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Cloudflare sits in front of about 20% of the internet, giving CEO Matthew Prince a clear view of bots outpacing human traffic. He expects the internet's current business model to break in the first half of next year, driving the final nail into the ad model's coffin.
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As 
Marc Andreessen highlighted on Bankless in 2022, internet ads became the micropayments the internet never had. Human eyeballs drifting over a banner ad, and maybe even clicking in, financed the content that fueled the internet's growth.
Yet bots don't click on ads, meaning this model no longer works.
Since AI Overviews became Google's default in 2024, referral traffic from Google itself is down 20x, 
OpenAI 1,500x, and Anthropic 60,000x. AI companies are taking the work, returning nearly nothing, and selling the output back to readers. Prince's read is understandably bleak: independent publishers go first, then publishing more broadly, if nothing changes.
Prince sees a solution though in stablecoins and x402 that Cloudflare's building towards: letting websites gatekeep their content and force agents to pay a microtransaction to consume what their human orchestrator asked for.
He just needs a 100 million TPS blockchain to make it work.
What Cloudflare Built First
Step one began last July with Content Independence Day, when Cloudflare gave every customer a switch to block AI crawlers. The key word is switch. Many sites, including Cloudflare itself, want their content in the LLMs, and Cloudflare actively helps those sites get scraped efficiently. The point isn't blocking. It's that once a publisher can withhold access, they can price it. Without withholding, there's nothing to negotiate.
The 100M TPS Problem
The next step is monetizing the access publishers allow. Cloudflare's answer is a three-layer toll gate: pay-per-crawl as the gate, x402 as the payment standard, NET Dollar underneath for settlement.
NET Dollar, or more precisely the chains underneath it, is the bottleneck. Prince estimates 1-10% of the 500 million requests Cloudflare processes per second are monetizable, meaning a chain would need to support 5-50 million transactions per second of stablecoin settlement. The fastest blockchain he's tested only does 2 million. Tempo, Arc, Base. None can do it yet.
We need a blockchain with 100 million TPS to save the internet.
Prince's Vision for the Future
If the rails get built, Prince sees content economics following Spotify's path: AI subscription revenue pooled and streamed to creators when their material is used to generate answers. This may even create a "request-for-content" model, he explains, where AI companies request original, hyper-local content that they can't synthesize. We're already seeing this premium exemplified in the price points Reddit's able to charge for licensing its data, a dynamic which may actually give indie publishers an edge if executed correctly.
In the end, this shift presents a real chance to eradicate slop and usher in an era where original thought gets surfaced and repeatedly rewarded. Despite the sheer amount of restructuring that needs to be done,
Prince is optimistic, and so am I. Be sure to catch all his thoughts in our latest podcast episode, too.
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Plus, today's top headlines...
- 💸 Kevin Warsh was sworn in as Federal Reserve chair today, replacing Jerome Powell as the new head of the U.S. central banking system.
- For crypto, the Warsh era marks a brave new world. He's the first crypto-friendly Fed chair in history, though he inherits a divided board, sticky inflation, and the growing economic uncertainties around AI. We'll have to see if he moves to cut rates (sooner rather than later?) or if the challenges ahead force him into immediate pragmatism.
- 📈 Coinbase is launching perpetual-style equity index futures, the first of their kind on a U.S.-regulated exchange.
- Arriving on June 8th, the inaugural contracts will track AI, China, the defense industry, and the top 100 Nasdaq-listed companies. For crypto natives, perps are familiar, but for traditional finance it's a new format with 24/7 trading + capital efficiency baked in. However the launch goes, this is just the latest example of the line blurring between crypto markets and TradFi.
- 🟠 Congress just fielded bipartisan legislation in the House that would augment the U.S. government's strategic Bitcoin reserve plans.
- The bill aims to lock U.S. BTC reserves for a minimum of 20 years and to enact quarterly disclosures, among other things, like more analysis on budget-neutral acquisition methods. It's only proposed legislation for now, but the bipartisan cosponsorship suggests it might have legs. Something to keep an eye on either way.
Cloudflare CEO Matthew Prince sits down with Ryan and David to explain why bot traffic is swarming human traffic on the internet and why that breaks everything.
They cover the slow death of the ad model, how AI companies are strip mining the open web without compensating creators, and why x402 and stablecoins are the most credible path to a new business model.
The catch: Prince thinks Cloudfare needs a blockchain capable of 100 million transactions per second to forge a new path forward.
Catch up with the full episode! 👇
