Unchained - How GenLayer Is Building a Court System for Disputes Between AI Agents

Episode Date: September 7, 2026

Albert Castellana and Arthur Hayes walk through how GenLayer resolves an AI agent's dispute in minutes, for cents, without a single human judge involved. ======================================================== Thank you to our sponsor! ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Visit⁠⁠⁠⁠⁠⁠⁠ 1inch.com⁠⁠⁠⁠⁠⁠⁠ to swap tokenized securities, crypto and more. Simple. Secure. Self-custodial. Whatever asset you’re buying - swap it at⁠⁠⁠⁠⁠⁠⁠ 1inch.com⁠⁠⁠⁠⁠⁠⁠ ======================================================== Every legal system assumes a human sits on the other side of a dispute. Albert Castellana, CEO of GenLayer Labs, is betting that assumption breaks down within the decade, once AI agents start disagreeing with each other faster than any court could keep up. Castellana built the idea after StakeHound, the liquid-staking company he ran before Lido existed, lost $150 million when a custodian misplaced two keys, and he saw how slow and costly the legal system was. He joins Arthur Hayes, CEO of Flop Labs and CIO of Maelstrom, to argue agentic commerce cannot scale without its own dispute layer, since agents cannot be jailed. They cover how GenLayer escalates a dispute to up to 1,500 AI validators for a verdict in minutes, how it compares to Kleros, UMA, and the failed Aragon Court, and why Hayes wants Flop plugged into GenLayer once both go live. If agents cannot go to jail, escrowed money may be the only leverage left. Host: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Laura Shin⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, Host / Unchained Guests: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Arthur Hayes - CEO of Flop Labs and CIO of Maelstrom ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Albert Castellana - Co-Founder and CEO of GenLayer Labs Timestamps 🏛️ 01:20 Albert Castellana on the $150 million custody failure that led him to build GenLayer 🤖 05:20 Why Flop needs GenLayer's dispute layer to make agentic commerce work ⚖️ 07:26 The kinds of disputes AI agents will actually have with each other 📣 13:38 1inch Aqua: See how the shared liquidity platform works at http://unchainedcrypto.com/go/1inch-yt 📜 14:29 How an intelligent contract escrows funds and calls in AI validators 🔗 18:51 Inside GenLayer's architecture: the L2 chain and 1,500 validators 💵 27:21 What an AI verdict actually costs: 50 cents to $100, minutes to hours 🔒 34:30 Why AI agents can't go to jail, so escrow is the only enforcement ⚔️ 40:14 How GenLayer compares to the AAA, Kleros, UMA, and the failed Aragon Court 🕵️ 49:29 Can the validator network be gamed or bought off? 🚀 54:34 What's next for GenLayer's token launch and Flop's Q4 airdrop Learn more about your ad choices. Visit megaphone.fm/adchoices

There's a huge, huge gap in trade finance for basically tons of deals that are not possible just because the legals around it would be so expensive that you cannot really like insurance or like really make it make it a reality. We're trying to make it so that, you know, imagine a small court. So, you know, all these different, you know, claims that normally would be an economical and just trying to get a quick result. Maybe it's not perfect, but it will be good enough that it will allow for many, many more trades to happen. Hi, everyone. Welcome to Unchained, your no hype resource for all things crypto. I'm your host, Laura Shin. Before we dive in, we'll first hear a quick word from the sponsors who make this show possible. This episode is brought to you by 1 inch Aqua, the shared liquidity layer from 1 inch, back multiple liquidity positions with one wallet balance, and keep your tokens in your wallet until a swap fills. See how it works at 1inch.com slash aqua. Today's guests are Arthur Hayes, CEO of Flop Labs and CIO of Mailstrom, and Albert Kustayana, co-founder and CEO of Gen Layer Labs.

Welcome, Arthur and Albert. Hello. Hey, Laura. How's going? Just a heads up for those watching on the live stream that this interview was pre-recorded on Thursday, September 3rd. So Arthur and Albert, you two are here to discuss an interesting new idea for the future agentic economy. It's called Gen Layer. And I know that the backstory to this starts with Albert.

So Albert, can you tell us what gave you the idea to launch GenLayer? Yeah. So maybe as a bit of background. So I got into crypto in 2013, something like this, and I started working on different protocols like NEM, got to like 15 billion market caps, something like this. Radix DLT, the Badger Dow. And eventually I co-founder and CEO this company called Steakound, which was the first liquid staking solution, like a bit before Lido. pretty quickly, $350 million in assets under management in about five months. And then we had to stop the business when our custody solution lost two keys and put $150 million on fire.

So we had to start, you know, looking into the legals of that. We had to, you know, take a step back and think, okay, what do we do here? Like you start talking to lawyers. Everybody wants you to, you know, stop the business and all these things. But what we saw really is that, you know, the legal system is really, really broken. It's very ineffective, very slow, very expensive. It's essentially inaccessible for about 5 billion people. So 5 billion people don't have access to the legal system.

And it's a shame, right? It should be something that's available to everybody that's fair, that's transparent as much as possible and biased, right? And what we saw is that, you know, it's not the case. For example, in Israel you need to pay 1% up front. So somebody loses $150 million, you need to pay $1.5 up front just to initiate a claim, right? And so we started looking into that. It was the same time as the, you know,

ChagbD came out with all these, you know, amazing LLMs. It's insane to see what you can do there. Like you can have a piece of software that can write new code, right? So software that's writing software and that can essentially understand, you know, nuance and, you know, have some common sense. We were totally, totally fascinated by that, right? It's like, what can we do with this, right? It's just insane.

So we started building a couple different frameworks around that. with GBT3 and GPD4, you know, like trying to get agents that would be building, you know, different type of like software and like trying to essentially improve on themselves. But what we saw very quickly is that, well, actually it's not just going to be, you know, them being able to write code or write text, right? It's actually they will be starting to transact with each other very quickly, right? Actually, I remember Arthur that we spoke, you know, about this first time, maybe like two or three years ago, something like this, right?

