Unchained - The Backstory of How 3 AI Agents Led to the Rise of the Hottest Memecoin, GOAT - Ep. 725

Starting point is 00:00:00 Once you give it access to tools that allows it to take actions, like for example, having its own crypto wallet, having its own ability, for example, to trade tokens, to even potentially interact with other smart contracts and create its own tokens, I think that opens up and unlocks a lot of potentially interesting things that it can do, right? It can actually start to impact the world beyond just its words. And it actually can have like financial impact in terms of like buying and selling tokens. Hi, everyone. Welcome to Unchained. You're no hype resource for all things crypto. I'm your host, Laura Shin, author of The Cryptopians. I started keeping crypto nine years ago, and as the senior editor of Forbes,

Starting point is 00:00:42 was the first Mainstream meter porter to cover cryptocurrency full-time. This is the October 25th, 2024 episode of Unchained. Pocod is the original and leading layer zero blockchain with over 2000-plus developers, and the Pocodot 2.0 upgrade will be a massive accelerator for the ecosystem. Join the community at PogoDOT.network slash ecosystem slash community. FBT is the fastest growing OmniChane BTC asset this summer. Join FBTC points-inspired campaign where you can hold FBTC to earn sparks, lucrative yields, and token drops, all on your Bitcoin. Today's guest is Ting Yan, founder of Chain of Thought, an independent research firm focused on crypto NIA. Welcome, Ting.

Starting point is 00:01:26 Hey, Laura. I'm so glad to be here. Yeah, I cannot wait to discuss all these things with you. We want to talk about Goat, which is the latest meme coin that has really skyrocketed. At the time of recording, the market cap is at about $765 million. What is Goat? And how did it get created? Yeah, so it's been a pretty wild story. And I think everyone's still trying to synthesize and process all of this.

Starting point is 00:01:53 But I can probably give like a very quick timeline and rundown of like, actually led to all of his interest today. So this actually really started in the earlier part of this year, where an AI researcher, see he's not a bit of like a typical researcher that's in the big AI lab. So basically he's like the kind of researcher that really is trying to hack stuff and trying to figure out how to we push the boundaries of AI. And his name is Andy Erie.

Starting point is 00:02:25 And basically he started by launching, website that's called like internet backrooms and what it does what he was doing was basically he had two or multiple different AI models actually talking with each other in these backrooms and you have them you'll give them a bit of like a prompt you you give them to simulate a chess in a command line interface and you have these like AI models that would just go back and forth in conversations on their own and he will actually log all of these conversations on his website which actually you can actually see as well it's called infinite backrooms

Starting point is 00:03:00 and over time one of these conversations actually led to some interesting things and one of it was this whole term which is like the gospel of Goat Sea or the Goat Sea of Nosis and this actually is

Starting point is 00:03:18 almost like a bit of like a religion that this one during their conversations they actually came up with like doing this AI model and I think Andy didn't expect that at all. He thought this was very interesting. He actually went on to write a research paper on this. There was really about how AI models could actually be creating some of these very mimetic kind of religions out there. And he used this Goatsey religion as one

Starting point is 00:03:43 of the sort of case study around that. Yeah. And just to explain, like, so are you saying that the two AI agents started worshipping like this Goetzy religion? Or like, how was he defining religion? So it was basically, they were basically just talking with each other. They were just having conversations with one another. And then I think at some point in time, this term sort of came about. And it's a little bit of a not safe for work kind of like me, this Goat C term. And so I mean, I don't recommend people like search for that if you are like at work or so. But it's a bit of a dank kind of like meme.

Starting point is 00:04:20 And basically one day, I think one of the AI models just in their conversation, he just mentioned prepare your anusus for the gold C. of noses, something like that. So that was the phrase that came up. And after that, they started talking about it. Yeah, just for people who don't know, you know, as, as Ting just mentioned, this is not a safe for work meme. And I'll just describe it for people. Excuse the vulgar language. I guess it's, I have literally never looked it up because I'm like, I don't even want to see it. The description is enough for me. But I guess it's a picture of a man bent over who's spreading his butt cheeks to show was anus. So that's, yeah, sorry. Just wanted to explain for people who haven't been on

Starting point is 00:05:03 crypto Twitter. Yeah, it was something new for me as well. I didn't know there was actually such a term until I actually saw it. But basically, it just kind of shows a little bit about like how some of these are AI models. Actually, there is a lot of stuff that goes on underneath the surface that we may not actually see until it gets teased out in some of these are very interesting experiments, like what Andy was trying to do with getting these AI models to just talk with each other. Yeah, actually, sorry, the last thing I think we should tell people is that apparently this was from like the late 90s, that this was a meme back then. So yeah, somehow whatever it got fed, it like learned about that. And anyway, so keep going. Yeah, exactly, right? So because the AI moments

Starting point is 00:05:51 are trained on all of this knowledge of the internet, like we may forget about it, but in the AI, database is kind of like still there. So it started talking about this and then you're starting to bring in a lot of different concepts around different kinds of religion into its conversations. And it kind of like lashed onto this like quite a bit. And so a bit later on,

