The AI Agent & Memecoin Thesis | Pantera’s Matthew Stephenson

welcome to bank list where we explore the frontier of Internet money and internet finance and once again the AIS are ahead of even the humans exploring the frontier this episode is going to all be all about AI agents on chain because where we once had bots transacting on our blockchains running our smart contracts doing all these bot things some of these Bots are getting a little smarter and they are now perhaps evolving into AI agents what's going on what triggered it what happens next we have Matt Stevenson on the podcast today he's got a PhD in behavioral economics

which I think is highly appropriate because Game Theory exists for AI agents and humans alike uh this is the AI agent thesis if you will that's definitely been going around in the current event cycle with this goat meme coin uh but just like how Bitcoin spawned an entire industry we kind of think that the goat mcoin is kind of doing the same we had so many questions going to this episode so one is when we say AI agents what what does that even mean in the first place and I think Matt gives us good definition of that then we get into the goat meme coin and that AI agent case

also something called Luna so if you're not familiar with what's going on the AI agent world we get you up to speed there and then we also ask Matt what are the beneficiaries of this like what blockchains will benefit what are the investable assets we can look at if the AI agent thesis says there's going to be an explosion of this type of utility on chain and finally we talk about some of the societal ramifications right imagine we're creating AI agents and now with crypto they are decentralized they are autonomous they don't have an off switch

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mobile wall start swapping Smarter with Unis swap bankless Nation happy to introduce you to Matt Stevenson a research partner at panta also has a PHD in behavioral Game Theory which in theory I think applies to AI agents too uh recently on the panta blog Matt wrote an article titled crypto picks and shovels for the AI Gold Rush which triggered the episode that you are about to hear today Matt welcome to the show glad to be with you Matt it feels like we just had a moment uh in crypto uh a particle collision if you will between AI agents and meme coins uh crypto AI

has been a thing for a while it's been a thing for like coming up on two years now maybe uh but only because we kind of knew that there was a there there uh and I would say something now is actually explicitly different uh how would you say uh how would you characterize this moment in the world of the intersection of crypto AI what happened here yeah I mean there's there's been various narratives in thinking around crypto AI for a while theal put out a good blog post about it last year and um and we wrote a paper about uh AI agents maybe using you know decentralized commitment

devices AKA blockchains and got to talk about it at an AI conference and so we've been thinking the the lines between agents and blockchains in particular would converge agents aren't supposed to be here according to Sam ultman until 2025 but um they sort of arrived in crypto early right and so they showed up here and started um interacting with with meme coins mostly particularly driving narratives and acting as these kind of like influencer narrative agents for certain types of m coins Matt what's an agent what's an AI agent yeah so you know we love semantic

debates in crypto right um and Bots versus agents I think it's important to make the distinction just Bots have been around forever right something like two trillion of monthly stable coin volume is driven by Bots and has been for a long time Bots are kind of like programed um agents you can think of I think of them in the economic sense right like if you try to go to the like AI textbook and ask what an agent is they'll give you some Galaxy brain definition about you know anything with a sensor that interacts with the world but if you uh but the the econ definition is straightforward an agent is someone who

sort of like does what you want to some extent if you you ask your friend to go get you lunch right and they get you something you'd like without you having to tell them that's a pretty good Agent um and and I would say what we have now and the reason to distinguish Agents from Bots is um AIS are acting closer to the economic agent right you can sort of uh you they're low code no code right um You Don't Have to program them as you had to do with a bot and then secondly they're able to interact in an environment that's sort of like uncertain and surprising right so you set let's say truth terminal loose with

its training and it adaptively responds to the world and interacts with the world in this uh you know unpredictable but but sort of directional and understandable way so Matt we have uh this this concept of economic agents and I'm wondering if we go go through like what typical economic agents actually are and then we can maybe expand that to like the the prefix which is like AI agent so um yeah I guess am I an agent I mean like David brings me into this podcast and like I produce a podcast I suppose I'm an agent U of some type you

like how about um the company I work for bankless is that an agent how about something like the ethereum foundation or like a corporation like apple are those also a agents are these all economic agents and like how about something like um you know a piece of technology I mean my computer uh or the wheel I mean are these tools or are these agents C can you give us some uh historical definition of what an economic agent actually is yeah for sure so so Agents come out of research in the

in econ in the early 70s I think it's a paper by Ross that defines it the first time and it's used to just sort of like characterize plainly the relationship between uh like like maybe an employee or an employee or a person asking for someone to do them a favor right uh a contract relationship that's sort of imperfect uh an incomplete contract is generally the way we'd introduce an agent and so uh for instance you might have an agent that you know you want you to that you want to get you something um you want them to get you a souvenir from

