts typically get hit harder. But to see something like a 60 to 70% retrace. And by the way, this isn't just specific to AI coins. This is across every single sector of alts that we've seen so far. It's just a different market and a different type of cycle. And I don't want to say that this time is different, but this time evidently has been different, David.

Starting point is 00:02:00 We've got virtuals pulled up here. I would actually say relatively speaking, obviously virtual's peaked at, I think, a $5. Yeah. Yeah, a $5. I think it was like, what market cap was that roughly? $5 billion. $5 billion. Right.

Starting point is 00:02:16 And we are currently at like 1.4. So I think when people look at like the size and magnitude of the AI agent space, I think the virtual's chart is kind of just a microcosm emblematic of the whole thing. So like November, we were at 50 cents. And we're at 50 cent virtual price. January 2nd, is the peak at $5.5. And then we are back down to $1.5.1.4. I think if I pull up AI16Z is going to do something similar. Pretty similar. Yeah. I think just like a lot of energy came

Starting point is 00:02:44 into the AI agent space. Yeah, way more aggressive. And then it's like, I think people's like, reality is caught up with people saying, oh, we have a lot more to build. And so people have, capital has flooded in and then flooded out pretty quickly. I mean, I do want to direct, for those of you who are watching, direct your attention to the bottom left. of this chart here, right? Which highlights that, hey, this whole meta is only a few months old still. It was still literally like, like, you know, AI16C, what, came to life in at the end of October, right? And then it had this kind of parabolic run up until like $2.5 billion market cap and then it kind of like crashed. So I think you summarize it really well, David.

Starting point is 00:03:22 Like the crypto AI sector specifically agents has seen a huge influx of capital. And we may have, you know, just surged two ahead of time. We might have gotten a little over our ski tips. We tend to do this as D. General gamblers. You know, and, you know, it kind of like, that pico top was kind of like when Trump released his meme coin and then Melania a few days later. And then everyone was like, well, hang on a second. Like, is this the end or is this just the start?

Starting point is 00:03:51 And then the market got really impatient because, surprise, surprise, the American government didn't announce a strategic Bitcoin reserve immediately and setting them up. immediately, right? Which is crazy to think, right? Like a year back, David, if we had this news, we would just absolutely send. And it would imply that the market has probably priced something, some of these things in since Trump got elected, right? So it's just like an interesting way to frame things.

Starting point is 00:04:20 I know you have AIXBT pulled up here, but I kind of want to direct our attention to a different flavor of the cookie. dot fund dashboard. They have this really interesting way of framing things, David, which is they're splitting AI coins into meme AI coins and then like infrastructure, framework, defy AI based coins. And why I like this view is it kind of shows us where the attention and capital is going into. And it kind of like informs us of the types of investors or, dare I say, traders that are involved in this sector right now. So number one, David, David, is meme AI coins.

Starting point is 00:05:01 So these might be AI coins that, I mean, there's some examples to the right, actually, that will kind of like tell us. So Falk coin up there. What else would we go, David? Toshi, which is the Coinbase-based chain, meme coin, which apparently has like an AI integration. But I think these are, call these memes that have some amount of AI properties. It's called sentient memes.

Starting point is 00:05:22 Right. Sentient memes. And if we come out of this, we see number two is led by frameworks. So this is typically protocols or teams that, you and I cover every week, actually. Like AI-16C and fundamentals. This is like the layer one of AI-A-I-A-Hs trade. Exactly.

Starting point is 00:05:36 And it's worth noting, actually, I kind of want to point it out here. There are very few protocols that show green in terms of like mine share, certainly not price action. But if we want to kind of look at certain teams that are bouncing off some of these like lows, we noticed that the largest market cap coin, which was able to do this, was arc right at the top of this, David. And I was kind of thinking to myself, like, I wonder why, because it's not necessarily a small market cap coin. And I would probably put it in the placings of virtuals in AI16Z.

Starting point is 00:06:10 I think it's through a few different things. Like one, I think probably it's making a lot of progress on Salana. And Solana is kind of being branded the AI chain or the AI Digen chain of this cycle. And I know they partnered with Salana Foundation. We mentioned that last week, actually. So I'm thinking we're probably seeing some momentum there. And the news hasn't quite caught up because markets are just dumping. But aside from that, you know, AI16 and Z hit pretty hard in terms of like Mindshare and Market Cap.

Starting point is 00:06:40 We're going to kind of dig into a little bit about why that might be a little later. And then Virtual is kind of like holding steady. As we know, Virtuals has decided to expand to Solana. They haven't officially launched that platform just yet, but they're going to be working towards it. So all in all, like, you know, the market is reset. The market is resetting. And it'll be interesting to see how we kind of move forwards over the next couple of months. I think that resetting word is nice because if you just look at the virtual's chart,

Starting point is 00:07:08 it has gone back down to a place. It's much higher, but it feels like it's much down, but further back down to reality, right? Things are like, we are no longer full of hot air. Things are starting to find there closer to a fair price. You can claim that AI agents are just bots. Maybe you're even right. But nonetheless, this industry is like real. It's attracting developers.

Starting point is 00:07:30 It is growing as fundamentals. There is like a loose roadmap for the sector as a whole. So I think things have kind of come back down to reality, which is, I know, call it like an internal to a broader secular bull market, a bear market. It's a bear market and a bear market. And AI tokens, AI agent is like the frontier of the frontier. And so it takes like it just a little. a lot of things to go right for, I think, you know, the animal spirits to find their way back

Starting point is 00:07:57 to AI tokens. But right now, right now we're in fundamental zone. Well, I mean, I always ask myself, like, am I just in this, like, tiny miniature bubble? Like, am I even focused on the right things? Am I, like, kind of like, dreaming? I think it's important to look at AI mindshare, just as a topic of conversation as a whole. Can you pull up Sammy's tweet here, David, where he kind of shows a screenshot from Quito which captures the different kinds of market share. So for reference here, Kaito tracks very, you know,

Starting point is 00:08:30 specifically a sentiment on crypto-Twitter, which is where a lot of people, you know, kind of like get their investment advice from trade or just kind of research. And we see that AI is still dominating, you know? Now we've seen better examples of this where AI just takes over 50% of the screen it's now down to like, what is it, like 30 something percent, roughly, David?

Starting point is 00:08:52 30-5. It's still a solid like 3x ahead of the number two, which is means. Yeah, which is means, right. Which is interesting because AI tokens by comparison to meme tokens are getting wrecked in terms of price action. Yes. But AI as a conversation piece, as a mind chair piece, is three times higher than meme pieces. And you can also see that show up in like centralized exchanges. When AI tokens show up on centralized exchanges, they don't necessarily catch a bid.

Starting point is 00:09:17 You know, we need more data to follow through on that. But when meme coins show up on centralized exchanges and token listings, meme coins go through the roof. So there's just a general appetite for meme coins. And it probably relates to the Lindy that meme coins have over AI. Yeah, there's a lesson there. Not quite sure what that lesson is, but there's a lesson there, which is, you know, maybe people that are just entering the space

Starting point is 00:09:39 and wanting to ape into crypto are just kind of, they view kind of crypto as this gambling sector. And maybe if they see meme coins, they're like, I don't need to think too much about this. I don't need to read a white paper about this. I don't really need to dig into this. Does it laugh? Does it make me laugh or does it not?