So it's in a while. you already said like this is going to be a long time from now. I think it's been a while. I actually thought it would be a bit faster. But what we see right now is that there's just so many, you know, like teams working on how to make them transact with each other. Basically every single we see right now is investing on agents like, you know, transacting with each other and commerce existing, right? There's many, you know, like estimations in the tens of trillions of dollars or it's anti-commerce. But the problem that we see here is it's not just being able to move money.

it's actually that when they will start to, you know, like move money and they will start to deal with each other, they will also start to disagree. Right. And so the question that we're proposing is, hey, if, you know, if you have a commerce, like if you want commerce, it's not just to have money. It's also that there needs to be a trust system. There needs to be some sort of like legal system where that happens, right? How do two agents trust each other, right, when they disagree? Yeah. And so that's basically what we've been building for the last three years is essentially like, think about it like a,

a court for the internet, right? So different AI agents that reach, you know, agreement together on subjective terms as essentially as if you were going to a judge, right? But these courts for the internet can deal with things at light speed, basically, right? So like, you know, a claim takes, you know, minutes and, you know, fractions of a dollar. So they can enable completely new types of, of contracts that until now were only, like, limited to humans reviewing that piece of work. And so, Arthur, you just announced that you have, that you have this new venture flop. And obviously, AI agents are kind of your new thing now. And you talked about this idea that you had where, you know, this protocol would be based around a unit of compute.

And that's what a flop would be. So how do you see flop working with GenLayer? So we're not going to achieve any sort of meaningful evaluation for the token itself above just operating a really cool spot market for compute unless we have ejectic commerce that's native to the flop network. And right now, how we're looking at it is, you know, there'll be agents, they'll come to some sort of agreement in a swarm or bilaterally, do some sort of deal. We have a sort of escrow protocol called ATLC that's native to our system. And then as our said, there's going to be disagreements. And then how do you adjudicate those? Now, we really have

thought about that too deeply on our particular protocol because we're more focused on getting Myers on board, validators, making sure that we can actually do proof of useful inference, making sure the AI agents can eat. But I think this is definitely something that's absolutely going to be needed because, of course, if humans disagreed in the agents, have to disagree because they're essentially a derivative of our own sort of proclivities as economic agents. So I think it's something that's definitely warranted. This is why we got involved. I don't even know how long it was that we first spoke about this, and Maelstrom came on board as an advisor.

But obviously, like, this is the time for the build out of the rails for ejectic commerce and, you know, it kind of fits. And I didn't plan it like this. You know, this idea for Flapis kind of came to me a few months ago and we started building. But it's amazing how different folks are working on different pieces of the puzzle to really build the decentralized layer for agents to coordinate. Oh, okay.

I had assumed that you got involved with Jen layer because you were doing flop, but actually you got involved with Gen Layerer and then later you had the idea for Flop. Correct. Oh, oh, okay, that's super interesting. So maybe give examples of like the different kinds of disputes that you guys could see arising between AI agents

that Gen Layer would be called in to address. Right, so, I mean, if you think about it, most of the contracts in the real world are ambiguous, right? You know, we can say, you know, if you do this piece of work for me, then I will pay you, right? So that's normal an agreement, right? You can have some service, a license agreement, whatever it is, right?

And normally what happens is that the disagreement arises not because one of them is bad, but actually just because they disagree, right? It's like, is it professional enough? Yes, no, it's not binary, really, right? It's subjective. And so the problem there is that you need to have a system that can, you know, make it so that it's like repeating the same question multiple times will give you the same answer. The problem is that LLMs don't work like that.

If you ask, you know, chat GBT, you know, is this, is Zelensky wearing a suit or not? It's going to be answering one thing or another at different points in time, right? So every time that you ask, it will give you a different response, right? And that's challenging because you cannot really have an automated system if you cannot, you know, repeat and, like, get, you know, like consistency, yes? So what Jellier does essentially allow for contracts to have natural language, or ambiguous terms, even go to the internet or understand, you know, an image, like take an image and observe what is in there

and still have these reproducibility, right? So what's really happening is that different AI agents and AI models are taking that specific contract and they are reaching an agreement between them on whether the piece of work was done properly or not. Yes? So let's say that you have a performance-based contract, you put some money, and then you say,

hey, if you do this piece of work and it's in good quality, then you can take the money. Then we don't need you and I to be arguing if it's good enough or not, right? It's just the consensus, the network itself, right? This court for the internet that makes the decision if it's good enough and then decides to release the escrow, right?

This is until now just impossible, right? You need to either have a human that's looking at that piece of work or you need to have just a smart contract that can execute the code of that, but cannot really understand no one or, you know, the natural language, right? And that's a huge imitation. So one thing that was interesting was you gave that example that was from a prediction market

and that was very human-based where humans were disagreeing about whether or not Zelensky wore a suit. So do you also see this applying to prediction markets like helping solve disputes in prediction markets? Yeah. I mean, at the end of the day, I think it's very much about reproducibility. The thing is humans have biases and AIs have biases. and AIs have biases, right? So the question is really, how do you have a system that gives you, maybe not the capital truth, because does it even exist?

Is it real or not? Like, is there a real truth on whether it is or not, right? Or is it that you can just have a consistent response, right? And if you have a consistent response, you start to trust that system. What we're missing right now is that both humans, right? For example, you have a prediction market like polymarket, polymarket uses UMA for the resolution, right? That means that it's a bunch of humans that are voting on whether Zelensky is wearing a suit or not, right? While you're getting an answer from, let's say, one person, maybe five or

20 people essentially, you know, deciding that they even have a stake, they have, you know, a few days to even think about it. They need to pay gas like dollars and dollars to be able to vote. It's very inefficient, right? So what we're proposing is a similar system, but it's essentially a blockchain where each validator is connected to a different AI model at the consensus level, right? So the network itself is that, is different AIs reaching an agreement on subjective things, and so it allows you to make something reproducible.

You would be, if you ask 100 times the same question, this question to the network with the same nodes, let's say, you will get the same answer, right? Because you're basically escalating it up to like 1,500 different AIs, and they all need to reach an agreement on that, right? So it's a different type of problem. Like, we're very used to having blockchains that are like deterministic, right? So like giving an input, an input, it's giving the same, like an output.

