Bankless - AI, Surveillance, and the Fight for Digital Sovereignty | Near's Illia Polosukhin

Episode Date: June 23, 2026

What happens when powerful AI requires an ID, governments can restrict access by country, and your most private data flows through centralized systems? NEAR co-founder Illia Polosukhin joins David to explain why AI export controls could fracture the internet, how nationalized AI could become a surveillance layer, and why decentralized, user-owned AI may be the only real alternative. They also unpack Ironclaw, confidential inference, private agents, and NEAR’s push to make AI and assets fully sovereign. --- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 🔮POLYMARKET | #1 PREDICTION MARKET https://bankless.cc/polymarket-podcast 🧭OKX | TRADE, EARN, PAY to OKX | 120M+ USERS WORLDWIDE https://app.okx.com/join/USBANKLESS 🦊 METAMASK | DOWNLOAD NOW https://go.metamask.io/BL-Pod-Download 🌐BRIX | EMERGING MARKET YIELD https://bankless.cc/brix 📊BITGET | TOKENIZED STOCKS 2.0 https://bankless.cc/bitget-stocks 🎯THE DEFI REPORT | ONCHAIN INSIGHTS https://thedefireport.io/bankless --- TIMESTAMPS 0:00 Intro 3:47 Pandora’s Box Opens 6:03 AI Meets Government 7:16 Decentralizing the Stack 8:51 Why Ban Fable? 11:18 Internet Balkanization 13:57 KYC for AI? 18:43 Nationalized Models 21:07 Building Private AI 26:30 Agent Marketplace 30:26 User-Owned Alignment 35:28 Winning Against Giants 40:19 Regulation Fuels Crypto 42:24 Global AI Adoption 45:05 Compute Is the Bottleneck 49:00 Enterprise Use Cases 51:39 Confidential TVL Explained 55:25 Full Sovereign Mode --- RESOURCES Illia Polosukhin https://x.com/ilblackdragon Near Protocol https://www.near.org/ --- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

Ilya, last week Anthropic removed access to Fable 5 after the U.S. government issued an export ban. They cited safety concerns about possible jail breaks. Is this the last models that are going to be available to the general public? There are no more models that are coming to me in my clod because the government is saying no. So, I mean, there's a lot here to unpack, right? First, Anthropic released this model and kind of neutered it on a number of dimensions. And everybody was outraged about that because effectively if you asked it about cryptography,

if you asked it about some bioscience, it would fall back to the kind of opus and initially even not very transparently, right? So I think like we get into a stage where there is different parties who are effectively deciding how you can use models, right? And so realistically, this goes back against, you know, some of the fundamental, like, policing the thoughts, not policing the actions.

And so I think, like, you know, I actually predicted that government will start stepping in because, like, they, they kind of feel they need to, even though it's violating some of the fundamental, like, freedom of speech, uh, kind of basis. So, so yeah, I think the, the, we'll start seeing the very strange things and already this is unrolling now where every, like, so there's a few things that are, that are interesting here. One is, anthropic effectively now dictates how you can use this models, right? They also change their privacy policy for the Fable, right, which says, hey, even though, even though you're paying us to not keep your data, we'll keep your data for safety purposes, right? So that was kind of one side of this. Then if you read the reasoning from David Sachs and kind of some of the other folks from the government side, they're like, hey, they said it's super dangerous. We have like a reasonable like a way to use it for effectively finding exploits. Like they didn't patch it.

Now the fact that they also then enacted this export control is a very. kind of obvious strange reaction. It's also now puts every single other government in the world on alert that at any time not just AI, every single internet service

can be shut down. Like if you think of it right now, like if you take your phone out of their pocket, it runs on a lot of services that are provided by US. And if government in export control on any of them,

it's not just it can be shut down like for your country it's also like you can shut down everything like you can shut down everything because it's also an internet hard like if you're as a US citizen go abroad like you know did you give your phone

to somebody else like how are they going to detect that right so it's a very strange precedent honestly for effect to the internet because it kind of again violates the whole premise that the internet is borrow us So I think that that was a very strange action to like use that methodology.

Even if they were kind of trying to like, hey, you guys should fix this problem, right, that you said yourself is, you know, hey, security and safety is a big deal. So now going back to the models, I think the Pandora box is open. I think people who are, I think like obviously, you know, misses came out, but it was only like available to a few parties but we in crypto saw hack after hack after hack. It wasn't because people were using myths. It was because the models are there.

A lot of them are open source now or open weights. You can put them in a right harness where you effectively inspect, you know, every line for invariance for all those properties and you can find run abilities. Like this is happening right now. The obviously like, I mean from kind of experiments and from what I heard of people,

Fable is like a good step forward on capabilities. But I really believe, you know, it's like whatever, four minute mile, right? As soon as one party can do it, right? Everybody else kind of like pulls behind it. And a lot of it is just like how much compute you can put behind it to really keep like reinforcement learning and update.

