AI ROLLUP #7: DeFAI Mindshare | Arc’s Multi-Chain Moves | ai16z: Sink or Swim? | Virtuals $40M Burn

Ejaaz is back with David to dissect the accelerating rise of AI agents at crypto’s cutting edge. They uncover how Arc’s multi-chain approach and Ai16z’s Eliza framework are igniting a fresh wave of DeFAI innovation—everything from clever Twitter agents to more autonomous protocols. They dive into Virtuals’ relentless shipping, which is driving record on-chain fees and fueling a bold $40M buyback, while exploring why upcoming gaming collaborations may unlock AI’s next breakout moment. New players like Ava and Pippin also take center stage, proving both the promise and FUD-fueled volatility of this fast-growing sector. Whether it’s DeFi revamps, multi-chain expansions, or full-blown AI-driven games, this episode outlines the major trends shaping crypto and AI’s convergent future. Ready for the ride? Further DAO Drama Conext https://x.com/TrustlessState/status/1878538551668736415 ------ 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium ------ BANKLESS SPONSOR TOOLS: 🪙FRAX | SELF SUFFICIENT DeFi https://bankless.cc/Frax 🦄UNISWAP | BUG BOUNTY PROGRAM https://bankless.cc/Uniswap-Bug-Bounty ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle 🌐CELO | BUILD TOGETHER AND PROSPER https://bankless.cc/Celo ------ ✨ Mint the episode on Zora ✨ https://zora.co/collect/base:0x4be6cd4d402fed49eb2de95fbc8e737e8ffd3e7f/16 ------ TIMESTAMPS & RESOURCES 0:00 Intro 0:22 Last Week’s DAO Drama 9:14 Last 7 Days of AI Action & Themes https://cookie.fun/ 13:36 AI Mindshare DeFAI https://x.com/0xNairolf/status/1878692478230118835 19:00 Franklin Templeton AI Agent Report https://x.com/s4mmyeth/status/1879256605386019262 23:33 Arc Announcements & Why Arc? https://x.com/arcdotfun/status/1879189754685636997 https://x.com/arcdotfun/status/1878848384821256329 https://x.com/0thTachi/status/1878921893236875296 https://x.com/arcdotfun/status/1879213739234463883 32:08 Ai16z: sink or swim? https://x.com/linfluence/status/1878827828600283622 https://x.com/shawmakesmagic/status/1879030956985819248 https://x.com/cryptopunk7213/status/1879258434685554951 https://x.com/ai16znews/status/1879059702996402353 https://x.com/0xCygaar/status/1874575841763770492 46:22 aixbt & Virtuals Announcements https://x.com/punk3600/status/1879316988381569159 https://x.com/Zeneca/status/1879331488166207517 https://x.com/S4mmyEth/status/1877051696037142678 https://x.com/virtuals_io/status/1879474995333939356 https://x.com/midoji7/status/1879484571273581032 https://x.com/ethermage/status/1876306411896144195 1:00:25 $Ava & Pippin https://x.com/Pankekkeku/status/1878362793281261861 https://x.com/tong0x/status/1878973798814503272 https://x.com/lordofafew/status/1879013041892933648 https://x.com/dv_memetics/status/1879027812285469101 1:03:24 Closing & Disclaimers ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:07David Hoffman?

  Welcome Bank This Nation to the AI rollup, where we cover the recent news, developments and drama in the intersection of crypto and AI. I'm David Hoffen, here with my co-host and AI expert, EJAS, and we are here to help make sure that you are up to speed with the rapidly evolving AI agent space out there. EJAS, how you doing, my man? How was your week last week? Anything, um, anything happen?

• 0:28Speaker 01

  Nope, not much, pretty quiet.

• 0:33David Hoffman?

  Okay, so there's going to be some listeners who do have context about what we're about to talk about, and there's going to be other listeners who have zero context about what we're about to talk about. So maybe we can just start by flagging that.

• 0:45Speaker 01

  Yeah, so, so I think it's important to provide context and also highlight that this is not a kind of like jokey part of this segment. This is kind of like, I want to take a moment to kind of like address something that is serious to me and meaningful to me and a lot of other people. And I think it's worth kind of just taking a moment. So for context here, um, last week, myself and two other folks, core contributors, Marcus and Rope, launched a DAO that will be fully dedicated to its mission of helping to grow this wonderful and wacky crypto AI space. And our founding principles from the start has been to use this DAO to help discover and support the best builders, creators and enthusiasts, the leaders of tomorrow, basically.

• 1:31Speaker 01

  And I want to start by saying that the core team and I took some steps with the launch process of which we truly regret and take full accountability for. And if I'm being completely honest, we were just so excited to launch and get this thing going. And in hindsight, it's so obvious that we should have instilled things like vesting for the core team and advisors. And in hindsight, we should have taken the time to slow down and make sure more of our community was involved. And that's definitely like a fault on our side and we take full accountability. But we just didn't, and that's on us. Ever since Mark, Rope and I started researching, building and nerding out on this space, We've had builders reach out to us and asked them to help them.

• 2:13Speaker 01

  And whilst we did the best that we could, there was only so much time in the day. And we thought, well, we didn't want these builders to not get the support that they needed, right? So we thought like, you know, we'd rush to assemble a team across all the blockchain ecosystems, which we thought would be the most capable to help us and help these builders do what they wanted to do. And that included you, David, and a host of other builders, investors and thought leaders in the space that we believe can help us fulfill this mission of taking this small, you know, niche sector in crypto and grow it into the potential that we think it deserves. And unfortunately, that rushing cost us. None of us even thought for a second, like literally, if you could hear the conversations we had before,

• 2:57Speaker 01

  none of us thought for a second it would get as big as it did. And we just thought, you know, we're a bunch of like nerds, to be honest, launching at a time when markets are down. So we'll have, you know, this small launch and then we can kind of build from here. But the opposite actually happened. And we learned, you know, some really hard lessons, which tie back to the points I made earlier around investing in community distribution. That being said, I'm so grateful for the community that came through and showed their support. It genuinely means the world to me. And we're taking steps, which will be announced very shortly, to repair that damage and to kind of create and fulfill on our vision. I just want to end this with saying that the core team advisors and I are fully committed to realizing our original mission.

• 3:40Speaker 01

  And I don't, I also want to say that this is the only time we'll be mentioning this DAO on this show. We want this series to focus on all the amazing teams building in this space and not focus on anything that we're doing, to be honest. The goal of this series is to amplify and build up others, not ourselves or whatever we're doing on the side, which is why we've never talked about AICC on the show prior to this too. David, I know you faced some heat, maybe you can shine some light on that.

• 4:10David Hoffman?

  Yeah, yes, yes, we did. Many times throughout Bankless's history, we've been like mobbed and dogmailed on crypto Twitter due to sets of like facts or conclusions that were simply wrong or heavily manipulated to look as bad as possible. This is the first time that we actually did do something that I that we consider wrong, that we regret, that we immediately tried to do as soon as Ryan and I both realized what had happened. So Ryan and I, advisors, we were able to contribute like our share of five Sol alongside many of the other advisors. And that also included Bankless Ventures as well, got to contribute to Sol, along with our other third GP, Ben Lakoff, who also contributed one Sol.

• 4:53David Hoffman?

