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Happy Saturday everyone,
In today's issue, David makes a cypherpunk case for Venice, the rising private AI inference platform built on Base. Not strictly Ethereum, sure, but the value here can expand and inspire in all directions.
Plus, David and Ryan talk through the new era of Bankless (and more) in the latest Rollup episode. Catch up on everything below.
Thanks for reading,
— WMP
p.s. Starting next week, 
Ethereum Weekly will be folding into the Bankless Daily newsletter, where our ETH coverage will continue as part of an everyday send!
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"Privacy is necessary for an open society in the electronic age."
"For privacy to be widespread it must be part of a social contract."
"Cypherpunks are actively engaged in making the networks safer for privacy. Let us proceed together apace."
— A Cypherpunk's Manifesto, Eric Hughes, 9 March 1993
Dear Bankless Nation,
Privacy is in!
There’s a section in Grayscale’s research report on Zcash that has been ringing in my head:
"Technological and social change can put pressure on privacy systems, often triggering public debate about financial privacy and new methods to protect it. In the 1970s, the digitization of financial records and the Bank Secrecy Act brought more attention to financial privacy. Similarly, in the late 1990s and early 2000s, the expansion of the internet and online banking, along with the Patriot Act, led to another wave of focus on financial privacy — and eventually broader use of encryption, 2FA, and related tools."
The existence of privacy in society is perpetually at risk, due the simple reality that privacy is rarely the default mode of operation. Privacy is always extra, technically speaking.
If privacy is opt-in, the act of choosing it becomes information. Simply using privacy paints a target on your back — you've self-identified as someone with something to hide.
The cypherpunks saw this early: a single envelope in a world of postcards is suspicious, but a world of envelopes is just mail.
Venice AI represents “a world of envelopes” for AI inference. Rather than sending plaintext queries to the desk of Sam, Dario, or Elon, instead Venice packages up our AI queries into envelopes, and protects them from prying eyes.
This is going to become increasingly important as the AI lab companies grow larger, go public, and mature in their business models.
Right now, these Labs are venture funded, or funded by subscriptions. Right now, these labs work for us. But we’ve seen this movie before with Web2. First, they enhance our lives, and then later they answer shareholder interests.
This Is the Least Extractive AI Labs Will Ever Be
When 
OpenAI announced it was going to introduce ads in ChatGPT, there was an uproar — no one trusted that OpenAI wouldn’t sneakily start adapting its responses to bend users to buying products from its advertisers.
People felt “We’ve seen this movie before.” 
Sam Altman said that “we promise ads won’t influence answers,” to which people responded with something between “Yeah, for now” to “That’s what a lying person would say.”
By 2026, people are tired of being the products — and the 2016 Cambridge Analytica scandal proved how powerful mass data could be.
With AI, it’s a much bigger issue than Web2 social media platforms. We LOVE handing AI all of our data. Our medical records… our financial portfolio… the concerns of our relationship health… We trust ChatGPT and Claude with so much data!
The trillion-dollar AI labs are going public soon, and soon they will have a fiduciary duty to maximize shareholder value… and they’re going to figure out how to leverage the data we freely give them to do so.
Venice Is the Antidote
"When you adopt crypto protocols, you adopt crypto values." It's a favorite quote of mine, coined by RSA. Venice has adopted crypto protocols in two different ways, and as a result it's been imbued with cypherpunk values: privacy and permissionless-ness.
Privacy comes from 
NEAR AI Cloud — your query is handled by confidential-computing enclaves, and the inference comes from a distributed network of third-party H200 clusters.
Your AI prompt routes through a blockchain protocol rather than a for-profit publicly-traded company with fiduciary duty to maximize shareholder interests.
The permissionless-ness comes from $VVV and $DIEM on Base. Via the Venice API and x402, anyone holding either token can claim their share of inference. No KYC, no signup, you don’t even need to be a human! Venice treats AI Agents as first class citizens!
Now, Venice isn’t a true protocol. It has centralized operators, and requires a team to maintain it. We’re not doing the ‘decentralized, autonomous, code-is-law’ thing here (we can’t even seem to get that right in crypto). Regardless, I appreciate the product philosophy at Venice to make the product as protocol-like as possible.
Where We’re Going, We Need Privacy
AI is quickly becoming a layer of the internet that we think through. Society is increasingly routing its thoughts through LLM intermediaries. Claude is increasingly the first reader of every idea I have, or is the first thing to understand all my problems.
That's the line Web2 never crossed. Zuckerberg watched and sold the patterns of our behavior. Our AIs don’t watch us… they are us. Our agents are supposed to represent us on the internet. They’re agentic because they’re acting on behalf of some human somewhere. The resolution of data they have is beyond Zuck’s wildest imagination.
The same way we eventually demanded HTTPS for the web, we must also demand verifiable privacy for the mind that we're outsourcing to the machine.
The cypherpunks were thirty years early. They wrote that privacy is necessary for an open society in the electronic age, and that if you want it, you have to build it yourself, because no one is going to grant it to you out of kindness. They were right about the postcards. They were right about the envelopes.
And they're about to be right about the most intimate technology humans have ever invented.
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David sold his ETH, the EF is losing talent, and Hyperliquid just hit a new all-time high. What gives?
Ryan and David break down the stagflation fears building in the bond market, why pockets of the crypto like HYPE, Zcash, and Venice are breaking out, what the EF talent exodus actually signals, and what a new era for Bankless looks like.
Tune into this week’s Rollup! 👇