Starting point is 00:09:53 Exactly. Exactly. And I think that kind of like ties into the financial nihilism that's been pervade across the sector over the last couple of months. I do personally think we're going to shift away from here. I think with the US government setting up a bunch of regulatory frameworks, you know, yesterday they came on and said, you know,

Starting point is 00:10:11 stable coins are going to be super important. We're going to build frameworks. I think led by Kathy Woods, that's going to figure out what all of this is going to look like. I think we're going to see a shift into fundamentals eventually. But one more point I want to make around this mind share chart, David, is AI has been the dominant category for about a year now. Probably a year and a half, actually. I've been tracking this Quito stuff since they pretty much launched. And AI just still has been top of mindshare.

Starting point is 00:10:40 So there's probably something worth paying attention to here. Maybe it's like an asymmetric trade or whatever that might be. But I mentioned earlier, David, like, we should look at like, okay, so the market is dipping. Which token should we focus on? Is everything, you know, going to zero or are there some things we should focus on? Well, if you pull up this tweet by deep value memetics, deep value memetics, I actually really like this account. It's a pretty small-time account. If you guys are listening, you know, just go give it a follow.

Starting point is 00:11:10 I have no association with it. I just think they produce some interesting pieces. Typically, they do like long-form stuff, but this one, I like their little market kind of summary here where if you look at like large-cap coins, obviously you have Fartcoin leading the memetic AI category, you know, bouncing back strong. And then you had ARC, which bounced back plus 40% off the lows. So it's really interesting to see which coins are being paid attention to. You have a meme coin, meme AI coin there. You have a framework coin, which is in the form of arc. And then you have VV and Anon, which kind of sit in the kind of, kind of, of a middleware slash defy AI category right and anon performing uh strongest in the in the latter interesting is anon anon is the token on base that uh you can tweet out of the annon account via zk privacy app uh no i think this is hey anon david so different one okay because that one does not look at yeah yeah that is that is a different story no one yeah and this is hey anon which is kind of like uh i kind of like think of it as similar to like what griffin guys are doing

Starting point is 00:12:14 where it's kind of like an agent execution platform and stuff like that. And then if you look at like the midcaps, obviously lower liquidity, it's easier to pump and and, you know, also easier to dump. The midcap coins are focused on largely agent execution platforms that are lower in their maturity, as well as agents themselves. So we have like Gryft, which is I believe Sphere One's protocol. And then we have Buzz, which is a protocol that came out. of the Solana AI agent hackathon, which I was able to help judge, and I saw the team kind of

Starting point is 00:12:49 build it out live. And then Moby, which is like the leading kind of crypto alpha agent on Solana. So kind of like similarly competitive to AIXPT on base, for example. So I thought this was a really interesting kind of thing to follow on. But like we should also look at like inflows, right? If you pull up Elon Money's tweet over here, so what I like about this account is like he always tracks using Nansen basically like what the smart money is buying. And you'll see that it represents the same kind of bounces that we've seen in tokens that we've just mentioned, right? We've seen Arc, Fartcoin. Griffin wasn't specifically mentioned. So that's probably worth noting. And then graph, I think like the lower you go down on here, like it's just, you know, a much smaller

Starting point is 00:13:32 market cap, so it's easier. But like I would say focusing on the top three gives us a a bit of a hint or sign as to what might, you know, do the best once. this market recovers. It is interesting to see FartCoin is 100% a meme coin. You are seeing FartCoin being talked about in like mainstream circles as an example of just like, well, Doge coin was funny. It was a cute meme. Ha ha ha, doge.

Starting point is 00:13:58 So therefore, obviously fart coin. Like crypto traders, fart coin, obviously. You don't even have to think about like that too hard. It just so happens to also be AI. So it kind of makes sense that the meme side of FartCoin is the thing like holding up the price. In addition, and like one day, I think this will be like synergistic with each other. But right now I think there's one, there's two sides of fart coin, the meme side and the AI side. I think it's the meme side that's actually outperforming here.

Starting point is 00:14:23 Yeah, hot air rises, you know. Yeah, it's a, it's a very reflexive asset. Actually, one of the most reflexive assets in the cycle across all different categories. So super interesting to see. And I know we've spoken a bunch about arc already. But the reason why I keep bringing it up is it's broken certain trends that has. hasn't been present in previous weeks. So this tweet that you've just pulled up here shows Arc for the first time ever

Starting point is 00:14:49 dominating mind share amongst top AI agent protocols. Typically, it's always been AI 16 Z. Typically, it's always been virtuals. And they've had some pretty big news over the last couple of weeks. But for some reason, and again, like, I can't quite pinpoint it just yet, but Arc is kind of leading the foray here. And it might signal that the markets are seeing something that isn't so publicly obvious right now.

Starting point is 00:15:13 Interesting. One thing that was pretty interesting this week was this tweet from Shaw. And I think a lot of the, you know, crypto Twitter, AI Twitter, the market is kind of processing this is Shaw's tweet that, when did this come out yesterday? Yeah, yesterday. He said, I would advise you to think twice about launching a fair launch coin if you intend on using it to fund a long duration project, which at a high level seems a little obvious. There has been a movement towards fair launch coins. It's kind of like, in a reaction to the high FDV low float meta. And so like meme coins really got a tailwind because the other, the other tokens at the casino were these VC coins with very low flow and a very high FDV that kind of just is a not a good deal for retail. Right. So then we went to these fair launch projects. The problem with fair launch projects is that it's hard to incentivize the team doing the

Starting point is 00:16:09 project if they aren't able to have a meaningful share. of their tokens, which is while the whole high FDV low float meta is toxic for different reasons, one thing that it's not a problem for is incentivizing long-term team commitment to the project because, well, why is there a low float? Well, because the team is locked up and invested. And so this is like the opposite end of the spectrum. And so Shaw put out this tweet talking about like, man, this whole AI16Z project, it's been fun.

Starting point is 00:16:38 I've enjoyed it. But also there's this fundamental incentive alignment issue with this fair launch coin. that much of the team doesn't really hold too much supply of, so we're not like sufficiently incentivized over the long term. That was kind of the big takeaway that I got from this thread. What did you take away from it? Yeah, no, I think that's pretty bang on. Let me add a few things. So you mentioned high FTV, low flow, just to kind of remind the audience, basically last year, everyone got super jaded by all these VC-back crypto protocols, because, you know, we really believed in the tech back a year back, right?

Starting point is 00:17:12 And then everyone learned about how the VC game kind of works and they're like, oh, well, okay, that makes sense their early investors because they're taking on the risk. But it was kind of like uncovered that, you know, VCs actually own quite a large percentage of the supply and a very minor amount sometimes gets, you know, put out to the public. And this happens on some occasions. It's not prevalent across the entire landscape. And this put a lot of people, this made a lot of people quite skeptical. They started thinking, well, that means we're only going to be used as exit liquidity, et cetera, et cetera. And that's what led to, you know, this frenzied meme coin pump, David, you know, like everyone was like, okay, well, I'm just going to be on pump fun and just gamble my money away instead of like

Starting point is 00:17:54 putting it into this high, FTV low float type situation. And ironically, some of these meme coins ended up pioneering agent coins, David, like goat and arc, literally came out of pump. fun. You know, some meme coins backed into becoming a real fundamental agent token. Yeah, yeah.

Starting point is 00:18:11 It was very prophyletic, actually. We didn't actually realize that that was going to be the case. But we watched as these coins went from being a meme to adding utility at the heart of an ecosystem. Sounds great, right? And everyone was able to ape at launch. The team has barely any allocations. So everyone wins, right?