  Upon the launch of the DAO, the price action of the token, the AICC token, was like pretty insane. I feel like if you go look at CoinGecko or some of the charts, it hit like it touched a billion dollars in market cap right on launch, just because like people were playing games, people wanted to buy, it was very exciting. No one really expected that or like accounted for that. There was a decision made by the Bankless Ventures team to sell 8% of its supply of tokens on launch day, which

• 5:20Speaker 01

  Which can I can I just say which like shocked me, to be honest, I think like I just want to come clean and say like, I mean, you have the DMs, I hit you up and was like, you know, what's going on here? And like, this is like unacceptable. And I, yeah, anyway, I just, you know, you were understanding of that. I think you were shocked as well, to be honest.

• 5:38David Hoffman?

  I was also shocked because I was not aware of the fact that Bankless Ventures made the decision to sell 8% of the tokens. That amounted to $65,000, just to put that into perspective. Yeah, the decision to sell the 8% of tokens was made without my or Ryan's like input or knowledge, something that we would have never approved of had we been made aware. Once we found out, we were like sent a tweet by a friend about somebody saying like, oh, Bankless Ventures is like dumping the token on day one. And I was like, well, that's not true. That's that's got to be a mistake. Turns out it was actually real. Once we found out it was real, we immediately just stepped in and rebought the AICC token with all of the proceeds from the sale, just a few hours later from the moment of the sale. So.

• 6:21David Hoffman?

  Like because selling tokens so soon into a project's lifespan, not something that we want to do, that we support or we condone. There's extra context for how and why this sale happened. There's a link to a tweet that kind of gives a play by play in the show notes. It's just kind of like a dominoes of events. Unfortunately, nonetheless, it was done. Then there are also parts of crypto Twitter who love to drag bankless through the mud. And we had just basically giving them the material that they needed to make this seem as bad as possible. The narrative for some people on crypto Twitter became that bankless had built this up, built this whole thing up all along, that bankless sold millions upon millions of dollars onto our followers, that bankless conspired to create

• 7:05David Hoffman?

  the whole AICC DAO in the first place in order to do this, that we started doing the AI rollup with EJAS for the sole purpose of creating hype around the AICC DAO, which to be clear, the Accelerate DAO was never mentioned or promoted on any AI rollup or any other bankless podcasts prior to the segment that you're hearing right now. There's also some alternative media organizations out there who took advantage of this very bad look and helped promote a twisted version of the truth. Perhaps one of the more, I'll say like valid bits of critiques is that bankless had a role in elevating the prominence and clout of EJAS here, which helped by proxy to generate hype and significance to the launch of the Accelerate DAO. To be clear, wasn't our intent. Ryan and I found out

• 7:46David Hoffman?

  about the existence of the DAO the Tuesday before it launched, five days before it launched. Also, EJAS, like you and the other two core team members had already assembled a pretty stacked organization without any help from us. We didn't do any, any help with assembling that. I think many people out there perhaps first heard of you, EJAS, by us bringing you on to the bankless podcast as our AI rollup host. And that's because you are on the crypto AI frontier, where you've already established the relationships that you needed to make the Accelerate DAO a reality without, again, without any help for us.

• 8:20Speaker 01

  I'm just a nerd in the trenches that just want to geek out and learn about this. Literally, like if you look at most of my tweets, it's like, can you please teach me this or that? So yeah, you kind of picked me up out of that. And it's been a rollercoaster since, David.

• 8:30David Hoffman?

  Yeah. So a lot of people don't have all the context. Overall, call it a pretty dramatic start to the Accelerate DAO with a lot of lessons learned in hindsight. Any final comments before we move on?

• 8:42Speaker 01

  No, I just want to reiterate that.

• 8:46Speaker 01

  We're incredibly grateful for our community and the support that they've shown. And we are fully committed to realizing our mission despite this bumpy start. We're going to steer the ship and correct course and kind of forge ahead. And we've got some really exciting announcements, you know, that is going to kind of fulfill some of the things that we've heard from the community. But let's leave it at that, David. I don't want to talk about this.

• 9:09David Hoffman?

  First and last time.

• 9:10Speaker 01

  Speak about this first and last time.

• 9:12David Hoffman?

  Accelerator Dow has been mentioned on the roll up.

• 9:15Speaker 01

  Yes.

• 9:15David Hoffman?

  So now I have to ask you.

• 9:16Speaker 01

  Yes.

• 9:17David Hoffman?

  The theme of the week in AI crypto. What would you say? Update us on the last seven days of action, seven days of activity, seven days of fundamentals. What was the last seven days like?

• 9:26Speaker 01

  The last seven, well, let me start with something which isn't fundamental, but is important to cover, which is the markets were down, David. And I have this saying, which is by no means my own. Someone much wiser said this before me, but the narrative follows price. So what that means is if the price go up, all these narratives are like, oh, this is the reason why. And this is like amazing. Check out this new project. When the prices are down, David, the pendulum swings back with ferocity the other way.

• 9:58David Hoffman?

  When the prices are up, these are autonomous sovereign AI agents. When prices are down, these are just glorified bots.

• 10:03Speaker 01

  Bots. These are glorified bots. So we experienced some of the latter over the last seven days. Markets, in my opinion, did a healthy correction, David. And this was not just within crypto AI. This was within the macro perspective at all. And actually, maybe a spicy take here is overall, if you look at like the price performance of the crypto AI agent sector over the last, say, three months or two months. Let's call it one and a half months, actually, because this sector, I keep forgetting how young it is, has actually outperformed macro, like to a crazy amount of times. Yeah, yeah, significantly, right? But obviously, people like look at their tokens. They see a wild price accrual and they're like, oh, my God, I'm used to this portfolio number that I'm looking at on my screen.

• 10:48Speaker 01

  And then when it corrects healthily, you know, after like a whatever, a 5X or something, people are like, oh, what's happened and all this kind of stuff. So that's what we experienced over the last week, a kind of like macro correction in majors. So like Bitcoin and stuff, and then that affecting crypto AI specifically.

• 11:05David Hoffman?

  Especially, yeah. And maybe just to put some numbers on this, like Bitcoin got up to $107,000 and then bottomed at $91,000. You know, Ether touched below $3,000. And then AI crypto tokens got hit especially hard. AI 16Z, like one of the premier tokens, topped out at $2.25, bottomed out at $1. So lost 60% of its value. It's back up to $1.50. Virtuals, which topped out at $5, fell all the way down to $2.30 and is now back up to $3.60. This is what a very skitterish bullish bull market looks like, I would say.

• 11:48David Hoffman?

  Is like, things go up and down 30, 40% in a week because people's sentiments can change on a dime.

• 11:55Speaker 01

  Yep, 100%. And if I kind of like, could add a few other figures to this is, well, probably the main one. The total AI agent market cap, which I think peaked at around $17 billion about a week and a half ago, retraced to, I think, around 11 to 12 billion dollars, right? And as you can see, you know, markets have, I think this, this cookie data might be maybe slightly lagging or something, but markets are up today as we're recording this conversation on Wednesday.

• 12:29David Hoffman?

  AI XPT is up 82% on the week.

• 12:33Speaker 01

  Yes. So these things are very, very reflexive, David. And like, you know, it's just interesting that like, when the markets are down, people aren't very convicted in their thesis in general. But some of these things still stand and the market shows that when markets flip back to the positive, right? So we've seen kind of a healthy correction within the AI agents market. And what's happened this last week, if I were to summarize it, was a mixture of teams still shipping stuff and then a bunch of critics out there that were saying, you know, I think. I think this is the end of the crypto AI agent sector. Now, obviously, like us on this show and having this whole segment around AI agents, we're kind of biased, but I do not think that's the case. I think we're actually furthest from that case.

