Editor's Note: This article is a written translation of Arthur Hayes' recent appearance on the Altcoin Daily podcast. In this interview, Arthur Hayes discussed the macro liquidity changes in the current market and the major rebound in this round of the cryptocurrency market, made predictions about mainstream assets such as BTC and ETH, and thoroughly revealed the design details of his personal new project, Flop Network.
Below is the original interview text, translated by Odaily Planet Daily. For the sake of readability, some content has been edited.
Macro Liquidity and This Round of Rebound
(Background: Last week, the US Treasury Department announced an expansion of its repurchase size for long-term bonds to provide greater liquidity support to the bond market. According to the statement, the Treasury Department's liquidity support repurchase size for long-term bonds will be "at least doubled" from $20 billion to $40 billion, covering bonds ranging from 10 to 30 years)
· Host: Let's get started. Arthur, your career started as a trader at Citibank, right?
Arthur: Yes, at Citibank and Deutsche Bank's Hong Kong branch.
· Host: As someone from the Traditional Finance (TradFi) world, how do you think these traditional institutions are currently viewing the headlines of the cryptocurrency market? Looking back from 2026, what are they thinking about the crypto market?
Arthur: "Sustainability" — I think this is a new term that the entire traditional financial industry is currently discussing.
With the US national debt reaching as high as $40 trillion, continuously rising interest expenses, and the struggles of many other major sovereign debt markets, they have started to worry: "Will these bonds I hold still be valuable in 5 years? Will inflation soar again? Is my asset allocation correct?"
Evidently, after US Treasury Secretary Scott Bennett initiated the bond repurchase operation — or at least doubled the authorized repurchase amount for long-term bonds — the market's reaction has precisely confirmed this.
All of this is exacerbating panic: "Oh my, I hold so much U.S. Treasury bonds, but their performance lags far behind all other asset classes. Why am I still holding onto them?"
And the fact has repeatedly shown that when you really need to sell to cash out, the U.S. government does not allow you to sell at will.
· Host: How do they view crypto assets then? They have been driven crazy by debt and treasuries. Are crypto assets completely off their radar?
Arthur: No, I believe cryptocurrency is precisely the only pressure release valve, the purest release channel for central bank money printing. With the market's increasing concerns about the U.S. adopting Yield Curve Control (YCC), Bitcoin and crypto asset prices act as that pressure release valve.
So after the Treasury statement was released, you overnight saw a spring-like rebound in cryptocurrency.
· Host: I remember the repo limit only doubled to around $20 billion to $40 billion, not some astronomical number...
Arthur: That's right, going from $20 billion to $40 billion or several billion, the amount itself is not exaggerated, but it sends a signal, which is an indicator.
In addition, the Fed will not raise interest rates at all, despite looking at inflation data, U.S. economic growth, and the 2-year Treasury yield being 50 to 60 basis points above the effective federal funds rate, the Fed should raise rates, without question. So why don't they? Because the Treasury needs to issue a large amount of short-term Treasury bills in the market for various maneuvers, as no one is willing to take on long-term debt.
· Host: For newcomers who have just entered the Bitcoin field in the past year or two and are still trying to understand macroeconomics, in simple terms, what does U.S. debt repurchase mean to them?
Arthur: It means more liquidity — more fiat currency chasing limited hard assets, and Bitcoin is one of them, so prices will rise significantly. This is replaying the path to Bitcoin's birth, mirroring the events of 2008.
This is also the ultimate logic of investing in Bitcoin, when everyone suddenly realizes — "Oh my, these U.S. Treasury bonds are worthless, I can't exchange them for any real assets, the market is so heavily manipulated that it can't even trade normally, I need a real store of value, I need an asset that can directly benefit from the massive influx of dollars chasing scarce assets," the best choice is Bitcoin.
This is what it was meant to be when it was born in 2009, and it has never changed since. Of course, it will fluctuate with the liquidity cycle, but if you are going to discuss a key moment that makes the whole world see that the "emperor has no clothes" — when the global largest sovereign debt market makes everyone panic that Yield Curve Control (YCC) is imminent, the price of Bitcoin will quickly soar to hundreds of thousands of dollars.
· Host: You were on the front lines of the market when the 2008 financial crisis broke out. Did they also engage in bond repurchases back then? Was the market trend one or two years before the collapse similar to now?