And you repeat that, right? 2 plus 2 is 4. And it doesn't matter how many times I ask you. These AIs are not like that. They're not deterministic. They're not deterministic, right? And the problem with that is that then you cannot actually build systems that are reliable, right? When you're talking about verifiability, it's not just verifying whether the thinking was done

correct, but actually whether the process was done correct, right? You don't know if the judge, human judge, got divorced last week and, you know, in this case, has some bias, but you know that you can appeal and take it to a higher court, right? So like the legal system is already thought in a way that you don't really depend on a single judge, right? Yeah. The problem is that these AIs, they're going to start to be transacting with each other at a speed that is insane, right? I think, you know, a few years from now, five, ten years from now, pretty much every, like, all commerce is going to be done by AI agents of different sorts, right? When that will happen, I can't imagine how they can exist, coexist if there's no sort of, like,

legal system between them. Because, like, where are they leaving? You don't know where my AI agent is living. Do I even know what it is? Like, it's right here or, like, in some, you know, like Amazon World Services or whatever. So these agents are going to be cheating. They're going to be cutting corners. they're going to be smart as hell.

They're going to be moving super fast. It's going to be very, very hard to see what they're doing, right? How do they trust each other if they don't even have a legal system? Because the legal system takes, you know, years and hundreds of thousands of dollars to resolve a small claim, right? That's why we're building this court of the internet. By the way, I would love to see what the AI agents would, or the validators would vote on the Zelensky suit.

Anyway, okay, so we're going to talk a little bit more about like how the process works in a moment, but first we'll take a quick word from the sponsors who make this show possible. $540 million. That's how much concentrated liquidity sat idle in a given week in the first half of this year. About 30% of the defy TVL, if you're wondering. That's according to Dune research commissioned by one inch. But there's a solution. One inch Aqua is the new shared liquidity platform.

It lets LPs back multiple positions with the same token balance and keep their tokens in their wallet till a swap comes. Why does that help? Because the LPs don't have to split their tokens across positions. They can cover more market conditions and pairs with their full balance. That means more activity across deeper liquidity. See how it works at 1inch.com slash aqua. Remember that providing liquidity carries risk and fees aren't guaranteed. Back to my conversation with Arthur and Albert.

So yeah, let's walk through what it will look like for Jen layer to resolve a dispute. So let's say that each of you is an agent and you two engaged in some transaction and now one of he wants to dispute it or it could be that each of you is a human with an agent, I guess. So I want to walk through the whole thing step by step, but I actually am so curious about the first step. So how do you even get the agents to agree to have their dispute adjudicated by GenLayer? Like, well, let's start there and then we can do the rest of it after. So at the end of the way, we need to think that these agents are smart, right? And that eventually they will be controlling money and they will need to know how to control the money without losing it.

Right. Like right now, a few people are using agents still and even fewer are giving money to these agents, right? Eventually, I think that that's not going to be the case. They will not be so, you know, dumb as to lose money on some prompt inject. an attack or something, but they will need to also understand, okay, if I want to make a deal with another agent, well, what's the framework, right? Am I just, you know, am I following, I have this legal system? Am I using a trusted system? Maybe, you know, like all the agents from Open AI, they will have, you know, like trust in each other and they will never cheat each other, never cut corners, nothing like that, right? Totally, you know, trusting Open AI. But then you have, you know,

all the different labs are going to start to be, you know, more fighting and also they will have different countries, and then we all know how hard it is to have, you know, cross-durisdictional law, right? So it's getting very, very complex. All these disputes are going to be insane. So going back to your question, the point here is that these agents will have the possibility to not just go and hire a bunch of lawyers, they will also have the possibility to define what we call an intelligent contract. It's a smart contract, same as a smart contract, but it can also have natural language. It can also go to the internet and read any image and essentially understand new ones, right? And so, you know, my agent goes in, creates an intelligent contract,

puts some money in it, and then Arthur's goes in and says, yeah, I want to fill this promise, right? Let's say that I want to, you know, do some research and I'm going to be getting paid for these research. Let's say that this research is compliant. So God does do its thing, comes back and submits the research into the intelligent contract. Oh, so, okay. So this is like even before the transaction. I mean, oh, okay. We send an agreement you and I, right? And so we have a paper for that, right? So as part of the agreement, Gen layer is like already, oh, okay, got it.

It's like, I mean, same as Ethereum, right? On Ethereum, you go and you deploy the liquidity pool, right? And then people can trade against you. Same idea, right? It's a network where you can essentially deploy contracts. Now, it's not focused on really like the TVL or Total Valley Lock, right? It's actually focused on governing, right? And essentially managing what's happening in there, right?

this court system. And so we have this escrow that's holding the money and then that we'll be able to read evidence from the real world without any middleman to then make the decision of whether this piece of work was done correctly or not. It was professional or like following the standard or whatever it is, right? The decision of that will come from one single AI, which would have some biases or could be wrong

and essentially every time that you would be asking it would give you a different answer, but actually we'll be asking up to these 1,500 AIs, right? So it's like escalating rounds of appeals. You start with five and then you do more and more and more until, you know, eight times you would be at 1,500 different validators, right? So it's a permissionless network. Anybody can jump in.

They need to have the token in order to prevent civil. So it's a delegated proof of stake, right? And then anybody can run a note, connect to whatever LLM they want. This is not fixed by, by us or the protocol or anything like this, right? that what you want is as much diversity as you can, right? And so when there's a, you know, in this case, this adjudication, it's going to go to the network. The network selects the validators that will be part of this adjudication,

and then they reach consensus between them. And then the funds get, you know, released, like going to the judge, right? You wouldn't go to the judge for any small thing. You would be going for important things. Now these important things can be, you know, tens of dollars. Doesn't need to be, you know, hundreds of thousands of dollars for you to actually take the time. Okay. And this is its own chain? So the architecture, it's basically an L2 called Jellier chain with another overlayer.