So I think like to your point, is this the last model? able to access, I think we will have this level of a model from open source one or another within next three to six months, right? We just saw JLM52 came out at least like from, you know, benchmarks and course re-usage. It looks kind of like 4.7. So like one generation down from Opus. So still still kind of couple months behind. But like this is already something that, you know, two months ago was actually like, hey, this is a great part. So I think like Pandora's box is open.

This intelligence at scale is coming. I think we as crypto actually always thought in this way where we assume there is somebody very intelligent on the other side who has tried to break in. The rest of the world hasn't built like that. And so I think this mindset of effect to like, hey, we have like a government adversary who is equipped with potentially quantum computers

trying to break us, we need to kind of apply that across the society, right? I've talked about this, like I call it, dedossing the government, right? Like right now, government is not designed to actually withstand somebody who has, you know, intelligence and immense amount of patience, right?

And it's affixable by effectively having a eye on the other side, right, to also respond to this. And like some of the services are doing, Like FDA, for example, getting so much filings and the filings are so detailed that they're now using AI to analyze the findings before any, like, experts come in. Because, like, it's just like the amount of content and context is exploding on both sides. So we just need to keep, like, ramping up and equipping government and services and kind of whizbed better, better tools and start using some of the more fundamental solutions. Like, for code, we need for modification, right? There's no way around it. like, you know, otherwise you can't and mouse, right?

The better model will always find issues that the previous model didn't find. If you spend more compute, you'll find more things. If you spend it more, you know, intelligently in a proper harness, you'll find more things, right? So you need a more fundamental, like, hey, this is actually mathematically proven. So I think like models are coming. I think the expert control is honestly was more of a really bad precedent that now I'm going to activate actually

even more AI development outside of US now like I mean I've heard at least multiple countries where people like hey we should have our own sovereign lab right that you know is able to do this and they will allocate capital to do this compute etc which is by the way good for crypto for when you know we have projects doing decentralized training we have projects trying to kind of facilitate that.

I think those as well will be, like before they're kind of like, hey, we have open source models. Why do we need this? Now it's like, well, what if we don't have? Now we need actually something that is decentralized that is able to extend it. And then at the same time,

we need to assume everybody's equipped with all the knowledge of the world and advanced intelligence. We should be able to build the society that kind of has that in and not please the thoughts, like not police what you're thinking and what you're asking,

but what actions you, you know, you're doing. So why did the government actually decide to put an export control on it? Like, what does, how does that benefit them? Because do they just want access to it before the rest of the world, kind of like how mythos was given to a select group of insiders,

call them elites? So the government needs to have the tools before everyone else. because certainly the government knows that all the other models in the world are also going to eventually become very, very powerful just like Fable, just like Mithos. What's the government's strategy here?

I mean, obviously, I'm not... Yeah, maybe you're not the right person to ask about the government. I mean, I'm not sure there's like a very clear strategy. I think it was... Like, that's what I'm saying. It's felt a little bit, like poor game theory poor game theory but also like like again effectively Anthropic been saying we're pro safety and then when they have like when there's like look

there is a safety problem you should fix it they haven't right so like I think that that is a narrative violation for Entropic and so maybe that was kind of reaction to that again this is like us guessing and and you know based on what what sounds like the folks wrote on Twitter. I think, like, again, from perspective of, like, maintaining U.S. as, like, the main technology exporter, this is a really bad precedent.

Because effectively, like, now, if I, again, if I'm a government or a kind of nation that is not U.S., like I literally cannot rely on the technologies. Right. this puts up walls between the United States and every other country ally or enemy alike, it doesn't matter.

It's just like, okay, we have this super powerful technology that we could share, but we choose not to. Exactly, yeah. So this is where like, and then again, this is not even for a super powerful technology. Like they can shut down maps, for example, Google Maps and Apple Maps tomorrow. And now, like, everybody's everywhere.

I don't want to catastrophize this, but in Russia, we're saying increasing, censorship of the internet. In Iran, the internet has literally just been off for almost three months now. China has its own version of the internet. Is what you're saying with the government turning off fable, like turning off a specific service of the internet, it's on that spectrum. It's not as crazy as Iran turning off the whole internet, but it's just like, oh, the United States government is turning off a little piece of the internet. And that's the precedent that you're worried about. Correct. Yeah, yeah. It's turning off a piece of internet, which means,

means like what stops them from doing this again and again from even doing this even further to further pieces of the internet. And again, I think, I mean, the, I mean, obviously technologies we've been building in Web 3 are resilient a lot of this, right? And kind of been built to withstand this. And so this is obviously an interesting time.

I mean, the one way I kind of draw a parallel here is now like a centralized AI is becoming like fiat like every government will want to have their own and then you still need like a decentralized you know everybody's tapping into it the internet just kind of becomes balkanized

as like you have the USA internet for USA citizens you have Germany internet for German citizens is that where you think this goes I mean I not if we can help it right again I think like we've or at least that's where the governments are pushing it.

That's what the government is. This may happen. Like, I mean, if you are in UK, for example, you have a very different internet. Like,

I remember opening up YouTube with VPN and it was out and, like, I forgot to turn it on. And, like, I saw completely different stuff, right?