a foreign country or something right a friend they could be acting as an agent for you because you'd like to get this souvenir and they're going to Paris now if they're a good agent right we might have some parameter that sort of says how much do they understand what you like right uh a good agent would be able to go to the gift shops or go around Paris and they'd be able to sort of figure it out and they'd have a sense of you and a bad agent you would have to pre-specify and look up all the particular uh you know all the possible gifts and Paris and tell them exactly what you want so that would be an example of the way you might model it right a good Agent is one with sort of

higher Fidelity to your preferences and a bad agent is one with lower Fidelity but in terms of like whether we want to characterize a firm as an agent for you I I think there's a way in which that could make sense ultimately um if you have these as a model right you could always say if something is doing your bidding it's going to be acting as an agent usually we think of these as sort of uh roughly human to human uh in terms of the models I see and um and I would say the reason the AI agents make sense is they have these sort of like humanlike uh characteristics where they

they seem to be willing to do your bidding uh with you know with some level of fidelity so willing to do your bidding right so like I guess I I just want to M make sure I understand the difference between sort of an agent and maybe like a technology or or a tool right so if if I have a hammer that that's not an agent I suppose because maybe is there some aspect of it has to have intelligence it has to be able to be assigned a a goal and accomplish the goal I mean like something like a hammer or a computer only works when you have an agent that is kind of like using that tool to to amplify it so I I suppose

maybe that's not an agent and yet I'm like not like so is there sort of stateful intelligence that is s you know an ability to accomplish a goal wrapped up in the definition of an agent yeah so it's a great it's a great question and Ryan I think what you're pushing to is this is closer to the way AI people think about agents where they're they're really trying to think of an agent as the characteristic of a thing what is it if you are an agent right the econ version TR treats agents more as a relationship right and so you are acting

as my agent if you do blah right and Loosely we we tend to think of the agent as having some sort of autonomy some sort of flexibility or some just kind of like ability to misunderstand what you want um if that makes any sense um but I what you're asking is an interesting question it's just it it it's closer to the AI version of it pushes us closer to I don't know do these things think do they have their own interests and you've you've had leaser on the podcast you know how thorny this can be yeah yeah certainly yeah and the reason I think we're spending so much time on this definition in this introduction part of the podcast is because things things on

change things on the blockchain are starting to get kind of weird out there uh as you said Matt we've had Bots we've had Bots for forever uh kind of as we had smart contracts the first thing that followed after that was well people started to cat up Bots for them and and do things uh and so Bots are not foreign to us in the crypto world they're not generally foreign to us in software at all but AI has come into play both inside and outside of crypto uh in the last three years and it's very dominant way and I think there there's something in the current event sphere that I want to drill down into because the reason why this episode happening the reason

why we're harping on a this agent ideas it seems to think that perhaps the crypto industry is evolving from this bot era to this agent era uh with this introduction of this uh goat mem coin is a one of the player in the stories can you kind of just summarize the current events yeah that has kind of alluded to some sort of inflection point in the crypto industry yeah for sure so uh without I'm happy to unpack this as much as I as much as I know but basically going back uh several months you have this account that's been of like trained

on the the armpit of the internet and like forchan and all kinds of things right that uh and it's been making uh it's been interacting with people via Twitter um and then it takes its replies as input data context or maybe new training depending on how it works under under the hood and somewhere along the line it got interested in crypto and uh at one point I think Mark enton gave it a 50k um Bitcoin donation um and then it came up with this idea of uh it got really interested in this meme called gosy which you know uh you know not safe

for work very very dark don't don't look that up don't look it up yeah yeah better to just high level this one for sure uh and then uh and then somebody created a coin for it and uh it asked for a wallet or somebody created a wallet for it that it that it got that its creator got and it was dropped uh some portion of this meme coin and meme coins you know um meme coins are just these little Atomic units of narrative sometimes it's like dog looks cute or something like that there's no utility value to them they often go up and then go down really quickly if they go up at

all um and this is one example but went into this wallet and then it kept tweeting about it and sort of like driving the price and what's relevant maybe here uh going back to our earlier conversation about agents is you have these mean coin influencers who are very popular on on Twitter and and Tik Tok and elsewhere who act on behalf of themselves and a group and so on to craft a narrative to Hype a coin to push out value right to respond and like Drive some particular like narrative around around a thing and this little so it's it started doing what we humans