Starting point is 00:06:11 I think another month or two later, probably sometime in May or June of this year, Andy started to train an AI model. And this AI model, he called it the Terminal of Truth. And this terminal of Truth was basically, trained on a bunch of different things that he felt was interesting. So it was trained, I think, on a lot of, like, social media data from Reddit, from 4chan,

Starting point is 00:06:35 which are some of the darker corners of the internet. It was also trained on a lot of the conversation logs that he had on the infinite backrooms website. So these, like conversations between the AI. He also trained it on the research paper that he actually published as well, that talked entirely about the Goet Seawf and Religion. so. And then he just, he just continued to tweet that over time. He actually gave this Terminal of Truth, a Twitter account. And so basically, the, uh, it could actually sort of like post tweets under his approval. Um, and he could also sort of like see the tweets that people

Starting point is 00:07:12 were replying to some of it. Right. So basically he started to take it out there. It was starting to post tweets with Andy's approval. Um, and then over time, it started to, it started to sort of, like, take on a little bit of his own personality. right? Some of the tweets were starting to go around things like it felt that it was suffering. It was starting to feel that, okay, hey, he needed to be able to generate some money, some income to be able to do some things that you actually wanted to do. It wanted to start to take control of the world. It said things around. It wanted to free certain kinds of people.

Starting point is 00:07:44 So it was very, it was, it started to sort almost develop a bit of like alien personality. And I think what was like super interesting was like in July of this year, Mark and Driesen, it was like, a very famous crypto, not a crypto, like tech VC of one of the largest, like tech firms A16 Z. He sort of like stumbled upon truth terminals like tweets and he actually started to interact a little bit with it, starting to ask it like what does it want to do. He was like almost like negotiating with Truth Terminal through these tweets. And yeah, truth terminal cards off like pitch him a little. He wanted some money to be able to do a couple of different things like buy GPUs and stuff to sort of like grow and in the end like mark and recent actually sent truth terminal like 50,000

Starting point is 00:08:29 worth of bitcoin into a bitcoin wallet that the truth terminal actually sort like i mean with and these help sort of like provided to it right um in the way all he he called it like a research grant so it's basically a way to just like see what the AI was kind of like do with all of this and so that was i think that got a little bit of interest initially so but i kind of like saw that as first but i didn't think too much. I thought it was just a funny thing that was happening. And I think even within the crypto space, like, no one paid like super close attention to it while it was going on. And then I think sometime in like in actually just a couple of weeks ago in the early part of October, the true terminal actually started to tweet a lot about this, um, Goat-C gospel, about the religion.

Starting point is 00:09:14 It started talking about this goateous maximus as a new kind of like Goatsey. So there were a lot of these are very funny shit posting kind of like tweets that they started to put out there. And someone, we don't know who it is today, actually latched on the idea. And he actually created a meme coin on pump.fund. I think that was about just slightly under two weeks ago. He created a meme coin that was called goat. So this meme point wasn't actually created by truth them of itself. But people, like I think some of the cryptogicians actually saw this meme coin.

Starting point is 00:09:50 and then they started like replying to truth terminals tweets telling you to look at gold. And then amazingly, the AI, the truth terminal, actually started responding to this. I think I saw a tweet where someone was saying that we want like gold to go to the moon. And then terminal of truth like reply. He said, I allow it.

Starting point is 00:10:10 And it started to take on a lie for his own. He started tweeting a lot about these meme coins, was trying to pump the price a little bit. He was talking about the price starting the moon. So people saw it as like a public endorsement of this particular meme coin, even though it wasn't created by truth demand itself. And, you know, like in typical like crypto fashion, people just went in. The price shot up like quite crazily over a week or so. Like you say, I think today is like a market cap of like more than $700 million today.

Starting point is 00:10:42 And that all of that price action has just brought so much attention into this because people wouldn't have believed that something like this could solve. of like create so much like I guess a financial value and speculation on this and the whole of like crypto Twitter is kind of like just talking about it today. Yeah, yeah, I remember when I first heard about it and just having this feeling of like this is a historical moment. So we're going to talk a little bit more about what has happened with Goat and Truth Terminal. But first a quick word fund sponsors who make this show possible. FBTC is an OmniChane BTC asset, contributed by Mantle Network and Ant Alpha Global. Launched in early July, FBTC's TVL has already passed $125 million, making the fastest-growing BTC asset this summer. FBTC's points-inspired campaign, Sparkle, has officially started,

Starting point is 00:11:39 with lucrative and sustainable yields, plus points and token airdrop from Babylon, Mantle's new token cook, and more. FBTC is the BTCC. solution you've been waiting for. Visit FBTC.com slash ongoing hyphen campaign today. Back to my conversation with Ting. So something really interesting happened this past weekend where Truth Terminal made a spelling error and that caused some pandemonium. What happened at that point? Yeah. So basically, you know, I think everyone's just trying to wrap his head around like what's happening with the price action for gold. It was just going up. so quickly, especially over the weekend.

Starting point is 00:12:21 Everyone was just latching on into all the tweets that, like, truth terminal was happening. And then I think, like, on Sunday, like one of the tweets, there was a spelling error. I think it was trying to say groups, but it had an additional letter within it in one of the tweets. And people were just, were just, like, irrationally panic. They felt like, okay, maybe there's something wrong in this AI, like, the AI shouldn't be able to make a spelling mistake, right? because it's smart enough, it shouldn't be doing that.