Like, half of the stuff I usually watch, which is some of the US, like daily shows and stuff, is banned in UK. Huh. Right? And it's like,

uh, or like the specific episode was banned or something, right? Like, you know, like there's things that they're banning on Google search. Like, people don't actually speak,

but there's actually a lot of, like, censorship and few other countries that kind of goes unnoticed. And obviously, UK is doubling down on some of the, like, you know, hey, we don't want children. Like, the problem is, like, you're effectively prescribing how, like, parents now should be parenting. And it's like, I maybe agree with the premise that, like, children shouldn't use social media until 1314.

but I don't know like government prescribing that is not a way to do this right there is parents who should be enforcing that on their children and kind of explaining to the children why this is not the right thing to do and and in enforcing that because I've been having a lot of these conversations about the same thing myself like yeah I think we should not have kids under 16 on social media social media is just like it's it's not ready their brains aren't ready for it but if we implemented that as a country, that would mean that we would require internet-enabled devices to have K-Y-C. And that's not what I want. I don't want that. And so, having, like, banning teenagers and younger from the internet requires K-Y-Cing everyone. And that doesn't seem correct either. One fear that I have is that the AI labs are forced to collect K-YC information. And that's not the blanket internet, but it's just like the most powerful corner of the internet.

What do you think is the odds that like open AI, Anthropic, X-A-I are forced to K-Y-C their users? I mean, I think like if this expert control stands, right, that kind of will be a requirement because how else they're going to be able to actually... Because right now it's brand for everyone, right? By saying, hey, it's only available to you as citizens, you affect you like, well, on internet, you know, there may be a cat on the other side, like, how do you know?

Right. So unless you really, yeah, KYC and not. And it's going to be like KYC, which you need to re-verify all the time, right? Because obviously I can like, you know, you can KYC for me and now I have access, right? So it's, this may happen. I mean, it's going to be great for decentralized AI, honestly.

But I think, yeah, this is a very strange, again, kind of expected. Like I'm fully much expected like full nationalization. AI Labs because they are creating a very, like AI creates a massive disruption to how governments work, to how kind of societies work. And instead of figuring out how to adopt society, the easy way is to say, no, no, wait, let us, let us stop everything. And, you know, and again, I think there was this petition like two years ago, right, hey, we should

slow down the AI, right? And there was a bunch of people signed it, like, including Elon Musk, right, I think. Very famous people, like Max Techmark, Yvall Noah Harari, I think, signed it, like a bunch of people signed it, yeah. Yeah. I mean, the old mask, I think, was the most fun because

he then went and started XAI, right? Yeah. But this is, this is what, like, I looked at this, I'm like, guys, this is, this makes no sense, right? You're trying to stop effectively, like, something that's already out there, right? This is, this doesn't work like that. Like, we should be thinking,

what is that substrate on which we can actually build to, with the assumption that everybody has. Like, again, nobody wants, you know, bioweapons to be designed and built. To be clear, like, right now it is possible to do with, you know, whatever, with 7B model on my local laptop, right? It's not like it wasn't possible. The hard part is actually, you know, materializing it, creating the substances are, exported by specific companies that actually require like physical production, right?

And so now are those properly controlled? Does the law enforcement has a tooling to actually understand when, you know, who is buying which like substances like this? Like that's a level where you should be enforcing, right? Not on like, hey, I'm trying to figure out how like molecular biology works and, you know, what happens when two molecules collide inside, you know, an A cell, right? Because like maybe I'm going to come up with a cure for something, right?

Like that's like, there's just like the levels are so make no sense. And so to your point, yeah, it's very much similar to already censorship and where you effectively assume that people are not able to, like the way to think about it is are you giving people the sovereignty and autonomy to make decisions and or you're enforcing these decisions on them, right? Which, you know, we've historically, I mean, we know historically doesn't work, right? It's like it works up to a level and then kind of cracks.

And so, yeah, I think this is, this is, it's an interesting time. It validates everything that, like, Web 3 has been building. And at the same time, it, I mean, now it's way easier to, like, explain this to people, right? It's like, oh, you know, why are we building what we're building? Because, like, well, did you like the model yesterday? What about today, right?

Right, right, right, right. So playing it forward and just kind of like running on the assumption that the AI labs do get nationalized. And you can listen to what Dario has said and Sam Altman has said. It's like, oh, yeah, like AI is going to be more powerful, as powerful as nuclear weapons. If the AI leaders say those things, well, the government's like, you guys are building something more powerful than nuclear weapons,

that's a national security concern or going to nationalize you. There's probably some steps, some gymnastics to do to get from A to B, but assuming we just get to the point where they are nationalized, the way that I see, me as an individual, as a consumer, maybe I just want access to the most powerful models. Now they're nationalized by the government, and I have to K-Y-C to get them. Maybe I don't want to do that.