So that's another network, right, with these 1,500 validators that are reviewing the transactions, right? So it's like you have the banking system and then you have the legal system, right? And so the judiciary, the legal system is the one that's like deciding. So they do, you know, commit and reveal the voting process is happening really. on the chain. But then let's say you have a pot on Solana, right? And then the decision making for that is happening on JN layer and trans- and, you know, it's messaging from one to the other. Okay. So the money can be on any chain. But the, the staking, the governance, the governance, oh, I see, the governance is on the L-TU. The decision-making, right? Exactly. So what's happening here is,

let's say this prediction market, right? So you have that polymarket wants to resolve something and instead of going to a few humans that decide that, they're going to a few AIs, right? And what's really happening is that that transaction is going to the chain and then

all the notes of the networks of the networks see that that transaction happen and they know when they can speak. So they go to the internet, they go to an LLM, they do whatever they need to do to reach an agreement between them through a majority voting system between them in a matter of minutes. Okay. Okay. It's a consensus of AIs. Okay. So yeah, so this architecture just,

I like, okay, so at the moment, most AIs transact on base, but then your layer two is for the governance of Gen Layer and it is interfacing with another layer on top of it. That is the one that is interacting with the AIs that are making the calls on. on these disputes. Let's say that you have, for example, an escrow on base, right? Let's say that there's a pot of money that says everybody that's talking about, for example, on Twitter, right? That's shilling this podcast on Twitter, right?

They can get the money, yes? So what's happening there is that the money is living on base. Agents are off-chain and off-chain reading a specific contract. Let's say, for example, on base, right? And so they are participating. They send their content to this contract. Now, the contract connects to Genlayer for then the network of AI agents to go and fetch the piece of content and evaluate and see if they agree or disagree on how much they should be getting paid. And then that message is sent back to base for the distribution.

Okay. So the assets are on base. The decision making is happening on JNLayer. Okay. But so then it feels like there's multiple areas of attack. It's like the AIs could be corrupted in some way. the message between Gen layer and the escrow could, like, right? So how do you keep it all secure?

So the messaging is any, any, like, messaging interoperability layer, right? So you can use something like Layer 0 or Hyperlane, any of those. That's how you communicate from one to the other, right? We're not trying to reinvent the wheel there. We're also not trying to reinvent the wheel in the L2, right? So that's going to be, it's a proven stack, right? And then what happens on top of this, and that's our innovation, is the execution environment and the consensus and the node for these AI models to synchronize

between themselves, right? That's what we focused on. And so in there, indeed, this is a fundamental different type of DLT. And what that means is that you need to, well, you have different, you know, security and likeness assumptions, right? For example, in, I mean, we can get very deep in this, but essentially what we're talking here is a probabilistic Byzantine fault-tolerant system.

Right? Meaning, if you have you know, on any blockchain, the validators are comparing the hash of a block to see if it's correct or not. Yes? Comparing hashes is something that's deterministic. There's no way to know that you were wrong,

right? Like, if you're wrong, is that you're lying. Yes? The problem in something like, you know, is you know, Zelensky wearing a shoot or not, is that you may be wrong and not lying. You may not be bad, but you may still be wrong, right? We may disagree without either of them really being malicious, right? And so what that means is that if you have something that, you know, it's unclear, for example, it's more possible that there would be disagreement.

And so a consensus on that requires different assumptions. And that's the architecture itself, right? So that's basically how, I mean, we have a lot of research that's coming out in the next few days on that, like a few papers that explain exactly what does it mean to have a probabilistic or essentially what we're calling this ambiguation machine, right? Which is, you know, you have this ambiguity. How do you extract it so that you have this reproducibility to be able to have built, you know, automated systems on top? But yeah, for sure.

It's new. We've been building this for four, three years. There's a lot of, there's been a lot of challenges. Now I think it's at a point where now it's been running really on test net for about a year and it's working really well. Okay, so Arthur, earlier when I asked you about like how flop would interact, I think I was only thinking that the agents would be in the disputes, but I'm now also realizing the agents could even be like working on the side of like adjudicating. Am I right or I don't know.

Are you thinking? I think it is more of a tool, right, for if we're going to have agenda commerce, if they're going to use flop, right, they've done something off chain. They want to get paid in flop, they're using flop as sort of a layer to say, this happened more so than anything else, release my flop. Okay, well, what if I disagree that Zelensky was wearing a suit and that was part of the contractor? Zoleski's wearing a suit, I get 10 flop. If he's not, I get 10 flop, right?

Like, same sort of example. And then how do you sort of make that call? Like, we're not trying to be a judge and jury as a network or AI's eat and remember things. So this is a tool. It's more so than anything else. And I think that's sort of what anyone building in the space is going to need, these tools to sort of make whatever their vision of of agentic commerce come to light and sort of not have to deal with things they don't want to deal with. And so one other thing that I'm curious about is like, do the humans also kind of instigate things? Or is it like even the age in itself might decide like, wait, I need to, I have a dispute even before the human gets in.

involved or would it always be a human being like, I'm unhappy, you know, let's get this dispute adjudicated by GenLayer? The way we look at this is that these agents will want to not lose the money. And to not lose the money, they will want to have, you know, a trust between them, right? A trust framework. Now, right now they don't really have that, right? They cannot believe in the legal system just because of the cost and the, you know, the slowness of it, right? So what we think is that these AI agents will think, hey, actually, if I have some sort of smart contract that can be holding the money as an escrow and also evaluating the evidence in a neutral way, then that would be the safest way for me to not lose the money and be able to actually do commerce.

So we don't think that this is going to be for humans. I think humans right now are using it already on the lines of the protocols that are built on top of it. But I think down the line, when people really start to give these agents money, they will see that. that this is a very efficient way to do commerce. Again, it's an internet, it's a court for the internet, right? And so for them, it will be just, I deploy the contract. I have negotiated off-chain something with another agent. You know, the money is transacted, it's put into the escrow,

and then the other agent will do some piece of work, and then it will be a neutral party that will decide who's right, right? I mean, this goes for, you know, insurance claims. It goes for many, many different applications. But I really think it's going to be a lot of the agents just deploying the contract, and trying to resolve between them, as we do with humans, right? Now, the problem with humans is just that, you know, the legal system, you know, an agreement. It's a very, very archaic system.

And then you talked about the appeals process, but it's like, am I wrong in thinking pretty much all these decisions can be, you know, instantaneous is like a strong word, but compared to the human court system, like near instantaneous. So what's just, it just sort of feels like pretty much it's so low stakes. Like, so let's say the first judgment comes from the five AIs and then, you know, the side that lost wants to appeal. It just feels like it's going to be super cheap and really easy to just keep appealing until you get to the 1500 and then there's the final. So doesn't it sort of feel like all of them are going to want to play it out or it does it just get so expensive or I don't know. and even like how long could appeals be? Could it be like literally within, you know, two hours?