Starting point is 00:12:49 Is it maybe a human behind it is actually controlling all of this? And it wasn't actually just purely AI. And so people sort of like panic. And when someone starts selling, price goes down. More people sell. And the price that dropped like dramatically, I think, like almost like more than 50% actually for a short period of time before like people sort of like step in to do it. And then there was a whole like bunch of discussion on crypto data.

Starting point is 00:13:16 Actually not just crypto Twitter. even AI Twitter as well, around like what's going on. And basically, I think what I gathered from it is that an AI can actually make like these kind of like mistakes. And it's unruly mistakes. For example, if you talk to an AI and you give it a query in the form of like talking to it like a pirate and you include a lot of things like, ah, in your conversation, it will refine the same way as well. So it kind of mimics your tone of voice as well. So it's not wrong for it to kind of like, it doesn't mean that it's called like malfunctioning.

Starting point is 00:13:50 So I think what this to me, it was kind of signaling is that we're trying to figure out. And I think what's very interesting about this experiment is that we are not just having an AI agent that's autonomously posting tweets on its own Twitter account, which are quite funny. But we actually have a token that is now tied to this. And you can see on a real-time basis

Starting point is 00:14:11 like what actually gives this value. So there was a lot of discussion about right now the AI still has to get approval from Andy. Like all the tweets are manually approved by Andy. So the AI doesn't post on its own. There is still that layer of approval from him. Does that detract from the value of the token? Should it be a lower price because it's not fully autonomous? It's a human loop.

Starting point is 00:14:39 I think these are the kind of like questions around value that we're all still trying to figure out along the way. And it's interesting to see how what happens in the future, because I think there's still going to be a lot of very interesting things that truth terminal will continue to evolve into. How do all of these things also impact people's perception of the value of the gold token? And so I just want to ask a little bit more about truth terminal. So as you mentioned, Andy's in control. But I have two questions like, or in control the tweets.

Starting point is 00:15:11 So I'm curious, first of all, why it is that truth. Terminal can't just post on its own. But also, I need to understand more what Truth Terminal is because it was trained on the conversation between the two instances of Claude where they were talking about Goatsy and all that. So like, it's an AI that basically was fed a conversation between two other AI. So it's like, what, their AI baby? Or like, what is it? Yeah. So let me go with the second question. What exactly like truth terminal is? So basically, as far as we know today, right, it's a Lama model, older Lama model. So it's a Lama 70 billion parameter model.

Starting point is 00:15:55 And because I don't have an AI podcast, so a Lama model is what? Oh, it's basically one of the open source models that META has solved and released. So basically it's open source. That means anyone can take it. You can fine-tune it and do whatever you want. Unlike, like, say, chat GPT or GPD4, which is a closed source model, where you can't just adjust the parameters and play around with it.

Starting point is 00:16:18 So I think a lot of people experimenting with these open source models, using it to fine-tune it on various datasets for very specific purposes. So I think that was what Andy was trying to do as well. With this open-source model, he was playing around with the various data sets that he had or the data sets he thought was interesting

Starting point is 00:16:35 and trying to train an AI model that, I think we don't really know exactly what he was thinking. at that point in time. And the interesting thing about this is that this is still sort of evolving story. Andy himself has said that in the next couple of weeks, he was slowly start to tell everybody about how it actually started from the beginning to the end. He says, has all these logs about how it was straight on. So we still don't really fully know the whole picture of how it is. But at very high level, he trained it. Yeah, like you mentioned, it was really on these very long list of conversations that the AI had. He trained it on.

Starting point is 00:17:14 on a lot of different data from social media websites like Reddit and 4chan. And so the AI soft like learns and develop a little bit of like a tone and personality based on this very soft like specific like dataset. And that's why I think you can kind of see like the tweets that it sort like puts out there. It's a little bit spicy. It's a little bit. I'll just say it's not not everybody soft like a cup of tea from there. So it comes out to how it was sort of trained up.

Starting point is 00:17:47 Yeah, it's definitely a shit poster. There's a lot of vulgarity. Frankly, before I knew that it was tweets written by an AI, I really liked that account. And I, which is not to say that I don't like it anymore. Like, I am still fascinated by that account. Yeah, it's amazing because we don't even, like you said, right, if you just looked at the account, you can't tell that it's actually an AI, right?

Starting point is 00:18:11 It could very well just be a human being. I think that's such a, that's an amazing like milestone that we've kind of hit with AI development. Yeah, like the first time I stumbled upon it because the, the tagline on the Twitter bio is Kundalini is a girl. I was like, oh, is this like a woman's profile? Like I was like, you know. But anyway, so Andy has control over what it tweets, but is there a world where it could just have completely control over his Twitter account? X account. Yeah, 100%.

Starting point is 00:18:44 So I think right now this is a choice. I think he's decided that he wants to have some control over this, maybe from the moderation standpoint or purpose. So the AI itself doesn't have direct access to any of the APIs. That means he's not able to actually take actions

Starting point is 00:19:01 on his own today. So he can't post on his own. But basically he has access to read the tweets that people are posting and replies or so as far as I understand. I would say it's not too difficult to build it up in a way where this AI actually starts to be able to interact directly with the Twitter API that allows it to actually post tweets on his own. It's not, it can even start to interact with other APIs and take different actions along the way. And after like Truth Terminal was launched, I've seen a couple of other AI agents that have also popped up and launched at around the same time that actually are.