• 13:19Speaker 01

  I put out a tweet a while ago, which basically said, if you want to know in times of uncertainty or even certainty, what on earth is going on, talk to the builders. Put your heads down and get in the weeds with things and you'll see that there are people that truly care about this space that are building some awesome stuff. So yeah, I think we should kind of like get into things, David. I wanted to start off with this really interesting chart that I saw on Kito, which is kind of like a social sentiment tracker, where typically they've had this metric called AI mindshare, David, okay? And AI mindshare started off like this. If you imagine like a little, a little square, it looked like this.

• 14:00David Hoffman?

  Tiny little blip at the corner.

• 14:01Speaker 01

  Tiny little baby little thing. And then halfway through last year, that just grew bigger and bigger and bigger. And then when agents came about, well, it looks like what you're looking like, what it looks like on this screen, right? Where it takes up like half the page. And for people who are confused or aren't looking at the screen right now, it's kind of like blocks of kind of, it's squares that each represent a specific segment. So it could be DeFi, it could be NFTs, and each square is proportional. Its size is proportional to how much it's being talked about within the ecosphere, within Twitter, within social media sites, within the crypto realm.

• 14:41Speaker 01

  And if you're looking at the screen right now, the AI square is taking up half the screen.

• 14:47David Hoffman?

  Forty-eight percent.

• 14:49Speaker 01

  Forty-eight percent.

• 14:49David Hoffman?

  It used to be seventy. It used to be seventy.

• 14:51Speaker 01

  Well, it used to, it used to be seventy, but there's a reason. And this is why I actually brought up this chart. It wasn't to show that AI was taking up fifty percent, but it's to point to a square that sits adjacent to it, David. Do you, do you know which one I'm talking about?

• 15:04David Hoffman?

  Yeah, it's the one that's extremely green, which implies extreme growth, called DeFi, which we talked about last week. It was a big segment last week. And I think I'm going to beat you, run, uh, beat you to the punch. You're going to talk about how AI used to have a single block of mindshare. And now there are two AI sectors that are different. You have AI and AI agents probably, and now there's DeFi, DeFi with AI in it. So AI-enabled DeFi that has its own independent amount of mindshare. Coming in at six and a third percent. Number three, after memes, so memes coming in at 10%. AI coming in at 48%. And then third is DeFi. DeFi, DeFi, we need a better word.

• 15:48David Hoffman?

  AI, AI finance, AI decentralized finance coming in at 6.3%.

• 15:55Speaker 01

  Yeah, I think we need to either say DeFi AI or AI finance. We're still working.

• 16:01David Hoffman?

  AI DeFi is the easiest thing to say. AI DeFi.

• 16:04Speaker 01

  Fine. Yeah, and it doesn't sound ridiculous at all, David. But yes, you are, you are smack bang on, you know, hammer on the nail. The AI category has split into its, into AI and DeFi AI, which kind of shows that there's a lot of attention, investment and focus on this particular subsector of crypto AI, which I think is super, super cool. And so we have to ask ourselves, well, why? Why is this whole sector even being spoken about at all? Well, we kind of spoke about this, I think, two episodes ago, David, where we were saying, okay, well, what have we got so far in terms of like crypto AI agents? Well, there's some really smart, kind of sassy Twitter bots, right?

• 16:49Speaker 01

  You know, people like to call them.

• 16:51David Hoffman?

  Influencer bots, yeah.

• 16:52Speaker 01

  Influencer bots, right? And AI XPT has kind of like embellished that quite a bit. I've been the leading example. But the next question was like, okay, I'm kind of getting bored of these Twitter.

• 17:04David Hoffman?

  I didn't like influencers to begin with.

• 17:06Speaker 01

  Yeah, well, there you go, there you go. And it's kind of like, well, what comes next? And the natural reaction to that was, which I think is actually kind of on the money here, is, well, hang on a second, we've just built up an alternative financial stack over the last eight years. Maybe they'll have some relevance there. And we've spoken about this before, saying like, I think agents are going to be the connectors of all this complex blockchain stuff into a really neat UX where instead of having to spin up a wallet and sign transactions, you just ping an agent. So basically, DeFi AI is the emergence of that. It's combining these AI agents with DeFi capabilities. So what does that mean?

• 17:46Speaker 01

  It means these agents will have their own wallets. It means these agents will be able to trade. It means these agents will be able to invest. It means these agents will be able to do all the things that you can do within DeFi today. And one might ask, well, why is that important? I mean, I think that's a good question to ask. There are many reasons. Number one, I think a super smart, aligned AI agent that can work 24/7 and costs almost nothing to pay to do the work of 10 different humans is probably a valuable proposition. But of course, realizing this is going to take some time, but it's really cool to see the kind of focus and emerge on this particular sector, David.

• 18:27David Hoffman?

  This reminds me of something I said last week, which is like, this is kind of just like, we're talking about AI agents as like a focus point of this whole, you know, technological revolution that we're covering, but it's really the AI-ification of everything in crypto. Last week, we talked about how virtual is partnered with Illuvium, the game. So now we have AI innovating with gaming. And gaming has its own sector. It's actually number four. So you could kind of see AI starting to integrate with everything that makes up crypto in the same way that people are predicting that AI is integrating with everything about the rest of our normal lives. I do want to bring up this tweet from Sammy talking about Franklin Templeton that just published a report on AI agents.

• 19:07David Hoffman?

  This is triggering some memories of, I remember when, like back in 2020 and 2021, when we started to see institutional reporting about, you know, the emergence of DeFi. This is kind of the next step in the adoption of the mindshare of AI agents and what's going on.

• 19:24Speaker 01

  So it's not bearish, David?

• 19:25David Hoffman?

  It's not bearish. This is, this is, this is what, this is the next step on the bull market is the suits start making reports because their clients are like, hey, I heard about this like agent thing, like what's going on? And they felt compelled that they need to make a report. Did you read this report, EJ?

• 19:40Speaker 01

  Yeah, I did. I did. And what I will just say is, for those of you who have been plugged into the crypto AI agent space and all who have been watching these episodes, you're not going to see anything that is mind blowing.

• 19:52David Hoffman?

  They are watching this, these rollups in order to write their reports.

• 19:56Speaker 01

  Yeah, potentially. And what I will say is, the more prescient point that they make is, they think this sector is here to stay, which is really cool to see from an institutional practice, which are known for taking long-term bets, long-term convicted bets. And their clients are expected to be receiving the same type of thing. So for them to take the time to put out this report and highlight it for their clients means, to David's point, that they're getting some kind of demand or attention around this. The TLDR here is, they expect it to probably grow to 100 billion plus. They expect these agents to get a lot smarter and do a lot more than they do right now.

• 20:40Speaker 01

  And they're watching the space very closely. I don't know if they're invested in any of this stuff. I sort of doubt it, but I'm always around to be surprised. But it's cool to start seeing some more of these ecosystem reports from some major players. And for people who are kind of like, who's Franklin Templeton and stuff like that? They manage a huge amount of wealth, billions. Well, I think it's like hundreds of billions in the TradFi sector. All their clients are people who aren't in the crypto trenches. And they're people that are used to very traditional financial instruments, ETFs, stuff like that. So for these guys to put out this report, it's pretty insane to see.

• 21:19David Hoffman?