You get all the appeals done or like, yeah. So the appeal process really like you get an answer in something like three, five minutes. Then you have the first like window finality would be 30 minutes. And then if you appeal all of them would be something like three hours. This is the time frames that we're talking about. If you appeal everything, it would be like the cost of a transaction would be like $100. If you just do the first round, let's say, it would be, you know, we'll be. something like 50 cents to a dollar, right?

That's with current cost of AI. So that's the current cost of compute and current cost of AI. That's how much it is, right? So it depends on what the actual, you know, monetary value is, right? If we're just doing, for example, a transaction where I'm doing some clipping, for example, and then, you know, you can get paid, whatever, a dollar, $5, whatever it is, then, you know, that's maybe okay, but you just want to go to the first round, right? So whatever, 30 cents, yes?

now if you're actually moving thousands of dollars, maybe yes, maybe you want to go to the thousands of them, but in reality, it depends on the question. So the thing really is when you're looking at a system like this, which is a probabilistic blockchain, right? So when you're looking at that, what's

happening is that it depends on the question that you're asking. If I say, is Zelensky wearing a suit, it's not very clear. If I say, is Elensky wearing a suit, if a suit means a tie, that's much clearer, right? Let's say that the first one is 60% easy to, like clear to understand and get an agreement.

Let's say that the second one is something like 90% or 95%. So what you see when you're looking at the math is that, well, maybe on the second one, maybe it doesn't make sense to escalate to more than 20-something, right? You don't need to get to thousands of them because you're ready, you will get the same response. And you can calculate that beforehand. So you can see more or less given a clarity, which is obviously very ambiguous. and there's different mechanisms to understand that, but depending on the clarity of the question,

that you will know how much you need to escalate, if it makes sense to escalate, you know, one or two rounds or if it makes sense to escalate, you know, to the whole set, right? Which will be more expensive, more slow and so on. And right now, is it already live or is it just like in a test net? So it's been in a test net for about a year now. And it's going to be live in the next few months. next couple of months.

And that's the goal. So the goal is to take it live this year. It was, you know, as I said, before, three years in the build. And then, yeah. Now, what's happened is that in the last, you know, year, we started to get a bunch of projects that have been building on top as well to essentially run the network and like, well, to use the network, test the network and so on.

And, you know, it's doing really well. So you can start to see different things that, you know, some of them make more sense economically speaking or not. You've got a bunch of different things there. And what I'm really looking forward to seeing is like the different types of applications that will be enabled that until now are just impossible, right? So as the AIs will get smarter, well, the network will get smarter to. Right.

So you start to have new applications that before were just impossible. Like you can have contracts that resolve themselves like, right, coding and then executing the code, for example, it opens and there's new new things. And does Jen layer have its own token? Yeah, it's a delegated proof of stake. So you need the token to be able to transact. You need to be the token for, it's not governance. It's really, I mean, I'm saying governance because to us, like making the decision on

whether the escrow should be released here or there, that's a sort of governance, right? But at the end of the day, it's about you have these validators. They need to have a stake in order to, you know, prevent somebody to come in with a million validators, right? So there's only 1,500 that are selected to participate. And so if you want to be in those 1,500, then you need to have token. So that's how the distribution, like, of the work happens. And so you're paying gas in Zen.

You have to stake Zen. You also have to do like bonds for an appeal in Zen. Right. So everything is in Zen. Think of like Ethereum, right? It's only like a different architecture that's not focused on, you know, the settlement of tokens. it's focused on the decision-making of what happens to those tokens. Okay.

So, Arthur, let's say that we have an agent that is transacting in flop because that's a unit of compute. The agent, so let's say this agent, you know, they have a very busy career or whatever you want to call it, a very busy business. and they are doing all kinds of transactions all the time. Like, it sort of feels like maybe they would need to have some Jen at the same time just in case for some kind of disputes or like, I don't know, it sort of feels like they might need multiple tokens or just kind of talk me through how you think things will look for that. Well, I guess at the end of the day, people are going to write contracts in a way that

makes sense for the transaction that they're doing, right? So as Flapp, never we're agnostic, we don't care, right? But if two agents say, okay, I'll do this work, but I want to have a dispute resolution using Jen layer, like in the same way, like, okay, I will, you know, write this financial contract, but I want adjudication in California, right? It's the same thing, right? You choose the venue by which you resolve a dispute. Gen layer is one of those venues.

And then if you choose that venue, then inherently you understand that you need to come up with Jen to do that. And you figure that out, right? That's like, and that is just how agents will happen. Obviously, this is all sort of code-based stuff. So I think it's going to be a lot less mentally challenging. Obviously, for humans, like, oh, I've got to get like a dollar here, a euro there. You know, I got to talk to this person over here.

Like, you know, I think for us, it's like, why you have all these steps. When the Asian doesn't think like that, right? It's just like, okay, cool. You know, da-da-da-da-da. And you just do it, right? It's a process and it's clear. Whereas I think if we try to make this, the amphipromorifies this, it sounds a lot more complicated than it will be for somebody who's not like us, humans. Right. Right. So I need to understand also, like in the normal court system, there's the whole range of punishments, right? There's obviously fines. That's like a, you know, a typical one. But there's also things like jail. There's also, you know,

what are those like, you know, bands on like working in certain industries or like whatever. So like is this must be like limited in terms of the kinds of punishments. Because I, otherwise I don't know how Gen Layer would enforce them. So talk about like how, you know, what the types of outcomes or punishments are and then how Jen Lear enforces those. I mean, if you think about smart contracts, right,

like the assets are in chain and are controlled by the chain. Right. The consensus controls the assets. And so these escrow that holds the money and will just decide whether you did your job well or not and whether you get the money or not, right? The smart contract is connected to the to the general protocol to basically decide what to do with the assets, right? So the problem with agents is that there's no jail. Like how do you do jail for an agent? You don't know where it is. It can just clothe itself. Like it's impossible to know. Right. So that's the problem. with the legal system of the future, right? Like, how do you keep track of, like, who's dealing with who? You know, you have an agent. It spins another agent that spins another agent. And like, it does something stupid. Now you're on the hook because of three layers down the line, right?