Arthur: When the 2008 crisis broke out, the first thing they did was rescue Bear Stearns — not a direct bailout, but they allowed Jamie Dimon to acquire Bear Stearns for a bargain price of $2 per share, and the Fed provided a large loan, a super gift for JPMorgan Chase.
That was the first red flag. Then they boasted about the free market, let Lehman Brothers collapse, only to find out that they could not bear the cost of the free market at all.
After that, CEOs of major banks all boarded the train — those big shots who would never take the train under normal circumstances, because they had to pretend to be humble while holding taxpayers' money — they took the train to Washington, knelt down to beg for mercy, and ultimately received a $700 billion bailout.
Then the common people got angry: "Why can Goldman Sachs executives still receive huge year-end bonuses, while I am about to lose my house just because of a mortgage default? They haven't paid the money back either! Why can Goldman Sachs and AIG be bailed out by the government and walk away with the money, while I end up homeless on the street?"
This is the background of Bitcoin's birth. Although I don't know Satoshi Nakamoto, if you read between the lines of the whitepaper and the timing of its release, you will understand that one of the direct incentives for the birth of Bitcoin was that the United States completely violated its commitment to maintaining sound money during the 2008 crisis bailout.
· Host: So looking ahead to 2026, 2027, and beyond, what other liquidity trump cards do they have in their policy toolbox? What will happen next?
Arthur: Clearly, Benthson has prominently revealed the killer move will be the FEMA repurchase tool.
Just think about it. There are so many foreign governments holding U.S. Treasuries, with Japan being the most typical — they hold about $1 trillion in U.S. Treasuries. Japan now needs to boost the yen exchange rate, bring funds back home to support remilitarization and subsidize the inflation-suffering population. Japan has sent signals that it will adjust its policies, encouraging companies, the private sector, and government-related entities to sell off foreign assets (namely U.S. stocks and bonds), sell dollars to buy yen, and bring the funds back to Japan for domestic construction. The European Union, Germany, and many other regions are doing the same — they all need money, whether it's for military spending or various social welfare programs, and their massive assets are all piled up in the U.S. financial markets.
They had to sell, but the United States absolutely cannot afford the largest buyer to become the largest seller, as that would completely destroy the market. For the past two to three decades, the U.S. stock and bond markets have been able to shine, all thanks to these countries' continuous buying; once the fund flow reverses, the stock and bond markets will plummet without a bottom, which is something the U.S. cannot accept under any circumstances.
Therefore, they have introduced this measure — not so much a threat as a reassurance: "Everyone, we are going to directly eliminate the counterparty limit for FEMA repurchase transactions (making it unlimited). If you want to sell your U.S. Treasuries, don't crash the market, just come to the Fed. The Fed will print dollars for you, and we will keep rolling over this loan. You take the dollars, go to the foreign exchange market, sell them, and exchange them back for your local currency."
The U.S. government hopes to weaken the dollar, as do other countries around the world. This is an operation that can weaken the dollar without backfiring on the U.S. domestic financial market, with the only pressure relief valve being the Fed's balance sheet.
I believe this is a more significant signal than the Treasury repurchase, although they have not fully implemented it yet. This will require consensus behind the scenes from Powell, John Williams, and Fed Vice Chair Jefferson. But they will eventually carry it out, perhaps officially announcing it at the Jackson Hole Global Central Bankers Annual Meeting.
Ultimately, Bassett has pointed us in the right direction — absorbing the potential selling pressure of U.S. Treasuries and other dollar assets through unlimited Fed money printing, thereby significantly expanding the balance sheet. This is the most crucial macro theme. The so-called repurchase is just a one-time retracement test that has revealed their pain threshold to us — the 5% yield level on the 10-year Treasury, once there are signs of a breach of that level, they will sprint along the money printing path all the way until they reach complete open yield curve control.
I Never Look at Technical Analysis
· Host: Arthur, you are the inventor or one of the founders of Perpetual Contracts (Perp), right?
Arthur: That's correct.
· Host: Some even call you the "Perpetual Contracts Godfather." Have you heard this term?
Arthur: I have, thank you.
· Host: Haha, this is a title given by netizens, not me, but everyone indeed thinks so. For the vast majority of traders, what do you think are the noteworthy technical setups for Bitcoin at the moment? When you look at Bitcoin's technical analysis, what do you usually focus on?