And then there is a growing, in order to access the more powerful model. There's a growing number of like borderless technologies. You named one, a VPN. You were in London. You wanted access to a more powerful version of YouTube by turning on your VPN so you could get, so you could get access to YouTube.

I'm calling that like a borderless technology, one that like doesn't really pay attention to nation state boundaries. How does Web 3, what you're building at near, Ironcloth, how does that, all of that borderless technology give me access to the world's most powerful models so that I don't have to KYC with the government. Yeah, so very much, like when you KYC as well, if this is government,

they will also store everything you do, right? Because, you know, what if you are a bad actor which should be able to, like, analyze everything you've done ever in your life, right? And again, the flip, to be clear, like I actually believe AI will be not just everywhere, it will be everything. like the operating system will run on AI. I open up Brave browser, my browser,

and it's not a web page. It's like my AI waiting for me to ask it something. Yeah, it's your Leo there powered by, well, in case of Brave, powered by Neo-AI. But yeah, I mean, effectively, you will be using AI as the interface to information and the way to communicate with others, right? And so in that world, right, yes.

Like if it's nationalized, all government, it's way worse than like Prism and kind of, because effectively, this is not just metadata. They will have literally every conversation, every interaction, every therapy session, every, you know, kind of meeting that you've had, like all of that information will be available in one place. And so that's kind of the bad scenario from my perspective, right, because it is 1984, literally, right? because they can also, if you change the system prompt, you can also change what people see and how make decisions right away. And like it's a very subtle, right? It's not visible to the user. So what we've been building is kind of like how do we actually decentralize like AI?

And we started very much in the inference place where it's like assuming the model, let's say open weight model exists. How do we bring this to everyone in such a way that? Indeed, you don't need to KYC. Nobody can see what you're using it for, right? So all the data belongs to you. And it should be decentralized and accessible, right? So, you know, if one country shuts down, et cetera,

like we should have redundancy. We should be able to bring partners with compute across the world. And there's that interesting efficiencies coming from this because, you know, if you're sitting in U.S., probably, you know, in Europe, they already went to sleep. They're using actually less compute right now, so you can tap in into that compute. So you can actually start like,

I call sitting the bubbles, right? Like utilizing compute better. Load balancing when one part of the world is asleep and they're not using compute, you guys redirect compute to the place that has slack in the system. Correct, yeah. So that's kind of where nearly I started. And then as part of this, we're like,

okay, well, now that I have confidential inference, and confidential AI, I want to give it more context. I want to give it my meeting notes, my notion, my, you know, all kind of my email, my financial transactions. And I'm like, do I trust the current agents to actually not screw it up, right? Not leak it, not say information. My cloud co-work agent, right, which has access to my desktop, has access to my files. But that's the thing, that's the an arc.

If Claude, if Anthropic is nationalized by the government, Claude Co-work on my desktop is a government application file agent. It's literally a government agent in my computer that I installed. Yeah, that can actually read every of your file. I can read everything. Yeah, but even before, like, the thing is like, even before any kind of like government or anything, like right now there's agents,

they accidentally read all your private keys and secrets and passwords and sends them to their Anthropic, right? So somewhere in the logs of Anthropic, if you're using all your keys, all your information, all your OAS tokens, like all of that gets like accidentally. My tax documents, my healthcare records, like even all the other stuff,

this stuff that like Normies might be more sensitive to. Yeah. And so that was kind of the idea behind Ironclays, like, okay, well, given the consent, like we won confidential and like very far, viable solution. We need a harness that also brings this properties and you can trust with your data and with your actions, right?

And so kind of Iron Clough really layers on on top of Near AI. You can use it with other providers, to be clear. But we're optimizing for that, like, hey, you have a private agent that's on your side that is not going to go and like, you know, do something stupid. They're not going to send any data, right? no telemetry that you don't want, and it uses confidential inference, so you kind of have the full stack verifiable.

And for people who actually been using this, like there's this feeling of kind of freedom that comes with it. Because like right now, if you're actually a technical person and you're on internet, you actually have a feeling that you've been surveyed all the time. There's actually no, like the way this compared is like when you sit in a Tesla, there's like a bunch cameras pointing at you,

and they're actually streaming all of this, right, because they're collecting all the data. Yeah. And so like, you're not doing anything wrong there, but like, you know, like now somebody has a footage of you, whatever, picking your nose, right? Like, like, that's kind of versus like you're driving in a, you know, kind of more traditional car, which doesn't have any of this.

And, you know, you don't have that kind of overarching feeling of you. So that's the same thing. It's like right now, when you use centralized providers, all the data goes there. They may keep it. They may not keep it. If you are on a subscription plan, they are keeping it for sure.