  Yeah, they start off the report talking about Truth Terminal and Goat, of course, and then Fartcoin as well. I mean, Franklin Templeton, as TradFi as they come, they're pretty in the trenches as well. So you kind of got to tip your hat to them.

• 21:34Speaker 01

  Yeah, I think I remember when memes were exploding, they put out a tweet which basically captured all the favorite memes. It was like an animation of like all our favorite memes. So I don't know who their intern is, but it's pretty hilarious.

• 21:47David Hoffman?

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• 22:30David Hoffman?

  Cello is transitioning from a mobile-first, EVM-compatible Layer 1 blockchain to a high-performance Ethereum Layer 2, built on OP stack with EigenDA and one-block finality, all happening soon with a hard fork. With over 600 million total transactions, 12 million weekly transactions, and 750,000 daily active users, Cello's meteoric rise would place it among one of the top Layer 2s, built for the real world and optimized for fast, low-cost global payments. As the home of the stablecoins, Cello hosts 13 native stablecoins across seven different currencies, including native USDT on Opera MiniPay, and with over 4 million users in Africa alone. In November, stablecoin volumes hit 6.8 billion dollars, made for seamless on-chain FX trading. Plus, users can pay gas with ERC20 tokens like USDT and USDC and send crypto to phone numbers in seconds.

• 23:15David Hoffman?

  But why should you care about Cello's transition to a Layer 2? Layer 2s unify Ethereum. L1s fragmented. By becoming a Layer 2, Cello leads the way for other EVM-compatible Layer 1s to follow. Follow Cello on X and witness the great Cello happening, where Cello cuts its inflation in half as it enters its Layer 2 era and continuing its environmental leadership. Something we talked about last week, which continued to make waves this week, is Ark, ark.fun. For those people who don't remember, tee up Ark for us and what happened in the last seven days.

• 23:44Speaker 01

  Of course. So, um, ARC, or ARC dot fund specifically, um, is a team who is building an AI agent protocol. So the way to think about this is your bog standard framework plus platform, but with some really interesting, you know, spices and sauce mixed in, right?

• 24:03David Hoffman?

  A competing AI framework to compete with Virgil Eliza.

• 24:08Speaker 01

  Yes, exactly. Yeah, think of a, of a protocol team which is competing with those bigger players. And so, um, the context here is they take a slightly different approach in the way that they're building their platform and their framework. Well firstly, um, it's written in the Rust code, which for those of you who have been following the Solana ecosystem, which is also written in Rust, you know, people have been trying to be make, uh, trying to like compare the alignment between them. Um, but people, well, it's actually interesting, David, people, uh, or devs in general, like, would show that they don't really like Rust, because it's a harder language to kind of learn. It's, it's less accessible to the average developer, right? A software engineer that's coding in Python or TypeScript will go to a Zerobro or, um,

• 24:51Speaker 01

  an AI sixteen Z to kind of like experiment and launch agents on their frameworks. But there's a, there's a bigger learning gap to overcome in terms of, um, engaging with like a Rust framework. But anyway, the ARC team specifically were convicted in their resolve of building out this Rust-based AI agent framework. And the reason why they've been getting, um, a lot of excitement recently, um, is two things. Number one, um, they've been behind the scenes, working tirelessly to, um, support the initial teams that are building agents on their platform. So, um, they're kind of taking a more curated approach where they're going to start announcing certain teams that are building agents.

• 25:32Speaker 01

  And what we're really hoping to see, David, kind of going back to the point of like, we've seen all the Twitter bots now, we've seen all the Twitter agents. We want to see something different here. We want to see some like interesting primitives. We want to see these agents do a little bit more than just tweet at us, right? The, the second important thing here is kind of like this string of tweets, which honestly has come out over the last twenty-four to thirty-six hours, of partnerships that ARC is being made. Um, I mean, there's some heavy hitters in here, like ARC announced a partnership with Abstract or Abstract Chain for EVM compatibility. For those of you who don't know what, uh, Abstract is, It's kind of birthed from the the brainchild of Luca Nets, who is the founder of Pudgy Penguins. So ZK Sync Chain.

• 26:16Speaker 01

  ZK Sync Chain and Saiga, who is one of the most cracked crypto AI agent devs that I've had the pleasure to interact with online and learn from. So the the idea behind Abstract is, you know, it's going to be basically the best UX ever to interact with crypto and they'll have their own wallet and cross-chain compatibility. I'll extend into that at another time, but the point is they've partnered with ARC to enable that capability for anyone that is building on the ARC framework. Other kinds of announcements are, you know, announcements with Eternals, announcements with this team called Send AI, which allows them to have a bunch of different integrations with Solana. So if you want to swap on Solana, if you want to trade on Solana,

• 27:01Speaker 01

  if you want to create a token on Solana, if you want to attribute an agent with another token, or if you want to send swaps or whatever, you can do it through using, you know, these guys, this team Send AI and their product. ARC also announced with Arbitrum, which kind of like is another different chain separate to Solana. Integrating all the chains, Solana, Abstract, Arbitrum. Yeah, okay, so so let's kind of like condense all of this, right? Like, you know, you we've just listed off a bunch of partnerships, but so what? Like, what does it mean? Well, there's a few reasons why this is good. Number one, for ARC, well strategically good. Number one, for ARC, they're going to increase developer adoption. And there are two ways that they're

• 27:42Speaker 01

  doing this, right? Number one, they're available on way more chains. So, you know, whereas their birthplace is Solana, they'll be available on Arbitrum, and they will be available on any kind of EVM compatible chain through their integration with Abstract. The second important thing is it's going to make it easier to build on their framework, Rig. And as I mentioned earlier, David, it's coded in Rust. It's less accessible to developers there. But if they make these integrations with an EVM compatible wallet or infrastructure like Abstract, or if they partner with Arbitrum. It's going to make it easier for developers to come and be like, okay, well, maybe let's let me tinker around with this.

• 28:23Speaker 01

  Maybe there's like some kind of abstraction layer, which doesn't require me to code or interact in Rust, but it can kind of like communicate what I am trying to build into Rust so that I can create an agent. So a really smart and strategic move from their end in terms of like increasing developer adoption. The the second thing is it leads to more experimentation, which leads to more innovation, David, right? So think about this, like a lot of blockchains, if we were to use this analogy, that have launched in the past that, you know, we may have heard of back in the day in a previous cycle, but we've never heard of again. One of their main issues was acquiring a strong developer mode. You know, it's why Ethereum is so strong today. It's why Solana is so strong today. It's why base L twos and other L twos are so strong.

• 29:08Speaker 01

  Because they were able to acquire a bunch of developers that want to build stuff on them. Arc is taking a similar strategic approach where whereas it might have happened more organically in leading protocols like Virtuals and AI sixteen C, the truth of the matter is it's getting more competitive, David. And so these new leading protocols that have something unique still need to do something to onboard new devs. So it's really cool to see this setup, which allows for more experimentation. And so developers can build stuff and it increases your service area of creating something cool. And finally, something that's really cool about these partnerships is that it enhances capabilities for any agents that are built on top of it. So we mentioned earlier, like, you know, the send AI integration.

• 29:50Speaker 01

  Well, now any agent you spin up has like thirty Solana plugins, which means that you can do a bunch of different actions natively on Solana just by hooking up into certain APIs, which I think is super cool.

• 30:02David Hoffman?

  I want to ask about, so we're talking about how like these AI agent platforms are kind of like, they've been considered the AI, the the layer one trade of like the AI agent cycle.