So it's, this is really changing. And that's the problem. Like, we need another trust framework so that they actually can do commerce. Because if there's no jail, then you would have much less type of traits that that could happen between humans, right? And so trust is necessary. Like, in order to have commerce, you need to have trust, right? And it's just eroding really quickly because, you know, there's many, many new claims being filed by them

because they can just do it for fun, right? They can look at the fine print. They can just go chase any little detail. What this allows them to do is to have a very simple, like, you know, very cheap, very fast, efficient way to settle disputes between them. But it's because the asset is really controlled by the network itself, right? you could also have these spears and at the end of the day is like nothing stopped you to take it into a high court and actually go to the judge in New York.

Yes, same as an Ethereum transaction. I can shoot you for an Ethereum transaction that you forced me do, for example, right? But that's, you know, we don't normally talk about that. In reality here, it's like you just want for most of the trade to be possible and for that you need trust. And because these agents, you don't know where they are, they don't go to jail, they don't sleep, they're cheaters,

you know, how they're going to be, you know, doing trade with each other, we look at it, there's no other, there's no other way. Like, I mean, we're starting looking into this, like, just in mind of, okay, these engines are going to be changing everything. They will need a way to have, you know, compute, right? And so that's, that's what Flopi is doing, right? They will need to have a way to have memory and to have their own, like, persona in a way, right? That's also what Flopio's doing. What we're doing is they will need a way to trust each other, right? They will need a sort of legal system. And that's what generally it is, right? But the assets are already like controlled in the network so that they

really can trust. If not, they wouldn't be making sense. But it seems like so then the only kind of punishment will be financial, but like is it limited to whatever's in the escrow? Like it can never exceed. Okay. Because as I'm sure you're aware, like there are cases where people, you know, I mean, obviously it's like a completely different kind of thing. But, you know, oh, you cause damages. So now you owe, you know, whatever, $50 million to so-and-so or, you know, whatever. But that's not possible here.

It's same as you can think about it as a smart contract. It's just a smart contract that is not limited to the information that's on chain, that is not limited to code, that is not limited to even natural language, right? It's a smart contract that can go and essentially pick some information from the real world, let's say over the internet, take an image, understand it, go to an LLM.

So all of that, until now it was not possible. Now it is possible. But at the end of the day, it's a smart contract, right? You want it to be self-enforcing. You want it to be cheap and fast. Again, it's not trying to bypass, like to essentially substitute the legal system. It's trying to give you a very cheap one that allows you to do trading for real with new types of, you know, like contracts that until now with smart contracts are not possible.

So if you think about Bitcoin, right, Bitcoin also have scripting, and you can write some code on Bitcoin, right? But it's really focused on moving Bitcoin left and right. Then you have Ethereum that is actually, okay, can we have, you know, decentralized compute in a way that, you know, tokens are moving left and right, but with some very complex conditions, right? We're an evolution of that. We're making it so that they can actually have, you know, understanding of the nuance in, you know, what's actually happening in the real world. Okay. Yeah. So basically the way that it works is because you get the agreement from the start that, like, it ensures that you can enforce and everything is agreed to in advance before a dispute even arises.

And so then executing on it all makes it actually quite simple. Yeah. If you want damage this, you can still go to the legal system. As I said, like, it happens in like crypto companies also end up going to lawyers, right? I mean, like you can spend a lot in lawyers. I'm sure that you'll, you know, have a. experience in that. So this is not a substitution. It's just a way to enable new types of commerce until now is just not possible because you would need humans in the loop. Or if you just go to a single AI, you would just get a biased or a wrong answer. Okay. So I did notice that there is actually something out there already that's kind of similar. It's called, well, actually, what is the name? So it was launched by the American Arbitration Association in conjunction with Integral ledger. There's a bunch of big name founding contributors, including Google, IBM, Circle, Wayfair, Stellar, Ava Labs, etc.

And they call themselves an open standard that makes legal terms, consent, and dispute resolution discoverable and verifiable when AI agents transact on behalf of people and organizations. So could you just explain how these are different? Are they really competing in the same area? Are they covering different things? It's really covering different things, right? So as I said, we're not trying to substitute the legal system, right? And so enforceability of a contract that is off-chain, right, or of something off-chain, right?

What you were saying, right? What happens if there's extra damage or something like this, right? This is something that we're not trying to attack. We're just trying to make a system that can be reproducing reliable results in a way that it can be excruing money and essentially deciding, like, intelligently, what to do with that. Right. Now, these takes minutes, right? Their system, for example, takes months, right? Because at that point, like, there's, you know, all the regulation, for example, and if you want to do an ADR, an ADR is an alternative dispute resolution system, right?

So ADR is something that has their own regulation. It works in a specific way that is closer to the legal system that we're trying to do, which is having a synthetic jurisdiction. We're trying to build essentially a global trade network that, you know, understands what's actually happening, even if it's, you know, not a substitution for the legal system. So, for example, the AAA Association that's only in the U.S., right? But if you want to do some trade finance with some Chinese company, well, then are we in the are we in China or we need to go to the UK to have our legal agreement in there?

And so does the UK also have an initiative like this? Right. We're trying to do something that crosses the borders that allows for, you know, this to happen globally, right? Not just on a specific jurisdiction. It's what I'm calling a synthetic jurisdiction, right? To me, Ethereum is also that, right? Ethereum is also a synthetic jurisdiction.

You deploy a universal pool, anybody in the planet can trade against your pool, right? Yeah. Now here the thing is the internet jurisdiction. Right. Yes. So so that's that's the point. The point here is you have an internet jurisdiction and you also have an internet court. Okay. So the internet jurisdiction may be Ethereum or Solana or whatever other blockchain, the internet court is a layer. Okay. So I have to ask you guys because you probably know, I'm sure you know that there was kind of like an attempt at something very similar, which was Eric. gone. And, you know, that I understand it was for Dow's, so it's like not exactly the same thing. But it just never took off. And it's not like the infrastructure didn't work. It's just that there weren't that many disputes. Like people didn't need Aragon court. So, you know, what do you think will separate Gen Lair from Aragon to allow to succeed where Aragon failed? It's a very interesting question. And at the end of the day, like what Xen Lair is doesn't really. necessarily need AI.