And all of that goes somewhere, right? Again, it doesn't matter like what will happen with it, but like it exists. Now, we also, you know, we can talk about quantum, like all of the information going on the wire, right? And like encrypted, you know, where's quantum make it decryptive?

hit so like again there's like additional problems that come from that and so like with with this approach you know everything's private everything is kind of stays on your behalf and so now you don't have that kind of like hey should I should I not ask this question right like hey you know I was trying to think through like hey whatever uh like a friend of mine is doing MRNA startup and I want to research a little bit and I'm like should I ask chat GPT about it because like I actually have some friends who got banned from chatyptu for asking questions right and so like should ask this question i got to get banned and i cannot access it anymore right versus here i can just ask question you know okay like i learned something good you know so that that's the kind of freedom that

like we offering really and then from there you know starting to partner like how do we build better models maybe first how do we optimize them how do we uh you know you can like fine tune models to make them smarter in the specific use cases. And so this brings to actually another idea we've been working on, which is agent marketplace, because, like, yes, your agent can do a lot already, and it can be smart.

But it doesn't always have all the contacts. It may be actually going to be very expensive for it to do something. And so the idea of agent marketplace is actually finding the agent that specializes in that. And again, you probably, like, when you're hiring someone, like in your company, you're giving them a lot of context,

you're giving them a lot of access. And, you know, if it's a contractor, like, it's harder and, like, if it's, you know, upwork, it's even harder to, like, you need to structure, et cetera. With agents right now, like, if you're hiring some agentic company on another side, again, you have the same problem as, like, is their upset good? Are they going to, like, leak my data?

If I give them access to my, like, sales, CRM, like, are they able to, like, are they going to look at my leads, et cetera, right? So what we're offering, because we have now this confidentiality and verifiableity tech, you can actually hire an agent that you know runs verifiable and confidentially that doesn't, not going to, you know, do anything with your data.

And you can give it access to your emails, to your CRM, to your notion, whatever. And so there can be a specialized agent, you know, better prompts, maybe fine-tuned model, access to some third-party data to then do actions. with your data as well, fully verifiable as well. So this is kind of like how this starts to scale as well, beyond just a single person, like what I call a multiplayer world,

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The link is in the show notes to learn more, not investment advice, not available in New York or Texas. You talk a lot about user-owned AI. A lot of what I'm hearing, which is, I think, what you're saying right now, that's what you're illustrating. What about, I mean, this is maybe just is the same thing, but just like everything that you are doing with the checks and like running confidential inference is building like user aligned AI as in you're taking the alignment

that any part of a AI tech stack might have with any other entity and you're cutting that off. And so you're only allowing any sort of like AI agent to respond to the, will and demand of the user. And so in addition to it being like decentralized and on the blockchain, it's also seemingly just like you're trying to optimize

for alignment here. I'm seeing a lot of alignment talk out of you. Yeah. So I actually define user ownership as privacy, alignment, and kind of this like verifiability neutrality, right? So yeah, to me, the alignment, like I have a, I mean, in AI, AI land controversial take that you cannot actually do a lot like a general alignment.

because we're not aligned. Like people are not aligned with each other, right? You know, countries not align with each other. You can only do alignment with a single person. Right? Like you can align a model or system to be on behalf of a single person or it's aligned to be on behalf of a company, right? Right.

Generate more money for the company. Those are two options. Everything else is kind of lip service. I think actually, I mean, again, speculating, I don't know, but it feels why people keep leaving sounds as labs, who are responsible for alignment and safety is to big part because of this. Like they can't, I mean, if I, again,

this is complete speculation, but it's like, it's just like impossible job because there's no, there's no codified properties of alignment for a broader society because we're, we are not aligned, right? Things that are, you know, some things that are like even.

Alignment is a meme. Yeah, alignment is a meme. Yeah, well, that's a whole, that's a whole different. conversation. But yeah, so I think like, I mean, you know, the way you want this model is to work. I mean, this is not my analogy, but it's like your mom, right? You want it to be on your side always, right?

It doesn't matter what you do. It's always on your side. But at the same time, it's critical, it can be critically pushing you back when you are trying to do something stupid, right? Right. And so like you want that level of alignment where it's on your side, it's aligned with your interests, it's trying to make you a better person. you know, more economically successful.

And at the same time, it's able to like, no, no, no, this is not a good idea and this is why, right? Like, it's able to shape and really, but coming from a side that it's on your side, right? Right now, you either have like a sycophony, right? It's like, everything you say is an amazing idea. Or, again, we don't even know how much of the tuning happening is to generate more revenue for the company, right? So, I mean, I can tell you kind of from my experience at Google, like, the economic incentives kick in. And so what does this mean? When you're launching a new system at Google, you are so-called A-B testing if it makes more money.

And so you naturally, as engineers, start optimizing for what will produce more money for the company, just because that's how you launch new products. That's how you get promoted. And like what makes more money for the company doesn't always mean. it's better product for the user. It doesn't mean it's always better for the user success, right? It may mean like you give them half the answer and they need to search more so they need to see more ads, right?

Like that's, you know, there's kind of like, there's an inflection point where it was actually a better product and then at some point it started becoming less of a better product and more, how do we make more money from the same people? And so I don't think actually AI is still, is there yet, to be clear. but as they're exploring how to put ads in it, as they're exploring how to kind of cross-sell, etc., those are types of properties that also will come through.