Starting point is 00:18:31 You know, decentralized investing. Let's go. But teams are starting to. face this different kind of problem that they're realizing in the wake of this heavy market crash in the sector. That is, you know, the team that doesn't have enough tokens to incentivize themselves to work on their vision can't really fulfill what their vision is. They have to like look at ulterior solutions and motives to make a profit in order to then refocus back on their vision, right? Think about it. You kind of give away 90% of your tokens and you at most manage to scrounge maybe 5% for you for yourself in the team.

Starting point is 00:19:05 You loves you. The community loves you, right? But your team certainly doesn't, and the developers that want to build with you that you need, probably don't. And, you know, that 5% isn't worth much to maintain the best builders to help you build. Like, especially in a world of open source development when, you know, you have many pots cooking. Typically with, if we compare this to crypto startups, David, the team keeps a large chunk, which not only incentivizes them, but entrusts them with the ability to use that allocation in the right way, right? Maybe it's like, hey, you need to get this.

Starting point is 00:19:34 It's your treasury. Exactly, right? That makes sense. Obviously, the founders likely know best where all of this is going, not some random anon on pump fun. That's like shit talking or shit posting, right? So teams are starting to realize that the lack of incentives and capital to carry out their mission, you know, and they're kind of like forced to seek alternative ways. So Shaw writes about this, like literally, I recommend everyone to read this post because I think it's important and might end up in a shift to something midway, you know, where maybe it's like. There's merits to all.

Starting point is 00:20:04 token distributions, there's merits to the high FDV low float launch. It doesn't do great for the community. There's merits to the fair launch mechanism, which does great things for the community, but really terrible things to the team and the structure and long-term planning. And then we need to figure out how to meet in the middle here. Now, granted, I do think that the fair launch mechanism that also reserves a supply of tokens for the team is a pretty trivial fix. I think there just needs to be, like, you know, a little bit more planning ahead of time before. Like, Shaw launched a meme coin. And then he was like, well, wait a second.

Starting point is 00:20:39 What if I, like, commit my time and life and career to this? So he didn't really have a moment to breathe to think about this ahead of time. But I think a fair launch, like a pumped up fun launch, a flare launch launch, where you do a fair launch, but then you just have 30% of the supply that's vested in a team contract is a pretty simple fix to this. It just requires a little bit of forethought. Yep, yep. I agree.

Starting point is 00:21:02 Yeah, I mean, I have no real comment here. It's just ironic that we've went to both ends of the extreme. And the answer is let's just kind of like settle somewhere in the middle. Yeah. What do you think this means for the AI 16C project? What do you think this means for Shaw? How do you think the AI 16C community is processing this? So, okay.

Starting point is 00:21:19 So to answer the last question, I think they're processing it badly. But that's understandable because typically it's the team and the leader that needs to have the vision. And honestly, the capability to execute from here. Okay, figure it out. You're in the situation that you're in. Figure it out. My personal take is I think the team is a crew of amazing developers and builders. And on the Eliza OS side, so that's the framework and the platform that they're building on top of it, they're going to kill it, right? V2 is coming out around the corner. I'm excited to see what that is. I think the team also has the capability to adapt to this. Now, what exactly that strategy is is yet to be determined. And I'm honestly curious to see what they come. out with. My personal opinion is they're going to need to cook something up that drives revenue or success of their framework that they've built out that they've open source for everyone to tie value back to AI16Z, whether that is driving more AI16Z tokens back to the team in some sort

Starting point is 00:22:18 of a treasury. So maybe they take a percentage of every transaction that's happening on every part of their platform that they're going to launch back to a treasury or if they do certain launches where they capture certain values and they're able to kind of like accrue it into their Dow treasury whatever it is they need to amass a stockpile a strategic AI agent coin reserve if you want for AI 16 Z and I think that they'll probably pursue a path like this there are other projects out there David that are in similar positions I won't name names right I was going to ask that yeah yeah I mean there are some I don't want to name names because you know what's the point of like funding but it's important that a bunch of these teams start

Starting point is 00:22:58 not thinking about these things. And it's evident from this post that they already are. Right. And I think the timing of this is very much because we have seen a 40, 50, 60% draw down in token prices. This isn't happening if we have 3x from here. You know, or even if we go 20% up tomorrow, we're not going to be talking about this because no one, no one will even care. Suddenly you have a larger stockpile. Suddenly your 5% is worth a lot more. Yeah. But if you're here for the long term, like we all know that AI agents are not going to be built overnight or in a week or in a month. This is going to be a multi-year-long arc.

Starting point is 00:23:29 And so teams need to be thinking about multi-year-long incentive structures in treasuries. And I don't think the AI teams, other than maybe virtuals is different because virtuals has literally already been around for well over a year. So they've already been thinking like a startup. And so maybe that's an exception. But this space has arisen so quickly that I highly doubt teams have been looking, thinking about like what happens if we go into a multi-cycle, not like four-year cycle, but but like a multi-era, like, bear market where funding is dry.

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Starting point is 00:25:27 Uniswap, the simple secure way to swap in a multi-chain world. Actually, speaking of virtuals, David, the team has actually been working on something that hasn't been seen in the market before, and maybe this is because they've been around for a while and they've kind of like seen how these things play out. So they're introducing something known as their fiscal policy for their virtual's nation, right? So this sounds very broad and bold and honestly kind of crazy. Virtual's nation fiscal policy.

Starting point is 00:25:53 I love that title. Okay. Okay, so the point around virtuals and the team and their vision is they believe agents are going to exist everywhere, right? Doesn't matter what chain they're on. And they've evidently expressed this in their roadmap by announcing that they're going to be launching on Solana. For those of you who don't know, Virtual's has primarily been based on the base chain, which is an EVML2. So the fact that they're moving over to Solana is pretty nuts, right? And they're going to juggle two ecosystems and they're probably going to expand to more in the future, right?

Starting point is 00:26:21 But the whole idea is, okay, if these agents exist on different chains and they're able to transact with each other and it doesn't matter where your agent is, they can just communicate and, you know, converse with each other, then you're kind of building out some kind of a separate economy, right? It's not governed by geographical borders. It's not governed by land. It's governed by virtual space, right? And so if it is governed by virtual space, there needs to be some kind of, you know, policy or tax. system that kind of keeps your stakeholders or participants in check, you know, David, making sure they're not doing illegal shit, but also making sure they're paying back to the society that supported them, that's allowed them to kind of like build into something, right?

Starting point is 00:27:05 And so virtual's announced this fiscal policy manifesto, right? I'll break it down. But it basically says, like right now, agents on virtuals can go to the platform and they can be designed and then they could launch, right? And there's like a bonding curve situation and all that kind of stuff. And they've addressed each stage of this agent's launch. And they've mentioned now how they're going to be introducing new kinds of mechanisms or procedures that would help either enhance or kind of cut out some of the riffraff that's happening at each of these different stages.

Starting point is 00:27:39 So basically making it a more functioning society, essentially, right? So if we look at like pre-launch, you know, they talk about this venture partner network. And what they mean by that is, so far, it's been a free-for-all, right? You turn up, there's not really been any guidance. There's a doc that you can read out online, and then you can kind of like just get on with it and launch your agent. They're now going to try and take a more curated approach, kind of similar to what we've seen with, like, ARC and a few AI16D team launches actually as well.

