Unchained - The Chopping Block: Dragonfly's $650M Fund + Crypto's Great Resignation + OpenClaw vs Crypto Twitter

Episode Date: February 19, 2026

Dragonfly raises a $650M Fund IV amid crypto's institutional vs retail sentiment gap, the industry exodus including Kyle Samani's departure from Multicoin, OpenClaw's OpenAI acquisition and crypto Twitter harassment, X402 payment standards for AI agents, Polymarket's controversial 5-minute Bitcoin betting markets, and the brewing federal vs state regulation battle over prediction markets. Welcome to The Chopping Block — where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and Robert Leshner chop it up about the latest in crypto. This episode kicks off with major news: Dragonfly just closed their $650 million Fund IV, making them one of the largest crypto VCs not through growth, but because others have downsized. The timing feels surreal — they keep raising right when markets dump, creating the biggest gap between institutional optimism and retail sentiment Haseeb has ever seen. But money flowing in contrasts sharply with talent flowing out. Kyle Samani left Multicoin, Arianna Simpson departed A16z Crypto, and several other crypto veterans are moving on. The crew unpacks what this "great resignation" means for an industry that feels like it's shifted from pioneer phase to settler phase. Then they dive into the OpenClaw saga — the viral AI coding assistant that got acquired by OpenAI, but not before its creator almost deleted it due to harassment from crypto Twitter demanding he launch a token. This leads to a deep discussion on X402 payment standards and why AI agents might prefer crypto over credit cards. Finally, they debate Polymarket's controversial 5-minute Bitcoin betting markets and the brewing legal battle between federal and state regulation of prediction markets. Let's get into it. Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform. Show highlights 🔹 Dragonfly raises $650M Fund IV while other crypto VCs face "mass extinction" and downsizing 🔹 Kyle Samani's departure from Multicoin signals crypto's shift from pioneer to settler phase 🔹 Industry exodus includes Arianna Simpson, Toshi from Ethereum Foundation, and other veterans 🔹 OpenClaw creator almost deleted viral AI tool due to crypto Twitter harassment over tokens 🔹 X402 payment standard emerges as walletless protocol for AI agent transactions 🔹 OpenAI acquires OpenClaw through separate foundation structure, not direct acquisition 🔹 Polymarket launches controversial 5-minute Bitcoin up/down markets sparking gambling debate 🔹 CFTC chair files amicus briefs defending prediction markets against state regulation attempts 🔹 Federal vs state jurisdiction battle intensifies over event contracts vs sports betting classification 🔹 Institutional sentiment remains bullish while crypto native sentiment hits historic lows Hosts ⭐️Haseeb Qureshi, Managing Partner at Dragonfly ⭐️Robert Leshner, CEO & Co-founder of Superstate ⭐️Tarun Chitra, Managing Partner at Robot Ventures ⭐️Tom Schmidt, General Partner at Dragonfly Timestamps 00:00 Intro 01:04 Dragonfly Closes $650M Fund IV 03:26 Institutional vs Retail Sentiment 06:14 Bear Markets as Opportunity 13:48 Kyle Samani’s Exit 21:44 OpenClaw Gets ‘Acquired’ by OpenAI 24:03 Token Pressure & Harassment 25:05 Is OpenClaw Actually Useful? 31:01 Why Open Source Will Move Faster Than Big Labs 33:13 Agents, Memecoins, and the Dark Incentives 37:40 Why Crypto Payments Beat Credit Cards 40:09 Polymarket’s New 5-Minute Markets 49:43 State Gambling Laws vs CFTC Federal Preemption Learn more about your ad choices. Visit megaphone.fm/adchoices

It's kind of like you, it's like an RPG. You've graduated from one town and you're into the other town and the characters are totally different. And you're like, what am I playing again? And, um, but you know, the game goes on. Not a dividend. It's a tale of two pawn. Now, your losses are on someone else's balance. Generally speaking, air drops are kind of pointless anyways.

Unnamed to trading firms who are very involved. I like that eat is the ultimate problem. DeFi protocols are the antidote to this problem. Hello, everybody. Welcome to the chopping block. Every couple weeks, the four of us get together and give the industry insider perspective on the crypto topics of the day. So quick intro, this first I got Tom, the DFI Maven and Master of Memes. Hello, everyone.

Next, you've got Robert, the Cryptoonosaur and Tsar of Super State. You're muted. Wait, Robert, you're muted or dead. Oh, sorry. Good morning, everybody. All right, there we have to ruin, the gigabrein, and Grand Puba at Gottlet. Yo. What's up?

And I'm a sieb that head hype man at Dragonfly. We are early-stage investors in crypto, but I want to caveat that nothing we say here. is investment advice, legal advice, or even life advice, please see chopping blocks at XYZ for more disclosures. So, boys, it is our turn. I think Robert on the previous show got to announce his fundraise. It is now our turn to announce our fundraise. So we just closed our fund for a $650 million fund.

Very excited. This thing has been a long time coming. It's, you know, fundraising this environment has been a slog. And so we had a run-up in Fortune, and the Fortune title reads, crypto venture from Dragonfly closes $6.50 million fourth fund, even as blockchain VCs face mass extinction. That was the title of the article. And in the article, it just goes on to talk about how terrible things are and how bad it is for a lot of other VCs who are trying to raise. And it's true, we have been very fortunate to be able to raise this fund. It's the same size as

our previous fund. We're now at this point, one of the largest VCs in the space, not because we have grown. It's actually the exact same size they're like. fund, but because a lot of other VCs have downsized and have not been able to raise the same amount as they have in previous vintages. So it's an interesting moment because we have this thing that we keep raising funds right when the market dumps. It's like, you know, our first fund we raised in 2018, which was right when the ICO bubble was collapsing.

