Musings on Blockchain from the Investor Trenches
AI is demanding an internet upgrade
The growing AI economy needs live data, human verification and payments at scale. Blockchain infrastructure is starting to meet those demands.
An AI agent comparing flights needs current prices, reliable access to airline websites and a way to complete a payment. Access to information, verification of authority and payment infrastructure are becoming practical requirements as AI moves from answering questions to performing tasks.
The Grass protocol is addressing the first requirement through a distributed network of millions of residential internet connections. Households are compensated for contributing spare bandwidth, allowing requests to reach websites through residential IP addresses. This matters because many websites restrict automated traffic from data centres, making their public content difficult for AI systems to access reliably. After growing revenues from selling pre-training data collected through its network to AI laboratories, Grass recently launched its Contents API. This extends the same infrastructure into live retrieval, supplying current information during inference, when a model answers a question or an agent performs a task. The commercial opportunity expands from supplying training datasets to serving recurring demand throughout an AI application’s use.
Cloudflare, the web security and infrastructure provider, is addressing another requirement: establishing who is behind an agent’s request. This week it announced a collaboration on Trusted Agent Delegation with World, the blockchain-based identity network co-founded by Sam Altman. The framework under development would allow websites to verify that an agent is acting on behalf of a real human, using World ID’s “proof of humanhood”. This could help websites admit authorised personal agents while maintaining controls against unverified bots, fraud and abuse.
Zoom out and blockchain infrastructure is starting to move into place as a foundation for the AI economy. The capacity to support it is advancing too. Celestia this week brought its Fibre upgrade to mainnet, expanding the data infrastructure available to applications built on the network. In a separate benchmark, Fibre achieved 3.07 terabits per second, which Celestia estimates represents enough data capacity for nearly two billion transactions per second. Such capacity could help fulfil blockchain’s longstanding promise of micropayments, with agents paying small amounts for individual data requests, computing resources and services. As agents account for more online activity, a substantial commercial need for those payments could emerge.
Grass, World and Celestia are building for a machine economy that needs live data, human verification and payments at scale. How these pieces fall into place will be worth paying attention to.
This week’s market
BGCI Index
-2.74%
Bitcoin
-1.47%
Ethereum
-3.75%
Solana
-2.57%
All figures are week-to-date as of 23 October, 16:19 CEST
Theta Blockchain Ventures content
•On 1 October, Legends4Legends brought together investors, founders and policymakers at EYE Amsterdam to discuss blockchain’s transition from speculation to institutional adoption (watch here)
Blockchain news
•Solana cuts settlement finality from 12.8 seconds to around 150 milliseconds as Alpenglow upgrade goes live on mainnet (learn more)•OCC‘s final rule to start fresh in weighing stablecoin rewards against GENIUS Act ban (learn more)•SEC tokenized stock framework faces issuer pushback as Broadcom, Verizon object to OKX-ICE listing (learn more)•SoFi launches interest-bearing, FDIC-insured tokenized deposit (learn more)•DTCC Outlines 25-Security Tokenization Rollout on Canton and Besu (learn more)•Mastercard Brings Its Fraud-Fighting Tools to Stablecoin Payments (learn more)•Hyperliquid Policy Center urges SEC to clarify airdrop and token buyback rules in its proposed crypto framework (learn more)•JPMorgan expands JPM Coin deposit token to Ethereum for institutional clients (learn more)•JPMorgan Brings MONY and JLTXX Tokenized Funds to Solana (learn more)
Relevant financial updates
•Erebor*, a federally chartered U.S. bank targeting tech companies in crypto, AI, defense, and robotics with banking and stablecoin services, has received a $30mln strategic investment from Robinhood Ventures Fund•Mural, an infrastructure platform for unified fiat/stablecoin accounts, payments, identity, and compliance, has raised $15mln in a Series A round led by Tether with investments from North Island Ventures•Dataline, a decentralized data network for verified onchain/offchain feeds for AI agents, has raised $10.6mln in a Seed round led by Lattice and Dispersion Capital with investments from Coinbase Ventures, Anagram, Vlad Tenev, Symbolic Capital•HoneyB*, a Bitcoin-backed lending and yield platform for borrowing stablecoins against BTC, has raised $5mln in a Seed round led by Portal Ventures with investments from Peer Venture Partners, Anchorage Digital Ventures at a $30mln valuation
*Underlying TBV portfolio position | Prices as per 23/10
Interesting things to read and listen to
•Andrej Radonjic explains how Grass unlocks real-time data access for AI on the Delphi Digital podcast (listen here)•Chris Dixon on why a16z Crypto is becoming a16z Frontier (read here)
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