AI Crypto in Flux: From Market Dips to Agent Breakthroughs

welcome bankless Nation to the AI rollup where we stay up to speed with the emerging Trends and developments in the AI crypto space I'm David Hoffman here with my co-host EZ EZ how's your week my man good man um markets have bounced back I'm seeing green on the charts for the maret are not dead yeah how does that feel my ego my ego is now preserved David I was about to lose it last week but it's it's feeling pretty good man um I have noticed like a lot of teams are just heads down building a lot of teams are complaining don't get me WR only to do yeah yeah but whether you like that

or not the market AKA crypto Twitter definitely just resonates with prices and so it's nice to see a bit of a relief so that the people's work can actually be a little more appreciated yeah and the like we were talking about all throughout last week just the hot air is out of the bubble uh we have been at a call it um a 6.5 to7 7 billion dollar market cap for all of February so we haven't gone up we haven't gone down so we are flat for 12 days and 12 days is like at least in terms of how long

we've been doing this that's like 20% of the entire longevity of this thing as people have been paying aged 10 years yeah you've aged 10 years yeah yeah I want to kind of start uh with a zoomed out perspective here on this episode e Jazz about kind of just like what we're doing why we're doing this and why what this sector really means uh I think people can kind of interpret crypto AI as this Niche within this Niche which I think it currently is and that's kind of what we're doing it's a of the total crypto market cap of 3.2 trillion the

total market cap of crypto AI is 7 billion so it's in incredibly small uh but I I think the potential of the crypto AI sector is what we're really here for and what we're trying to talk about and I maybe have this like um positioning that I think might be useful for for you and me as we do these episodes but also for the listener so you ready yep go for it man okay so say you're a modern day investor which you are uh so am I so is the average listener here and you just want exposure to AI obviously you want exposure to AI

because it's 2025 like the modern Millennial geny investor wants to invest in AI not like s or manufacturing like AI is where all the growth is uh that's why we're predicting so much growth uh coming so like we I want I want exposure to AI so you can either buy tra Silicon Valley equities Nvidia $3.1 trillion market cap Microsoft $3.1 trillion market cap Google 2 trillion Amazon 1.9 trillion meta 1.3 trillion

like very expensive very highly priced software companies tech companies every single one of these other than meta is valued higher than Bitcoin and also in addition to that every single one of these is a diversified basket of like a variety of products and services some AI related many of them not so it's actually just not even perfect AI exposure to begin with now not to knock down these companies there are benefits of investing in these companies in order to gain exposure to AI if that's what

you're seeking um they they have all the proprietary user data and that can only come from the value of proprietary user data which is very powerful in the AI context can only really come from closed Source wall Gardens of Silicon Valley and web 2 so will kind of always be their main advantage their main Edge that they have versus other investment vehicles um also worth noting on the same size subject disadvantage is something that like the arms racing Nation States of uh United States and China will also help fight over data is

the line that's drawn between China and United States in the AI arms race uh and you can you can gain exposure to this investable value of data through these companies albe it through very high price tags okay so that's one option to gain exposure to AI as a category the other option is you can venture out into the world of crypto AI which other than investing in the private Market space like private and AI startups that which is closed off to most people really the only way to gain exposure to AI as I

understand it is through crypto Ai and that's because there's some inherent resonance between the value of Open Source Ai and crypto AI through tokens we all learned um that the big takeaway from the deep seek R1 model is that while there are like billions and billions of dollars being poured into developing these Frontier highly capable highly sophisticated models from the Silicon Valley companies these models when they get released get deconstructed and reproduced by the market extremely

quickly the the digestive process of copycats once that is finished the value of that model is now just owned by the public domain it's in the open source world for anyone to use we saw people like things like uh ER forhe Venice platform and many other platforms just integrate R1 just instantly and the so the value of chat gbt and and the models that the R1 model copied just ended up in the open source domain very very fast and so this is where kind of the the crazy creative developers in the open- source AI sector really take over here

rather than like billions and the trillion dollar companies that are all competing to produce the most valuable model on the open source AI sector we have this Army of Open Source developers that are applying these models that are leveraging these models in like crazy experimental Innovative call it risky ways and so we have like a Tail of Two Worlds here like in contrast Silicon Valley China are in this arms race to produce the same like monolithic product which is a really good model like all of these billions of dollars in meta Amazon