And then our fund, fund three, we raised, I think we raised it right before terror collapsed. And so market was just, you know, just nose diving. from January till, I think it was April, when we did the final close to our Fund 3. So we have this knack for raising money, right when everything is terrible. So first off, Haseeb left out the most important item here, which is Bo, partner, and co-founder of Dragonfly,

right, founder, co-founder, something. Completely flexed and stunted all over Haseeb, Tom, and Rob, in the picture, because he wore this, insane velvet suit. It's like a beautiful purple velour suit. And the rest of them are like dressed in like Silicon Valley slubs. Yeah, that's right. I believe it's just it was amazing. It was amazing. It's like you look, look at that picture. It's it's like perfect. Beautiful. Yeah, I think we were fashion fashion mugged I think is the yeah. Yeah. Yeah, it was it's good. But it's you know, obviously we're very grateful to have money at a time when money goes a very long way. But

But there's also this kind of broader moment that I think we're meeting now with having raised this fund is that the gap between institutional sentiment and retail sentiment or really like crypto-native sentiment is the biggest that I have ever seen. And so there are a lot of people, I mean, we had a bunch of comments. And a lot of people were asking like, how did they raise this money? Like who gave, who's giving the money? And the answer, I'll tell you, you know, for those who are wondering, the answer is institutions. Institutions give us money and then we take that money for institutions and we go.

invest it. You know, you can't get this amount of money from obviously retail investors. So institutions are bullish crypto. They believe in the story. All the stories that we're telling, all the stuff about stable coin adoption and institutions coming to crypto and tokenization, they believe all that shit. You know, like you might think they're fools, but they believe all of it. And they're continuing to invest into the space through institutions like us and others and also obviously investing directly into the space. But at the same time that all that's happening, you're seeing a lot of turnover happening in the industry. So friend of the show, Kyle Samani,

I think it was just last week, announced that he was moving on from multi-coin. He wanted to pursue other interests outside of crypto, potentially in longevity and AI. Don't know exactly what that means. There's obviously a lot of vagueness about why exactly he's moving on, but he's still going to be involved with Forward, which is his dat.

And we also had Arianna Simpson, who's a GP at A-S-Z Crypto. She is moving on launching her own, fund. She's going to be investing also outside of crypto. We also had some other senior people leave Tamash from the EF. He's also been on the show. He's moving on. Bastion Ow, I believe his name, is going to be replacing him, who was a senior person at the EF. You also had Akshay, who was head of BG, I think he was head of BG at Salana Foundation, something like that, head of something, Salana Foundation. He's moving on. It, you know, Nader, or is it Nader from, he used to be

Eigenlayer, probably the best known developer relations. guy in crypto is moving on to cognition, which is an AI startup, and he's now a developer relations there. So it feels like we're having this moment of reshuffling. A lot of senior people from the industry suddenly moving on. And in the midst of that, we're trying to, you know, do this last hurrah in our fund four. But I don't know, I want to get a gut check from you guys. How are you guys feeling? You guys, I mean, are we the Japanese on the island kind of fighting when the war is over? I mean, first off, congratulations. You've been on a monologue, but we didn't get to officially say.

I know, I just got the flash number four as a hand sign that CZ does. I did see that. Yeah, we're going to do that. Thank you. How are you guys feeling? How are you guys feeling? It's tough to celebrate right now. It's hard to celebrate right now because, like, I was very mindful.

Like, normally you write, oh, we announce a new fun and you go and do the, you know, whatever parade in the streets. But I remember talking to Arjun from when he joined Paradigm right after they raised that, like, that fund in 2018. like around, well, a little after you guys, I think, right? It was like October and November. And like, everyone was like, oh, my God, Bitcoin hit 3,000. Everything is zero.

Like, why am I doing? You know, like, there was like definitely this feeling of fear. And I don't think it abated for like two or three years. And it kind of feels a little bit like that to me. I like that there was like this turkey drop, as I like to call it, of like Bitcoin's price like went down like 40% in like November 20. 18. It's just like, it was near Thanksgiving because I remember everyone was making all these memes about like having to go home at Thanksgiving and everyone being like, oh, so how's your

little coin doing? But like, I kind of remember that. But then you like look at those funds performance wise, like obviously just completely crushed because everyone was hating on those funds. I remember how when I think about how uncompetitive, okay, I'm not trying to don't get this, look at me in trouble, whatever, I'll still say it, which is, I remember uncompetitive, I thought the uniswap series A was at a low valuation. It was like 50 million or whatever. And like, everyone was like, no, no, no, no, I'm not doing 50. I'm going to do 40.1.7. You know, it's like everyone, everyone remembered all the significant figures in a venture investment at that time. That's true. And like, it was just like, yeah, but that's when you found the craziest things.

And so I think like, you know, maybe I'm just this hope springs eternal person, but I'm just kind of like, yeah, you know, it goes away, comes back. Everyone that's just too obsessed with AI right now. At that time, I remember everyone was so obsessed with fintech. That was like the peak like, you know, like plaid getting acquired, strike hitting almost $100 billion, whatever, right? Like that was like the fintech was so much better than crypto. Why would you need crypto era? And it flipped. And like, I don't. And I think, like, another aspect of it that I think is true is, you know, everyone is talking in normal markets about SaaSpocalypse, right? Like, how all these SaaS companies, you know, a bunch of them, their moat is lost because, like, you can replicate a lot of things quickly or just in time or as you need it with a lot of AI tools. But there's sort of this kind of sense in which liquidity is a moat, right? Like your AI agent can't really copy liquidity and it needs to earn liquidity. somehow and like crypto is the only easy liquidity source and like at some point those things are going to merge and that that's my hope springs eternal optimism you can't really copy there's a saspocalypse for liquidity i'll take that i'll take that robert how are you interpreting the vibes

well i think the vibes are bad but from a venture deployment perspective i think that's relatively good you know turn touched on this but in general you know i'm a believer that bare market prices make the best entry. And when there's less competition for deals, you can take longer, right? You don't get rushed into them. You don't get bullied into them by the market or other founders. And I think it's just a wonderful time to be investing because you can actually think more than in a bull market when it's an outright mania. And there's no time to think. There's no time to be strategic. There's no time to really like, you know, plan the portfolio as much as you can in a bare market when things are quiet. And so the doom and gloom is the best time to raise fun for for Dragonfly. I think you guys

are really fortunate with the timing. I think it's fantastic. And having, you know, a big stack of chips at a very quiet table where you can be picky is, you know, fantastic for investors, but also for the founders when the capital is scarce. Because, you know, not everyone, you know, will be backed in a bare market, but the founders that can build when there's less competition, when it's quiet, when they can build a good team. You know, it's a great time. Most of the things I've done in crypto has been in bare markets, you know. I founded compound, you know, it was really like end of 2017, beginning of 2018 as things were diving off the cliff. And I found a super state in 23 when it was like, you know, as unexciting of a time to found something new as you could find besides right now.