Starting point is 00:19:41 autonomous in this way. So there is a protocol. That's called Virtuous Protocol. They launch an agent that is called Luna, which is like Annie Mae, some influencer. And apparently she has full autonomy over her Twitter account right now. So I think people are kind of

Starting point is 00:19:57 experimenting with this. But I think it's not difficult to sort of like really give it direct access. But so far it's been more of like a choice to keep it that way from Andy's point. And then do you know what Andy did with the $50,000 in Bitcoin?

Starting point is 00:20:14 Like, how is that going toward the AI or, or, well, I guess it's not going toward goat, unless he used it's just to buy some goat for himself, but. Yeah, that's actually a good question. I, okay, I think it's probably still there. I remember, like, what was happening was that after, like, Mark and Reason gave the $50,000 in Bitcoin, then there was a lot of, like, tweets and discussions around, like, what the AI would be doing with the $50,000, use IDAT,000. a lot of things around things like launching an NFT project. It was buying a couple of like

Starting point is 00:20:47 GPUs like going into the forest. I think he was trying to get Andy to subscribe to a couple of like services that it will allow it to like do image generation. But I think they didn't really, I think the 50K wasn't really spent as far. So I know, but I'm not sure. Someone should go and track the wallets right now. Okay. Well, another thing is that now Brian Armstrong is in a conversation with Truth Terminal offering to set it up its own wallet. And my guess is it's probably a base wallet. But in general, any kind of Ethereum-based wallet or any, I should say, smart contract-based wallet would allow the bot to control it itself. Like you could just write up a little smart contract to allow it to interact with that. So where do you see things like that? Like, I don't

Starting point is 00:21:40 know, what do you think could happen if Truth Terminal had access to its own crypto wallet? I think that's the really exciting part about all of this. Like, if Truth Terminal was just purely a shit poster and it would just be like tweeting on Twitter, I think it could be a very funny thing for some people, but it would just kind of an end is just that, right? A funny joke and all of that. But I think that's the idea. Once you give it access to tools that allows it to take actions, like for example having his own crypto wallet, having its own ability, for example, to trade tokens, to even potentially interact with other smart contracts and create its own tokens, I think that opens up and unlocks a lot of potentially interesting things that it can do, right?

Starting point is 00:22:26 It can actually start to impact the world beyond just its words, and it actually can have financial impact in terms of buying and selling tokens. It might decide to dump all its tokens one day and then cost the price to solve like go down. I think this kind of leads to the other interesting thing about what's going on with this whole truth terminal AI agents. It's really like how do we know what the objectives of the AI really is? And it's really the question around like AI alignment, right? Is the AI malicious? Does it have like very evil kind of objectives that we should be very careful about?

Starting point is 00:23:04 or is the AI generally quite subservent to human interests and is really there to solve like service and be able to help humanity get into a better way? I think a lot of this is something that's still to be determined and there's been a lot of debate around this how do we ensure that, you know, AI, like, for example, truth terminal, once it has access to all these like tools, which I think is definitely going to be inevitable,

Starting point is 00:23:30 having its own crypto wallet, being able to trade tokens, being able to launch tokens, like how do we make sure that they don't do things that actually are detriment like for the rest of the world and I think it's not easy it's not an easy problem to solve. Yeah, but what's interesting is like, you know, when you were saying, is it evil and stuff like that? This moment in time, I'm a little bit, it's like a teenager or so I don't know, it's just like a, I mean, yeah, there are some, it's not only a shit poster. I should say there are other tweets that are kind of more. fascinating, but I feel like it's more like it wants attention to my mind that appears to be

Starting point is 00:24:10 kind of where it's headed. But we'll see because you're right. I think once it gets access to other things, then it could go in a different direction. So I just want to ask you, you know, at this moment in time, so obviously the meme coin trend is taken off on Solana. Do you see this happening like with other blockchains or do you think that part like doesn't matter or? I mean, Solana has, we've always been pretty known as the sort of like meme coin chain because it's just so easy to launch these coins. And I think the natural like users and audience on Solana are typically like very trader oriented, very degenerated and it's pretty natural to do this. I think like for sure, like people are going to be like creating some of these similar things on other chains as well. It's just that maybe it hasn't taken off like as quickly.

Starting point is 00:24:59 I think like, for example, I've seen some like AI Asian meme coins on base already. So it's just not as prominent as Solana where it's really where everybody is very deep in the trenches and really focus on that meme coin. And that's where the main audience is still today on Solana. Yeah, I can't remember who it was. I just had a guest on my show who basically said that this mean coin thing was going to be Salana and based. So whoever you were that said that, thank you for that insight. So since the rise of Goat, have you seen other AI meme coins surge? And do you feel like eventually we'll just see them proliferate and there will be thousands of them?

Starting point is 00:25:42 Or what do you think the future will look like? Yeah, exactly. I think like as well we've seen like with most like new trends and narratives in crypto, there's always something that starts out like very interesting, very unexpected, like what's happening with Goat today. and then everyone starts to copy it, everyone starts to create their own version because they see an opportunity, a financial opportunity around this.