like Elon Musk open AI China they're all producing really good models the same product they're all going after the same product they're all going after the same space and they're also really highly valued and then then also things like open AI aren't even aren't even public you can't even buy open AI in crypto on the flip side of things these extremely Frontier Niche creative risky Endeavors are valued anywhere between $10 million And1 billion I think virtuals is the most highly valued crypto AI token at 1.3 billion uh maybe tensor a bit tensor

is up there too and they're simply leveraging the fruits of the AI models arms race and they don't even have to do any of the work and so like I don't really know what products and services will emerge out of this open- Source AI sector but that's what we're doing here on this podcast uh we are doing these podcast series about what these creative exploratory uh developers are working with AI models and that's exactly what I'd say like our North Star is on these podcast series uh and I think really the point that I want to drive home here is

that so much of the investable opportunities for AI remains in the tokenized open open source crypto AI sector you have the value of Open Source AI which is massive and then you slap a token on it and that becomes a way that the value of Open Source AI gets monetized and that is what I would describe as much of what the content that we cover here on this podcast series is so that's like kind of my like thesis my my model my North Star I think we've we've said this in a variety of different ways and a handful of

different times on the podcast but I kind of wanted to just open up this podcast once again of reminding our us and also listeners about that yeah I love that I mean just to to kind of summarize that from from what I've heard at least David like AI is the most exciting sector and probably the most lucrative sector to ever befall Humanity right and it's happening right now in front of us every week There's a new update a new major model breakthrough and you're saying typically the way that these things are invested in uh pushes out 99% of people yeah um and even

people that like take the time to research learn and and you know try and teach themselves about these things they don't have any access because it's private rounds or you have to wait until it's public and then it goes to trillions of dollars until you can buy it hence the Nvidia and stuff and you're saying that crypto not only offers us a new way to invest in these things via tokens but it also allows us to invest in a wider range of products services and companies because of its open source

nature am I getting that right David that's exactly right and there's something about the nature of tokens that's kind of just aligned with the investable appetite of people these days we we we know that Financial nihilism is in starting from like the gme movement back in 2021 uh but people are really looking to like invest $500 to $5,000 and trying to 10x 100x that that amount and that is something for Better or For Worse it's something that is like that is that's crypto that's what crypto does there's a reason why this AI crypto

sector also started highly overlapping with the mcoin sector because a lot of these AI tokens started La as tokens launched on pump. fund and so there's just kind of like investor appetite residence with AI crypto tokens that are like valued between you know $10 million and 1 billion dollar I think that it is matching the Zees at the times for investors well let's just be honest with everyone for a second here right David the main reason why these tokens weren't really recognized as quazi equity

instruments was because we had governments that were just very much against acknowledging any of this right and now we have the most Pro crypto US Government ever which kind of like leads and has a knock on effect to Every Other Nation in the country uh sorry in the world um that than we've ever had so if there's ever going to be an opportune time to combine like tokens with uh a real investable opportunity into real Tech that's being built in an open source fashion it's probably now yeah I think that's right and especially as I

think that is what everyone is getting excited about that's what that was that big bubble was that we are kind of on the tail end where the total crypto market cap of AI tokens uh was at 15 $18 billion excuse me almost almost 2020 billion we are now down to $7 billion but now everyone realizes this this is the game like there is immense value in open- Source Ai and the only way that open source AI can become monetized by developers is with crypto tokens it sounds like you're saying we''re bottomed David don't don't say the word I don't

want you to say the word would but it sounds like that's what you're saying don't jinx it but well I I think if anyone is like I mean it's I think too late now we I this you know we've we've already done the thing that you just said but it's just a good reminder for like why this isn't not a one-term blip of a bubble that happened in you know January of 2025 but this is actually an ongoing sector that's going to be alive and iterative and worth paying attention to and keeping tabs on as we go forward I appreciate that David and and actually on that serious not