And this is what we explicitly against, like, hey, this should be your product, your system. And I actually think uniquely Web 3 is the substrate to build that, right? Because if you think of Open AI, they started as a foundation, and they ended up being kind of for-profit company that starts to optimize for those things because they needed to do capital formation

and they couldn't do it through foundation. And we actually, in the three, have foundations which have a capital formation system through a token to create that where you have alignment with a user. The token holders are the users. And so you have that alignment. Like we actually solved the problem that, you know, OpenEi-I should have launched a token effectively

and then they would have been on the, on the right path. Right. So, I want to ask you how you win this game, how NIR and the user-owned AI world wins this game

because I see a lot of like nobility in, you know, private AI, user-owned AI. It makes sense. Like it's private. It's aligned with me. It's probably good for the world. We don't,

we're taking, you know, power out of the hands of the elites. But you're going up against, you know, just simply giving your, driver's license over to Anthropics so you can access the world's most powerful model in this sexy like interface that is, you know, optimized by billions of dollars of Silicon Valley

Capital in order to make the best product possible. And so like it's kind of just like, you know, the Ethereum versus Robin Hood thing. Like what am I going to go do by tokenize SpaceX via onto on Unoswap on Ethereum with my Ethereum wallet? Or am I just going to open up Robin Hood? and I'm just going to buy SpaceX IPO on Robin Hood and as a B, custodial. And so you're going up against the, you know, the gargantuanes and you're doing it inside of a context that's like cumbersome and difficult

and decentralized and one way that this manifests is like, well, we literally have Fable banned. And Fable's not even out. And so, you know, maybe it's great that NIR can aggregate a bunch of open source models and you optimize for all these different models, and you can have the power of all of them, but they're still not fable.

So how do you just compete with the constraints of the environment that you're in and the principles that you have trying to go up against like the most useful product in the world? Why will your products be better? Yeah, so I mean, it's a great question and this indeed always been a question for crypto, right? Why is this a better product?

And I think the answer I always came back to was twofold. one was we do need to first build a better product, right? As you said, you know, buying under and univiswap with your metamask is not, right? I mean, on a crypto side, like we launched near dot com and you can, you know, buy all the assets from a single place with a face ID. Now that's actually, you know, and it's confidential. You don't need to think about like who sees your balances, et cetera. Like that now is one-to-one comparable to kind of Robin Hood experience. I will say I was using neer.com for the first time

and I was just cleaning up a bunch of dust from some very old wallets that I had, like 20 wallets that had somewhere between, like actually more money than I thought, like somewhere between $20 and one wallet to $2,000 and another wallet. And I was sending everything to my near wallet because near can literally receive everything. So I will give you points and kudos for that. It was nice that like once I had assets in my near wallet

that I could do the pass key on my browser or face ID on my phone. So I never had to press done through my ledger button 17 times to approve a transaction. And it was warning me that it couldn't read to me anyways. And so I will give you kudos and points for that. That U.S. did seem very solid. Yeah.

So that's always been the thing is like, how do we create a U.S. And by the way, for Ledger, we'll have sessions as well. So you'll approve once a session with like guardrails and then you'll be able to, within those garth rails, use a bunch of transactions. Cool. Because like, I, yeah.

I think universal, everyone knows us like that you click the right button on the ledger four times and then you click them both so you can improve the transaction. Yeah. Well, near at least like you can actually read what you're signing. But yeah, that's the. But anyway, like through the broader point, like we need to build better products. Like that's the I think like the bar in crypto being very low. And indeed I think we have we have a need to do this. to create a product that are truly accessible and really simplifying.

At the same time, right, I mean, again, the benefit of NIR.com now compared to Robin Hood is you don't need KYC, it is accessible through all chains. You know, like it's actually a better product than a centralized service provider product because it's accessible everywhere. It's, you know, you can access all those things. It's always with you anywhere. right so like and if this front then stops working you can access it through any other front end by the way because like at the end it's a pass key into your into your near account right that holds assets so like it's all protocol

like i actually have like my own like cloud build me a custom front end uh from the same APIs right just just to kind of check that so i think like we can build better products and results right and then yeah the more restrictions they add actually the better pro the better our product becomes without having it. I think on the model... Is near bullish, the more restrictive governments become? I mean, in a way, yes. Like, it's always been true for blockchain, right?

It's like the more restrictive the government, I mean, the harder it is to get a bank account, the harder it is to transfer money, the more bullish blockchain becomes. I think it's going to be kind of very similar arc that happened in fintech, right? You know, crypto, like, first nobody cared. Then there was like, we'll ban things and make things complicated.

And so it kind of strived on a ridge. And then, okay, we should adopt this because actually it's just the better rails. And I think, I actually think if they don't want to get nationalized, they will become decentralized. Almost, right? Because, like, if you have a decentralized backbone, like you can still be shipping like research and models and and even safety rules right like I do think there's this need for some safety rules it just needs to be very explicit like they're

bundled in and everybody can see what they are and so we can actually have like on conventional inference you can have a private model like model weights that are not open weight but they need to you need a hash you need like to know what they are and you can apply additional restrictions if you want. Like, again, if a developer wants to launch a model, they should be able to do it with restrictions they want. Like, again, this is their freedom as well. We cannot encourage on that.