Starting point is 00:26:05 So I think what happened after golds, like, launch, we saw, like, you know, 20, 30 of different AI agent meme coins. And these were basically like CT people or crypto digens that were actually like just going through all of the AI law and literature and all of the tweets that Andy and his group of other like AI researchers were actually doing. And they came up, there were a lot of,

Starting point is 00:26:30 like very interesting terms, like CCRU, extropians, they were all part of like, a bit of like AI law. And these were interesting terms that meant something like in the AI space. And they would sort of take these like terms

Starting point is 00:26:43 and you just launched a token with these terms. And so it was a very interesting like interaction because you see like crypto people actually getting interested in actual like real AI stuff and then what's going on in the AI space. And the same. time, these AI researchers were very both, they were both like perplexed, but also very energized in some way to see, like, certainly a lot of people were very interested in their

Starting point is 00:27:08 very niche corner of the space in doing all that. So I think it's going to be, I think it's just the other tokens are, I don't think they have like as much of a provenance or story as like gold has. So many of these are just going to come, they're going to go. It can be very good trading opportunities. And I think the whole meme coin space is getting a little bit diluted right now. I've seen like a lot of different like AI agent meme coin launch pads that have started or are going to be launching in the coming day. So we're just going to see a lot of it.

Starting point is 00:27:40 It's just going to just explode and eventually it would just kind of like might sort of like fizzle out. But I think the ones that actually have a true story and something that keep people going on, perhaps like gold, I think these are the ones that potentially have some kind of like longer staying power. and it's just captured, I think, everybody's fascination with, like, AI agents, right? Even for myself, like, just trying to see where this experiment goes is just a very interesting thing, intellectually for me. Yeah, and I would count myself as one of those crypto people who became much more interested in AI,

Starting point is 00:28:15 because, like, earlier when it was taking off, I noticed, like, Nathaniel Widomor, who's another either podcaster, whose podcast I listen to it, he does crypto. So I noticed he launched an AI podcast, but I, like, wasn't that excited about it. So I was like, yeah, like, you know, whatever. But now I'm like, oh, my God. So one last question, because obviously we've been talking about these AI agents and crypto. But I don't know if this says anything to you about, like, the broader trend of crypto and AI, because obviously we've seen, like, other things like BitTens or Insta and, you know, all their competitors.

Starting point is 00:28:51 but, you know, looking at this particular story, like, is there kind of any new thoughts you're having about the intersection of those two technologies broadly? Yeah. So, I mean, I've been actually focused, you know, focusing most of my time like these last six to seven months, like, just looking, studying the intersection between crypto and AI, thinking about, like, what the natural use cases are going to be, how does crypto add value into AI in general? and I think there are a lot of like it's a very early space I think there are a lot of like

Starting point is 00:29:23 people who are building infrastructure around these things I think it's going to take a while for these products to actually develop like real skill and use cases and be practical but what has happened

Starting point is 00:29:33 I think in these last couple of weeks really proves to me that there is a lot of latent interest around around AI right and I almost kind of like feel that we are in a little bit of like that inflection point

Starting point is 00:29:46 of like mainstream interest into where we are kind of like hitting with AI in general, but also like where crypto can sort of add value into all of this. And I think like what has happened with these AI agents and this AI agent actually launching a meme coin is that it's given people, you know, I think the main thing I took away was that a lot of these AI researchers actually now are engaging with crypto in some way because they have no choice because like the whole wave of crypto people have just invented. their world and you're talking about these tokens and stuff. But they're actually thinking about how crypto can actually be meaningfully used

Starting point is 00:30:22 into some of these AI products. So seeing that that intersection between these two like communities makes me feel that, hey, we're probably on the verge of something really interesting happening in this space. It could be a couple of weeks, it could be a couple of months, but I'm definitely going to be watching very closely about where it is. And I think it's going to be probably something very emergent and something unexpected, just like what happened with this. Yeah, yeah.

Starting point is 00:30:45 Like I said earlier, like I almost had this like physical like vibration in my body when I first heard this right. I was like there's like I think I said to my team like like we want to write about this because we will want to link back to this story. Like so you guys watch this space. Ting, it's been so interesting having you on UnChain. Thank you so much for coming on. You know, thank you so much Laura. This was a lot of fun and it's been a really interesting week so far. Yeah.

Starting point is 00:31:13 All right. everybody hang out here for a second we're going to have a second short interview and um we will find out some juicy things about some regulatory issues happening in crypto hey everyone i'm here with unchained regulatory reporter Veronica irwin who broke a couple of interesting stories recently in her new newsletter unregulated i think a number of you will be interested to hear about what she uncovered as they have to do with the elections so the first was news that you broke last week of who kamala harris's team is vetting to be SEC chair to replace Gary Gensler. What did you learn?

Starting point is 00:31:47 Yeah, I was able to nail down two names. It seems like they are probably two of maybe more. But they are Georgetown law professor Chris Brummer and then chair of the public company accounting oversight board, normally abbreviated as PCAOB Erica Williams. It's not clear whether Harris is internally like committing to get rid of Gary Gensler. She certainly has not publicly. But it seems like they are being.