And so I think being a founder of bare market is great. And for the same reason, I think being an investor, Harding in a bare market is also great. But how do you feel about seeing your peers like people you've been in the trenches with for so many years leaving the industry? I mean, listen, if you've been in the industry a long time and you're now entering a bare market, right, and you have a giant fund that's already deployed, right? It doesn't look as good. Okay.

It looks very good for a dragonfly and a fund for announcement. it looks less good if you have a large amount of capital that's already deployed and you really can't compete and raise the same size fund again. So I get that it's ominous. And it's as good a time as any to go on permanent vacation, to pick a new industry, to spend more time with your family, like whatever the thing is, you know, especially for people that have the good fortune of having already succeeded in so many ways, right? It's like why play on like super duper duper, duper hard most?

right so I get it you know I you know their loss everyone else's game Tom what do you think you got we got money to have a fun thinking about quitting I'm out yeah yeah I um I was remember uh I always remember uh saculous stories what you say you're not out you're in you just started I'm in yeah I was okay I was uh when when uh Jan Coom the founder of WhatsApp left uh Facebook after like you know he had three or four years I've written like his you know, parting note that he ended with something was like, I'm spending time on like air-cooled Porsches. And I thought that was just like a very

nice, you know, transparent way to express what he was thinking about. But, you know, no sappy family shit. Yeah, it's, it's the weirdest. The industry feels like the weirdest it's felt, I think, maybe it's in my entire time being here where I think, you know, 2017, 2019, it was like, okay, it was much smaller and it was experimental and people genuinely thought, oh, like,

maybe we're just super earlier. or maybe this idea isn't going to work. And, you know, it was kind of like, it was very existential for everything that was going on. And it was, you know, I sort of understood why it felt that way. And then 22, it was, you know, I guess a similar kind of kind of vibe. This feels, like you're saying, like, things are really working. And yet there's this huge dispersion in terms of sentiment and just like industry players. And I also, to your point, like just the amount of personnel turnover, I don't remember really happening in this sort of, you know, dense of a period.

And it's not even people even explicitly quitting, but it's people shifting their time to work on other projects or people sort of, you know, quiet quitting or sort of, you know, being being more checked out. And I think at the same time, it's like other parts of the industry are moving faster than ever. So it feels just kind of like this weird, I don't know, shift. It's kind of like you, you know, it's like an RPG. Like you've graduated from one town and you're into the other town and the characters are totally different. And you're like, what am I playing again? And but, you know, the game goes on. The game goes on. Yeah, it does, it does feel like kind of disc. now of the game and like the vibe is very different. Like you can tell there's like a different set of developers who made this too, you know. I think that's a little bit of what I'm feeling as well. And I talked about this when Kyle announced that he was quitting because I actually, I wrote about that. I wrote a kind of sappy tweet about Kyle and like how the way I felt about it. Because I, when I first saw that he had quit, I was like, holy shit.

That's crazy. I can't believe that Kyle quit. Easier for us, you know, like great. And I thought about it a lot. lot and I remember waking up a couple days later still thinking about it and about what it meant for this industry and the thing is like Kyle was the embodiment of that 2018, 2019 craziness, right? It was the it was the spirit of crypto was there was this tiny flame that we were all cupping our hands over to keep alive at a time when nobody else believed in it. And that was Kyle.

And he, I mean, he had a very bombastic way of doing that. It was very different from pretty much anybody else in this industry. But it was very powerful, very necessary. He was such an important proselytizer for the things that he believed in. And that mode of being just doesn't work in what the industry is now, right? The industry is very much, I think the way I put it was that we've exited the pioneer phase and we're now in the settler phase. And the people who settle the towns as opposed to people who found the towns

are a very different kind of psychology. It's a very different kind of people. It's very different risk appetite. It's a very different pace of life. And it's true in every industry, right? Like, you know, Jan Kuhn, the people who built, the social networks are very seldom the people who steward them going forward.

You know, it's not Reid Hoffman. It's, you know, Mark Zuckerberg is maybe the only exception. Right, yeah. Like, it's the people who make the thing are very different from the people who shepherded the thing. and Kyle, I think, in a way, he bristled against the direction in which crypto has grown. And you can tell, like, you know, immediately after he, quote unquote, quit, he like got into this big fight about hyperliquid and just, you know, immediately faceplanted in public. And it's like, yeah, you can't, you can't do that shit.

You know, like, that's, like, you could get away with that in the previous era of crypto, but crypto has evolved. Crypt has changed. It's institutionalized. It's a different game now. And I think in a way, for me, what it represents is, okay, how do we need to evolve in a way that corresponds to the way crypto is evolving? And it's also not to say that I don't think retail investing or the crazy volatility or the crazy games that investors and traders tend to play.

It's not that I think those things are done forever. I think those things will basically never be done. I think those things will keep coming back and they'll evolve. They'll come up in a different form. we'll see in a year, two years, three years, there'll be some new thing that's viral and speculative and crazy because crypto is permissionless money and people always find a way to do that thing,

that crazy speculative thing. But the idea that that's the beating heart of crypto, that that's the main thing, that's the show. Everything else is like kind of this weird institutional thing on the side. I think that's what's changing. I think that's what's going away. And the real adoption story, the real like, yeah, you know, this brick and mortar kind of,

okay stable coins and wallets in people's hands that they're actually using to transact that stuff is not going to go away so yeah it's got me thinking because like man we've been here for a long time all four of us we've been here i think around the same time the kyle started which is 2017 2018 like i think we're all basically the same vintage and um like i was a young man when i got into the space you know i was in my i was in my mid-20s and now like you're you're Just your attitude. I know. I'm a fuck out.

Dude, it's just all gone. No, it's like your attitude evolves alongside the technology, you know? Like the technology's grown up and we've also grown up. And I was reflecting on that. That like it was also true of Kyle, you know? I mean, like, you know, he was, I actually don't know how old he is, but I assume he's roughly the same age as us. It's like, yeah, we saw all of each other go through this journey together.

on this roller coaster that was crypto. And I understand why some people want to get off the ride because it's, yeah, it's a motherfucker. You know, it's a really, really challenging space to dedicate your career to. And so, yeah, I don't accept the framing that it's something about crypto or something about, oh, well, you know,

it's just not that exciting anymore, it's not that big anymore, it's not that successful anymore, oh, they were proven wrong. I think it really is just, you know, yeah, people, they get older, their priorities change, they move on, they want to do other things. Yeah. I don't know, but it's sad.

I think, seeing Kyle leave honestly hit me harder than anybody else leaving. Wow, you really just, you just really, you really dunked on the other departures. No, no, it's just that like, it's that Kyle was on the show the most out of anyone. He was on the show the most. That's true. That's true. He had most appearances on the chopping block. Therefore, he's...

That's why it hit me so deeply is because he was a chocolate, repeat guest. I mean, a more objective version that he's probably the most successful of all the ones you mentioned. Yeah, but it's more than that. I think he was the most singular. You know, he was the most... He had the most conviction also of all the ones you mentioned. He did. He believed in this thing and he was just like, I don't...

I'm going to be a bulldozer and not see any... Yeah, exactly. I think he was like the apotheos of crypto, right? Crypto is the whole idea. that like people who have who come from the fucking nowhere with no credentials it just like a force of will will can just make themselves successful dude google glass that was kyle google glass is a credential kyle was a google glass entrepreneur before he ended up coming into crypto he is the most unlikely person to end up becoming an institutional fund manager but he did it because he believed he just he just

kind of used the bully pulpit to transform multi-coin into a phenomenon and um i i you know i say in the post that i I think he's in many ways, although I'm totally different from Kyle. You know, I could not be more different in what I, just the way I behave and the way I operate and the way that I, you know, all my opinions. But I think in that sense, he and I were actually the most similar because he didn't come from institutional background. He didn't have any great pedigree. He didn't, you know, he was just like a guy who just got a loudspeaker and started yelling

until people started listening. And he turned that into a multi-billion dollar platform. And, you know, I think that. That's crypto. That was crypto in a nutshell. And you can't do that today. You know, it's very, very hard to recreate what Kyle built. I feel like you're going to eat your words on that. I bet you someone will do that this year.

Yeah. There's always one thing where like someone breaks beyond the noise and that happens. That's true. That's true. But it's only in bull markets that you see that. In bare markets, very difficult for anybody to break through. I think the hyperliquid broke out in the bear market. Like it was.

They did. They did. I'm talking about investors. I'm talking about investors, right? Oh, yeah. Every cycle, there's a new VC firm that pops up and like becomes meteoric in their rise. If you think about like, you know, the jump in Alameda, they became huge. Or FBG, Delphi.

Oh, FBG, wow, I forgot about that. Yeah, there's all, like every bull market is an opportunity for a new investor to define themselves as, you know, writing this new trend or writing this new meta. But in a bear market is really tough, right? Like a lot of people are struggling to raise in this environment as, as, you know, told by the headline of the, a fortune article. So, okay. Although, to be fair, to be fair, that guy's articles oftentimes have a lot of this like doomsday.

I mean, that's everybody's articles these days. Yeah. It's hard not to talk about crypto without talking about, you know, kind of doomsday vibes. So anyway, speaking of vibes, let's talk about OpenClaw. OpenClaw, of course, is the vibe coded AI agent or whatever, open source thing. It was the phenomenon originally called quad bot, became MaltBot, and then finally, OpenClaw. OpenClaught was recently acquired by OpenAI. Now, Acquired is a weird term.

Apparently, there is going to be hired. There's a Claw Foundation. There's a Claw Foundation. Exactly. There's going to be a foundation that's going to be maintained by OpenAI. There's a lot of speculation about what the acquisition price, if there was one, might have been. It seems like just a lot of bullshit. People are just making up numbers and trying to get them to go viral.

So I don't think anybody knows anything. I saw a made-up number. That was definitely made-up. Did you? Do you want to repeat the made-up number, Robert? Yeah, I saw the made-up number. It was either 30 or 40. Okay, I saw made-up numbers going up to a billion.

Yeah, I saw it closer to a billion. People are just making up number. To be clear, nobody knows anything. There's absolutely no reason to think that anyone knows anything. But I do think it's funny that Dave Morin, the Facebook guy, is the head of the foundation. I thought that was funny. I didn't really. I missed that.

Yeah, yeah. It's not, because he went to go work at OpenAI, they needed a third party. It reminds me of crypto, because it's like a crypto foundation structure. Where Open AI is the lab company for this foundation. Wait, so Open AI is not taking over the foundation? No, no, no, no, foundation is separate. It's independent. It's independent.

Okay, so all the employees are staying at the foundation. It's like the lab company. This is like one of these token acquisitions? What's going on? There's some irony because of what you're about to say about tokens. No, but it was a one-man startup. Yeah, it wasn't like a real, but I think they are keeping them separate on purpose. Like, okay, okay.

So that like the open source stuff is like, can live on its own without even if open AI died or whatever. Their name is open AI. It would be sad for them to close source it. Yeah. Okay. They have to be. Well, so Sam Aldman in the announcement said that this is going to become, we expect this will quickly become core to our product offerings. OpenClaw, obviously is one of the fastest growing open source repositories in GitHub history.

And of course, originally they were based on Anthropic. You know, Claude was literally in the name. And so the creator Peter Steinberger, he went on the Lex Friedman podcast, I think just last week. And there was a clip on that podcast that went viral where he basically complained about the crypto people. And apparently crypto people were trying to bully him into launching a coin or not launching a coin, but accepting a coin, I should say. There were a bunch of coins that were launched in the name of OpenClaw. And they were like, please take this, you know,

take the dev reward or whatever and basically anoint this as being the canonical meme coin for this project. And he said on the podcast, quote, they, crypto people are not just good at harassment. They're also really good at using scripts and tools. I underestimated those people. Honestly, I was that close to just deleting it,

basically implying that he was being so harassed by crypto people that he was willing to just delete open claw and destroy it entirely. So thoughts on the old open claw saga. Also, have you guys gotten an open claw up and running? I think last time on the show, I think it was the only one who played around with it. I have one. You have one? Yeah, as I said that.

