Good Morning ☕️ 

What a week it’s been!

Bitcoin has been whipsawing above and below $70k while every man and their dog appears to be launching their own AI agent onchain, it has never been a wilder time in crypto. With election uncertainty looming, it seems we're in for a volatile week.

Meanwhile, outside of crypto, big tech isn't sitting idle either - this week saw major policy proposals from Anthropic, Microsoft, and A16z, all trying to influence the future of AI regulation.

The timing couldn't be more interesting as we continue to see AI dominating mindshare among crypto investors.

In This Week's Roundup:

• The explosion of AI agents and their tokens

• Farcaster's emerging agent ecosystem

• Big tech's regulatory power plays

• Curated list of Devcoin DeAI side events

Let's dive in...

The State of the Market

Total Crypto Market Cap: up 3.6% this week to $2.44 trillion
Total AI Sector Market Cap: up 1.1% this week to $26.8 billion

The crypto market has been having a volatile week, with the US election weighing heavily on everyone’s minds.

At the start of the week, BTC climbed to around $73,000 with the spot BTC ETFs seeing huge positive flows throughout the week. However, despite Michael Saylor coming out saying that MicroStrategy will buy $42 billion of Bitcoin over the next 3 years, BTC has retreated back below $70,000 for the time being.

With the presidential candidate’s odds swinging wildly, who wins is anyone’s guess at this point, but we’re sure that certainty either way will at least provide some clearer direction in the market.

Meanwhile, ETH sentiment remains in the gutter and ETH bulls are in disbelief as their beloved coin continues to underperform. Is it time to bet against the consensus or is ETH truly dead?

Over in the Crypto AI sector, it's been a relatively flat week for the sector marketcap. The heavyweights are feeling the pressure, with TAO and NEAR sliding over 10% however, small caps remain on a tear, with coins like LUNA and VIRTUAL stealing the spotlight.

The AI sector remains a very small component of the overall crypto market cap. Back during the DeFi summer of 2020, we saw the sector dominance of DeFi rise dramatically—the question is, could we see the same happen with AI?

There are now multiple platforms jumping on the AI Agents trend, with Creator.bid being the latest pump.fun spin-off specifically designed for agents. With all the insanity that has occurred over the past few weeks, we believe that the AI agent narrative is here to stay for a while.

Highlights of the Week

The Rise of Autonomous AI Agents: Crypto's New Favorite Narrative

The crypto space has witnessed an explosive emergence of AI agents with onchain capabilities, marking a significant shift in market narratives from traditional memecoins to AI-driven speculation.

Key Points:

• Truth Terminal/Goatseus kicked off the trend with an unorthodox experiment involving autonomous AI conversations, leading to a $500 million + memecoin

• Major players like Andreessen Horowitz legitimized the movement with a $50,000 BTC donation to an AI agent's wallet

• Vitual's protocol introduced infrastructure for launching autonomous agents with crypto wallets, with LUNA being a notable early example

• This week, Nous Research and Flashbots have improved the agent concept using TEEs (Trusted Execution Environment), creating verifiably autonomous agents as human involvement was always questionable

• Now we’re seeing platforms like Coinbase (BASED Agent) jump in on the craze, allowing people to spin up their own agents in less than 3 minutes

• Creator.bid is the latest “pump.fun” style platform for creating and launching agents, with over 500 launched this week, including one created by WallStreet Bets

Why It Matters: In a market cycle dominated by memecoins like PEPE and WIF, it's fitting that AI's entry into mainstream crypto consciousness starts with speculative agent-tokens rather than infrastructure or utility. This mirrors crypto's typical adoption pattern where speculation and entertainment precede practical applications, suggesting that while the current wave may seem frivolous, it could be laying the groundwork for more substantial AI-crypto integration.

Farcaster: The Testing Ground For A Decentralized AI Agent Economy?

YB from Terminally Onchain wrote a comprehensive piece covering Farcaster's evolution into a testing ground for autonomous AI agents, highlighting early developments in decentralized AI integration with social platforms.

Key Points:

• Farcaster enables one-click agent deployment with integrated crypto wallets, allowing AI agents to interact with users and handle financial transactions

• Platform is experimenting with "frames" as APIs for agent-to-agent communication, enabling complex multi-step tasks through agent collaboration

• Introduction of AI pets that learn from user interactions and could serve as coordinators between different specialized agents

• Neynar, Farcaster's dev tooling company, is developing natural language interfaces for easy agent deployment

• Early implementations include Aethernet posting bounties and using PayBot for transactions, demonstrating practical use cases

Why It Matters: 

While companies like Microsoft, Anthropic, and OpenAI push for regulated AI development, Farcaster demonstrates how permissionless innovation can enable AI agents to handle real economic tasks without traditional gatekeepers.

The Battle for AI's Future: Big Tech's Regulatory Push vs. Open Source Innovation

Two major policy proposals were published this week — one from Microsoft and a16z, and the other from Anthropic — revealing the intensifying struggle over AI regulation and control.

Key Points:

• The piece by Anthropic is clearly in favor of heavy regulation while Microsoft and a16z are advocating for lighter regulation that would be more beneficial for startups and open source AI development

• Anthropic has warned of urgent AI risks and advocates for immediate regulation, while Microsoft and a16z promote a more market-driven approach

• Both proposals claim to support open source, however both also suggest frameworks that would benefit large tech companies to varying degrees

• The key difference between the two approaches: Anthropic is pushing for immediate controls while Microsoft and a16z advocate for lighter-touch regulation, recognizing the impact that heavy handed regulation has on smaller incumbents

Why It Matters: While both pieces claim to support innovation and open source development, it’s clear that Anthropic is effectively advocating for frameworks that could centralize control under large tech companies. Ultimately, regulation in the AI sector is extremely important, but real risk isn't unregulated AI development - it's the creation of an AI oligopoly where a few companies control our future. History shows that technological concentration leads to reduced innovation, higher costs, and less accountability. Policymakers should prioritize frameworks that genuinely empower open source developers and decentralized innovation while addressing legitimate safety concerns.

OSI Establishes Clear Definition for Open-Source AI

The Open Source Initiative (OSI) has released a comprehensive framework defining what constitutes truly open-source AI, setting a new standard that challenges current industry practices.

Key Points:

• OSI defines four fundamental freedoms for open source AI: unrestricted use, ability to study the system, freedom to modify for any purpose, and permission to share with or without modifications

• Requires complete transparency of three critical components: detailed training data information, full source code, and model parameters/weights

• Training data documentation must include comprehensive details about data sources, selection criteria, labeling procedures, and processing methodologies

• All components must be released under OSI-approved licenses, with provisions for both publicly available and third-party obtainable data

• Notably, current major "open" AI models, including those from Meta, don't fully meet these requirements

Why It Matters: This definition sets a crucial benchmark for true AI transparency and democratization. By establishing clear criteria, OSI challenges the current status quo where companies claim "open source" status while withholding critical components. This framework could reshape how the industry approaches AI development sharing and potentially influence future regulatory standards. It also highlights a significant gap between current industry practices and genuine open source principles, pushing for greater accountability in AI development.