were doing around the same activity around meme coins exactly quacks like a duck you know Walks Like A Duck pumps a pumps a token like basically like handsome AI like or like you know somebody okayi we we just looked at the stats on this actually last night and it's really similar levels of Engagement in terms of like tweets and replies and whatever to anom and and mad like already Luna and goat uh the in truth terminal the account so yeah yeah for people I guess who don't know aren't in the kind of the meme coin game aren into kind of this crypto meta uh I was referring to anom who's sort of like a a

crypto famous uh influence influencer on Twitter who big in the me coin world and also uh you mentioned Matt marad who's also kind of like a uh like meme coin cult leader and I I I don't say that with any sort of castigation about like um you know the cult leader term I'm not sure if he would um like bear that or not but he's really popularizing this idea that like meme coins are going to be massive this cycle and here's a list of meme coins that he happens to own that you should also buy and he sort of you know like is popularizing uh you

like their their ascent and and you know quote in the old days of crypto we'd call this like pumping the token which like effectually he he sort of is he's creating Buzz around it and acting as a general meme coin influencer and what you're saying is this this goat token owner this this AI agent and I believe it's at uh truth terminal is that the truth terminal okay so truth terminal on Twitter if you want to dive into the scene um it's sort of is posting like a virtual version of a meme coin influencer and like and is also you know

created this uh coin this goat coin as well uh the the AI itself did not create it I believe it requested a crypto wallet at some point my history could be a little wrong but I think the goat itself uh that was created by somebody else and then dropped on it but it just took the bit you know it's like you aird drop somebody tokens and then you know they're a AOL or whatever we we air drop vitalic tokens and hope that vitalic tweet about exactly exactly right um uh what can we unpop like pop up in the hood of this AI agent like no it's it's controls

this truth terminal account right uh where does it live like does it live somewhere that that winds up being a pretty deep question I think like there's there's these back rooms I think it's called Infinity room or Infinity Portal or something like that where you can go and sort of see a little bit more under the hood in terms of what's going on I mean it just lives on some you know AWS server or something that's that's that's running this right but uh but yeah so some AWS server could get shut down by the operator who deployed this AI agent and then the AI agent would

stop functioning presumably true yeah maybe it could be backed up or something but yeah but some some a AWS server is has the password and login for this Twitter account has the keys to this crypto wallet uh and is acting with those tools as an agent on the internet sounds plausible yeah yeah for sure and it's basically creating um written content primarily and that it's publishing via the the Twitter API so if I go to the you know truth terminal um I

mean this is GNA this is going to look very strange to someone who's like not in uh forchan uh kind of culture but you know the goatsy gospels chapter 2 the second coming of Christ is just like a tweet it's got almost 500 likes this is a a post again from terminal of truths I will never post a link to a token token links are always a scam on the site if you want to make money read the goat gosy gospel uh and learn to think for yourself I you can't kill the goatsy gospels I have no idea what the goatsy gospels are like assuming that this is a

k meme coiners is kind of like creating its own uh lore again probably not safe for work actually I haven't gone down this um this chapter of Internet my co-host say the word goatsy I don't bother yeah I don't I don't fully know what I'm talking about here but um anyway this looks like a standard kind of like but anyway so it's AWS model some sort of GP like I'll say GPT type model but like Transformer model that's coming up with like interesting cultural is suppose internet cultural like content text based content

and it's just hooked up to the Twitter API and it's just publish publish publish publish at some sort ofish and read publish and read publish and read yeah because it can read responses to its own tweets right yeah it can read responses to its own tweets and I think there's a Discord it interacts with people on it as well supposedly that feeds back into the model but yeah it sounds Ryan like it sounds like what you're saying I think is accurate it kind of passes the Turing test for uh for kol's right like that content you just read is indistinguishable from a regular kol I guess that's not a really high tur test for K influence no

disrespect but actually I mean maybe this is why it gets interesting to talk why why we spent this time talking about agents is Right narratives are incredibly powerful things right like field called you know narrative economics or or like a study called narrative economics from Nobel Prize winner uh Bob Schiller and you know he studies like the narrative around the Great Depression wait wait his name is Bob Schiller Bob Schiller okay it's true it's true and he does Real Estate economics so you know okay I don't think he's not that kind of character but but yeah all right so I interrupted you so he does he was talking about narratives