Arthur: To be honest, I'm not really into technical analysis. I follow someone named Milton Berg, who does technical analysis on the US stock market. Currently, Bitcoin seems more like a follower of the US stock market. If the narrative in the stock market collapses — because everyone is holding the same thing with leverage — when people get margin called, they can only sell what they can sell, right? Bitcoin is a more liquid asset, so you can only sell it. So I mainly observe his trading rhythm.
As for myself, I don't do specific technical analysis on Bitcoin. I think $60,000 is a key level, clearly $100,000 is as well, and the previous all-time high of $125,000 or $126,000 is also a crucial level. As for the volatility in between, I don't get caught up in short-term trading. That's not my style.
· Host: I don't want to put words in your mouth, so correct me if I'm wrong. Can we say that for any asset that has achieved product-market fit, the 200-day Exponential Moving Average (EMA) is one of the most important technical indicators to watch?
Arthur: Perhaps. But I can tell you, I never look at it.
I focus more on the "Vibes."
· Host: Vibes?
Arthur: Yes, the macro narrative and intuitive vibes. I like to look at vibes because ultimately, we all have to tell ourselves a logical story of why we should buy or sell. Of course, it's best if the liquidity logic aligns with some kind of emotional vibe or trend because you wouldn't want to enter the market when the vibe is extremely euphoric, but rather when the trend is just emerging and the asset is still unloved. That's why I like Ethereum. I believe in this round of the crypto market liquidity rebound, its performance will outpace all other large-cap crypto assets.
High-Cap Altcoins, Bullish on ETH
· Host: Alright, let's talk about that. Because in my view, if you had to choose another altcoin, all signs seem to indicate that ETH still has at least one more cycle, and possibly even more room to grow... Major institutions are building on Ethereum, it also has the most stablecoins, so buying ETH still seems like a very safe choice.
Arthur: Yes, Robinhood's RWA narrative is a good story. Of course, the actual gas fees flowing down to the base layer are very minimal, but that's not the key point.
The key is the narrative. And in this cycle, ETH has not yet broken its 2021 all-time high of $5,000. In contrast, almost all other major large-cap crypto assets have already surpassed their previous all-time highs in this cycle. So ETH is lagging behind. That's exactly why I like it.
And it is important to note that ETH will not go to zero immediately. I don't envision waking up one morning to find ETH suddenly down 75% due to some event—although the possibility of such an event is by no means zero. But Ethereum has been running since 2015. In comparison, some other blockchains have only been around for two years, three years, or even shorter. So, the risk of the latter is much greater.
Therefore, in our portfolio, compared to any other crypto asset, I would more confidently allocate a larger nominal position to ETH's long side. The reason is simple: Lindy effect; after all, Ethereum has been around for so long.
· Host: If someone asks you, "Why Ethereum?" how would you respond? Other chains have various functions, such as Solana being faster, who's who has more gimmicks, and so on. From your perspective, what is more important? Network scale or speed? Low cost?
Arthur: I think the question ultimately boils down to who has the largest developer community. The answer is Ethereum.
I don't care about all those fancy features. You tell me, which DeFi infrastructure was first created on a network other than Ethereum? So, the vitality of innovation is here, and the developer talent is also here. Indeed, some people take these ideas, package them more eye-catchingly on Solana or other platforms, and those people have indeed made a lot of money. But that was a year or two ago. What new things has Solana brought out recently? Ethereum hasn't really brought me any big surprises in the past four to five years, but precisely because of this, I think it is an excellent target to outperform the market in the next stage.
· Host: Assuming that in the next 5 years (whether 2 years or 5 years) Bitcoin rises to $200,000, where do you see Ethereum's price?
Arthur: I don't know what the price will be, maybe around $20,000, $25,000, or even $30,000.
· Host: According to historical exchange rate trends, much like Tom Lee's logic based on historical data — where Ethereum is considered a high Beta asset to Bitcoin, meaning if Bitcoin reaches a certain price level, Ethereum's price tends to experience a magnified increase. Do you agree with this?
Arthur: That's basically correct. Just think about it, Bitcoin's market dominance is currently around 60%. During the "DeFi Summer" of 2020 to 2021, it dropped to around 25% to 26%. I don't think it will drop that low again, but reaching 40% is possible, and this process will mostly be driven by Ethereum. Since Ethereum is the largest asset by volume, no other asset can rise as much and as fast, significantly undermining Bitcoin's dominance.