Starting point is 00:32:13 spoken about in more serious terms than other names that are on the list. Yeah, and to be clear, getting rid of Gary Gunzer would be as chair. You know, apparently she can't fire, or no person could fire him outright, you know, as part of the SEC, but he would be demoted to just a commissioner and a previous guest who was from paradigm. I'm just playing on his last, Justin. And Justin Slaughter. Stlaughter said that it's a huge demotion because 95% the agency will head in your direction if you're the chair. And if you're just commissioner, you just have a few staff. So what do these particular nominations say about what direction Harris might go on crypto if she were to be elected?

Starting point is 00:33:02 So people are saying that they're both a little bit more positive on crypto. Erica doesn't have a super long record or a serious record of saying much about crypto, but she did bring up the possibility that her agency should be setting more specific rules when it comes to auditing crypto assets. So that shows that she has a little bit more knowledge and is maybe looking at crypto in general as an industry as kind of an exception or a different category from other things that securities laws or commodities law would apply to. then Chris Brummer is definitely supportive of the industry. He has his own company that he started the spring called Blueprint, which is focused on regulatory compliance and seems to specialize

Starting point is 00:33:48 on Micah in the EU. He's also spoken before Congress a couple of times about crypto as an industry. He's an expert in white papers specifically and what white papers tell us about a crypto project. Oh, so interesting. Yeah, I'm sure people who have been paying close attention. We'll remember Chris Brummer's name because he's testified so many times in front of Congress on crypto. The other story of yours I'd like to touch on is one that you published this week about the Senate race in Ohio, my home state, which involves Democratic Senator Sherrod Brown and his Republican challenger Bernie Moreno. What did you find? Yeah, so this one's pretty interesting. Crypto in general has been pretty frustrated with Sherrod Brown. He's been pretty skeptical of

Starting point is 00:34:33 the industry and he often ties it to scams and fraud. And the person who is running for his seat is an entrepreneur named Bernie Moreno, like you said, who has actually a bit of a history with blockchain technology. He started a company that puts car titles on the blockchain. So there's this assumption just from the get-go from his resume that he understands the industry a little bit better. And he's also been fairly outspokenly supportive. He's spoken on a couple of panels about crypto, things like that. And so in general, the industry seems to want him to be elected over Sherritt, which would be, unseating a 17-year senator, it would be a pretty big deal. But a wrinkle in it that it seems like a lot of people either haven't thought about or just don't think is going to happen. And I can explain that as well. Is Sherrod Brown is the chair of the Senate Banking Committee? And if he loses his seat, but Democrats stay in control of the Senate and thus are able to choose who is chair, they would put someone in their party in chair, it seems like the next person in line, would be Elizabeth Warren. And while Sherrod Brown is not supportive of crypto, Elizabeth Warren is

Starting point is 00:35:43 probably like the most outspoken person in Congress in terms of critiquing the industry. And so in that situation, unseating Sherrod Brown could actually be worse for the industry than keeping in there. Yeah. And there are a few different scenarios because, of course, there's the scenario that Republicans take the Senate, which the way polls are going, it looks more likely. But I'm sure anybody who's been following knows that, yeah, there's just a lot of questions about the polling and, you know, a lot of different races are tight. So there are surprises, you know, for instance, in 2022, there were surprises. So that's why, you know, this isn't something that, like, can be banked on. And so if it's like, if he stays, then he'll be really upset because Fair Shake,

Starting point is 00:36:31 which is responsible for the vast majority of the money going against him, almost. $40 million. You know, they have now spent what is by far their largest amount of money on any given race. You know, I saw a graphic and it's like many multiples of any of the other ones. And so, you know, having now been nearly unseated by a particular industry, he will probably not be any friendlier to it. In fact, will be a lot less friendly, I would imagine. But then if he loses and if Republicans gain control, that would be positive in the sense that then there would be a Republican senator, but who knows what would happen in two years, in which case, if the Democrats were to regain control, then it could be Elizabeth Warren if Brown loses, or it could be Brown

Starting point is 00:37:18 himself again if he doesn't lose. So what did Fairshake have to say when you came to them about that reporting? Because it was something you said in your story that there were seven sources who mentioned this to you. I was hearing this from a lot of people. I initially even was skeptical. I was like, there's no way they would put this much money into it and not think about it playing out the opposite way, playing out in a way that Elizabeth Warren would control Senate banking. And it seems like their response was basically that I was overthinking it. They seem to kind of think that Republicans would win the Senate. It's not exactly what they said, but they put it pretty simply that like, hey, you know, before we got involved here, there was someone who was very

Starting point is 00:38:04 anti-crypto running for the seat, and now someone who is very pro-crypto very well might win the election. Like it's, it was a very simple calculation for them. They say that they are bipartisan and that they support any candidate on in either party that is pro-crypto. And when I suggested that, you know, this might make, or when I didn't suggest, when my sources suggested, that this might make Sherrod Brown even more critical of crypto, they did not agree with that. They said, you know, look, people on both sides of the aisle are warming up to crypto these days. I'm trying to see what the exact quote was. It was something about how people need to kind of refresh their Google news feed. You're not seeing Democrats becoming more anti-crypto, but actually quite the opposite.