I want to move on to something a little more serious as well that happened this week cuz obviously there was a million things is this a serious serious or is this an e serious David look at my face for those of you who are looking at the podcast look at my face I'm not cracking A Single Smile this is serious David do you remember that one time that um a certain Elon Musk said he'd be down to buy Twitter for $44 billion and everyone called his buff do you remember that time I I remember do you remember that time when he actually then proceeded to buy Twitter for $44 billion that's

and to this day I don't know if he originally intended to or not yeah who knows it's kind of like he's rolling the dice right but it can't possibly get any crazier than that yeah well it looks like this week elon's trying to buy open AI for $97 billion um in a bunch of news articles that sprung up yesterday I believe or two days ago um Elon and a group that he was leading of investors presumably basically made an offer for 97.4 billion

valuation prior to that so so that this is the thing that's being contested right now so um they want to attribute open AI with like a $44 billion valuation and Sam's like hey it's a nonprofit or like he's trying to get like the valuation like a little lower or whatever and now um Sam's kind of like contesting and saying you know it's it's not worth that much and then uh oh sorry it should be worth more or whatever and basically elon's come and said hey we'll give you 97 billion for it right now and Sam said no which kind

of goes in contradiction to to what he was saying so I I don't know there's a few things playing out here but I thought that was pretty hilarious and wild that we have like these two guys just going at it essentially interesting I don't really know what to make of this like once again I don't really know if Elon is doing Elon Shenanigans or if he's actually trying to buy open AI I I can't remember what the valuation was on their most recent funding round I think it was somewhere around $300 billion so that would be a pretty fat discount from Elon to open AI investors yeah I also

like yeah I think it was for the controlling entity of open air whatever that means but anyway we can um we can move on into crypto open source stuff as you said David um let's let's pull up the cookie dashboard I think you you've had it up here um okay so we look at the markets right now um I'm noticing two things number one you mentioned it earlier we're ranging between $6.5 billion total market cap and I think around 7.3 billion market cap and that's

just been the case for the last couple of weeks as you said since the start of Feb and I think a lot of this is just tied to macro macro being Bitcoin primarily right until Bitcoin kind of breaks out of its range uh of 90 to 100K and and blasts upwards or God forbid downwards um will we then see kind of like a major Divergence of this total market cap share the second thing I'm noticing dve is kind of something we're going to dig into later but look at that salana and Bas discrepancy so we' mentioned this a

few times um typically these have been a lot closer like like kind of and and arguably they still are yeah arguably they still are but now there's a billion dollar difference and it's interesting to see how this market dominance from salana Trends in the time going forward so you know we have some breaking news that um you know virtuals was going to launch on a few weeks ago and now they've actually launched this week and we'll get into that later in the episode but I don't know what are your thoughts David do you think like salana is kind of like tracked OTE here by any chance

or do you think this is just kind of like hand wavy price stuff going on yeah I don't know I don't think salus has always been ahead we have salana the market cap of all AI tokens on salana is at 3.5 billion on base it's at 2.65 uh if you look at the Gap you can see the chart like this salet has always had a a meaningful lead but I don't think that these two lines the market cap gap between Bas and salana are like diverging in any in any direction it is interesting to note that the $2.65

billion of market cap of tokens on base well I mean that's all virtuals right virtuals is 1.3 billion so virtuals the virtuals token alone represents 50% of total base AI tokens market cap and I don't know what the equivalent is for salana or if there is even one like what is what's the most value AI token on salana well well it's probably AI 16z right if we're talking about like the protocol side of things but now I think we're going to see a lot of virtuals value from base Port over to

salana they have their like a Stargate Bridge setup which basically allows you to Port tokens and that's just the virtuals tokens but I've seen a lot of projects on virtuals actually Port their token over to salana as well which is crazy I wonder if they are going to double count that because what that does is the the virtuals token on base will go into a contract address on Bas and then a a IOU token will be minted on salana and then that in theory depending on what cookie. fund does might double count that so I think if if they are

listening which I think they do listen to the these podcasts they should actually subtract the value of virtuals in the bridge contract so that it only is counted once when it gets sent over to salana yeah for sure for sure um let's pull up the Mind share um chart I I think we we have this tweet from uh Samy just posted today if you scroll down there we go we track this right yeah this is Kido and we and we track this every week uh on our episodes the reason why we have we show price and then M share is because both are often

quite correlated with one another the higher the Mind share sector has the higher or better their token prices do in that particular sector and we've seen a notable regression for the AI mind share David uh but it's still Standing Tall it's still number one though it's still number one it's been like this for a year and a half it's still number one by a lot it's still almost it's like two and a half times the second place which is defi interesting that defi is getting such a dominant okay okay but my theory here is defi is becoming more popular