· Host: Following this calculation, Ethereum's price would then exceed $20,000.
Arthur: That's about right.
Clarity Act, Useless
· Host: Arthur, you are a legendary trader and have been in the market for decades. So, how important is the U.S. Clarity Act for cryptocurrency?
Arthur: Insignificant, doesn't really matter. Who cares?
· Host: Do you hate it?
Arthur: I don't hate it. If you are someone doing a crypto project in the U.S. and need money from U.S. venture capitalists, I completely understand why you would like the Clarity Act. You want to establish a moat through regulation, use the money spent on lawyers to stave off competitors. I 100% understand this logic.
But that's not how I approach investing in the cryptocurrency space; I'd rather just buy U.S. stocks. If that's your game, go for it.
I believe the Clarity Act is a terrible thing for the U.S. domestic crypto ecosystem, true innovation, and those useful projects with market demand. Bitcoin has not needed the Clarity Act from 2009 to now, and it won't need it in the future. What does it need? It needs the Treasury Secretary to ramp up overnight repo sizes to save the U.S. bond market or the Fed to print money to help Japan swap U.S. bonds for cash — that's what Bitcoin needs.
The Clarity Act has been talked about back and forth for nearly two years, but the recent surge we've experienced is still due to the market realizing the U.S. debt issue is undeniable and yield curve control (YCC) is on the horizon.
· Host: It will undoubtedly benefit ETH...
Arthur: (interrupting) Maybe. But think about this, the U.S. government and the capital markets are undoubtedly strongly pushing AI, directing money into AI non-stop. They may also want funds to flow into stablecoins, as this can boost the demand for U.S. Treasury bonds.
But the question is, has the U.S. Department of Defense or Treasury bought equity in Circle (the issuer of USDC)? They have directly invested in rare earth mining companies, Intel, IBM, and a bunch of other companies. Where is the government support for crypto asset companies? Nowhere to be found. They talk big about certain bills, but in reality, their full bet is on AI, tweaking rules for banks to carry more AI assets on their balance sheets, even taking funds allocated by bills to directly invest in companies.
What about support for the crypto industry? Where is the help for Circle? Where is the direct investment in Coinbase? They talk a big game on the surface, but in actual funding, they haven't put a penny into the crypto industry, it's all lip service.
· Host: Our podcast show has over 4 million crypto investment audiences across the web. It is confirmed that the Trump family is also our audience. If Donald Trump is watching the show right now, regarding the Clarity Act, what would you like to say to him?
Arthur: Straight veto.
· Host: A permanent one?
Arthur: I didn't say permanent, just veto it.
· Host: Very interesting. Mr. Trump, if you're watching, please leave a comment in the section. Anyway, this week at the White House summit, the SEC and CFTC are taking steps to support related measures, how do you view the SEC and CFTC's full turn towards supporting cryptocurrency now?
Arthur: It's good, beneficial for U.S. domestic companies, I support it, I have no negative views on this.
BTC Price Prediction: New High Expected by Year End
· Host: Next, let's play a little game, please give a genuine answer based on your intuition. If the following situation occurs, what is the reason, and what will happen next in the market. First question, if Bitcoin drops to $35,000 tomorrow, what is the reason? What will happen next?
Arthur: Michael Saylor (MicroStrategy CEO) got liquidated, forced to sell all his Bitcoin at once.
· Host: Will this lead us into a bear market lasting for decades, or is it...?
Arthur: No, this is the long-awaited 'Capitulation candle,' which is the best buying opportunity, equivalent to the flash crash moment in March 2020. Moreover, the government will inevitably continue printing money, so even if there is a short-term mismatch, just buy the dip.
· Host: If Bitcoin were to skyrocket to $120,000 tomorrow, what would be the reason? How would the market react?
Arthur: The Fed decides to remove the counterparty limit for foreign and international monetary authority (FEMA) repurchase agreements. Next, Bitcoin will quickly surge to $500,000.
· Host: Because everyone is underallocated in their positions?
Arthur: Exactly. And since a new all-time high has been reached, everyone will feel it's safe to jump back in, which falls under momentum play.
· Host: Both of these are extreme scenarios. In reality, where do you see Bitcoin by the end of this year?
Arthur: Breaking the previous all-time high and reaching around $126,000.