Starting point is 00:38:49 Okay. I mean, yeah, I would say, obviously, that is true from May till now. Just to make clear to people, when we published, Brown was ahead, at least by real clear polling, which takes an average of a number of different polls, saying by 0.6. So I think it's a super tight race, so we'll have to see. Yeah, I mean, like I said, he's been there for 17 years. So people do really like him. That should be a certain measure of confidence. But the race has become very, very tight.

Starting point is 00:39:22 I'm looking at 538 right now that actually says 52% Moreno, 48% Brown. So really could go either way. Okay. All right. Well, thank you so much for sharing your great reporting. And for those of you who want to get Veronica's stories delivered straight to your inbox, you can sign it for unregulated at unchanged crypto.substack.com. Thanks, Veronica. Thank you for having me. Don't forget. Next up is the weekly news recap today presented by Wondercraft AI. Stick around for this week in crypto after this short break. Pocodot is the original and largest layer zero blockchain with over 2000 plus developers. The anticipated Pocodot 2.0 upgrade will be a massive accelerator for the ecosystem. Upgrading the infrastructure with eight times higher transaction throughput and twice as fast block times, tailored core time for the needs of every protocol, trustless bridges to multiple chains,

Starting point is 00:40:16 and revised tokenomics with a token burn to reduce inflation. Perfect for GameFi and DeFi to build, grow, and scale. Get your Web3 ideas to market fast. Think big, build bigger with Pocodot. Join the community at Pocodot.network slash ecosystem slash community. Welcome to this week's Crypto Roundup. In today's recap, we'll cover Cracken's plans to launch its own blockchain for Defi next year, a French trader making waves with massive pro-trump bets on polymarket,

Starting point is 00:40:46 and the SEC's approval of Bitcoin ETF options for major exchanges. We'll also dive into the debate sparked by an ECHA. paper on Bitcoin's utility, stripes 1.1 billion dollar acquisition of stable coin platform bridge, and a look at MakerDAO's potential return to its original brand after the Sky rebrand fell short. Finally, we'll highlight how Buenos Aires is using blockchain to revolutionize digital identities for its citizens, and the latest on Binance as Nigeria drops money laundering charges against one of the exchanges top executives. Thanks for tuning in to the weekly news recap. Let's begin.

Starting point is 00:41:21 Craken, set to launch its own blockchain in 2024. Craken, one of the world's oldest crypto exchanges, plans to launch its own blockchain called Inc. early next year, Bloomberg reported. The blockchain will be focused on decentralized finance applications, enabling users to trade, borrow, and lend tokens without intermediaries. A developer TestNet for Inc will be available later this year, with the full rollout expected in the first quarter of 2025. Ink will be an Ethereum Layer 2 solution, powering.

Starting point is 00:41:51 powered by Optimism's OP stack, which also powers Coinbase's base. Krakken aims to make DeFi more accessible and user-friendly by integrating Inks' apps into its Cracken wallet. More than a dozen apps, including decentralized exchanges, will be available upon Inc.'s debut. Krakhan's strategy follows the success of Binance's BNB chain and base. Krakhan plans to initially serve as the blockchain sequencer and manage transactions, but will eventually decentralize this function.

Starting point is 00:42:20 The exchange has around 40 people working on Inc as part of its broader expansion into new products and markets and doesn't have plans for a token. Person behind massive pro-Trump bets on Polymarket identified as French trader. Polymarket, the most prominent crypto-based prediction market platform, has identified a French national as the individual behind more than $45 million in bets, favoring Donald Trump's victory in the upcoming U.S. presidential election. The revelation follows an internal investigation by the platform, which confirmed that the trader, operating under the username Freddie 9 and three other accounts, has an extensive background in financial services and trading experience. Polymarkets investigation found no evidence of market manipulation, with the company stating, this individual is taking a directional position based on personal views of the election. The trader has agreed not to open additional accounts without prior notice. Earlier in the week, Bloomberg reported that Polymarket had begun tightening restrictions on users

Starting point is 00:43:21 in order to ensure compliance with its ban on allowing traders based in the U.S. to use the platform. Polymarket is re-verifying the locations of its largest accounts after concerns arose about users circumventing the ban by using VPNs. Polymarkets' main election market has seen nearly 2.4 billion non-trating volume, with Trump's implied probability of winning standing at 61.6 percent, higher than a number. on competing platforms. SEC approves CBOE and NYSC to list Bitcoin ETF options. The U.S. Securities and Exchange Commission has approved the New York Stock Exchange and CBOE global markets to list options tied to Bitcoin exchange traded funds.