because defi AI is being discussed way more and it's having yeah and it's having a spillover effect into defi protocols that are like figuring out okay well what's our AI strategy I might be coping but I I do think that there is a spill over notably but whether you like it or not I think a lot of attention has been drawn to other things over the last week you know we had the I think there was the bar chain launch and just people were just kind of jaded with AI in general after seeing it tank on an average of 70% but we're starting to see

it stabilize and slowly increase um I think it's it bottomed at around 29% and now it's slowly increasing above so um I'm curious to see how this uh kind of develops over time but let's look at some of the most reflexive tokens of this Market bounce David so um as we're recording this um episode this week we've seen a notable rebound of some of the top AI tokens within this sector and by notable I mean like these things are up like between 30 to 60% um if we look at some like at some of the the large

caps which are rebounded we've got cookie so cookie is Rel to the data dashboard that we just had up um ar ar token I think they had a pretty big week um we've got some news that just broke literally a few hours ago which we're going to talk about ai6 Z with a new to economics and elizza upgrade the one and true F coin leading the way for AI memes um and then gri then Griffin there with a 23% increase now I want to point out that the market caps here range between

$160 million and $650 million so we're kind of playing within like um when when you consider larger protocols which are often like $1.5 billion and above we're still playing small weights here but you always want to kind of be uh looking at what could potentially enter that Billion Dollar Plus range and a lot of these tokens David have already done that right Ai 16z and fcoin so um I'm I'm curious to kind of like track and and see how this goes the fcoin I love how I give my monologue about you know

if you're just the average modern investor and you're looking for AI exposure crypto tokens or where it's at anyways fcoin up 27% yeah take take it stop taking yourself too seriously D like come on we got to we got to be focusing on some of these other things I am bullish on fcoin as just the fact that it's both a meme and Ai and so you get exposure to both sectors but okay we let's not get into this but I I don't see the AI side of things aside from the fact that it came from the truth

terminal law basically right from the oh is that it doesn't yeah he just mentioned that fart jokes are super funny and then someone created fart coin and then it just there is far as the AI goes in Farin don't let anyone else yes don't let anyone else convince you otherwise all right um but anyway going back to to fundamentals and not um fcoin stuff um if you pull up this tweet from uh Elon money um he tracks something that I think most people ignore but should

actually track which is kind of GitHub open source commits um uh to some of the biggest projects out there and one notable difference here is that core contributors for AI 16z and and uh AI rig complex which is Arc um in this case have just been up only and um you know a lot of people could like turn this as oh well they're just adding a bunch of small changes and updates if you actually dig into these things that's not the case at all you see them making some pretty big updates to their uh potential platforms that they're launching and their tokenomics as well

so it's really cool to like see whether rain or shine these guys are just heads down building and I think that's like super important um uh to to kind of observe within a sector you said earlier David like you know you're trying to make your case as to why crypto AI is here to stay and not just a you know a meta that's going to die after a couple of weeks these are the kinds of things you want to like see more of right yeah it is hard to qualitatively analyze uh GitHub commits as you've said how do you actually what

was your method or mechanism for actually like qualitatively giving the thumbs up to the to the you know quality Behind these uh updates yeah so there's a few ways that I do this number one is recognizing that I am dumb and so I need to speak to people that are smarter than me more in so Engineers across a bunch of these different protocols and that's kind of like what I do so I spoke to um JY on the ai6 Z team I spoke to Tachi and Tori on the arc team and saying like hey what are you guys pushing what are you guys building and they walk me

through like their release it publicly just yet um another way is I kind of like follow um and and this is for people who are listening uh check out Nat um n bit I believe um uh from the evm uh igen ecosystem and then Saar as well who do a lot of like reviews and and cover a bunch of these things and then number three is just jumping into the GitHub itself um you can see a ton of what these updates are

you can read through it you'll know which ones are just simple API Integrations and which ones are like larger toonomic related things right or or platform related thing and the fourth and final way to do this is and it doesn't sound remarkably sophisticated just go on Twitter and follow the projects they post um weekly Dev updates all the time and it's just you know to kind of like nod our heads towards open- Source development it's some of the best ways to keep track of these things but um yeah pretty cool something that showed up on my radar uh Andre Andre