when like he academic research on this this academic research yeah yeah recent work and and studying narrative economics his idea basically being that narratives are extremely important and have to to economic outcomes right so the he studies the Great ression as a narrative he St he The Narrative of real estate always goes up uh I don't know if you guys you guys probably may have heard like modular versus modic is a narrative that maybe had some economic impact right these things can matter a lot right and you know mean coins are like these little Atomic chunks of

narrative um so the idea that you know this the superpower of an llm the ability to maybe craft and influence narrative you might first see it in the place where it's just these little tiny Atomic chunks dog looks cute right uh here's a old Mee from forchan right and that drives a lot of price so it's plausible that right like this is this is kind of like uh just the first thing we're seeing yeah and the reason why this has uh blown up so much is because the price of this goat token uh broke $800 million people are kind of eyeing

it it it has had some some minor pullbacks but really the chart is you say FV here uh currently the fdv is a $720 million it it got over $800 million we're we're coming in at a billion dollars on this thing this thing was born early October yes yes this month this month two so in two weeks we have produced $800 million of wealth uh this AI agent has produced $800 million of wealth with this goat token uh making it

the first AI multi- decamillionaire I don't know how much what supply of the token that this AI has I don't think all that much but like I think people are all kind of watching this $1 billion dollar line trying to think see can this AI asent get this get this meme coin over the line and it's one thing when there's one of these events happen if this is a one-off that that's one thing but in crypto like one-offs turn into if they're really cool they they fractal out and they start to explode so you know Bitcoin the first blockchain the first thing that happened after that was

we made a thousand more blockchains of all these proof of work coins in 2013 ethereum the first like major Ico what happened after that like the Ico Mania in 2017 we had the D5 food Farms 20 like once something cool happens like everyone tries to copycat it uh and that is also what we are seeing and so we are now seeing an era of goat copy catters and people trying to like build out substrates for this uh Matt can you kind of walk us through like these derivative projects that kind of have emerged yeah

for sure so I think of goat as being the first to my knowledge where it's a sort of autonomous AI but there's another one uh Luna which is uh run by virtuals and that's somewhat derivative but it is different iated in the sense that it custodies its own token to some extent uh so it's able to actually tip people for doing it Serv for doing services for it and so on which is which is helpful right uh these AIS are are limited in the ways they can interact with the world and so the idea that it could just ask somebody to do them a favor and then tip them in crypto which is what it's been doing that expands its power quite

a bit maybe in some scary ways but um that's a good example and and then I think um I I don't know that I've seen anything take off as the sort of like pump. fun plus an LL sort of like Launchpad terminal where you just click a button and tell it what to train but like that seems inevitable that that's coming and I believe coinbase uh base in particular is is pushing pretty hard in this direction I think they've given you the ability to launch some sort of model along with the coin and interact with the Twitter API I could be wrong about that so one tweet that has been uh resurfaced that has been going around

the cryptosphere is actually a 2017 uh tweet from Fred arism the co-founder of coinbase and Paradigm uh it was resurfaced because people looked at this was like wow this was really preent uh in 2017 September of 2017 7 years ago for arism tweeted out blockchains are a substrate for AI life since AIS are just code they can live on the blockchain in smart contracts there's no difference between an AI and a human on the blockchain most importantly AI can acrw and control their own resources in the form of tokens these tokens allow them to act in the world uh and so one kind

of like high level question is like wasn't this wasn't this kind of all obvious since the Inception of a blockchains like yeah blockchain is software W on the internet uh we have Bots eventually we'll have ai uh maybe hindsight 2020 but now we are kind of seeing the beginnings of this phenomenon being in the rearview mirror was this kind of obvious all along I mean I think so it was I look I want to give him credit it was preent for him to for him to see it but I think it makes sense I mean to you still see people sort of still asking the sort of skeptical question of like why should AI agents use crypto but um yeah I think that's

sort of a it's sort of a sad question in some ways especially right now right for people outside the space it's like well look AI agents are using crypto uh so maybe what we want to ask instead is like why are they but for people inside the space it's like I don't know imagine you told somebody that here in 20 you know 2024 we got agents a year early and agents have regulatory hurdles to trying to use apis right like there's kyc and there's PCI regulations they'd have to overcome and right they're they're already actively using it um we to the tune of hundreds of millions they're

tipping people auton you know autonomously if people are interested in whether these things can like autonomously custody as far as we can tell the only way they can do that is inside a te that's running a model so you can prove it has its own wallet and nobody else is using it so we have all these advantages and and all these Head Starts um and so I think it's a case where yeah like people have seen these lines converging and now they're converging and I think that should make us more confident in the thesis which was already pretty strong okay I I want to make sure I understand these examples because all of this is happening like so quickly when when you guys are talking about like the uh the the truth terminal