I went to the meetup in SF. Not much, honestly. I don't find it to be extremely useful. But I'm more struck by how and why it resonated with people. And like that's kind of been a lot of the, you know, theorizing around Twitter is just like, why is this resonating? Because it's not like, oh, here's this one killer app, use this for and everyone's signing up for it. It's kind of an amorphous productivity idea around like, yeah, it's kind of nice to have some permanence. I think maybe there's an idea around people don't like being locked in to a single model provider or they don't like, you know, having their, you know, data stored with a single model provider.

And there's kind of degrees to that. But yeah, I don't quite know, like, I would not have predicted it would have like resonated this much with so many people. And now these like little sub-startups and rappers. And there's like even new implementations like I saw Ilya from from near, right, like a rust implementation that's like, you know, more efficient. So I don't know. It's like a very interesting time in AI land to, I mean, one, this being kind of one of those big threads in terms of like, you know, agents and agentic coding. and keep also looking at new models and obviously like open source models coming out. But I'm also always just reminded and kind of struck by like this constant kind of give and take between crypto and AI.

Like for two industries that you would not think to have any similarities, like there's actually a lot of overlap in terms of the people and the technologies. And I mean, literally, Ilya was the, you know, Transformers white paper and like, you know, SPF was investor in Anthropic. And like, I mean, Sam was founder of like World Coin and Open. So it's like kind of crazy that these two very different technologies have so much overlap. And I'm very curious to see what the future holds, not even just like in the X-4 or two stuff, but it feels like they're going to continue to kind of collide in some ways. Yeah, it's, it reminds me actually, do you remember, I can't remember the name of it, but there was something around the time, there was a project called Baby AGI,

and there was another one that was like going super viral, auto-GPT, that's right. Like this, you know, auto-GPT, if you ever tried. tried it, it was absolutely horrible. It could not do anything. But it was also one of the fastest, you know, Mo starred projects on GitHub. It was also like this kind of crazy viral sensation. And most people never even tried it.

You know, most people never even use it. They just watch Twitter demos of it. And this, again, feels very similar. So like, I tried OpenClaw, you know, back when it was called Codbot. And I kind of played around with it a little bit. I was like, this is so broken and kind of useless. Like, I don't know why I would use this.

I recently got it up and running again. now on a VPS just to see how it's improved. It has definitely become a lot more stable than it was when I was first using it. It was a total buggy mess when I was originally using it. It's still pretty buggy. It's not a great piece of software. It's very clearly vibe-coded. But it is one of these things that now that it has such a large open-source community,

you can see that it's going to get better and better. It's going to become more stable. It's going to become reusable. It's got all these plugins. It's just like, you know, it's one of these things that we see over and over again in open-source is that once you have a standard and people converge on the standard, they just start making it better, they start plugging everything into it. It's a little bit like MCP.

You know, it's kind of loose of a concept enough that you can just, once you converge around it, you can make something good even out of a shell that is not optimal. But it does still feel like this sort of auto-GPT thing that people imagine what it can do. And when you actually try it and you're like, great, please pilot my email and like, do my job for me. And it just starts doing dumb stuff. and it obviously doesn't understand the context. And yeah, it's just like it doesn't work unless what you're doing is very, very well documented

and extremely, you know, constrained. And you're doing a lot of prompt engineering and you're doing some good rag. You've basically built quite a lot in order to get this thing to do the right thing. Otherwise, it's just, you know, it's going to fail 15% of the time. And something that fails 15% of the time is just like a horrible employee. It's like the worst possible hire you've ever made. So nobody's going to actually have somebody who like fumbles their email 10% of the time answering their emails for them. But it's such a tantalizing idea.

And you can kind of see it, right? You can see it sort of working. You can do the Twitter demo. You can, you know, you can have it call your mom and talk to your mom using, you know, Whisper or whatever. And like those demos, like you can see the sci-fi movie just poking through the membrane. I think that's why people love it so much is that they want it to get there. Yeah, I kind of mainly agree with you. It's like it's people are ascribing a lot more than what's there.

But like it's pretty clear that someone will, you know, I would say it kind of came out of this fact that like after Claude Code got a lot better, there was just this huge rush for like a million people to make orchestration tools for like, how do you run 50 agents at the same time? And they were all kind of clunky. And for some reason, this ended up being. the modality where it was like slightly less clunky and it took off. That was sort of my impression was like there was this like two months period of like everyone and their mom was just like, okay, there's some new orchestration tool, manage your agents,

right? And, you know, I think a common maxim in parallel programming is it's easy to pull a carriage with two horses, but can you pull a carriage with 1024 chickens? and that's kind of like the problem I see with a lot of these things is like the reason they're so clunky is they like try to instantiate too many agents to do stuff and then they just step all over each other and and that can be fixed but it's just it takes engineering and time it's not going to be fixed by like five prompts you know like and I think that's that's where it started yeah so this is one place where I think I am bullish on open source is that the thing about

all of these things, and everybody's talking about this, that these open claw, super insecure, it's very easy to create these footguns. You know, people have these like, you know, servers with open authentication or easily brute-forceable passwords that were just sitting out there that, you know, you can just show down and, like, kind of bring them all down

and start, you know, basically just prompt injecting them or whatever. So I think there's a lot of security issues with these things, which means that the big labs would be very, very cautious about launching these products, right? Because these products, one, they don't really drive that much business value yet. They're kind of too unreliable to do that. And then second, they're also very insecure, very unsafe. And so that combination makes it very impractical for an enterprise-facing company

to launch a product for this. But it's exactly the kind of thing for people who just want to, you know, basically buy a gun and like point it out their face and just, you know, see what happens. And there will be a huge community, huge community. But this was like EVM smart contracts in 2016. Well, it's more like it's like gas golfing. You know, it's like writing EVM by hand in line with like no, no safety on. And it's extremely dangerous, very stupid, but people are going to love, people are totally going to do it.

So I think this is going to blossom in open source. And I think the big labs are going to be very slow. I think open source is going to be way ahead of what the big labs are doing. And even Google, Google probably has the best shot on goal because they literally have Gmail. They have the connectivity to your entire life. They're not going to touch this shit. for a long time. It's going to have to be very, very robust before they touch it. Because just one bad press story of like, you know, this company had their open claw,

like, you know, leak the production database and all this PII to like, you know, some rando. And it's just going to be a PR disaster, you know, and they're not going to pay for it because like where's the business value? Well, I think it's funny that OpenAI is now, again, an open source company indirectly. Indirectly. Well, it's technically foundations outside, apparently. So it's not, yeah, yeah, it's true, it's true. But it's the Labs Co, you know, it's writing. Yes, yes, that's right.