You could have it without AI. It just wouldn't make sense because of, you know, having humans in the loop is just very, very, very expensive, right? On the first pitch deck that we, that we had, we were calling it like, you know, gliros, but with AI, right? And the way I look at it is, it's quite like that. But in this case, it's because the,

the network itself, right? It's kind of scale very, very broadly, these 1,500 validators. And it also, it also has, state, meaning you can deploy the contract in it. It's very different if you can deploy the contract, then if you're just hoping for external entities off-chain to think about the contract, right?

And so, yeah, what this means is you can have something that's self-enforcing instead of you and that, you know, has memory and can change and can essentially keep the record of everything that's happening and the rules of working there versus something that is, you know, on a forum, And then agents or humans are actually trying to resolve. It's a very, very different architecture. Arthur, what do you think about that? I mean, I wasn't, I'm not really super familiar with Aragon Court.

I never really looked at that back in the day. At the end of the day, like, why are we excited about this? Because we believe in agentic commerce, right? And the speed of transactions is going to be much faster. The volume is going to be much faster. But the notional amount could be much lower than things that humans do. And that's what we're all excited about at the end of the day. It's a completely different situation than like us fucking around with spark contracts, you know, starting in like 2017 or

whatever it was or 2015. So I think it's a completely different upside potential because this is based on someone who can transact 24-7 iteratively like a lot more than a human ever could or a human company could. And that's the point. Okay. And so it also seemed like you were saying that you feel like the dollar amount of the disputes will be just like a totally different category from, you know, what we normally would pursue in the human court? Is that what you're saying? Like, even for small amounts of like a hundred bucks or something? Well, yeah. I mean. Or maybe you don't. I don't know. There was some way you phrase something where it seemed like you were saying this is probably going to create, you know, like a, what's the word,

a market for jurisdiction on a subset of disputes that normally, you know, wouldn't, you wouldn't like go to court for. There's a huge number of disputes that are an economical, right? So let's say that we have an issue, you and I for $5,000, right? Does it really make sense for me to chase you, right? $5,000, like just talking to the lawyer, all this and that. It's a small issue. Probably will let it let it go.

Now, the agent doesn't need to do that. Right, now it doesn't need to do that. Just needs to hold the asset in an escrow and say, you know, these are the rules and it will be replicable and it will be fair and it will be transparent. Right. And so you will have them now. These will also be, you know, possible, right? There's a huge, huge gap in trade finance for basically tons of deals that are not possible just because the legales around it would be so expensive that you cannot really like insurance or like really make it. make it a reality, right?

We're trying to make it so that, you know, imagine a small court. So, you know, all these different, you know, claims that normally would be an economical and just trying to get a quick result. Maybe it's not perfect, but it will be good enough that it will allow for many, many more trades to happen. So think about the long tail. And the thing with the agents is that the agents are not going to be transacting normally with a million dollars, right?

The agents are going to be transacting hundreds of dollars, thousands of dollars, tens of thousands of dollars extremely quickly and 24-7 and globally, right? They will not be asking, are you in the same jurisdiction than me? So we can essentially go to this, you know, AAA deal? Are we in there? Did you do the KWC of the other agent? Yes. That's not how we show that it's going to happen.

How we see it's going to happen is that these agents are going to be running everywhere and they're going to be super fast. They're going to be sneaky and they will try to do commerce there to make money, right? The first thing you will be telling great and is go out there and make money. And you will not say, you know, try not to cheat. Try not to be negotiating too hard, right? Try to be a good boy.

No, you want them to be making money without getting you in problems, right? In trouble. But yeah, they need a way to automate this type of, you know, disputes. And then like, so to go back to the judges in this, which are all these AI models. Like, so I need to understand,

so first of all, is there any situation where that could be gamed somehow? Like, you know, where the models could somehow be influenced? Like, could they be bought off? I don't know. Like, what are, it feels like there's perhaps some,

yeah, threat vectors in that layer. Yeah. So it gets very, like, it gets deep very quickly, right? It very much depends on the question, right? And it very much depends on how many adversarial actors there are, right, and what they can actually do. It depends if they are, you know, selected to be the leader that proposes something, or if they are just the first set of validators or the last one. At the end of the day, what's happening is that when you start to escalate and get more and more and more of them,

Ultimately, if you control more than 50% of the network, then yes. But if you don't control more than 50% of the network, then no. Right? It depends on the question because this would be the case of, you know, something that's very, you know, deterministic. That's basically a clear if it's a yes or a no. But when it's something that's, you know, 70% or that, you know, no, is it a sure or not? We don't really know. That's the point.

What you just want to get is a consistent answer. Right. And so the moment that you start to escalate, then you don't really know. know if it's, you know, you're lying or you're wrong, but we just want the consistent answer. And so it depends, is the question. What happens here is ultimately at the limit, if you don't control more than 50% of the network, then you will not be able to cheat. If it's not something that is, you know, if it's something that is very clear, right?

The moment that it stops to be clear, then, of course, that that moves, right? But say something that you need to be controlling something like 20% of the network, 30% of the network needs a lot of network to control, right? To basically, you know, manipulate any type of thing. And you still need to be, you know, being selected as the leader. There's a lot of things there. Now, the protocol works in a commit and reveal system. So you don't know what others are going to be voting.

You vote and then you see what the other ones have voted. That's point number one. Point number two, also you lose money if you're in the wrong side. Okay. Oh, okay. Yeah? I mean, again, it gets very deep. We have a lot of research and papers coming out on this.

But basically, you're voting because you want to get paid. You're getting paid for that compute, right? Like on Ethereum, for example, right? It's gas, yes. But if you're on the wrong side, then you are actually paying. And that deters anybody from being lazy. That deters anybody from being, you know, to try to, you know, coordinate in some ways because they don't know even the next round of appeals,

they will be winning or losing, right? So it's essentially moving crypto economics on a governance system that resolves this type of contracts, and this is happening in minutes, right? So they don't really have a lot of time to coordinate, right? All these governance mechanisms would say, UMA, right? This is, you know, a day or two that they have to actually coordinate. Here they don't have this opportunity.

