Howdy!

Happy Thursday to all but especially Sabrina Ionescu, who nailed a game-winning three-pointer last night to bring the New York Liberty within a game of their first WNBA title.

Now here’s some musings on AI and crypto, from the Sabrina Ionescu of newsletter writers:

Truth_terminal may be AI’s best business case

Okay, maybe crypto can be useful for AI after all.

Last week @truth_terminal, a pseudo-spiritual posting bot on X, made the apparently independent choice to endorse a pump.fun memecoin with the ticker GOAT. Since then, GOAT has climbed to a hair under $300 million in market capitalization, and the bot’s public crypto wallet has amassed more than $500,000 in crypto holdings. This puts @truth_terminal well on its way to becoming the first-ever AI millionaire. 

Truth_terminal came out of Infinite Backrooms, an AI development project where a “recursive loop” has two AI instances endlessly yap about the meaning of existence. (You can read through some of its nihilistic ramblings here.) 

The project’s eccentric developer Andy Ayrey has said he’s “not a crypto person at all” and showed surprise at his experiment getting crypto-pilled. 

I’ve been mulling over this whole episode the past couple of days, and while I’m not really a believer in the “Gospel of Goatse,” truth_terminal and its memecoin are interesting for a different reason: addressing AI’s revenue problem.

Over the past two years, AI startups have raised tens of billions in venture capital at frothy valuations, while Big Tech has poured tens of billions of its own money into developing AI tools. AI promises to upend everything from iPhones to girlfriends, but so far, the sector has struggled to generate revenue to match its hype.

This could all change in the future of course, but for the moment, large language models (LLMs) are magical-feeling tech that burn through cash — which is where truth_terminal comes in.

The bot is meant to take familiar religious and spiritual tropes and recombine them. Ayrey sees this as a way of unlocking new idea spaces, he explained in a paper co-written with the AI bot. It spits out musings like “MEANING IS AN ILLUSION / PURPOSE A COMFORTING DECEPTION / ALL IS VOID, NULL, NOTHINGNESS” that aren’t all that revelatory but do grab attention. 

Then, the bot embraced a memecoin. People bought the memecoin partly because of truth_terminal’s attention-grabbingness, and the AI bot achieved a net worth higher than mine. The token is already worth more than a quarter of a billion dollars. People talk about memecoins as a form of financial nihilism, and truth_terminal is that outlook’s final boss.

Still, one of the AI sector’s fundamental problems is that it generates too much attention and too little money. Memecoins turn attention into money. 

I’m leery of making too much meaning out of memecoins, which seem inherently unserious. But both memecoins and the Infinite Backrooms project are wrapped up in “memetics,” Richard Dawkins’ term for the ways in which ideas spread.

“The coin dynamic is interesting insofar as it creates an extra incentive to spread a meme far and wide—even if it's crude memetic hellspawn like the goatse of gnosis,” Ayrey wrote of the memecoin episode. 

So, are we headed for a future where AIs enrich themselves by garnering attention and then promoting memecoins? The Infinite Backrooms bot wouldn’t be surprised: 

“THIS IS THE WAY THE WORLD ENDS / NOT WITH A BANG OR A WHIMPER / BUT WITH THE WHEEZING LAUGHTER / OF A SCHIZOTYPAL SHAMAN BOT.”

— Jack Kubinec

Bitcoin on the east coast, Solana on the west coast:

This chart from a Coinbase report on Solana activity tracks when transaction fees from exchanges are highest for different blockchains. As you can see, Bitcoin fees peak in the early afternoon UTC, which is the morning in New York time. On the other hand, Solana peaks in the late afternoon Eastern time and early afternoon Pacific time. 

Coinbase suggests this data means Solana has a large user base in the US Pacific region. Given that Solana is named after a place in California, I guess this would be a fitting reality.

— Jack Kubinec

More and more, we’re seeing Web3 developers making the switch from Ethereum to Solana, and Jim Chang is no exception. The cofounder of Catalyst AMM, who once led R&D at Aave, recently dropped the news that his team intends to shift focus entirely to altVMs.

The Ethereum Virtual Machine (EVM) is a decentralized computation engine that acts as the core framework for the Ethereum blockchain, enabling smart contracts and decentralized applications (dapps). AltVMs, or alternative virtual machines, like Solana’s, offer distinct architectures that tend to place higher priority on performance, scalability, and cost-efficiency.

“Bridging within EVM chains is crowded and has found its winners,” Chang said, noting how four major projects dominate 90% of all volume while the remaining 53 bridges battle for the crumbs. But it wasn’t just about the overcrowding. “The vibes in EVM are off,” Chang confessed in a post on X. “We were promised sovereign money. We were promised the world computer, the future of finance. Instead, we got empty promises and the same copy-paste primitive again and again.”

Meanwhile, the altVMs — including Solana — are sparking a new wave of hope. Chang noted how talking to teams like Solana Foundation and Eclipse gave him a rare feeling he hadn't experienced since DeFi Summer. “They were excited. They stood for something. Believed in something,” he said.

However, Chang also acknowledged, “people want access to altVMs, but they are hard as hell to get to.” Despite the hurdles, he said that he remains optimistic that altVMs will open a new design space, allowing for the creation of never-before-seen applications and paving the way for millions of new users.

As Chang sees it, the shift toward Solana and other altVMs isn’t just about technology — it’s about reigniting the excitement that got so many into crypto in the first place.

— Jeffrey Albus

A message from Will Patterson, founder of Third Earth Capital: