Crypto is essentially the asset class of AI. Currencies are going to be exchanged essentially through whether it's a stablecoin as an RWA or whether it's going to be sort of Bitcoin or Ethereum or any other kind of token. People are going to be trading these tokens through an AI agent because of the fact that you can prove it. It can have its own wallet. Which bank is even going to allow that?
Welcome aboard Gatecast. It's here to take off your gateway to innovators, builders, and both thinkers shaping the world of Web3. We ready to take off today at gate.com. I'm your host Maria Wu Chuck and today we're super happy to welcome here a true visionary, Yat Siu, who's building bridges between digital property, institutional adoption, and gaming at Animoca Brands. Yat Siu, welcome to Gatecast. How are you doing today?
Very good. Thank you for having me.
Thank you. Thank you for coming. One of the things that I would like to start our interview with is actually you recently compared Bitcoin to digital gold, but also while comparing also Bitcoin to digital gold, he also compared altcoins to the stock market. So, from your perspective, as you're observing different institutional, does institutional capital view them as at the current market as an asset preserve value or still grow the return?
Well, I mean, I think generally speaking, when we made that comparison, we looked at what was the purposes of those particular asset classes. So, Bitcoin typically, at least in the digital space, is very much a reserve asset. You use it for collateral. You don't really use it. People don't really spend their Bitcoin. Even though a lot of Bitcoin maxis would like that to happen, it's not actually happening, right? It's really
Yeah, yes, they huddle it. And also they never spend it, right? So, you basically have the same situation as with the gold. The utility for gold is very minimal, but really it is a reserve asset. And gold today sits at around 27, 26 trillion dollars in value. But then, what is it that we actually use in the world? We use the products built by the companies from the stock market. And they're the ones who are bringing people into the ecosystems. So, we use Google, we use Nvidia, we use Microsoft, we use Apple. Those companies by themselves are not larger than gold. However, combined, they are larger than gold, right? I mean, I think that S&P 500 is about 500, so that is $50 trillion in size. And the entire stock market is around $128 trillion in size compared to gold, it's around five, you know, five, six times.
And we think altcoins versus Bitcoin will be the same. Because think about it, what is it that we use in crypto when we're building on chain?
We're actually using altcoins. Whether we use it for gas, whether we use it for gaming, whether we use it for utility, for deep in, those are altcoins. Now, that's not to say that altcoins in and of themselves are going to be bigger than Bitcoin, that will never happen, we think. Also, we don't think, you know, just like there are millions of companies in the world, there are going to be millions of tokens. Not every token will be big.
But you will know which ones of them are important. And right now, when you think about institutions, I mean, I would argue that Ethereum and Solana have very much hit sort of the era of institutional adoption. People do understand its purpose. But when I look at Ethereum and Solana, for me, they're very similar to the early internet days, kind of like Telcos.
They're building the infrastructure in which you can build on top. But then you look at other companies in the space that are building, you know, for instance, like a Polymarket, right?
I mean, how many people know that Polymarket is actually sort of building on blockchain? Most people don't even care about it. But it's built on Polygon, for instance, right? And so, there's an infrastructure play that's happening right now. And eventually, though, those applications that essentially are owning the customers, we think, will be the ones that are going to be the biggest ones. And that's the same that we see in the stock market. We think altcoins will very much be driven the same way. But we're early.
I mean, you know, in 2001, 2000, 2002, after the dot-com bubble, a lot of institutional investors weren't sure about internet stocks.
And I think the same is true right now for altcoins. They're sure. They see it, it's liquid, however, they're not exactly sure how to work with that. And I think this will change in just a number of years.
Talking about S&P equivalent and S&P 500 in particular, which altcoin sector do you see as S&P 500 equivalent in this case and where do you see there is institutional lasting interest and there is utility?
Yeah, I mean, asking for the S&P 500 equivalent today is a little bit like asking in 2000 or 2001 where the Amazon or Apple or Google are going to be essentially the biggest companies in the world.