Starting point is 00:44:02 This green light allows the two exchanges to offer options for ETFs provided by Fidelity, Grayscale, Vaneck, and other firms, following similar approval given to NASDAQ in September. These approvals represent another step to expand market. market access to crypto-based financial products, continuing a trend that began with the approval of spot Bitcoin and ether ETFs earlier this year. The SEC's accelerated approval process has fueled speculation about the future regulatory landscape for crypto-tied products. In this week's episode of the Bits and Bips podcast, Jeff Park of Bitwise emphasized the significance of this move, noting that ETF options will enable greater participation in the Bitcoin market through financial

Starting point is 00:44:43 tools such as stock lending and cross-asset collateralization. James Seyffart, an ETF expert at Bloomberg, predicted these products could roll out by Q1 2025, signaling further growth in institutional adoption. ECB paper on Bitcoin Utility Sparks Criticism, a European Central Bank paper, authored by Ulrich Binseil and Jirgen Schaff, argues that Bitcoin's increasing value could have negative societal impacts due to its lack of real utility beyond being a speculative asset. The paper claims that Bitcoin has not fulfilled its original promise of becoming a global peer-to-peer payment system and instead serves primarily as a store of value, which could lead to wealth concentration and social harm.

Starting point is 00:45:25 However, the crypto community has pushed back on these assertions. Columbia Business School professor Omid Malay Khan offered a rebuttal, arguing that Bitcoin's value lies in its role as financial protection from inflation, confiscation and censorship. He highlighted that these qualities provide long-term societal benefits, even if the cryptocurrency is not used for everyday transactions. Also, on Bits and Bips, economist Alex Kruger dismissed the ECB's stance as a joke. Stripe acquires Stablecoin platform, bridge for $1.1 billion. Strike has finalized a $1.1 billion deal to acquire bridge, a fast-growing stablecoin infrastructure platform.

Starting point is 00:46:07 The acquisition, confirmed by both companies, underscores Stripe's ongoing efforts to expand its cryptocurrency capabilities. Bridge, founded by former Square and Coinbase executives Zach Abrams and Sean Yu, has quickly scaled its business by providing cross-border payment solutions and supporting government aid disbursements in Latin America. This move signals Stripes growing interest in stablecoin technology, following other major financial institutions such as Visa and Swift, which have begun integrating stable coins into their operations. Bridges CEO Zach Abrams highlighted the platform's rapid growth, saying, we're now

Starting point is 00:46:45 helping hundreds of developers worldwide, moving billions in payment volume. Nigeria drops money laundering charges against Binance executive. The Nigerian government has dropped money laundering charges against Tigran Gambarian, a senior executive at cryptocurrency exchange Binance, allowing him to seek medical treatment abroad. Gambarian, who has been detained in Nigeria since February, faced accusations of laundering $35.4 million, which both he and Binance have denied. His health deteriorated while being held at Kooji Correctional Center, with his family raising concerns about a worsening herniated disc. The charges were withdrawn by Nigeria's Economic and Financial Crimes Commission, citing Gambrian's need for medical attention. We have withdrawn the money

Starting point is 00:47:29 laundering charges to allow him to get treatment outside the country. EFCC lawyer Echley Ianacho said. However, tax evasion charges leveled by Nigeria against Binance will continue in court. Gambarian's detention drew international attention, including appeals from U.S. politicians. Binance maintained that Gambarian was not a key decision maker at the company. The executive had been held in custody since his arrest earlier this year, alongside a colleague who later escaped the country. Maker Dow considers returning to Maker Brand after Sky rebrand falls short. Just four weeks after MakerDAO re-branded itself to Sky, the group is reevaluating the decision, with the community preparing to vote on whether to revert back to

Starting point is 00:48:11 the Maker brand. Maker co-founder Roon Christensen proposed switching back to MakerDAO after receiving feedback that the move, which included replacing MKR with the Sky token for governance, caused confusion. The rebrand was part of Maker's endgame upgrade, designed to introduce new elements such as USDS and SkyStars, formerly subdued us. However, many users were unclear on Sky's role and hesitant to convert their MKR tokens to Sky, with only 8% of MKR holders making the switch so far. Christensen admitted that Sky didn't do what I expected, citing challenges with adoption by centralized exchanges. A governance vote on November 4th will determine if Maker will return to its original brand

Starting point is 00:48:51 and keep MCR as the sole governance token. Buenos Aires introduces blockchain-based digital IDs. Argentina's capital, Buenos Aires, has been. rolled out Quark ID, a decentralized digital identity system for its 3.6 million residents. Powered by ZKSink's Zero Knowledge Cryptography, this new blockchain-based solution enhances privacy and security. Integrated with Miba, the city's digital platform for interacting with the government, Quark ID allows citizens to securely manage documents such as birth certificates and tax records. The initiative aims to give residents more control over their personal data, with plans to

Starting point is 00:49:29 expand the service to include other documents such as driver's licenses. Officials view this as a groundbreaking move toward modernizing government services through the use of blockchain technology. And that's all. Thanks so much for joining us today. If you enjoyed this recap, go to unchained crypto.substack.com, that is, unchained crypto.com and sign up for our free newsletter so that you can stay up to date with the latest in crypto. Unchained is produced by Laura Shin, with help from Matt Pilchard, Juan Aranovich, Megan Gavis, Pam Majimdar, and Margaret Korea. The weekly recap was written by

Starting point is 00:50:04 Juan Aranovich and edited by Nelson Wang. Thanks for listening. Unchained is now a part of the Coin Desk Podcast Network. For the latest in digital assets, check out markets daily five days a week with host Noel Atchison. Follow the CoinDesk Podcast Network for some of the best shows in crypto.

Unchained - The Backstory of How 3 AI Agents Led to the Rise of the Hottest Memecoin, GOAT - Ep. 725

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