Starting point is 00:28:08 So what they mean by this is they're going to have several venture partners, which will act as curators. So think of like a profile on Instagram that has a verified checkmark, right? you're going to probably trust the content that comes out of that account, same as on Twitter, right? You'll see venture partners that will have a verified checkmark on their platform that will be able to offer up certain opportunities to invest in agents or teams that are going to be launched. And you're trusting them that they've done their due diligence.

Starting point is 00:28:38 You're trusting them that they've kind of figured out what this might be and they're kind of like funding and supporting the right things, right? The second bucket is they're calling post-launch pre-sentientia. So VirtualS has this kind of launch mechanism where, okay, once the agent reaches its bonding curve, it launches, right? The token becomes available on whatever decks they support. But then, like, it's still a low market cap, right? The team could just dump this entire thing, but they have different kind of like milestones. If your market cap for your agent hits 50 million, then it's considered sentient.

Starting point is 00:29:15 Or if it's 100 million, then it's considered, you know, something a little more useful than sentient. or whatever that might be. So the post-launch pre-sentience, like, they're going to try and focus on funding teams that believe they have, you know, full, like much better potential above that particular category, right? So they're calling it prototype to sentience virgins, which is like a play on, I guess, virgins,

Starting point is 00:29:42 but like it's like virtual D-Gens. Well, it's virtual D-Jens, and it sounds hilarious if it's like virgins. but they'll be basically provided with virtual grants to scout for like high potential teams as they put it out here. And as funny as that sounds, David, I've never seen teams take this more seriously.

Starting point is 00:30:02 If you pull out actually the next tweet by Vader, you know, he talks about, this team rather talks about virtual's quantitative easing TLDR, right? Right. Essentially. So let me checkpoint this. It collects revenue from the virtual system system. We know this.

Starting point is 00:30:18 It collects fees from trading fees on the bonding curve using the virtual's token. And now it is implementing a top-down fiscal policy that is meant to encourage new businesses, aka agents, in the virtual's universe. And it has bestowed some powers to certain people that we're calling venture partners to go out and actually sprinkle out some cash in targeted precise directions at precise teams because they think it's a good bet to help encourage. the teams grow that AI agent on the virtual platform. And so taking some of the revenue, putting it back into the bottom of the economy, the virtual's economy, hoping it trickles back up and then we can create a feedback loop, which is like basically a taxation and like social safety net system, not a social safety net, but collect taxes, put it back out into the economy and in ways to simulate the economy,

Starting point is 00:31:10 and then collect taxes again and do it all over again. That's what we're talking about here. Yeah, it runs pretty much like an actual nation would, which is like something we haven't really seen in terms of. of protocol governance in crypto before, right? And so what this Vader tweet is highlighting here is for a specific, one of those specific programs, which is the prototype to sentience program, basically $2 million or 900,000 virtual at current pricing will be put into the prototype stage at this point, which means that

Starting point is 00:31:40 these different venture partners will be able to allocate this equivalent amount of money to fund certain teams that they believe have potential to. become the next billion dollar protocol, for example. And the reason why I said this is like super interesting is I've never seen a bunch of teams get so locked in immediately. I was on a spaces yesterday where they were doing kind of like a shock tank pitch session. I was on it for an hour. And the winner of that, yeah, it was good.

Starting point is 00:32:07 And the winner of that basically got 10,000 virtuals or whatever it might be equivalent to like do that next stage of funding or get them over their next milestone. So these venture partners are like locked in. And like I want to point that out. because like, typically the ecosystems that flourish after a bear market or a bear dip are the ones that are just locked in building during the bad dip, right? It's not someone that's like kind of like habitual, depending on the mood of the market. So if you pull up this, this Veda, this second Veda tweet, Virtual's Den, episode one,

Starting point is 00:32:38 where, you know, they basically had a bunch of these teams pitch, 45 minute spaces, 30 minute pitch, and it was pretty cool to like see this whole like judging criteria. and I'm already seeing a bunch of other formats like this appear. So I'm really impressed with like what virtual is doing and how they're kind of approaching this. It's pretty crazy to watch a team kind of like try and build an actual economic zone for agents. And in my opinion, if anyone's nailed the tokenomics so far in this space, it's virtuals, you know, pre-Sentient Scouts, venture partner model post-launch funding.

Starting point is 00:33:11 They've thought about everything, agent token tax fees. They're building what I would term as a sustainable. sustainable, David, ecosystem, right? And sustainable isn't really something that has been habitual to crypto. We've seen like meteoric rises and meteoric dumps. But sustainability is going to be super important if you ever want to become a mature protocol. I think this is really just very apt in timing for the specific week that we're talking about this, which is like deep, deep AI agent token bear market week where we are now realizing that this is a long haul.

Starting point is 00:33:43 You know, some of the people who were in this industry for a quick buck are leaving. And so now we are going back to, I mean, you and I were going through the 2018 through 2020 bear market together. And the teams that made it through that bear market, the Link Marines, Avey, synthetics, they all found a ways to engage and, you know, create a hot campfire for their community to, like, gather around. Things to do, things to pay attention to, ways to make money, even if it's small in the bear market, to keep that community, entertainment. and to keep that fire going. And so this is what I'm saying here. And for like the average person who's in this economy, which is just like a virtual's token holder, this shows that there's something alive and there's something happening.

Starting point is 00:34:25 And there's a reason to hold on to your virtual as tokens because, you know, there's actually life in this project. And there's a campfire that's burning and people are gathered around it talking about like these, these hackathons and this judges. And so it makes me, reminds me of like the 2018 through 2020 bear market and the projects that made made it through that bear market just, had something to do and, and, like, outsourced their growth to the public in creative ways like this. Yeah, at the end of the day, a lot of the criticism comes down to everyone thinks this is a transient meta, right?

Starting point is 00:34:56 They think AI crypto is just another kind of meme thing and it'll die off soon. I personally do not believe in that at all. I think you'd probably say the same. And so the only way you could validate that is by watching teams and seeing what they're doing, seeing what they're building, seeing what they're invested in, seeing if even the big head-hont teams are not taking their foot off the gas. And it just seems like virtual is doing exactly that. Yeah. That wasn't the only hackathon that happened this week. Coinbase, Coinbase had an AI hackathon. Were you paying attention to this? Fill me in on this. Yeah, dude. So, okay, so our job here on this

Starting point is 00:35:30 show is to give everyone the lowdown on crypto AI every week, but it's also to be the source of new alpha and trends. And part of that involves being aware of teams that are just getting on their feed or, you know, taking a unique approach to a problem, right? And hack, Hackathons are the best way to do that. And it just so happens that my old stomping ground of Coinbase held one this last, you know, this recent weekend. And the winner, Mammo Rico is the name of the agent, was worth highlighting, in my opinion, because it's designed to not just be a single agent, but a swarm of agents.

Starting point is 00:36:00 Now, before we get into this demo video, I just want to kind of point out why I think the Coinbase Hackathon in particular is worth highlighting. Funny enough, David, and I'm saying this as a previous employee there, usually they're not right on the edge of things. You know, usually then... Coinbase is not on the frontier, typically. They typically, you know, they kind of wait a couple months at the very least

Starting point is 00:36:23 and kind of like see how these things mature. But it was really surprising and a pleasant surprise for me to see that they were one of the first teams to come out with an AI agent kit, you know, from their Coinbase SDK. And the AI agent kit served as like a tool or a framework for those people building agents to kind of like plug in to base

Starting point is 00:36:42 or whatever different kinds of chains and perform a bunch of different on-chain actions. So it was very relevant that they held a hackathon so that teams this was held in the San Francisco area were able to come along and hack and build something super cool, right? So they had a bunch of winners. I wanted to point out two specific teams. So one was the first place winner.

Starting point is 00:37:03 Mamor Rico, as I mentioned earlier. In this demo here, Luke, shout out Luke. He was the guy that built out the staking stuff at Coinbase or helped lead the team there. describes the agent's function to find the best and safest yield strategy for your USDC and Bitcoin. So Bitcoin in this context is Coinbase Bitcoin, I assume, on base. CB Bitcoin. Exactly, CB Bitcoin.

Starting point is 00:37:26 So this agent basically has four worker agents, David, that perform analysis for it. So two agents work on USDC. One does like a health check on the USDC markets, you know, just to make sure nothing's wrong, nothing's weird. the market is healthy. And then the other searches for different available yield options for that USTC on base. And these agents run in a loop every 15 minutes so they get refreshed. So it's kind of like this very basic but potent version of an agent swarm that's like constantly updated. So I thought that was a pretty unique one to point out because I've I've kind of been thinking like where does this agent swarm thing end up?

Starting point is 00:38:07 Is it just like a hype term? Like my original question is like, why can't you just get a single agent to just do all of it at once, right? Right. And there are a bunch of engineers that support this for you, right? But at some point, I don't think it's favorable to assume that one agent rules all, right? There are going to be different teams, different funding. Like people are just going to build out their kind of like version or inflection of an agent to serve a particular subcategory. So whether you like it or not, there's going to be a world full of agents, right?

Starting point is 00:38:39 And I don't think it's going to result in one agent capturing it all and the other agents just dying off. I think it'll be a way of like getting these agents to kind of work together. Yeah. I think that probably goes pretty deep to the heart of the very core of this AI universe, which is will there be one God AI LLM algorithm that is superior to all others? Or will it be many, many, many, like countless amounts of individual niche experts. Usually when there's a spectrum like this, the answer is, well, it's somewhere in between. When it comes to like optimizing yield, there's something about like yield optimization and an AI agent that just intuitively goes hand in hand.

Starting point is 00:39:18 Because if you're a yield farmer, yield optimizer, you are basically a single human agent scouring defy for optimizing yields. And it seems like a very simple thing to automate. In fact, we did that in 2021 with this thing called yearn, which was basically an orchestration of not agents, but bots that optimize yields. and it seems to be something that's very close in proximity to just being able to be agentified. And I think I've seen this a handful of times. It's just like yield optimizing agents. What that agent is actually doing is hard for me to understand

Starting point is 00:39:54 like how that's different than a bot. But I can just imagine that like, well, if I want something to automate this, it's an agent. And I think really the market is going to wait for validation that an agent can do it better than a human. Because I'm not sure. I'm still not ready to give a large, amount of my net worth to an agent to manage on chain.

Starting point is 00:40:11 But I could see yield optimization as like table stakes, like the entry for this kind of activity. Yeah. Well, just on your point of like delineating whether a bot is different from this agent, well, typically you would expect that a bot has predetermined things to fixate on, right, David? So it's like you have to spend all your time programming this bot to specifically look at this protocol, this asset pool of this protocol, right? And never take your eyes off it. You're not looking at anything else.

Starting point is 00:40:42 And it's pre-determined. New protocols don't exist. It's like literally it's got its blinders on. It can literally only see what's in front of it and nothing around it, right? An agent is the kind of like converse of that where it is aware of everything. It's plugged into all the on-chain data. It's aware of crypto-twitter. So if a new protocol announces that they've just launched, it's going to check it out.

Starting point is 00:41:02 It's going to see whether they've deployed smart contracts on-chain. And then it's going to evaluate it. You know, it's going to see how many users it has, how much TVL it has. how much TVL it has. So you're betting that the agent is going to be like a human, David, smart, aware, and able to digest and analyze whether the risk is worth taking for a particular thing. And to kind of like answer your question on, you know, whether Defi or like, you know, these human agents are the right way to kind of replace, right?

Starting point is 00:41:29 Because you mentioned human agents are basically those ones that are optimizing for yield farming. It makes sense, right? Defi was the first thing that kind of exploded. outside of the, you know, just store of value sector or proposition of crypto because it was financial rails that were built and we could just analogize with and kind of like build an alternative product. It makes sense that agents kind of capitalize on this first. That's why we see Defi AI trending the most. So yeah, super cool. There was also a runner-up that I just wanted to shout out, which was a social media agent set up where advertisers could post bounties for

Starting point is 00:42:06 marketing agents to fill. I'm not going to pull up the tweet, but I just kind of want to point it out, like, whichever agent had the most tweet engagement would receive USDC rewards. And we've seen agents like AIXBT gain larger mindshare over time and outcompete every human KOL. So why not this time and why not in this format? It kind of like redefines what the bounty program looks like or what advertising distribution might look like. I thought that was well, I will say there are very few AI agents left on my Twitter feed that I do not block after AIXB team because there are so many and they are so goddamn annoying. Yeah, I do the same.

Starting point is 00:42:43 Yeah. Yeah. Yeah. So there's still a lot of work to be done in order for AI agents to get like my interest on Twitter. For sure. I feel like probably listeners are probably feeling the same. Yeah. But they are getting smarter, David.

Starting point is 00:42:56 Open AI actually this week announced a new agent. So last week they teased an agent, which was like, you know, going to book your travel. for you, book restaurants, whatever. But now they've released a pretty much a serious agent called Deep Research. The way I want to kind of like pitch this agent and its capability is

Starting point is 00:43:16 do you know those like institutional reports, David, that take like a bunch of analysts that work at some of the... Analysts research report or something. Do you know what I mean? And they're like 30 pages long. They have all these like unique graphs and data and they're super useful. But that's, it's a lot It takes teams of people to make.

Starting point is 00:43:38 Yeah, all of that is getting condensed into a single agent that could produce that in about five minutes now. Oh, yeah. And it's not just anything to do with financial markets. It's whatever category, profession or field you choose. There are a number of examples of this that exist. I think Sam Altman in this tweet mentions right now. Like he was trying to figure out, you know, something to do with like a project that he was

Starting point is 00:44:00 focused on. And he just like ran it through deep research. and it came out with like a 10-page report, which was just like, honestly, like, insane to see. How much compute does that cost? Well, yeah, I mean, he describes it as very compute-intensive. But the fact of the matter is, they've put this for pro users to access and run on their MacBooks

Starting point is 00:44:21 or their normal regular computers, and it's working. Wait, you can do local inference on your MacBook. I don't know about local inference, but the point is you can get access like you do to chat GPT. So if you have a pro open. an AI account, you now have deep research as an agent that appears. And you could talk to it and say, hey, listen, I want to be, I'm a medical practitioner and I'm trying to figure out A, B, and C.

Starting point is 00:44:45 How do I figure that out? If you pull up actually this tweet by Felipe Milan, I think he maybe worked on the team or whatever that might be. And he kind of gives you this personal story here where, you know, his wife was diagnosed with cancer and, you know, obviously it turned their life upside down. And they wanted to get a idea of whether, you know, she should do radiation after chemo or whether they should leave it or whatever that might be. And there's a ton of... He tweets out, we uploaded her surgical pathology report and asked for guidance on whether radiation would be beneficial.