Right? So, I think it's a bit early to say that. But, the point is that the trend line towards us is very clear. Basically, the future is being built by these companies. The other problem is you don't actually know which ones are going to be the big ones. But, I think the point is that the space is just evolving in such a rapid way that it's hard to know who's going to be leading in the space, which is why at Andreessen Horowitz, we generally invest in a broad spectrum of companies that we all think are building and leading sort of programs. However, none of them are, you know, we don't know which ones are going to be the ones that are really going to be the big one at the end of the day. I mean, how many people thought sort of Amazon was going to beat eBay for instance as an example, right? Or when you think about search engines, I mean, Google came late to the party. It was Yahoo, it was Magellan, it was Infoseek, it was all those guys actually who were actually much bigger. And then at the end of the day, it was Google who basically took the crown much, much later. However, if you were invested in all of them, you only needed the one to essentially create not just all the returns in your fund, but essentially go like 1,000x. That's actually sort of the strategy of Andreessen Horowitz and that's essentially why we're investing so broadly as an investor and also builder in the space.
You also mentioned earlier that the hype is over. The crypto hype is over. Obviously, what matters is infrastructure. From your perspective, what are right now the biggest infrastructure gaps that might be still holding crypto back?
So, when I said the hype is over, what I really meant was that the sort of general attraction as a speculative asset has essentially died down. Not for the purpose of speculation, people will speculate, but in terms of the speculative asset, it feels like it is the most sort of interesting, most sort of, you know, I don't know if this is a correct expression, but you know, Bitcoin and crypto used to be both sexy and exotic.
Right? It was something you would see and you'd say, 'Oh, this is kind of interesting.' However, it's a sexy asset. It's kind of I don't really know, but it was also mysterious. It was not well understood. And a lot of people looked at the sort of upside of it in a very different manner.
And now we have a lot of other sexy assets, such as AI token sort of AI stocks, you know, energy has become sexy again, right? You know,
Bitcoin is already not that interesting anymore.
So, Bitcoin is not as exotic anymore. Still sexy, but not as exotic anymore. So, it's mixed in this entire pool of institutional capital as well as retail capital that no longer has a distinction. So, if you're basically thinking about someone who's just looking to speculate, the difference between Bitcoin and an AI stock or even gold or silver seems the same.
So, that's the point where that sort of let's call it speculative sexiness has gone away in the sense that it's the same as everyone else. I mean, you think about what happened this last week or last couple of weeks, the distinction between silver and Bitcoin and even to some extent gold is no longer as clear even though we in the industry understand there's a very clear distinction in terms of its sort of, you know, basically scarcity. However, that's how most people will treat it. And also because of the fact that now because Bitcoin is in the form of ETFs, you've got all sorts of derivatives attached to it. Right? You've got the whole financial world that is now attaching itself in different ways in which you can create synthetic versions of these assets. Again, it doesn't change the scarcity of Bitcoin, but it does make it much more available and essentially much more common as it were, right? So, what does it mean? Just like the early days of the internet, it means that the true believers and adopters are going to want be the ones that drive the industry forward. They're the ones who are not buying it just because they want to speculate. They're buying it because they believe in a better future, they believe in the fact that there's going to be sort of utility around these tokens, they believe that this is going to change the world for better internet. Whatever belief that you have on this this is why they're doing this, right? And I think this is basically why we think utility tokens, particularly with altcoins, are going to ultimately shine because there's a purpose for them, right? One example for instance, when you think about what's happening in AI,
right? I think a lot of people are somehow treating crypto and AI as entirely two different topics, when in fact very much intertwined. I mean, you know, crypto is essentially the asset class of AI. Currencies are going to be exchanged for whether it's an RWA or whether it's going to be sort of Bitcoin or Ethereum or any other kind of token. People are going to be trading these tokens through an AI agent because of the fact that you can prove it. It can have its own wallet. For instance, think of Polymarket. Without blockchain, Polymarket couldn't have been built.