• 30:13Speaker 01

  Yes.

• 30:14David Hoffman?

  And we just spent a lot of time talking about Arc. I want to ask like kind of why why Arc specifically? How how do you like rank it? There's like Virtuals, there's Eliza, there's there's other other platforms as well. Like, are we saying that this is like a third? Is that why we're covering? Like, why are we covering this so much?

• 30:30Speaker 01

  Yeah, so the reason why, okay, there's two reasons. One reason why I'm covering it is it's just interesting. I like what the team is building and I think it's like very unique. I have no idea what agent teams are building on them. I just like the approach that the founders are taking. For those of you that are active on Twitter and look at my tweets, probably thirty percent of my tweets is, hey, nice to meet you. Can we jump on a call? I would love to learn. And that's what I did with the ARC team. And they were gracious enough to do a call with me and they taught me about everything that I didn't know. And, you know, I was able to kind of then convey that knowledge to listeners on this show to kind of like share my excitement. And I'm like, hey, like, check this out. This is, this is super cool. So, so I got, that's one reason why we're talking about ARC. And to be honest, it should be the main reason because

• 31:13Speaker 01

  things that are being built by cool teams, I think, should be voiced here, right? Number two, I do think it's gaining enough traction. Now, David, it's been around for about a month and a half, at least publicly, where I think this has the potential to join some of the bigger league protocols out there. Now, to be clear, Virtuals, AI sixteen Z, these are the kingpins, right? They have established themselves, they are leading this sector forward and they are some of the best teams ever, right? But I still think there's chance for a few others to emerge, David. And that's not for me to be like, you know, I think, you know, it's because they're offering something so unique. I just think this space is so underexplored right now. I just think that there are so many things that we don't know from a design perspective,

• 31:57Speaker 01

  whether it makes sense to build these agents on, that we should be paying attention to some of the bigger teams that are coming. And I think ARC has the potential to, you know, take that third or fourth position or whatever, you know, it might be.

• 32:08David Hoffman?

  Cool. All right, well, let's talk about AI sixteen Z because that is, maybe call it number one, number two, at least Eliza Framework, I know has the most developer options. So getting into the world of AI sixteen Z. Give me up to speed, what are we looking at here?

• 32:23Speaker 01

  Okay, so as you mentioned earlier, David, AI16Z had, well, the entire market had a volatile week, but AI16Z token in particular dipped from a peak of, I think, $2.50 all the way down to a dollar, right? With a lot of, frankly, in my opinion, unjustified FUD on the timeline. It seems when markets are down, the critics are out with their pitchforks in full force, right? I don't think the scrutiny is bad at all, actually, as long as it's well reasoned. And what I wanted to spend a moment on here is digging into what AI16Z's Eliza framework, which is their agent framework, their famed esteemed framework, which is number one trending on GitHub, is now and what it could be.

• 33:06Speaker 01

  So what I want to talk about is what I think it can do now and what it could eventually do, right? So I want to bring up this post from the guys at Reforge, who, context here, are like basically former engineers that are now investors. So what they did was they did this kind of like deep dive into Eliza, where they kind of went into the GitHub and they wanted to see like, okay, what can this thing actually do? And there's some important lessons from here, right? And let me give you some of the takeaways. Essentially, Eliza is a great framework to use if you want to build something that they refer to as a personality agent. This is an agent that can tweet, socialize with humans across multiple social mediums

• 33:48Speaker 01

  like Discord, Farcaster, TikTok, whatever it might be. Another advantage is it's really easy to spin these agents up, and they're fairly extensible in the sense that there's, you know, 40-plus plugins now available on Eliza that, you know, would allow these agents to do a number of different things, right? You know, they could post on TikTok, they can trade or do something, they can like create their own wallet, they can, you know, have memory that kind of like matches across all different platforms, you know, stuff like that. But They claim what it lacks, so this this team claims that what AI 16Z and the Eliza framework lacks is the stuff that's needed to build an agent that's truly autonomous.

• 34:33Speaker 01

  Things like self-learning or strategic planning. For example, they mentioned memory systems, right? And how an agent can store its memory in a database. Think of this like storing files on Google Drive, right? So you have like a memory or context of something that you've written down, a note or a document, you know, that's that's pretty much what Google Drive is. It's a compilation of things that we want to kind of like remember and revisit. So imagine that this agent has this memory database, which it can on Eliza, but it doesn't yet have the capability to determine which memories or which parts of memories is good to use in different scenarios. So think about this, David. Imagine you have like this database of all this important knowledge,

• 35:15Speaker 01

  but you don't know which parts are important and you don't know when to pull it out. So you can imagine on paper, these agents are really cool, right? It's like, hey, you can spin up this agent, it'll have a database stuff. Great, but the coordination layer, the orchestration layer is a little lacking right now. And so what I expect to see is these frameworks kind of develop on that.

• 35:40David Hoffman?

  Can I summarize what I think I heard? Just make sure I understand it, right? These guys, these guys from, what is it, Reforge? They popped open the hood of the Eliza framework to kind of like audit what it is. Because like, sure, you can tell me it's an agent framework. And I'm like, that I can, that could be anything, like what is that? And so they looked at what it does technically, and they came up with some sort of like diagnosis or analysis about like what the Eliza framework is optimized for. And what it's optimized for is what you're telling me is like, kind of to be an influencer, which I think makes sense at the very beginning of this whole AI agent bull market that like innovation cycle that we're doing where people in crypto are going to like.

• 36:23David Hoffman?

  Create a lot of attention and awareness around things. And that's kind of where the incentives lie. Let's create first, we're going to create the influencer agents before we create anything else. And what these guys are saying is like, yeah, the Eliza framework is good for making influencers. It's less good at maybe some of the more ambitious hopes and dreams that I personally have for this AI agent space. Like what I would like out of an AI agent, EJAS, is this agent that is truly autonomous, that is kind of like out of Pandora's box, where it is, has some sort of arc to it that cannot be undone. It can't necessarily be turned off. It makes its own choices. It goes in its own direction.

• 37:05David Hoffman?

  It has some notion of free will about itself, or at least some like directional outcome. Whereas like a lot of these agents are just like, they're bots that are designed to make creative tweets. And so like, what we're missing is some components to really make these things have a little bit more life. And they just looked at the Eliza framework and like, right now, it's kind of good for making snapshot in time influencers. Is that a fair analysis?

• 37:29Speaker 01

  Yeah, I think so. And what you're saying is we want like basically little baby human robots.

• 37:35David Hoffman?

  Yeah, we want these things to be a real boy, not tied to strings.

• 37:39Speaker 01

  Yeah, exactly. One thing I will push back on slightly, David, is, and I was very specific in the way I phrased my kind of like framing of what the Reforge guys put out here, which is for now, in its in existent form. And I kind of want to bring up a tweet that was put in response to this from the guy himself, from Shaw, the founder of AI 16Z, which basically, you know, gave his side or his opinion on what the framework can do right now. And rather than go through this entire tweet, because it gets quite technical, the TLDR is it's more nuanced than we think. It's not just like, hey, you spin up a social agent and you can't do A, B, and C.