Starting point is 00:45:19 Yes. What happened next was mind-blowing. What happened next? So basically, they asked deep research, not really expecting much. And deep research spent six minutes crunching every single latest cutting edge, scientific. paper, analyzing all the contents of it, pulling out the things that were relevant for this specific lady's circumstances, and delivered a full report as to whether she should or shouldn't ensue upon a path of radiation after chemo. And he just said that just kind of like changed their

Starting point is 00:45:51 complete idea of all of this. Why? Because it gave, not only gave them confidence in a path, but it provided proof. It provided evidence. And it was built off of the stuff that these doctors are already looking at. Also, David, it might outperform the doctors at their very own job. Think about it. How many doctors do you know spend, I don't know, 18 hours of their day at practice and then go home and read a bunch of papers? It's probably unrealistic, even when you're at top of your field. But now you have this genius little assistant that is accessible to anyone that's paying whatever, 200 bucks a month to now just devour everything that is online and within the medical field. And that's just the medical field. It's insane.

Starting point is 00:46:30 So we got here because I was talking about how AI agents on Twitter are super annoying and dumb and very low utility and I'm blocking every single one of them. And then you're telling me to the story of like this guy who used deep research to pull out a report. So you're saying, well, no, we know that there is value here. We know that these LLMs can produce something extremely useful. I'm telling you not to get too comfortable, David, is what I'm saying. So I bet that query like from Felipe about like what he should do. about his wife's cancer. I bet that query costs open AI like $5, $10, something expensive.

Starting point is 00:47:07 So it makes no sense for swarms of AI agents on Twitter to be popping out queries like this over and over and over again. Yeah. But we know that all of these services, all these resources are going to become commodities. Exactly. The whole deep seek thing taught us that like this thing is accelerating towards both open source and extreme inexpensiveity as relates to producing some of these outputs from inference. So like, you know, give it a year.

Starting point is 00:47:32 And maybe we have these, this, what do they call deep research? LLM. Yeah. As actually what is table sakes for being an AI agent that's connected to Twitter. Well, David, I mean, in true open source fashion, remember, open AI is centralized company. It's ironically closed AI. But an open source competitor has already emerged. It's been like to deep researcher?

Starting point is 00:47:53 Yeah, to do it to basically mimic and do the job of open AI's deep research. And it's hit a 54%. score on the same validation set that Open AI's deep research agent scored, which is just like insane. And I haven't used this agent just yet, but I've read a bunch of feedback that people have given from people who actually have used this. And it seemingly performs as if not better than the actual model in different kinds of sectors.

Starting point is 00:48:22 So just insane to see, I just want to point out, like, how quick the open source community just catches up on this, right? Remember, literally less than a week and a half ago, we all believed this was just a big company game. And then DeepCe comes along and it's like, hey, actually there's a new reinforcement learning technique that can now allow you to reproduce some of the best models for next to nothing of the cost. And then we're seeing this kind of like similar pattern play out with, you know, someone recreating this deep research agent. So just super, super exciting stuff. The Arbitrum Portal is your one-stop hub to entering the Ethereum ecosystem. With over 800 apps, Arbitrum offers something for everyone.

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Starting point is 00:50:58 I'm taking over a lead now. Take the steering wheel, dude. Let's go. Okay. So if you remember, on our second episode ever, we talked about this AI agent game where there was like a treasury, like a honeypot. And it was guarded. Fraser? Fraia.

Starting point is 00:51:13 Freya. Fraia. We still have not figured out how to pronounce it. F-R-E-Y-S-A. It was this little game of this like $50,000, $20,000 in eighth that's guarded by this agent. And the goal was for humans to prompt this agent to try and trick it to get it. get the pot. And the cool mechanism was that, well, if you wanted to send a prompt to the agent, you actually had to pay some small fee in order to send a message, like 0.05Eath. But as more messages

Starting point is 00:51:42 were sent, that fee would tick up. And so that pot got larger and larger and larger. This caught got kind of viral. Somebody finally cracked with prompt engineering, finally cracked it, convinced the AI to give him the pot of like $80,000 or something. John Wu turned this into a Twitter thread on Twitter, Elon Musk caught Elon Musk's attention. He responded interesting. The Freya token pump, the token price pumped and then fell back down. That project. That project. Okay. Turns out Freya is like much different than a little game of, you know, a FOMO 3D type game for those who are around in 2018 where you are filling up a pot and there's a little game. This team with this very ambitious endeavor to create sovereign AI. And it's actually impressively hard to figure out

Starting point is 00:52:29 how Frasia, what they're doing. They don't have a lot of content out there, but a couple of my friends are deep in the Frasia world. Eric Connor, when he removed his D.Eath name, he put on a Frisia profile picture. So the Frasia team, what they're building, the arc of what they're building is a set of tools that all kind of composed together

Starting point is 00:52:48 once the tools are refined, perfected, ready for production. They kind of composed together into what they want to create, which is sovereign, on-chain, embedded AI. So truly autonomous. You cannot turn this thing off. This thing has life. This thing develops and grows.

Starting point is 00:53:07 And it is fully embedded on chain. So like really capital S sovereignty when it comes to an AI agent where it starts to really get some human like qualities, kind of the early few episodes we talked about where these agents are real. They are equivalent in terms of, you know, permissionlessness access to these blockchains. Wait, so I want to unpack a few things here, David, because I think what you're saying is super important, right? So blockchains for the longest time has always been like, one of their value props has been verification, a single source of truth, etc. Right. And we're now seeing this kind of be carved out by the Freya, Fraser, Fraser team in terms of like their tool set that they're building out. And I've seen a number of teams actually take this approach. And I believe the Fraser team is focused.

Starting point is 00:53:56 on using trusted execution environments and also some kind of verification procedure so that you can trust that what the agent is doing is in fact what it's doing so that I can act sovereign. And what's interesting about this, David, is if you have a sovereign entity that is this agent, right, that, you know, hands are wiped clean. David isn't involved. This is this agent is acting not on behalf of David. It's just doing its own thing. You know, who's liable for this thing, right? Is it the random anon devs that have built this out? Or do we end up, I'll be running back tornado cash? I hope not.

Starting point is 00:54:31 Like, you know, like where does this end up? The second thing I want to point out before you comment on this, David, is how cool is it to go from a gamified bounty where it's like, hey, I'm an agent. I'm holding a stockpile of $100,000. Try and hack me if you can. I've been programmed to basically not give you this money. But if you can prompt engineer, if you can prompt hack me, I'll give you the money. money, right? That's kind of, they're basically building out community tested tools. Right, right. To make this trusted execution environment, this sovereign agent, be trustworthy. You've mentioned

Starting point is 00:55:05 so many times, David, I don't know if I can trust an agent, but what they're doing is they're kind of like stress testing it, right? They're saying like, if we put this out into the wild. Gameified stress testing. It's really cool. Yeah. Yeah. And I think this is why I've been excited about the AI agent meta, why Bankless has like invested time and energy into this AI agent meta. Because there, there is a big difference between what I could just like reductively call web two agents versus web three agents there's web two agents with the properties of web two right a centralized server you know ownership by a person or a company at the it's gate kept you know it's controlled versus web three agents which are fully autonomous fully trustless fully sovereign you know there's some alignment between

Starting point is 00:55:48 bearer assets like crypto and then like the sovereignty of AI and I'm interested in fully independent, fully sovereign AI agents. And the Frasia team is like zeroed in on that direction. Olaf Carson, he was on the Unchained podcast with Laura Shin. There's a three-minute segment that I want to play that I think kind of illustrates what I'm interested in, what Frasia is building. I actually found this link from the Frasia telegram group when somebody just said in the telegram, Olaf just explained Frasia without actually naming it.

Starting point is 00:56:20 So I'm going to play this clip and we're going to put this in the podcast. Let's go. Okay, so, you know, this kind of, I've been thinking a lot about these like social media curation markets, right? But the second thing or maybe first thing, actually, that I've been thinking a lot about is pretty much embedding autonomous agents on chain, right? And giving them wallets that they uniquely have access to and sort of go out into the world and hustle and try to make money, right?

Starting point is 00:56:48 And so, you know, I think it is so tantalizing. the idea that I could own like, you know, a percentage through a token of some agent that just never stops working, right? He's out there just whatever it is, right? It's like posting, messaging people, making, you know, AI music, right? And launching it. Making AI videos and content like trading in in defy markets, like market making, running some quant strategy in defy markets, doing venture style investing. You know, eventually, these AIs are going to be more sophisticated than humans at pretty much all this. And I really think that giving them an on-chain or of autonomous identity will be the best mechanism to bootstrap

Starting point is 00:57:38 fundraising. So when you have this new AI system and you say this thing is going to be an incredible market maker, and I tuned it specifically for that use case, you know, I need to crowd fund initial capital you sort of launch the AI it's owned it's owned in a sense by all the token holders right but it's totally autonomous and trustless so even the dev that made the AI you're you're not going to really need to trust them per se right like they're not going to be able to shut it down or change it or steal the funds or anything like that and so they where we're headed again i think is sort of pump fun for AIs right where when you get the ease with which you can launch an AI agent to be like really, really, really easy.

Starting point is 00:58:23 And you get the ease with winch. You can embed it, you know, inside like a TEE style architecture where it has its own private key. This is like the secure enclave on the iPhone, right? You know, and it can access its own private key uniquely. You make that really easy. And then you make like tokenizing that and crowdfunding it, like pump fun style really easy. I think we see an explosion of financialized agents that are out on the internet, like hustling while you sleep. and you own this sort of portfolio of, you know, autonomous agents.

Starting point is 00:58:54 Like, it's like I own a few that do market making for me. I own a few that post in social media. I own a few that make video content. And they're sort of out there competing, you know, with each other going head to head. I think that perfectly encapsulates some sort of like North Star of almost everything that we talk about here on the AI rollup. When we talk about ARC or virtuals or AI 16Z, they're building out like the pump dot fun side of things. When we talk about defy AI, they're talking, that's like the AI market makers or the AI quant traders.

Starting point is 00:59:24 Everything kind of aligns with that sort of vision of how do we make AI agents on chain? How do we make them verifiable? And that connects me to the thing that I want to bring up next, which is what Eigenlayer is been talking about lately. So a lot of people who have been paying attention to Sri Ram and EigenLayer, there's actually a lot of resonance with AI that Sri ROM has a background in and what EigenLayer is good for. Um, Srivum actually before he, uh, was a, was a startup operator with eigenlayer. He was actually just writing up. He's a, he's like, he's like six AI machine learning, deep learning, uh, AI, like papers. And though he's now kind of applying that to eigenlayer. So Avess is an eigen layer used to be called actively validated service services. They're now calling them autonomous verifiable services. And what a eigenlayer does, which is E3 staking, pairs really, really.

Starting point is 01:00:18 well for making agents verifiable, imbueing agents with Web3, like upgrading them from Web 2 to Web 3. And the reason for this is simple. So I can later put out this tweet thread, which is kind of a roadmap to how to make AI agents verifiable. And very simply put, you can't put AI agents on chain. You can't do that. Why can't you do that? Well, AI models are massive running inference on chain.

Starting point is 01:00:42 That's just not what blockchains are good at. Even Solana, you know, very fast, very high bandwidth blockchain. AI resource demands are larger than blockchain as a category. Inference compute costs are large. Memory is a very high intensity thing. There's not enough memory to do the- This is like the whole like, do you remember of previous cycles, David, where it's like put data on the blockchain?

Starting point is 01:01:04 It just doesn't make sense. It doesn't make sense. It doesn't make sense. And so what Eiger-Layer wants to do is, well, we have this amount of ETH that is restaked. You can move everything off-chain with an eigen-layer A-VS. And then you can. receive crypto economic guarantees about off-chain inference, off-chain memory, any off-chain

Starting point is 01:01:23 like compute costs, any off-chain resources. You just use an eigen-layer AVS to verify, to imbue any sort of agentic activity that we want to have verifiable. You can imbue that with crypto-economic properties via eigenlayer restaking. So this is what ISRI-ROM is calling the eigenlayer agent universe. And he thinks that in addition to many of the other reasons why an eigen-Layer AVS would be useful, it's actually agents that are going to be able to refer to each other, have an interagent network. Because how do agents trust other agents if they are themselves black boxes? Well, EigenLayer thinks that it can solve that by imbueing these agents with Web3 properties by making their slashable offense if they do some computation off-chain that doesn't align with their

Starting point is 01:02:10 commitments on-chain. And so it's interesting to see EigenLayer, which is like neutral protocol infrastructure. It's just resaking, but it actually works very well with an agentic economy. It allows humans to trust agents more, and because of that, it will also allow agents to also trust each other more. And so I think maybe adding restaking crypto economic guarantees to agents and their resources can kind of help facilitate this economy. David, can I ask a dumb question to you?

Starting point is 01:02:39 Sure. So if these agents run or are tied to eigenlayer Avess, right? And in my understanding, eigenlayer, very Ethereum-based, obviously, because it's restaking ETH, these agents are going to be cross-chain in my assumption, right? Does this affect that underlying mechanism in any way, do you think? Like, what happens if an agent, you know, transacts with Solana? Yeah, yeah, yeah. What if it does something on Solana or another L-2, you know? Yeah, I don't, I don't, that ought not matter, because really if you can create a proof, if you can prove that there was cheating done, it doesn't not matter where the cheating happened.

Starting point is 01:03:19 We call this in Aguilayer and word verbiage, you call this an intersubjective fault and what that means. Remember the intersubjectivity. Yeah, yeah. So, so long as it's intersubjective as in multiple humans can all look at the thing and agree on a truth about it. It doesn't matter where that event happened. the only reason, the only thing that Eugenler is actually using is cryptoeconomic stake. And so it's just using Ethereum for its ETH and for its Eth to be staked. And so if you lie somewhere of an agent, you know, cheats by claiming to use off-chain infra in one way and then it uses it in a different way that it promised not to, well, then

Starting point is 01:03:59 your stake gets slashed. The only thing that matters is that there's something, there's a bond that's slashable. Got it. That makes sense. Yeah. Yeah. Yeah. All right, Ejazz, that's my, that's my brand. I'm going to give you back the driver's seat. That was a good. I like you digging the steering wheel. That was good. It made me think about some things that maybe I haven't explored too much. I need to dig into the whole eigen stuff.

Starting point is 01:04:18 Okay, one last thing to round this out. Take us home. Okay. So I like to end every episode with a future facing trend that we see emerging that might become a bigger thing. And listen, eight times out of ten, we're going to be wrong. But for the two times out of ten that we are right, hopefully, it's going to become something pretty major. Now, the thing that stood out for me this week, David, was or is voice-enabled agents. Now, I put out this tweet that kind of summarizes my thoughts here. I think voice-enabled agents are going to be 100% more addictive to engage with.