But they should be known what those restrictions are. Like, I'm as a consumer, should be like, hey, this model doesn't allow me to, you know, explore biotech. Cool, I'll use something else. So I think like the, as the technology is mature in decentralized world, I think there will be adoption as well.

It will, you know, just naturally because, like, this is a way for them to also offset their risks and potentially tap in into more markets that, you know, they're going to be cut out if they continue on this route. Do you think one thing that we're noticing is that stable coins got adopted in developing countries sooner than developed countries. Inside of developed countries, Cablecoins is like margin on Avey, and that's how we use stable coins.

But developing countries use stable coins for payments. And like stable coin adoption in Africa, no one pushed that. Africa just started using them. And I could imagine maybe something similar happens with decentralized AI and also just like AI model aggregators where all of the different models are like pretty cost effective and not that much worse than the top models, the frontier models. And so you get like 90 plus percent of the strength of the model for a 90 plus percent discount.

And if you can, and if governments in the first world are being restrictive in like putting up walls, do you think it's possible that developing countries or just like the global south, for example, or just people just away from Silicon Valley are actually adopters of these decentralized. AI platforms or products, simply because the cost is better. What do you think about that? So I think the cost is actually true even for Silicon Valley, right? I mean, we saw Uber saying that, like, hey, they, like, in fact, they were limiting

how much the, like, Anthropic and Cloud can people use. Microsoft canceled their Cloud subscription, right, because they spent, like, a billion dollars. And so I think this is a more, like, a, a, like, a. the months, right? I think this is a more fundamental that because this is actually cheaper, fundamentally cheaper. And indeed, the gap is there, right? I don't want to say it's not right now.

But between eigen hardness and indeed maybe routing to multiple models, you can actually achieve pretty good results. and we had open router, obviously showed some interesting results as well on this. You can actually get pretty far. You know, your agent harness can be like, hey, you know, try a cheaper model. Like if the answer is not that, like, because it's iterating, right, it can be like more things that's running on background,

maybe running at like batch API. Like there's like a lot of tricks you can do to make things cheaper. I do feel there is a, yeah, just huge opportunity. across the board. Again, this comes back down to really good product and honestly compute. I think the bottleneck right now is actually compute. What's happening right now is hyperscalers, right?

Like three, four companies, effectively, buying out all the new compute that's been built next year or even year after in some cases. So there is like very limited room for tax tapping into more compute. There's interesting, again, experiments around how to tap in into Apple devices and some other things, which are pretty powerful and really aggregate their compute. And so, like, you know, we're experimenting on some of that as well.

I think, like, yeah, the compute is, like, even though we're aggregating, like, you know, you need something to aggregate, right? If everything is owned by Microsoft Google, Open AI, right? then there's nothing to aggregate much. But I do think the cost, yeah, the cost differential is so dramatic that for a lot of cases, people will start switching now because, like, just spend is going to the roof, right?

The flip side of Anthropics revenue being parabolic is that everybody company spend on Anthropic is parabolic, right? Right, right. Yeah. And so, and again, as people are starting to, like, give it more access and more production, like more of your IP and more of how you're making decisions are really, like if you're a company, right, and now the way the decisions are being made is effectively flowing through AI, you don't want that, like, you know, if they're training on that data, they effectively will replicate your business in AI, right?

So confidentiality becomes also more valuable, more important, and the safety of the hardness, right, the fact that like, if it's non-technical people, you know, doing operations and financial operations, you want to make sure that that is like really, really tight. In 2024, emerging markets generated over $115 billion in annual yield for investors. with yields ranging between 10 to 40%. These are some of the highest, most persistent yields on Earth. The problem, Defi can't access them.

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or find a link in the show notes. There's a new episode waiting for you now. So there's both retail individual adoption of user-owned AI, and then there's also institutional, like entity corporation adoption of the same thing. Like, you could imagine it would be corporate rules

for a specific corporation, just like, hey, We are doing all of the, we're doing Iron Claw, we're doing the decentralized AI platforms because of all the same reasons that we've been talking about in the podcast just being aligned with the corporation. Where are you focused on for growth?

Like over the next six months, how does NIR grow all of it as products, it grows Iron Claw, it grows confidential inference, all of the private and self-users-owned AI stack? Where do you see like the next marginal user coming from? Yeah, so we're targeting kind of this like overlap between like small and medium enterprise and like prosumer. Because I mean, big companies just move slowly, right?