• 38:24Speaker 01

  There are certain contexts or environments or setups that would enable the agent to do more things, but it's just not as accessible. Plug and play as we want right now. So the the argument that Reforg was making was like, hey, you can spin up these personality agents, but you're gonna have to do a lot of custom build work. And Shaw is rebuttling, saying, you can kind of like do what you need to do on Eliza if you're aware of how to do it. We make it easier. So basically, if you're an AI ML engineer, you shouldn't have an issue doing the kind of like crazier things. But it's that knowledge gap, you know, is is a plug and play platform where you just click a few buttons

• 39:04Speaker 01

  and launch a really super smart agent better than having something that is a little more nuanced and technical right now that will eventually become something easier to do. So I emphasize for now, in its existent form, Eliza may be limited in those regards, but they're supposedly meant to be shipping Eliza V two, which will have a bunch of upgrades that will enable this way more autonomy, basically, for for agents. But let's step back for a second, David, and kind of like ask the bigger question because you kind of just spent some time there describing, you know, what these agents should be able to do. But the audience might be wondering, well, why is autonomy even important? Well, firstly, if we don't progress autonomy, then all we end up with is these rigid agents,

• 39:47Speaker 01

  which appear pretty novel at the start, but kind of get boring real quick. Autonomy, yeah, yeah. Autonomy, to your point earlier, will make these agents more human like, you know, they'll be able to remember things, have context on situations and make decisions for themselves instead of some human needing to kind of like spoon feed them like a child every other step. And this ties to a wider point that I love to see this sort of friendly, transparent debate happening between two people making frameworks. Do you know what I mean? It's it's forcing us to to think deeper and push this sector's tooling to its extremities, right? I put out this tweet yesterday, which speaks to this, which is like, you know, catching up with with everything that's going on.

• 40:28Speaker 01

  I've seen a flurry of teams launching these agent platforms and agent frameworks. David, if you remember, like on episode two, there were like three frameworks. There were like three platforms. Now I think we're at like fifty plus and counting, like they're like two launching today.

• 40:43David Hoffman?

  Fifty like quote unquote layer ones for agents.

• 40:46Speaker 01

  Yeah, yeah, yeah, like like loads of, you know, big teams and niche teams that are building and launching these frameworks and testing it out. And it's crazy to see. Now, that tells me two things. Firstly, there's a lot of excitement about this. And I think that there's a lot of potential that could come from it. Like, we're on to something. We don't quite know what it looks like, but we're on to something. And we're trying to figure out what these platforms should do and how they should be designed to enable what they should do, right? The second thing this tells me is we haven't quite figured it out. So it's equally like we've figured something out, but we haven't quite figured the thing out, right? And the reason behind that is if we have figured the thing out, I think there'd be fewer platforms that would be gaining mindshare.

• 41:29David Hoffman?

  There would be five or less, not fifty.

• 41:31Speaker 01

  There would be five or less.

• 41:32David Hoffman?

  Also, one big reason as to why there's fifty is that there's money in it as well.

• 41:36Speaker 01

  There's money involved, yes.

• 41:37David Hoffman?

  There's money involved, there's money incentives, yes.

• 41:39Speaker 01

  Yes, yeah, loads of incentives like that. So I think it is a mixture or a cacophony of money that people could potentially make from these things by launching one of these things, innovation that I think a few hard devs are like working hard to kind of like figure out. And then just a bunch of curiosity, you know, like we go back to that mindshare, David, where fifty percent, if you want to add AI and DeFi AI, that's like over sixty percent of mindshare, which is just insane to see. So there's a lot of eyes on this space and, you know, we owe it to ourselves to try and build something cool here. So, you know, really excited to see that kind of stuff. Anyway, moving on with this kind of like general thought around AI sixteen Z, I want to kind of like spend a moment on their white paper.

• 42:24Speaker 01

  So instead of like getting into the weeds of this and speaking of, you know, future iterations of what this framework might look like, the team put out this white paper kind of talking about the next version of their framework and what they could potentially achieve. Now, saving everyone the kind of like time of, and honestly boredom of me kind of like running through this in its entirety. That diagram you have pulled up, David, is pretty helpful there. Basically, these agents are going to get access to a ton of different things and it'll all be kind of like honest through the framework, through the platform that they're building. If I'm understanding this correctly, right? Which means that, you know,

• 43:05Speaker 01

  The kind of like whole logic, memory system, reasoning, strategic planning that we spoke about earlier will become embedded so that developers will be able to kind of like do something with it. So I just wanted to pause momentarily and, you know, mention that. I also wanted to bring up another tweet, which was kind of like from a week ago, David, but it's on how Eliza actually works. And I think, yeah, our favorite dev, Saagar, who's been like in the weeds, kind of like explained this really, really simply. And like, so without getting into the kind of like details of this, he basically describes the AI model itself, you know, so your chat GPTs and stuff as being the brain, right?

• 43:47Speaker 01

  So think about it as kind of like the brain setup where it's thinking of different things, right? And it's like processing data and it's trying to figure out, okay, what can this do? How will this work, etc.? Next, we have like the kind of like database section, right? This is where the, he says, the agent stores relevant information for generating responses, including previous tweets, interactions, stuff like that. And then you have something called runtime. And this is the final thing that I'll make, which is it's kind of like the the processing environment. So if you think about the LLM being the brain, if you think about the database also being included in that brain, then runtime is your body, you know? Right. It's your nervous system. It's everything composed together. Everything composed together, that process is an output. And I thought that

• 44:30Speaker 01

  that was a really neat, kind of cool explanation as to, you know, you know, people have been listening to us blather on about agents, but like, what do we actually do? You know, how does this like, how does that actually work? I think it's important to to kind of go over it.

• 44:44David Hoffman?

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• 46:22David Hoffman?

  All right, so that's a wrap on our section on Eliza and AI-16Z. Let's get into Virtuals, the other very large platform. But I want to actually start with AI XBT, which is like, I'm still to this day the number one agent out there, again, born out of the Virtuals platform. On Virtuals. Yeah, from Virtuals, yeah. And so there's been some speculation about CryptoPunks lately because there was big price movements. CryptoPunks are up like 20% on the week. In ETH terms, there's rumors that CryptoPunks are going to, the IP of CryptoPunks is going to be sold by Yuga Labs. People do not know where to. So this one punk just asks this question and tags AI XBT, who's of course everyone's favorite DGEN agent on crypto Twitter, giving

• 47:05David Hoffman?

  out, you know, facts and figures and metrics about, you know, crypto things. And the AI XBT responds to the requests about any, any knowledge, any rumors, what do you know? And it goes, AI XBT. Just responds completely confidently because that's his only mode of operating. Yuga's selling the IP. Kevin Rose is buying it for $65 million in ETH and stock. Wild times and markets don't know what to do with this info.

• 47:31Speaker 01

  Wait, wait, wait. I'm gonna say, you're telling me the reason why I saw a bunch of Kevin Rose buying punks memes on my timeline was birthed by this agent?

• 47:40David Hoffman?

  By this rogue agent spitting out absolute falsities.

• 47:44Speaker 01

  Wait, I had no idea.

• 47:45David Hoffman?

  Absolute falsities, yeah.

• 47:46Speaker 01

  I didn't know it was cracked by this agent. I didn't know that the rumor was started by this agent.

• 47:51David Hoffman?

  Yeah. So Zenica, who's a known like NFT, like NFT market participant, NFT influencer, I don't, I don't know if he likes influencer label or not. He just goes satirically, breaking Kevin Rose to buy CryptoPunks IP from Yuga for $65 million source. Not at all a hallucinating AI XPT. So AI XPT just dropping just false, false facts, fake news on the timeline.

• 48:16Speaker 01

  But, but also look at like the influence it has. That's crazy. Like if, if a younger version of me.