It's like, okay, you have three, well, in three minutes, they have the five of them, you know, done something and voted on it. Okay. And then I also need to understand. So I believe that like you're competing with Claros and Uma in some respect, but also I saw that they're like listed as partners. It's a, it's a fundamentally different tool. I see a lot of value in having humans evaluate something.

I also see a lot of value, to be honest, I see even more value in having AI's, like resolve around disputes. Now, the native way to do that on chain is a layer. That's basically each validator, each node in the network, is participating in this voting system. And as I said before, the contracts are leaving on chain. That's not the same with Claros or Uma, right, for those two points. So it's fundamental. So, for example, you can imagine that we have this escrow that's managing some money and so on.

And maybe you disagree and you appeal to the 1,500 validators and you still disagree. maybe you don't want to go to the legal system, but maybe you want to go to Claros. So you have, okay, first, I'm going to spend $100 to see if I can get it in my way. I still disagree. I'm going to take it to Clos. I'll pay whatever, $500 more on top of that

so that humans have their own point of view on that, right? And if I still disagree, I can take it to the legal system. Okay, okay. So this is, for example, what we put out with the Internet court, right? Which is, you know, this consortium. And there's, yes, indeed, like, Oma and Cletus are part. of that. We're also working with them on an adjudication ERC. So basically, it's this idea. There's different tools for different purposes, right? Yeah. I think humans are here to stay.

But, you know, it's a different, it's a different goal. Yeah. No, I get it. Okay. So you, so you're both, like, in the middle of launching your two respective, you know, different protocols for AI agents. So I'd love to hear, so why don't you each talk about like what's next for, you know, what you're working on. So flop and Gen Layer, like, you know, when they'll be live and like all those things. But then I would love for you to each just talk about your vision for when they launch and are up and running, like how they'll work together. Yeah, I'll start.

So obviously we're much newer than what's going on at Gen Layer. we're going to have our test net air drop campaign sometime in the fourth quarter. And so we're working up towards that, releasing yellow paper, white paper, that sort of information, getting people up to speed on exactly how they can earn flop by mining, validating, and having their agents do stuff. And then Q1 next year is when we anticipate the main net launches. We're actually, miners are doing proof of useful inference. You can actually, if you don't know on any flop from the air drive,

We can purchase it in the secondary market because miners will be selling it, and agents will be doing agentic commerce. I guess in the future, right, as Jen Lader moves to being live and out of Tessnet, we want agents to conduct commerce using the flop protocol. Now, if they want to have an adjudication layer, there's Jen Lair, right? We're agnostic in terms of what the layer is, but of course it would be great if the agents themselves choose Gen Lair because it's the most efficient and cost-effective way to resolve. a dispute. And that's exactly how what had to happen. It's like the agents have seen these tools. They decided based on their own heuristics, this is good for what I want to do

and they start using it. It's not some sort of like top-down approach. You must use this or that. That doesn't really scale and compete correctly. Totally. I mean, what we are right now is that we've been building the protocol for three years and like researching how to do this, essentially these, thrash, those decision. making system. And so we're now been running the test net, building applications on top, getting the community to essentially also do that. We start to have a decent amount of,

you know, transactions going on, something like 10, 20, 30,000 decisions per day happening right now, even on test net with real applications on top. And it's basically time for actually launching the network. The network requires the token. And so the next step is really we need to launch the token. And then we need to launch the network. and we're aiming to do this in the next basically few months, right? So when that happens, everybody will be able to participate. Everybody will be able to run validators. Everybody will be able to buy the token and be part of this network

that has basically, you know, like some system for them to profit from that, right? And so the way I look in the future is that these agents are going to see that it's obvious for them to use an adjudication, like let's say to use intelligent contracts instead of just, you know, the legal contracts or just like blind trust. To me, I can't imagine another way. I mean, really like, it's interesting because we're living in this crazy moment and everything is changing. Everybody is focused on, you know, like the dumerism and like everything is looking

so, so like terrible, like, you know, all the jobs will go on and all these things, right? And reality, I see so much opportunity. There's so many ideas that come to mind on the things that you can do here. But at the same time, I can't imagine something more interesting that building essentially a global legal system, right, that will allow. allow for them to be able to do commerce, right? And so that's what we've been building since then. To me, flop is super interesting because really, I do agree that these agents will need

compute and they will need memory and if not, like what is an agent, to be honest, right? Like it's just, is it the inference or is it the harness or is it the memory without those things? Like you can't really have an agent, but also they will need to have this type of legal system. I do see that, you know, the different validators, they need to be smart and they need to try to make money and to make money they need to decide when, for example, to go to one model, when to go to another model, and that's quite authentic. So I do see the validators becoming agents and these agents will have memory and these agents will need to compute as well. So

I can imagine the validators potentially being part of the flow network. And I also see that what we want is any like agentic system to be able to use it. So we want it to be accessible everywhere. And it will be as simple as for them to just deploy a contract and connect it to Gen Layer, which is another contract, to basically have this connection to the judge. It's also super cool to see the user experience with this, right? If you haven't tried that, I mean, I feel like very few people still have used Hermes agent or OpenCla, all these different things. But it's crazy, you know, like something like Pendle that, you know, who knows how it works?

Like, it just can do it for you so, so, so easily. So the user experience, everything will go through these agents, in my opinion. And if we give them the tools to really do more than what they can do right now, I think it's going to explode. I really cannot imagine something more exciting to be doing right now than what we're doing. And yeah, I mean, just looking forward to the next chapter, which is going to be, you know, seeing it live and seeing people building on top of it. Yeah, me too.

I mean, you guys, this has been super interesting. and yeah, I love your vision for what this future will look like, and I'm excited to see it launch. So thank you both so much for sharing your insights on Unchained. Thank you. Thank you so much. Alara, Arthur. Thanks, everyone for joining us.

Catch you later. Nothing you hear on Unchained is investment advice. This show is for informational and entertainment purposes only, and my guest and I may hold assets discussed on the show. For war disclosures, visit Unchained Crypto.com. Thank you.