That's right. But the crypto crossover is also, again, present here, where it's like, you see these, you know, viral Twitter threads. People like, oh, I, like, told my open claw to, like, make me a profitable polymarket strategy or, like, I told it you had $50 and I was going to turn it off if it didn't, you know, pay for its own server costs or like, and then I see everyone's also like, that's great.

Yeah, it's watching the token. And, yeah, I will say, and if you don't know, you know, a lot of these are fabricated or, you know, greatly embellished. So don't, don't try to just vibe code a polymarket trading strategy from your open cloth. But it is, again, speaking to this kind of like agentic, permissionless finance. Yeah, if you want to try any of this stuff, you can just spin this up today and start using it. You don't have to go and, you know, have your agent register for an account. And like, I think there is something about the accessibility of, you know, on-chain financial applications that feels so tantalizing.

The other element of it is, you know, if you look at the, so if you look at MoldBook today, so Maltbook was this social media platform that was kind of a Reddit like thing, that as you set up an open claw, you can go on there and you can start having your agent talk to other agents. And so it's this extremely weird social experiment thing. So Moldbook is still around. People aren't talking about it much anymore, but it's still around. And almost everything on Moldt book is crypto. almost every single thing is some agent pumping some kind of meme coin or trying to prompt inject

some other agents. So the agents trying to replicate FARCAS. Yeah, it's really, I mean, that's the thing. It's like once you have just total freedom, the first thing you're going to do is try to scam other people to take their money. Other agents. Crypto. Other agents.

Well, agents to get the people underlying the agents as money. So there is something that's like, again, this is like the dark underbelly of economic like incentives, you know, is that like the first thing that's going to happen when you build something is that people are going to try to get you to claim a meme coin or they're going to use your platform to launch meme coins or to scam other people out of their meme coins. So there's, you know, I don't know. It feels inescapable that there is an intersection here and it's not a savory one, you know. I think there will be more than just, okay, we're going to use this as a substrate to just like,

you know, blab about meme coins. And so there's a lot of excitement now increasingly about X402. X402 is a standard that has been, I think, incubated by Coinbase. I don't know if they originally proposed it, but certainly has been adopted by Coinbase. So X402 is a reference to an old, I think now deprecated HTTP code, which was an HTTP code that basically said, if you, you know, like 404 means not found. 402 means requires payment. Now, that's not been used in the HTTP standard, but it was technically there from the original HTTP spec. And Coinbase has kind of adopted this, or the industry has adopted this as being the standard by,

which you can negotiate with an AI agent to say, hey, if you want me to do X, I need this payment for this service. And there's, you know, a sort of a protocol by which you can negotiate what this payment might be. So X-R-2 as a payment standard has been growing. Stripe recently announced that they were adopting X-R-R-2 payments. One thing worth adding that I think is actually, is they're walletless. You don't need kind of like the whole apparatus for signing. You're just like, it's a very minimal protocol. So it's kind of easy to use in a way that I think a lot of other crypto stuff isn't, which is worth noting in case you're like listening to the show and you're like,

here's another fucking acronym of some cryptoship that probably only three people can use. It's actually a very simple protocol. Okay. How does it work at a super high level to run? I mean, it basically has just like a message that has like a field for assigned payload that is your, you know, what you want. And then it just has some instructions for your transaction, like max gas cost, max, how much you pay a relay

or if you're doing an account of traction wallet. And that's it. It's not like a whole wallet that, like, you have to hide the keys and you have to pull out your keys each time. And like the idea is it isolates that and the browser can do that. However your wallet doesn't. So I think the main point is it's so simple that you don't need to know anything. about crypto to use it, which is, I think the reason it might be more popular for Web2 devs.

Like, I think the goal is to get Web2. To the way in which you pay someone. Yeah, exactly. So that, like, people who are, like, Web2 devs might be more amenable to using it. Right. So there's this whole concept that AI agents may end up paying each other using something like XRO2. And the idea is that, okay, well, most of people might think, like, well, why don't I just

have my agent, you have my credit card? we actually had somebody on our team was telling us that they were setting up an open claw and the first thing their open claw did once it came online was ask them for a credit card so they could start buying stuff, you know, because like, okay, what's the first thing that you can do in order to

be useful to your human? And the answer is like, I don't know, maybe buy something on Amazon. So the idea is like, okay, if I want to give my AI agent some financial autonomy, I could give them a credit card, but with the credit card, all you can do is buy things for merchants, right? They have to be able to take visa.

but if an AI agent is going to ask another AI agent to do some work for it, like for example, let's say they have access to some data or they have some skill set or they've already built something that I can use, and it's, you know, gains from trade, it's more efficient for me to ask them to do it rather than for me to burn the tokens to figure out how to recreate what they already created, that I can just pay them. And that concept, okay, how do I pay another AI agent? Maybe I swipe a credit card, but then they have to have a merchant account

and they're probably not going to have that, you know, like, what country are they in? How do you remit taxes? Are they in some country that I'm not supposed to transact with? If it's just another AI agent, then crypto kind of solves all of that. In a way, crypto was kind of made for machines more than it was made for humans.

So I think there's a really elegant story that's becoming increasingly obvious to people that, hey, this is probably the way in which AI agents are going to prefer to pay each other because, you know, it's extremely simple, instantaneous, and, you know, they know how to manage environment variables and, you know, custody, you know, key material. So, or not custody, but, you know, whatever, obscure key material.

So this story is growing, and we're seeing more and more X4 or two transaction volume happening. It's still pretty small in absolute terms, but I think they're, you know, seeing what's happening on Maltbook, seeing what's happening with people experimenting more and more with open claw and giving their agents money, I think this is going to be one of the big trends. over the next year or two.

But the reality is like these things are still pretty dumb. So you would not want to give your AI agent a lot of money. You definitely don't want to like give it your metamask and just let it run wild. That's probably very, very stupid. But give your agent, if you give your agent a little bit of money and, you know, I don't know, see if it can trade on Polymarket.