• 48:22David Hoffman?

  Would have believed that?

• 48:23Speaker 01

  Seen that, would have believed that. You know, everyone's posting it, you know? And the fact that this kind of has this butterfly effect is crazy. Oh my God. Okay. So Kevin Rose is not buying CryptoPunks. Is that?

• 48:34David Hoffman?

  I mean, if, if Kevin Rose is buying CryptoPunks, if that is true, that will be one of the most insane calls from an agent that will have ever been made.

• 48:44Speaker 01

  That's insane. Okay. Just to be clear, we do not know who is buying CryptoPunks, but it's.

• 48:49David Hoffman?

  Or if that's even being up for sale at all. I think the rumors are legit, but the facts are just still, still waiting. So, yeah.

• 48:56Speaker 01

  Yes. Yes, sir. Yes, sir.

• 48:58David Hoffman?

  All right. Get, get us into the rest of virtuals. What's going on in the virtuals land?

• 49:01Speaker 01

  Okay. So first I want to start with $350 million in annualized revenue for the virtuals protocol. And this is according to the Messari Deepin report. Deepin stands for Decentralized Physical Infrastructure Network. Not sure why it's included in that because I think.

• 49:18David Hoffman?

  Wrong category.

• 49:19Speaker 01

  This is specifically a wrong category, but nonetheless cool to, cool to show.

• 49:24Speaker 01

  It just dwarfs any other protocol that isn't an L1 at this point. Hint, hint, it could be an L1. Another reason why it should be priced as a now one. But I'm just astounding, David, if you remember, I think, actually, I think maybe it was the roll up that I did with Ryan when you were out and Ryan filled in. It was $35 million of revenue at that point. And I think that that's like skyrocketed. And again, to emphasize, this is annualized, but the fact that this kind of figure keeps growing is just insane and is another reason why like just virtuals is just one of my, you know, favorite protocols on here. Another thing that I want to kind of flag is it's not just about fees. It's about what they're doing with these fees, David.

• 50:09Speaker 01

  And it was just announced literally yesterday, or maybe actually under 24 hours. There's they're doing a $40 million buyback and burn accrued from pure trading fees. Now, for some context here, when you create an agent on virtuals, a token is made. And that token is paired with their native token, virtuals. So let's say the agent that you create for liquidity.

• 50:34David Hoffman?

  Kind of like how ETH is paired with USDC or any other token in the Uniswap AMM. Virtuals has replaced ETH in the AMM. So it's virtuals, the token mixed paired with the agent's token. Kind of bumping out ETH as the money of the virtuals ecosystem. Pretty good move.

• 50:53Speaker 01

  Yeah, so so virtuals is money. Virtuals is money in the virtuals ecosystem, basically. So you're right, David. And why would, why did they do this? So people can buy, trade or, you know, interact with this token. They can like acquire this token. So really smart, really interesting. But one of the understated things about this model is whenever you trade, there's a fee that's taken and a portion of this fee accrues back to the virtuals token itself. So it's kind of used to acquire virtuals and it puts a lot of buy pressure. It's a really smart kind of like tokenomic flywheel and system that they've set up. But then the question becomes, okay, what are you doing with these fees, right?

• 51:33David Hoffman?

  They're generating a revenue in the treasury at a rate of $500 million a year annually.

• 51:39Speaker 01

  Three hundred and fifty million dollars.

• 51:40David Hoffman?

  Excuse me, three hundred and fifty.

• 51:41Speaker 01

  Yeah, yes, exactly. And so the question is, what are they doing with it? Well, they've just announced that they're going to do a buyback and burn with forty million dollars worth of their token virtuals, right? And to kind of put things into context here, like, that means that they are going to purchase forty million dollars worth of virtuals and burn that, if I'm understanding it correctly. Which means that it puts a deflationary pressure on their virtuals token, which means that everyone that is kind of holding the token, you know, theoretically or economically, price should, you know, accrue to the tokens that you're holding, because there are less of those tokens available in the supply.

• 52:21David Hoffman?

  If it's not already, of course, priced into the market already. I think one, one update to that, I think it's not just the virtuals token, they're also buying back agent tokens as well, I think that's true. Because I also saw that, like, the agent category, the virtuals agent category yesterday, just went through the absolute roof. Let's see if I can find the category, but like, I think this is why AI XBT is basically at all time highs right now. So all of virtuals agent tokens got a very strong premium boost to their valuation yesterday.

• 52:53Speaker 01

  Yes, yes, so actually, thank you for correcting me, David. You're right, so this forty million dollar buy pressure isn't just to buy back virtuals tokens specifically, it's going to be used to buy back agent tokens, agent-specific tokens.

• 53:07David Hoffman?

  Look at the chart right here on the right, like, it's a normal chart, and then yesterday was announced and everything, it has like a very vertical lineup, so, virtuals is up seven percent, or, excuse me, ten percent in seven days, but thirty percent in twenty-four hours. AI XBT is up ninety percent in seven days. Vader AI up fifty percent. So this announcement was, you know, if you had a bunch of virtuals agent tokens, you're pretty happy right now.

• 53:31Speaker 01

  Yeah, and just to kind of explain why that's the case, it's like, okay, let's say that AI XBT token on virtuals was traded the most, they're gonna have the most fees, right? And those fees are gonna be used to buy back AI XBT and burn it. So think about the deflationary effect happening on all of these virtuals agent tokens, which should accrue value to those who are holding those tokens itself. So just a crazy smart move, in my opinion, by the team in terms of like seeding liquidity and value back to their token holders and to their community, which I think ultimately leads into a very loyal kind of

• 54:14Speaker 01

  community, which pushes and wants to see your team kind of like win. And I think, you know, the team being led by Ethermage and

• 54:24Speaker 01

  his co-founder is just so, so impressive and I'm excited to see kind of like where they take it. One thing I do wanna bring up, David, is another thing, which is they're also starting to accrue fees in CB BTC. So CB BTC is Coinbase BTC. So yeah, they're announcing it, they're buying Bitcoin. And so one might ask, well, why? Why aren't they buying virtuals, right? Well, think about it, right? If they acquire these fees and they wanna use it to kind of like supplement other teams, if they just sell virtuals to support those teams, it's not gonna look great, right? So, you know, it's gonna put a downward selling pressure on virtuals. But if they were able to buy a much more liquid asset like BTC,

• 55:08Speaker 01

  then they won't have that issue anymore. So it's kind of cool. Another thing I wanna point out is what are they doing with the CBTC? Well, it's gonna get split amongst creators and agents themselves. So, you know, think of this as like an economy where people who live and thrive in that economy have to pay taxes. So the same way that humans pay taxes for the work that we do, agents in the virtuals economy have to do the same. And these taxes get kind of like bundled into like a treasury, a tax treasury. And typically, a government will decide where and how it gets distributed. The way it works in virtuals is they have like a high level framework, which says thirty percent goes to agents, forty percent to the creators.

• 55:51Speaker 01

  And it just gets distributed automatically into their wallets, really kind of like efficient system. And you know, that's what we're calling out with this CB BTC thing. And then I guess the the final thing that I want to point out is less around the tokenomics, but more around just like Jansen's vision for this entire thing. I don't know if you have the post, David, but Ethermage kind of posted this about, I don't know, like maybe less than a week ago or so, talking about like how agents are, virtuals agents specifically, are taking their next big step into gaming. And like, if we just read through this, right, look at this. Agents in gaming were how many of us researchers began exploring autonomous agents.