carpath uh who is kind of a a Chad in the AI world dude The Godfather of AI yeah uh just for context for people who don't know Andre uh he was like the head of AI at Tesla to help Tesla build their self-driving Vision system uh he was on the uh early in the early days of open AI on the open AI board he went back to open AI recently and then he just quit Andre now just makes content he just educates he thinks he the reason why he

quit is because he thinks that his best leverage on the AR space is to just educate about what's going on and like yeah seven days ago released this three and a half hour marathon which I am halfway through and it is some of the best content that I have ever consumed about Ai and llms and it is just you watch I feel like I've taken a university course and I'm still just an hour and 40 minutes into this thing it's crazy this stuff is free it's it's crazy that's that it's free he's super articulate he's super good at explaining this stuff uh and he's just extremely

well respected uh across the AI space and is used as a resource um just by many many people to understand to like how to learn he's got also 1.1 million followers uh he in one of his videos talked about how one of his favorite platforms to use these base models is hyperbolic which is a crypto AI startup so it is cool that these crypto AI companies that are leveraging crypto are you are being used whether they even Andre I don't even know if Andre knows

that this is a crypto AI startup uh is using these things and he's calling hyperbolic as one of his favorite platforms for interacting with llm based models uh pretty cool pretty cool congrats to the hyperbolic team yeah I mean it's the crypto AI molet right I don't think he needs to know that it's crypto on the back end right and for those for those of you who who don't know hyperbolic um hyperbolic is basically a decentralized compute platform so they're able to provide compute to help run your models or more

more famously inference new models so be able to like request um answers from certain models and they host a bunch of models some are open source some are access to close Source ones and uh apparently their service is so good that uh Andre is using it so yeah uh pretty pretty awesome to to see David with over 1.5 billion dollars in tvl the meth protocol is home to me the fourth largest eth liquid staking token offering one of the highest aprs among the top 10 lsts and now CM takes things

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this tweet from repet um so I just want to emphasize with saying this isn't a crypto company but it's going to have a huge impact into crypto AI stuff so what you're watching right now is a video of an app an app called repet um and repet basically now allows you to prompt and create any app that you want now let's just like take a step back and and and kind of digest that for a second you could be like hey I'm coming up with some um you know some music ideas and I

want to like describe a beat or I want to use a tool that will help me translate what I'm thinking in my head they'll be like cool like what kind of Symphonies or stuff do you want to include what kind of instruments are you vibing with or whatever and it'll just produce an app um now you could take that to the opposite end of the spectrum and just be like well hey um I am trying to figure out a 3D structure for a waveform that could fit into a my earthquake model and they'll be like cool what kind of seismic indicators do you want to use a b and c and then it

creates an app for you to do this and you can literally like if you play this video you can like model it you can turn it around it's it's pretty insane to see David and the kind of point that I want to make about all of this is right imagine like you just come across a problem where a user is like um faced with a ux issue or something deeper like not knowing how to invest in money um you could just get an agent to query or prompt an app like this and spin up an app or an app or a tool which is tailored specifically for them right so

we keep talking about this like AI stuff and we're like well you know we got to connect uh this API with that API and it kind of gets a little complex right but what if they could just be um an agent or a human with a problem just like you and I come across many um uh with the questions that we ask every day when we're trying to learn about this stuff and just say hey uh I need a tool that will help me research AB andc or I need a tool that will help me send um tokens from this wallet to that wallet and then um you know lock it in another wallet um

and it just spins up an app or a button that they could just click and use for them um the cool part here is like in a world of hundreds of millions of tailored apps like this David where does the value get captured do you think my bet is decentralized protocols and maybe I'm biased but um I think it's the decentralized protocols underpinning all of these think about it right we're already spinning up 1 million new tokens a week with pump fund and that's one app alone right if the world does Trend towards being um tokenized like sir Larry thinkink says every day on

Bloomberg um says this this only scales with decentralized protocols in my opinion this reminds me have a Andre tweet Andre the same guy that we were just talking about uh there he that he he tweeted out let me just read this because I think this really just resonates with uh what you were just talking about uh he tweeted out there's this new kind of coding I call Vibe coding where you fully Give In To The Vibes Embrace exponentials and forget that the code even exists it's possible because the llms are getting too good also I just talked to composer with