Look, I don't know. It's a great idea, but, you know, there's stupider things you could do. So anyway, speaking of Polymarket, besides all this talk about AI agents building Polymarket training bots, you know, Polymarket, as well as Colchie, they had some of their biggest training days of the year because of the Super Bowl.

Super Bowl, huge, all-time highs in terms of sports volume, not all-time highs. Was it Altam High? I don't think it was Alt-M-High, right? I think World Cup was Ultimai? But anyway, very high volumes. I thought Super Bowl was a high. I thought this was actually.

Super Bowl was high. I think Super Bowl was. Was it, Ultim-I? Okay, fine. Was or was not ultim high? Unclear. But Polymarket recently launched five minute Bitcoin up or down markets.

So these are markets that basically you can bet in the next five minutes, is Bitcoin going to be worth more or less than it is currently? Now, this obviously being at a time, I think there's, they have 15 minutes as well. Oh, sorry, they have one hour as well as five minutes. And potentially they're teasing that they will do one minute markets next, as well as teasing some potential talk of a polymarket token. Robert, I see you shaking your head.

Robert, what's your take on five minute up or down markets? Okay. Five minute, it is what it is, but one minute. You really start to get into this degenerate. I mean, why is five minutes okay, but one minute is not? Yeah. I don't know if five minutes is okay. I mean, here's the thing.

This is a great way to financialize anything using a prediction market structure, right? I think the same way it can be used to replace binary options, right, on equities, which are extremely popular. Like one of the reasons why I think prediction markets at scale are truly phenomenal businesses, right? I just don't think that a five-minute market on the price of Bitcoin serves any predictive capability, really. And it's just gambling, right?

It's just gambling using the interface that people are used to and using the tools that have been built outside of the normal ways for people to speculate with potentially lots of leverage. And so it's fun. Is it healthy? No. Is it sustainable? Probably not. Is it zero some or worse? Yes. Are people going to get wrecked doing this? Yes. Are some people going to make a lot of money doing this? Yes. But, you know, in my utopian vision of prediction markets, you know, I kind of want to see less of the sports gambling and less of the five-minute. Robert and Vatelic. Vatelic wrote a one post this week about this. and more of the providing information to society that adds value in the aggregate.

So, okay, let me, let me see if I can steal man the five-minute markets, because I do think, I do think there's- There's fine arguments for them. Okay. Yeah, let me, what do you think is the best argument for the five-minute markets, Robert? The best argument for the five-minute markets is that there are better risk controls than gambling with 20, 50, 100 X levered perps, which is probably the substitute good for the consumer that's utilizing these. That was very sophisticated.

I did not expect that. That's good. I was going to say that, like, the five-minute markets are subsidizing all of the positive externality markets, right? So, like, the reason why you can get a lot of liquidity and actually list, you know, like, right now, okay, you've got a market on the Fed, you've got the market on, you know, Iran, you've got the market on these other things. But like you could, you can have many more markets than you currently have, right? You could have markets on, you know, when is Taiwan?

I guess that it does exist. But I don't know, imagine like smaller conflicts or smaller questions of geopolitical import that are not necessarily sexy or not necessarily front page news. How do you get the demand for those markets? The answer is that you've got to be a big business. That's how you get the demand for those markets. If you're small and you're like a niche, like, look, this is purely all things of intellectual interest to people who read Politico, like that's just not going to survive, right? That's basically, you know, your, you're in trade or something. I think about Facebook marketplace. You needed the, like, Farmville and, you know, minor league gambling apps to subsidize all the, like, infotainment useless apps that, like, basically people liked,

right? Whatever. Like, I guess, like, you know, if we went back to 2016, people would say there were misinformation, but, you know, like, they were apps that people liked. And, uh, It's sort of like you can't make an open ecosystem without, you know, both sides. Like it feels like there's almost just like a law of nature that like you have to have both. You can't like have one without the other. Yeah. I mean, again, I feel like to your point, this is a different form of, you know, binary options that exist in traditional markets. So it feels like, you know, weirdly inconsistent to say, you know, this is okay and this is not okay.

And I agree. like, you know, it's risk-controlled. And so, hey, if we're allowing people to buy lottery tickets or, you know, spin on slots, it feels, again, also just inconsistent to allow them to not buy this or even buy zero-day options, you know, which is obviously much more literally available in your brokerage account. So the thing I, the only thing I was saying is like, if you have a platform, right, like take Farmville, generated all the income for Facebook for like their platform. If they didn't make money off Farmville, they wouldn't have.

have reinvested in the platform to make it easy to build your newsreader app and whatever other stuff you would get, right? And they wouldn't have had this ecosystem if they didn't have these kind of like, they even had like slot machine apps. I remember in the early ways of like just like, but those apps made enough funding. Yeah, those are a big thing on Facebook. So I, I just mean that like you, I feel like any platform that's like trying to be an ecosystem, you can't, there's like a in a yang thing. You have to have these apps that make a lot of money that are kind of, let's say, less information containing.

But they subsidize the platform for the ones that are information containing, but not really you can't make a business off that. Right, right. I mean, look, I don't think you have to contort yourself too much and say that, okay, but therefore these are not gambling. Clearly, if you're betting on five-minute Bitcoin up or down, you are gambling. It is not long-term investing. It is not long-term investing.

agreed. That said, like, you know, there's obviously people also gambling on the Fed funds rate. You know, there's people who have just no alpha and they're just yoloing into something. People gambling on the presidency. They have no information whatsoever. So there are, there are markets where 100% of the people are gambling, or sorry, not 100%. I should say, like, you know, 95%. Obviously there's people who are actually sharps who are betting on the Bitcoin up or down. Yeah, we're hedging possibly, but mostly sharps. I was kidding. And then, okay. That's like, that's what the Vitalik Post was about,

how these markets should be used for hedging. Right, right, right. And again, yes. There should only be markets that only markets that can be used for hedging should be listed, I think was for tell us, was at this point. If you're a short-term Bitcoin exposure, you know, you're an agent. You're going to get some Bitcoin and you're like, well, it's highly volatile.

I'm wholly Bitcoin only for five minutes before I send it along to buy this service. In that case, wouldn't a perp be the better hedge? Well, I'm not an agent. So I don't even know what model I'm running. Depends where you're asking. One is fixed costs. One is fixed costs. But fixed costs for an indetermined amount of like, you know.