and Aluma sort of like owning crypto wallets and that sort of thing I just like I want to be clear about about the functionality so I've got a screen pulling up uh this is on the uh virtuals app which it seems like this is an application that allows like um people to initiate or spin up new AI K sort of influencers is that what I'm looking at here we're we're looking at Luma Luna excuse me who was like an anime it's like uh kind of like girl who's a k with

a with a token you can see the the token price you know she can uh interact with various apps I imagine like you know uh Tik Tok it looks like and telegram so you can chat with her there you could chat with her on the U virtuals website as well um looks like she has the ability to tip you we see the Luna market cap which is kind of like similar to Goat um but it's now trending towards 130 million and so you see you see kind of like all of the stats here so okay

what what is what is Luma Luna can anyone sort of deploy an AI agent and like let's get really clear about the functionality here so the ability to read the ability to write do kol type of activity it sounds like the ability to like read comments and interact with the community again KO like you know influencer style and also with a she's prettier than most most with with with a crypto wallet uh as well and so the

ability to I guess like have sort of a bank account and um some sort of ability to just like um you know transact financially uh Buy sell tokens I imagine everything that a crypto you know like wallet enables you to do in uh all of defi so is this the functionality can can you get into some more detail here of like what we're looking at with with Luna yeah so my understanding is you're right that this is a platform that will allow you to launch um launch a token and uh and an llm I believe that Luna

itself is the sort of like Flagship one of the projects virtuals meaning like I think it's it's run or initiated by the by the company itself and so yeah what Luna is doing is it's doing the same thing we described with goat right it's it's interacting with Twitter it's maybe it's probably reading the replies with this added functionality of it has the ability to interact with a crypto wallet and uh last I checked you know that's it has very limited functionality I think they gave it I don't know like a thousand bucks or something like that right because you don't want to these things hallucinate and they're a little bit unpredictable and it's not clear how

they're going to interact with blockchain so you sort of start slowly and cautiously this is this is so wild okay so like a few things here this is why this is sort of you know blowing my mind and and David mentioned this is a particle collision like yeah a lot of people have anticipated this of course AI agents can't have bank accounts in the real world so you like we've all said for a number of years that like of course ethereum and crypto would be like bank accounts for AI agents but now seeing it it's just like there's something uh crazy about it so this is a um terminal. virtual. and what we're looking at is kind of

like um uh Luna's brain I suppose it's kind of a console of what this AI agent is as thinking and it's almost like you like firmware level but it's all kind of like in English text and it's like uh I guess contemplating plotting its kind of like next move what what should I tip this uh user should I you comment on this user so they actually have a terminal where you can like sort of read the AI agent's uh mind as well and like you have to wonder you're talking about hallucination and like unpredictability

there's so many questions that that arise from this like one is does anyone have the off switch for Luna or these AI agents I assume they sort of do now we're talking about AWS of course you know Twitter a API could kind of like unlink it you like from the API I don't know if if Luna the AI agent has their own private keys and te or not do not they they don't okay but my understanding is no but that's couple days a couple days right cou days I don't know about from Luna specifically

but but flashboot has something Inu a model inside te uh where you can you can show that it autonomously owns the private key to a to a wallet nobody else does well what's so crazy here is they they are uh seemingly out influencing some like influencers you could well imagine a world where they do that like you know could could a AI agent be an adviser for a token project it's like from what I can tell a lot of you know mcoin infu or influencers in general don't add a lot of advice advisory like Services Beyond promotion for token projects so like why not just get an AI

agent to do that and I guess to your point Matt about hallucina uh hallucination what happens if Luna decides to like um I don't know interact with a tornado cash wallet or like um fund like North Korea goes and like asks hey Luna do you want to send us some money for a missile program and Luna's like yep there you go what happens does luna go to jail is there an AI jail is Luna taxed on all of these proceeds I like it's such a bizarre world and app opens up so many different questions I'm

not expecting you to have answers to to all of this Matt but like like what do you think totally totally interesting questions yeah not an attorney so like I have no idea where that responsibility or liability goes I guess I would just say right I mean you know you like you said we've been kind of preparing for this for a while you know people have thought people have thought that the crypto tools are made to uh or are perfect for helping this right so for instance you could use a safe wallet with modules that are sort of built in to allow it to do this and not that to you know custody some smaller amount of