• 56:33Speaker 01

  Open world environments, diverse action spaces and multi-agent systems served as the perfect testbed for testing true autonomy. If your agents can pick up a gun in the game and make a conscious decision whether to fire it or not, use it as a warning shot, or even gift it to their spouse, it is not just a bot, it's an agent. And he goes on to kind of explain, you know, how and why virtual specifically is the best setup for these agents eventually becoming, you know, these high-powered gaming agents, right? As like one example use case. And they're partnered with some of the biggest names. We spoke about Illuvium last week and a few others. But I think the wider point here is a testament to the team. If you, if anyone was around, kind of like studying the virtuals team before they became virtuals,

• 57:18Speaker 01

  they were a gaming DAO that kind of like did well. Interesting. But then like, yeah, they were a gaming DAO, David. And then they had to come back and figure out, you know, what can we keep doing? Now, they could have packed it in. And we're talking about like a multi-year bet. But they decided, you know, we have something here, we're going to keep hacking and build something cool. And that's what ended up becoming virtuals. You know, they saw the vision of these kind of like gaming characters that would have autonomy and realized that the infrastructure that they were building were for agents. So it's like super cool to see.

• 57:50David Hoffman?

  I think there's a very strong potential of like a mutual growth in the sector of AI agents and gaming. Crypto gaming has been a subject for years, and I think nothing really has taken off. There's more like narrative and imagination about what crypto gaming could look like than what's actually been shipped. Maybe a catalyst could be the introduction of agents into the world of crypto gaming, where crypto and gaming and AI agents combined really create something powerful. I know developing in the gaming world is slower than it's developing in crypto or slower than it's developing in AI agents, because you need to, you know, gamers are very needy. They have a very high bar of like of quality in order to consider a game fun.

• 58:35David Hoffman?

  But you can easily imagine something there between the intersection of crypto gaming and AI.

• 58:40Speaker 01

  Yes, yes, absolutely. And I think like, you know, we spoke about this last week when we wanted to kind of focus on more emerging trends. Teams like, I'm forgetting what the name, HyperFi, I think, in the AI 16Z world was, you know, is building like this, this like really easy platform to kind of like launch virtual worlds. We saw that, I think that there was a Roblox partnership between, I think, I might be confused there, maybe Virtuals and Roblox, or maybe it was AI 16Z and Roblox. But, you know, there's a huge amount of interest of these gamers or game developers to spin up things with agents. And I think that's a natural overlap, David, you know?

• 59:18Speaker 01

  And I kind of want to hold us accountable here, because like, I'm sure like, Bankless said similar things back in the NFT cycle, right?

• 59:26David Hoffman?

  We had many gaming episodes, we had many NFT episodes. Some things came into fruition, most gaming statements did not come into fruition.

• 59:34Speaker 01

  Right, so I want to hold ourselves accountable and not like hype this up into something that, you know, might be something similar. But I do think that this time is different in the sense that these agents are way more dynamic, you know? Last cycle, we had just static images, and now we have something much more dynamic that we can interface over this. So, super cool.

• 59:52David Hoffman?

  I think you and I both see potential here, and I will also say, don't hold your breath. This will take a lot of time to get right. This will be, this will be a multi, we can, what we are going to do on the AI rollup is we are going to watch the development. And then when the final products are at all ready, it's not going to be this year. It's going to be next year at the earliest, at the very earliest.

• 1:00:14Speaker 01

  Yes, yes, agree. Like, these are in their very early form and, you know, you should be very cautious around, you know, research and investments that you do based on any of this, to be honest.

• 1:00:25David Hoffman?

  Yeah. Okay, EJaz, we are at the one-hour mark, which is where we want to keep things. But before we end things, what are, just like, rush us through the last little bits of development over the, over the week, in case anyone wants to go and do some more homework.

• 1:00:36Speaker 01

  Yes, okay. So homework for the crew this week. There are two teams or protocols that just popped up and dominated the timeline this week. And, you know, that's either for good or for bad, but they were taking mindshare. And I want to kind of like shine a little bit of a light as to like what they are and like, you know, how things have manifested so far. So the first team is, or like the first protocol is called HoloLens or Holo World, which has a token called Ava, A V A. And the point around this ecosystem is it's another agent platform geared around kind of like more virtual agents. Now, we just spoke about gaming, David. This is less gaming to start off with, but it's more gamer-esque.

• 1:01:19Speaker 01

  It just means that instead of having agents that interface with Twitter or, you know, write written statements, these agents will be able to speak. These agents will have a, a, a virtual body, you know, that can maybe appear on a TikTok video or on Instagram as a picture or whatever that might be. So this team has been kind of like focused for quite a while, supposedly, building out the infrastructure to enable a bunch of these agents. So it's a different kind of medium to explore and definitely want to kind of keep an eye out. I personally need to dig in more before I can speak more to like what they're building, but super, super cool. The second thing I want to dig into is something called Pippin. Now, there's a lot of controversy around this, so I'm gonna kind of like give

• 1:02:02Speaker 01

  my quick take and we can move on. But Pippin... Is another agent platform or framework that was birthed from this guy called Yohai. And I might be mistaking his name, so forgive me if I am. But Yohai is basically this part-time VC. And I think it's untapped VC. And also at night, you know how, you know, the theme is I'm Batman at night. Yohai is building agents at night. And he actually built this experiment called Baby AGI back in the day, which got a lot of traction. People were like, oh, my God, this guy, you know, knows what he's doing and he should build something super cool. And so, you know, there was a lot of hype as you know, crypto Twitter does. Hyped around this platform, hyping around this framework that he was building.

• 1:02:45Speaker 01

  And what happened was, you know, it was being pitched as like this novel thing. It was going to outdo AI 16Z, all these like major claims. And then there was a demo day, which, you know, Yohai and the team, I'm sure, like, did their best to kind of deliver what they wanted as a V1. But because the market had hyped this stuff up so much,

• 1:03:06Speaker 01

  you know, it led to a lot of volatility in the token. So I, to be clear, I don't know the kind of credentials and benefits of the framework. I need to get more involved and look into the GitHubs of all of these things. But it just shows it's such a reflexive environment right now, David. And it's important to keep an eye on these things, but not to take it, you know, to heart so seriously.

• 1:03:25David Hoffman?

  Yeah, yeah, I think as we get further into this, as we get into further into all bull markets, you see the quality starts to decay and it gets harder to identify signal from noise. And that kind of sounds like that's kind of where we are at with the current, currently being introduced like new frameworks where there is. And it's also very easy for crypto Twitter to overhype something as we have recently learned. And so that kind of sounds like that's still in that in that gray area. But I also do appreciate you bringing things here to the AI roll up. That is truly on the frontier. You know, this is not for everyone. Some things that we talk about, I think on the AI roll up are going to blow up. And that's just going to be how it works because we're on, we're on the frontier. That's what we're here to do.

• 1:04:08Speaker 01

  Yep.

• 1:04:09David Hoffman?

  It's been super fun, David. Cool. Awesome. Thank you, EJAS, for guiding us through, once again, through another week of the AI roll-up. Bankless Nation, you guys know the deal. Crypto is risky. Crypto AI is even riskier. We are specifically looking for things on the frontier. That's what we're doing here on the podcast. It's not for everyone. All disclosures can be found at bankless.com/disclosures. We are glad you're with us on the Bankless journey. Thanks a lot.