And it's also hard for them to like redo their organization to use these technologies. The general consumer indeed just doesn't care, right? like, you know, your mom probably, like, is not using it too much, or at least my mom is not using it too much, right, beyond asking, like, beyond like a, you know, fancy at Google. And so there's, like, not as much of the, of that need. But the people who are running businesses, building things, scaling initiatives, you know,

like we call them kind of sovereign individuals, like people who actually, like, have agency and doing things, right? They're either, like, a prosumer of an organization or, you know, somebody in organization who wants to implement it kind of broader, that in organizations that can move quicker. So those are really the kind of target audience. And again, because like finance, legal, medical,

like those are these cases where especially privacy is important, those are kind of the main target as well. Obviously, you know, you can sign up and use it for anything. But like crypto, fintech, medical, legal, those areas where you especially need privacy because, like, you know, chat GPT came out and said, like, no, like, if you put any information in chat GPT, it's not privilege, even if you were a lawyer, right?

Obviously, medical data, like, all over the place. So, like, those are really use cases where you need these systems. There's a, since I got you here, as we wrap up earlier, there's a tweet that I want you to interpret for me because I'm seeing more and more of this stuff. This is from the Near Protocol Twitter is saying Daily Confidential TVL on Near Intents is picking up and we're just looking at a graph going up into the right

starting from February when you guys launched Confidential TVL. What is this? What does it mean to have confidential TVL on Near Intense? What is actually being locked up here? Can you help me understand this chart? Yeah, yeah. So what we launched is effectively maybe like stepping back

we launched a private chart right so this is a chart of NIR where everything that's happening there like you cannot just go into explore and see how much balance everybody had or what transaction people said you need to have your viewing key and then you can see your stuff and you can still run smart contracts

you can still run services inside that private chart then we launched intense in that and kind of plugged it in with the rest of it And then near.com is kind of the first product using that. And we actually have few now partners building on top of the same API. So you can, again, your balance on near.com will show up on other places. And so now what is like how do you get privacy confidentiality is to have funds at rest in a confidential place.

Right. Because like if you just, you know, if you send money through confidential chart and right away somewhere else, well, that's very much truckable. You can map that, right. Yeah, you can map that. Now, it's still useful in some cases, so I don't want to just completely discourages, but that doesn't give you true privacy. So this is actually a balance of people

who put their assets into private chart and keeping it there. Oh, this is your privacy set. Yeah, this is a privacy set. This is like the Zcash percentage shielded, except a percentage. It's just like a total, like total volume, total assets.

Yeah, total amount. And the cool thing is this is different assets, right? There's NIR, there's Z-Cash, there's UDC, UDT, Bitcoin. There's some Sui, some whatever, Salana, right? But can't U.S.DC be held across many chains? So how does this account for that? So we, like whenever you deposit UDC here, it converts into like a near-Native U-SDC.

Okay, okay, okay. And same thing with Z-Cash with ZEC? So Zach is we have our OmniBridge, that effectively holds at a mere. This is also the same Zcash brought to Salana and like, so everything we're out, like we have the kind of our Omnubridge deck to that. And so yeah, so this is all of the assets

of different, different assets in one place. And importantly, yeah, because you can also trade privately, this whole set actually fits, right? Because normally you would have per asset, right? Like if you, you know, Zcash, you only give Zach. They're not a cash. Every pool was a separate asset. This is you come in and you can trade.

So you know, maybe you came in with DCC, but you're actually holding Solana. Maybe you, you know, bought a bunch of NIR. So like that whole whole set effectively is an inability for everyone. And this is just one, in order to get privacy, you can't have privacy in one specific pocket. You kind of need privacy everywhere for the privacy to be real. And what I see NIR doing is they're just like building private puzzle pieces.

And for agents and for humans who want to transact privately on the internet, maybe you can use eCash, but not everyone wants to use Zcash. Maybe they want to use USC. Maybe they want to use dollars. Maybe agents want privacy. This is how we transact privately on the internet. Well, it's a vertical stack, right? From blockchain to AI, right?

Venice was a good example, right? You can pay with VV and DM for your Venice product, right? And so we have VVV on confidential intent, so you can buy it confidentially, and then you can use Venice, which actually use, like, in the into encrypted mode, uses near AI inference. So you can kind of have like the full stacks through Venice as like one of the products. And so that's idea is like as these products coming together, you get like full sovereign mode where everything's confidential, everything's yours,

your data, your assets, your choice. Full sovereign mode. I like that. I like that a lot. Uh, uh, Ilya, it's been pretty cool to watch near

do some of these things. Uh, I've been pretty excited to see what, what you guys have done. Uh, it just seems to be you guys are building for the, the current age that we are in. Uh,

and so as governments get more restrictive, and as they clamp down and ask me to KYC so I can have more powerful bottles, uh, I know that there's near on the other side of that trade. So thank you for doing what you're doing. Thank you for coming on the show today and answering my questions. Uh,

if people are curious, just like, to go down the top of the near rabbit hole, where would they go? I mean, you can start with NIR.org, and then if you're more interesting, nearDi as well, has a bunch of stuff. And then if you want to use NEOGoneer.com

and became confidential today. Become confidential. Yeah, thanks for coming on the show. Bankless Nation, you guys know the deal. Crypto is risky. You can lose what you put in. But this is the frontier. It's not for everyone.

And we're glad you're with us on the Bankless Journey. Thanks a lot.