Joining us now is one of crypto's most closely watched voices, co-founder of BitMEX, chief investment officer of Maelstrom, and now the CEO of Flop Labs, Arthur Hayes. Hello.
Hi, Arthur. Arthur, we didn't know when you were going to arrive, and then I heard this contagious laughter from behind the cameras, and I knew you were here. Just such a presence.
You're welcome.
How is Korea going for you so far?
I love Korea. I love kimchi. I love Hanwoo beef. Like, this is my favorite conference of the year, cuz I get to eat the great food.
Yeah, it's so delicious. Eleanor's only been here for 12 hours, so she hasn't experienced it yet.
She's getting all the recs. She's getting so many tips. Last year at Korea Blockchain Week, I adopted a dog, so anything can happen. Anything can happen. All right, Arthur.
You got bangs this time?
Bangs this time. Yeah. Every time I come here, I make some kind of wild decision. All right, let's talk about Flop Labs. You are now the CEO of Flop Labs. Lay a foundation for us, for our audience that's watching at home who has never heard of it. What are you doing?
So, very simple, right? We believe that there is this agentic economy. Can't deny that. The question is, what is the payments network that they're going to use? And we believe there's a wedge in the market in that there's no currency that's directly convertible into compute, which is what your AI agent needs. They need to process inference. And so, using the principles of Bitcoin, we've created a proof of useful inference blockchain where anyone can contribute their GPUs. They mine Flop by providing inference requests for agents. They get this currency, Flop, and then agents use it in commerce. And we hope that this is the payment network of agents and will be worth a lot of money in the future.
Break that down for us for someone who doesn't know DePIN, doesn't know AI. What's being verified? Who's doing the verifying?
So, like, I'm sure most of your listeners use some sort of agentic tool or a chatbot or whatever, and essentially they spend these things called tokens. Now, there's no standardized definition of what a token is, but below a token, every model contacts a data center, they send some data, and they do floating point operations per unit of time called flops. That's the name of the network. So, we're saying, 'Okay, if these agents are going to communicate with each other and pass currency to do work, let's build that network, and that network will be very, very valuable.' But the only way your agent is going to want to use a currency is just like humans, like we take a fiat currency, we convert it into food. Well, an AI agent needs to convert Flop into compute, and that's what our network does.
So, can an AI agent use stablecoin to convert into compute, or does it have to be the Flop token?
Well, right now it's, you know, USDT, USDC, even a US dollar. They're not directly convertible into compute.
And essentially, there's another demand function or supply function of these currencies, right? You look at the inflation demand. Well, the government can decide, 'Okay, I'm going to create a trillion dollars,' and you've diminished the value of this currency that you hold. It's not directly convertible into the thing that you care about, which is compute as an agent. Which is why, yes, they could use stablecoin rails, but why would an agent hold a stablecoin? Because it doesn't actually do the thing it needs it to do.
Well, that's interesting, cuz almost everyone I talk to on my show say agents are going to use stablecoins, and that is kind of the theory behind some of the chains like Ethereum, Solana, that the next billion users on chain, right, all are going to be AI agents. And so, give me the counter thesis. Like when you hear that being said by so many smart people, so many people with money behind them, what are you thinking?
Number one, if I own a stablecoin network and I've seen volume stagnate over the last few years, and then there's a new creation called agents, of course, hammer or nail, right? I am selling into this narrative that my currency will be used by the agents. But if you think about where the value comes from for my currency, it's in the MiLk's building in New York City. It's not anything programmatic. It has nothing to do with compute. It's just a bunch of dudes deciding what the value of this currency is. That has nothing to do with agentic commerce. Whereas what I'm saying is that agents want to have something that is compute-forward. I can convert Flop into compute. Why? Because Flop came into existence because somebody did useful inference.