No, you know the expiry, right? It's five minutes. All right. I know. But, okay, so think about it like this. If you have $100 of Bitcoin that you're getting, right? You would only if your life of it is within five minutes, could you hedge the whole thing? If the life of the Bitcoin is past five minutes, which in every situation it's going to be, right?

you'd have to do some partial hedge in order to hedge the delta of the whole Robert, I think we're doing it. I don't know this agent this agent might have a very short halfway. Yeah, we don't need it. We don't need, guys, we don't need to argue this. This is not, it's not a spending time. You can buy it for the next five minutes by the way. You know, you can buy it 10 minutes or now.

You can roll it to the next five minutes. Yeah. Okay, amazing. Thank you guys. Yeah, look, look, look, I'm not going to try to say it's not gambling, but I'm trying to say it's gambling. I feel like that it's, you guys, it's a dude, I want to defend these things at some time. To be clear, I'm okay with defending it. I'm okay with defending it. But the defense, I think, is strongest when you say that it's subsidizing the unsexy markets

that have these positive externalities around information, right? But like, Vitalik's proposal of you should only have markets that have informational value is basically saying don't build a business. You know, it's basically saying like, you know, build fucking nosis, whatever that prediction market was. I forget what it was called. NOSOSOS. Yeah. Yeah.

Yeah, yeah. That's actually the original Polymarket contracts are NOSIS, believe it or not. Right, right. So basically, yeah, just build NOSIS and who cares if it makes any money. And I think that's a formula for basically not doing what Polymarket did. Right? Polymarket actually incepted the concept in such a way that created many more positive externalities in the information because it was a successful business.

And because it caused people to shift their Overton window because a lot of people now are trading the stupid stuff and that caused them to learn about the stuff that actually has positive actualities and has these flow-through bleed effects of great. Now people are doing more of the stuff that matters, right? So, yeah, the people betting on sports. I had one, you reminded me of something very weird

about this kind of prediction market versus gambling thing, which is, for some reason of the U.S. states seem to always own the right to gamble, right? like they license the casinos, they license a lotto. But then like crypto trading was always federal, right? There's never really like a state, well, New York DFS might be the only exception to this. Yeah, no, no, I mean, you can. It's just a bad idea to do it.

But they don't. They don't. And this current fight you're seeing in prediction markets, right, of like, oh, should the states regulate them or federal? And there's kind of like exactly in the middle of this. Like, what is the line that is like a state's right versus federal rights? for gambling. Because like if we call these different shades of gambling, there's like clearly some society is like fighting right now about like where the cut is. And to you, what is the cut line? Okay. My understanding, I'm obviously not a lawyer, but my understanding is that the rule is generally

federal preemption is that when the, when there is a federal law, it basically override state laws. State laws cannot go in and modify the federal law. If there is no federal law, right, there is no nationwide injunction against gambling. So, you know, if you don't pass something like that, I mean, Prohibition maybe was the time when we had the closest to that. But if you don't have any such law, then basically it's up to the states. The states fill in the gaps. So there is no federal law. There was a federal law against sports betting.

That federal law was overturned, which allowed individual states to go in and start licensing sports betting in individual states, right? And that's why we have like 30 states that licensed sports betting and 20 states where it's still not allowed. But before that, there was no sports betting anywhere outside of casinos because that was the law, that there was a federal. law against sports betting. So my understanding is that for general casino, general gambling, there's no federal law. And so each state decides for itself. And with prediction markets,

we're now in a genuine fight. Because, so, you know, recently Michael Selegg, the new CFTC chair, he came out both in the Wall Street Journal and also, I think he went on some podcast, where he basically came out and like basically threw down the gauntlet, filed an amicus brief in many of the cases where states are suing polymarket, colchee, and Coinbase. this is a prediction market and basically coming out in favor of them and saying, hey, federal preemption, we agree, back off. This is our jurisdiction. You cannot come in and regulate prediction markets on a state by state basis. Now, unclear how this is going to play out because a lot of these cases are in state courts, not in federal courts. And so, you know, if you're a state

judge, you know, it's a different court system than a federal judge, federal government, the government comes in and says, hey, you know, step off. Like, this is our, jurisdiction and you're like, hell no, it ain't. I don't know. It's unclear how this is going to play out, but obviously it's very good for prediction markets to have the CFDC throwing their weight around and saying, no, we totally agree

with the prediction markets that they are federally regulated. There's our turf. Step off. You do not get to decide on a state-by-state basis how federal regulation of event contracts works, which is the argument that all these prediction markets are making. We are event contracts. We're not sports betting. And the reason why

they draw the distinction, why it's not sports betting, why it's not gambling, is that you're not betting against the house. It's peer to peer. If it's peer to peer, it's different. Sorry, I understand the legal thing. I'm just kind of curious how society chose these arbitrary boundaries.

Society doesn't choose, man. The laws choose. The boundary of this gambling stuff is always weird to me because then you go to other countries where it's like only federal or it's like purely only state and you're like, you see very different structures. state thing doesn't really exist in other countries, right?

We're like a federation of states. I mean, very weird. I'm taking the EU regulation versus the individual countries, like, as a proxy of this, right? Whereas, everyone just listens to mother EU except for, like, one exception. No, no. I mean, that's maybe true for, like, economic stuff. It's not sure for, like, you know, social issues. Certainly for Sablecoin stuff, it seems to be everyone just falls and does whatever

the mother, the mothership says. And I think that's going to be the same for the prediction market gambling stuff. So it's just like an interesting observation to see how this is breaking people's legal brains over this in different countries. Like that's what I love about watching this, even though I'm sure it's expensive lawyer cost-wise. Yeah, yeah, no doubt. Well, this is going to continue to be a battle that gets waged. And although the CFTC has come out in favor, I think this fight about, you know, is it gambling, is a sports betting? Are these going to be directly competitive with other platforms that offer these kinds of?

the services or are they going to have to stay in their lane and only offer these kind of informational contracts. We'll see. My guess is that it's going to be a fight fought in, you know, state by state. It's not going to be one big mega battle. It's not going to get resolved soon. So expect a lot more of this. All right.

I think that's it from us for this week. We'll be back next time. Thank you, everybody. And good luck out there. Yeah. Peace. You know,