AI may need crypto to become decentralized

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The Crypto x AI narrative is evolving quickly

While there’s a lot of hype around crypto and AI integrations, investors and startups alike are looking to find the best use of its existing potential and future value.

“The AI tailwinds are just too strong to ignore,” Anand Iyer, founder and managing partner of Canonical Crypto and venture partner at Lightspeed, said on Talking Tokens podcast.

(Listen to the episode on Spotify, Apple Podcasts or YouTube.)

“The utility of blockchain numbers can be largely proven by AI. So with that sort of backdrop, I think there’s a lot of noise, like people who wishfully wanting to see this work, me included.”

But in order for it to work, the focus needs to be on true substance, Iyer said. There’s a few areas in the crypto and AI sector that he’s monitoring, including machine learning pipelines, data collection, compute training and inferences, to name a few.

Iyer noted his investment in Sahara Labs, a startup building a decentralized AI blockchain platform that recently raised $43 million in a strategic round, as one startup that’s “truly crossing the chasm” through its collaborative economy.

“A lot of centralized companies trying to do data labeling [but] Sahara is leveraging the power of the masses, using a distributed consensus system to be able to label data…then using it for training models and then storage.”

There’s a lot of focus on “training” models in crypto and AI, while also “unbundling centralized AI,” Iyer added. “This isn’t an overnight success…but we’re starting to see how they’re credibly being used.”

While it’s still early stages, there’s a lot of movement in the space to decentralize AI. And crypto plays a big role in that, given that blockchains, by nature, aim to be decentralized.

It’s important because “as long as decentralization exists, these networks don’t go away,” Iyer said. Whereas if a centralized company shuts down, what happens to users’ data, trust and more?

“This open source, transparent primitive needs to exist and decentralization is one of those core tenets,” Iyer said.

Check out the next section for more details and the full episode.

The latest Talking Tokens podcast 🎙️

For this week’s Thursday episode, I sat down with Anand Iyer, founder and managing partner of Canonical Crypto and venture partner at Lightspeed. 

We talked about Crypto x AI and opportunities he sees in the sector as well as his view on the overall web3 VC space, the type of founder he likes to invest in, how to scale a company and more. 

Talking Tokens episodes are released on Spotify and Apple Podcasts at 6AM EST or YouTube at 10AM EST every Tuesday and Thursday. Listen in!

Make sure to subscribe to keep up with the latest episodes. Feel free to leave a review and tell us your thoughts.

Monitoring blockchains

Looking at some of the biggest developments onchain.

• Superchains Mode, Zora and Metal L2 show decentralization progress with upgrade key transfer

• Avalanche-powered Off The Grid launches on PS5, expanding web3 reach to console gamers

• Illicit activity onchain has dropped year-to-date compared to the past 3 years, according to a new Chainalysis Crypto Crime report (see chart below)

Taking on the tokens 

The total crypto market cap decreased 3.7% in the past 24-hours to $2.08 trillion. It is up 3% over a 7-day period.

As for the largest cryptocurrencies by market cap…

These metrics were taken prior to publication on Thursday morning EST.

Other numbers we’re eyeing…

• $418M — that’s how much spot bitcoin ETF holdings Goldman Sachs has, as of June 30

Money and people moves

Latest updates on crypto startups that secured funding and industry players who are starting something new.

1. Bitget hires ex-Binance Policy Head Hon Ng as chief legal officer

2. Crypto Project Essential Raises $11M for 'Declarative, Intent-Based' Blockchain (CoinDesk)

3. Intent-centric Ethereum L2 Essential raises $11 million in Series A funding (The Block)

4. Bitfarms founder and former chairman Nicolas Bonta steps down, while its CEO Ben Gagnon has been appointed to the company’s board

5. Ex-TON Foundation execs launch $40M TON Ventures fund (Cointelegraph)

Talking points for the road 

Here’s some headlines and topics that you can talk about at your next dinner party, crypto event or on a first date to look smart (results may vary.) 

1. PayPal’s $733m stablecoin is growing faster on Solana than Ethereum. How long can it last? (DL News)

2. Coinbase Returns to Hawaii Seven Years After Exiting Market (Bloomberg)

3. What Grayscale’s new flurry of trusts says about where we’re at (Blockworks)

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Please note that this content is for informational and entertainment purposes only. Any views shared should not be considered financial advice, nor should it be used to make investment decisions. Cryptocurrencies are high risk and you should consult a financial professional before making any financial decisions. Make sure you do your own research. We may have a direct or indirect financial interest in content mentioned in this newsletter.