I mean, yes, you can build your own database, you can build but what does it cost? You have to hire a really really strong engineers, you have to people who understand how money flows in sort of an internal banking infrastructure. Like you have to recreate essentially a mini bank in order for you to really operate a stand-alone sort of, you know, prediction market.
And they know how to build it on top of Polygon as well, obviously.
Well, yeah, but building on top of Polygon makes it easy. Building on top of any blockchain makes it easy because you've got the smart contract factor basically
When you already have it ready.
Exactly, you have it ready. You've got essentially the ability to really ideate new financial constructs or products with all the security in mind without actually having to rebuild all of that. So, it's like a public infrastructure. In the early days, for instance, you know, it was hard to build a website because you had to buy a server, you had to set up somewhere in some data center, you had to configure all the IP configurations, you had to figure out routing, you had to do all that kind of stuff before you can even run a normal web server, and then came Amazon Web Services.
And basically, now you don't even care about that, you just click a button, set it up, your website's ready, and you can roll, right? And that's what blockchain basically did for financial infrastructure. I'm able to now build and compose on top of a financial infrastructure that is safe, that is secure, and then as a result, I can now build something like a prediction market that deals with real money. I mean, just think about how difficult it is normally for a private company to build a transaction layer and a let's call it quasi custody layer that deals with real money. Extremely difficult. Tokens and blockchain essentially to the rescue, right? And of course, that means AI agents can now trade on top of these and buy stuff on top of these without having to deal with some kind of API layer. I mean, imagine if you have an AI agent that wants to transact, they have to plug into your bank account. And they have to sort of get permission. Which bank is even going to allow that, right? And so, that again, blockchain, tokenization solves that. So, what we did at Animoca Brands, and this was kind of really timely because the product has been really sort of in ideation and development, but just essentially when well, ultimately Claw, Multibot, and then Open Claws as it is now known, basically when that emerged, that was sort of the right time to essentially push out the product. And what it really is is essentially Open Claws except an entire cloud version. And the difference is that it has its own wallet, it can do its own transaction,
it can also plug into your calendar and do, you know, you work with Telegram and do messengers, but now I can basically tell my AI agent what to buy from an AI standpoint in terms of, you know, maybe to trade, do a transaction, and it's much more accessible and easier than, you know, to go on your wallet, remember your 12 or 24 keys. You even if you have a ledger, which is very very important to hold some of your key assets, again, for most people that is a barrier that is difficult from a mass adoption standpoint.
But ultimately, the point is that it's integrated into your life. It's not to say that you only using this AI agent to trade, just in the way that you're only going to this account to basically go and trade assets. This AI agent does everything for you. Right now, I have the AI agent that's managing sort of, you know, schedules for my children, for instance, right?
Right. It's managing it right now, right?
Um, so no, no. This is our own. Animoca Go-Minds, right? It does it over Telegram. You know, it's handling my travel bookings.
Everybody can use it already?
Everybody. You can sign up for it right now. Animoca Go-Minds on AI. You can try it out right now. It is in a beta version.
But, you know, you can basically. And the way you interact with it is entirely text-based. So, you can chat to it and say, 'Set up a wallet.' You know, and then you can basically put money into the wallet and you can do trading. It can basically also do things like, you know, some people are actually building some cool stuff that I'm seeing. Like they're basically building, especially what happened last couple weeks, people are building essentially, sort of astrological bots that are trying to tie astrology to trading, for instance, right?
Yeah, just kind of, you know, wild funny stuff, right? And of course, people also building games with it, like text-based games, like quizzes. Right, so you can see that emergence. And what it really is down to this next area of you can now innovate and create things just with things that are always in your head and always in your idea.
But, you don't need to have the technical skills. The problem with Open Claw is not that Open Claw isn't innovative. It's incredibly innovative. It opened up this whole new sector. It's the issue of complexity.