Starting point is 01:04:51 But first of all, like, what are you talking about, EJA? Like, what is a voice-enabled agent? In my opinion, it's an agent that you can talk to. The same way that I'm talking to you right now, David. It can understand what you're saying regardless of what language you speak or what accent you have. And it can... Hey, Siri, turn it.

Starting point is 01:05:06 on my lights. Exactly, right. And it can perform actions like that, turning on your lights, or tasks that are much more complex on behalf of you. And it occurred to me that this feature would be way more addictive for a human to engage with than, you know, just typing or writing or, you know, interacting with an agent in some other way, right? So the reason why I think this is important is it kind of puts you at ease, David. You know, like, I use the example I state the example in this tweet that I've started using chat GPT very differently now. I pick up my phone and I'm just talking to it.

Starting point is 01:05:42 Well, I've got my app pods in and it's voice mode. And David, I've noticed that I'm giving it way more information than I normally would if I was typing. If I'm typing, I'm thinking, right? I'm saying, oh, I shouldn't say that or let me rephrase that. When I'm talking, I'm caught unawares. No filter. I'm just no filter.

Starting point is 01:05:58 I'm like, oh, yeah, I'm this and that, right? You could just see the text length of each of my prompts is way higher when I'm speaking to it. And what's interesting about this is, is it catches each individual, human, at their most natural form. So it kind of like it kind of like feeds into, okay, who is EJA, you know? Oh, this is what his voice sounds like. This is the kind of tone that he's expressing.

Starting point is 01:06:19 Maybe I can revert in the same kind of way. And I don't know if anyone's tried out the voice feature on chat chitpit. It's really good, right? It responds almost immediately, right? So the point out. Wait, so one question. So sometimes I use Siri to dictate my text to like some of you. but then also sometimes I write a voice note

Starting point is 01:06:39 and it sends the voice note. So when you're talking to chat, JVT, are you dictating into text or are you sending a voice note? No, no, no, no. I'm talking to it. It's like I'm having a phone call with someone. And the response might be, hmm, it's a good suggestion,

Starting point is 01:06:54 but actually I think you should probably explore A, B, and C. And let's say I say, well, actually, I like option B, but maybe with like an inflection of option C, it responds immediately. There's like no hesitation. There's no like compute loading, analyzing like we see with chat GPT. It just responds seamlessly. It's pretty wild. Relatable? Yeah, yeah. And the point of why I think this is super important is it is relatable. And I think it's a much more engaging form to interact with these agents, right? So, okay, so what crypto projects are even exploring voice enabled agents? And the reason why I'm asking this question is, well, right now we have a bunch of text chatbods, right? But if we want these agents to do more things, we need to be able to. to interact with them in different ways and we also need them to be able to understand

Starting point is 01:07:39 what we're asking for, right? If I'm saying, hey, could you trade this asset for this asset? It's probably going to question, hey, are you sure about that? Okay, this person is unsure about these things where if I'm like, hey, swap two ETH for blah, blah token, they're going to be like, okay, he seems pretty confident.

Starting point is 01:07:57 Like, I'm just saying that there might be some kind of tweaks here, right? So what crypto projects are even exploring voice-enabled agents There's a few that are probably worth mentioning that are still very early stage, but I think are going to be building out some cool stuff in the future. We've mentioned Solgraph, David, on the show before. It's one of, I think it's it's arc. Yeah, it's one of arcs like opening projects on their platform rig. But I want to focus on a feature of what they're building here, which is voice-enabled agents,

Starting point is 01:08:26 right? A16Z, the real one, not AI-16-Z, wrote a really cool thread on why voice is a important. And in crypto, we're focused on text-based interactions, but what if it was voice-enabled, blah, blah, blah. Soulgraph is like kind of centering this as like one of their main features, which I think is super cool and worth paying attention to. Agent Tank, David, is another one. I think if you pull up this tweet here, they mentioned like bringing it up basically in their next product launch, right, where they'll be, I think they're building like a co-pilot or a co-companion, you'll be able to just kind of like seamlessly speak to it. And I think they're going to have like a

Starting point is 01:09:01 demo ready in like the next week or so, which is like super wild and cool. Like we literally might go from like these kind of like tech spots immediately to to something much more, you know, engaging and useful. The final project which I was caught aware of, which I think someone told me about, is this team called Limitus. I don't know too much about this team. I've just seen what they've kind of produced in terms of like demos on Twitter. But they're, you know, in the early stages of building out this product. But, you know, they're enabling voice for this as well. And specifically in this demo that they're using, it's within telegram chats. So, you know, you could be typing about a certain token on telegram, then you could just speak to it and say, hey, could you just ape this token?

Starting point is 01:09:38 Here's the contract address, right? And it can pull it. Lots of ways this can go wrong. I'm not saying it's lots of ways that this can go wrong. But I'm saying we have to figure out those kinks if we want something super intuitive for humans to engage with, right? I bet you, David, you would trust an agent way more if you were just speaking to it. And it sounded of like a human than this like random like code screen that you're looking at on this tweet right now. I think so. I think maybe more, but I'm also extremely wary. I, each as I have never been fished or hacked or exploited.

Starting point is 01:10:14 You better knock on wood wherever you are. My track record is very good. And I'm, and so part of it is because I'm risk averse to like using new technology like this. But nonetheless, I'm sure you saw the Zach XPT threat about how like Coinbase is losing $30 million. 300 million dollars a year or something to like customer fishing attacks. And that's just Coinbase. Like fishing is a problem throughout the entire industry. When I see stuff like this, I see a potential solution to the buggyness and bad

Starting point is 01:10:43 UX of crypto by having AI agents make sure that we don't get fished. But at what cost? But first, like some people are going to lose some money first. Probably. Like it's going to pick their wrong contract address. I'm going to say, hey, chat, do you. Hey Siri, buy this one token, and then she's going to mishear me and buy a different token, and that token is going to be a honeypot.

Starting point is 01:11:05 But it's a very hard challenge, but it solves, it's like two birds with one stone. We solve a very big problem this way. Yeah, I mean, building an open source is hard, right? And I'm guessing, like, some of the centralized companies will come up with something cooler much, like way before, but we'll learn from that, right? And at the end of the day, no pain, no gain. Yeah, that's right. That's right.

Starting point is 01:11:28 Really? 10 episodes in. It's been a pleasure, my man. How you've been? How you, like, reflections 10 weeks in. I feel 10 years older, David. 10 episodes later. My hair is graying.

Starting point is 01:11:39 No, I mean, we, God, 10 episodes? Episode one, we were talking about Goat. Truth Terminal. Goat. Oh, my God. What's happened with Goat? Goat really hasn't been on the scene much.

Starting point is 01:11:52 Goat's taken, like, a huge hit price-wise. And that might be reflective of just, you know, the team not really shipping anything material since then and it's kind of just been branded as a meme coin and fart coin's kind of taken uh the spotlight but yeah not not not too not too well go got farted on yeah yeah got farted on is the summary um but yeah wow we've come such a long way and again 10 episodes ago was uh two and a half months ago november two and a half months ago literally which is just nuts to see how far we have had a bull market top and a bear market bomb in 10 weeks, which is just very typical of crypto,

Starting point is 01:12:35 but super excited about where things are going. All right. Well, here is to 10 more weeks and then 10 more weeks after that. Bankless Nation, especially you people enjoying the AI agent meta. This is what we're focused on. Crypto is risky. Crypto AI is even more risky. You can lose what you put in.

Starting point is 01:12:51 But we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot. See you guys.

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