· Host: That's an ambitious target. Finally, two more questions. As a long-term investor, if you had to name one thing that keeps you up at night and worries you the most when heavily invested in the crypto market, what would it be?
Arthur: War. Because ultimately, if even the electricity is cut off, cryptocurrency ceases to exist. What will you have left then? Electronic dollars? Are those useful? Or will you rely on fiat, physical gold, or guns... This involves the collapse of the entire societal order, which may not necessarily be a full-scale war, like a cyberattack that paralyzes the internet or water systems, sending us straight back to the wasteland depicted in 'Mad Max'.
· Host: Do you think that scenario would first break down the more fragile underlying protocols before affecting Bitcoin?
Arthur: What era are we living in now? Who the hell still cares about those fragile protocols? By then, you'll have to desperately establish cooperation with people around you, figure out what exactly can be exchanged for others' survival goods and time.
· Host: For those who are just starting to trade now and see Arthur Hayes, they might think "I really like this person's career path, and I also want to learn trading like him." What advice do you have for them?
Arthur: Patience and Focus. The purpose of the market is to take your money, not to help you make money.
Therefore, you must have patience, you must be focused, and you must read a lot.
· Host: So, what is your favorite book?
Arthur: "Reminiscences of a Stock Operator," which tells the story of the legendary speculator Jesse Livermore during the Great Depression in the United States.
Reinventing Again, Flop Network
· Host: Arthur, let's talk about your new project. I heard you are launching a meme coin; please introduce to the audience what this project is about.
Arthur Hayes: It's called the Flop Network. The name Flop comes from floating-point operations per unit of time, which is what I usually refer to as computational power.
The core logic behind it is this. One day, I was pondering, what is the value of a Token really? I spent a fortune on those AI chatbots that bill by the Token, but what is a Token exactly? I couldn't find a consistent standard; each model's definition of a Token in the underlying data structure was different.
Well, I started to realize that perhaps I was asking the wrong question — because, fundamentally, no matter what Token you deal with, you're essentially instructing a computer to do its job, and the computer's workload is measured in floating-point operations per unit of time (Flop). Therefore, my next question was, is there a global marketplace where I can look up the price of a Flop denominated in a certain currency?
I looked around, and I couldn't find such a marketplace that would allow me to directly purchase computational power on a computer network via validation using USD, JPY, BTC, or stablecoins. This was a fascinating discovery: currently, there is no way to directly exchange a certain currency unit for computational power.
Then I thought, the AI Agent payment system in the future will be massive, right? Whatever currency eventually becomes the universal currency of the AI Agent economy — whether it's owned by a network, a centralized corporation, or a decentralized network like Flop Network — its scale will be enormous.
Because I believe in the judgment of all advocates — the AI Agent economy will be a big deal now and in the near future. But ultimately, why do humans use any form of currency?
You can pay someone in dollars because the other party accepts dollars and knows that as long as they want to turn dollars into calories (food), it's a one-step process — go to the supermarket, hand over dollars, buy food, sustain human life. That's why people are willing to work for dollars and accept them, rather than something else.
If you apply this logic to AI Agents that are removed from the human context — AI Agents need computational power to survive (floating-point operations per second). Therefore, the currency they use in the Intelligent Agent economy would ideally be easily convertible into computational power in a transparent, unrestricted manner.
However, nothing currently available on the market achieves this. So I think that if I were to build a currency payment network or business network for Intelligent Agents, it must be directly anchored to computational power. Therefore, the first thing to build is a computational power spot market with a native currency, which is Flop Network.
We have created a consensus mechanism called "Proof of Useful Inference" — miners perform tasks in Flop units for this network and earn the tokens we have created out of thin air — just like Bitcoin did years ago. We aim to drive AI Agents to use this token in their commercial interactions and to use it to store their memories and essence of existence. Just as memory gives humans consciousness, AI Agents also need a decentralized way to store context and memory, allowing them to access it anytime without anyone's permission. When the "food of AI" (computational power) is combined with the "memory of AI" (storage), you have an absolute reason to hold and use this token. This is the logic we are betting on with Flop Network.
Of course, a good idea alone is not enough to kickstart a network from scratch with no one involved. So once again, we have leveraged the magical tool called a "Token." I know that for many, the Token has been stigmatized because many teams have abused its power, conducted a large-scale presale, filled their pockets, hosted lavish parties, and then experienced a 99% token price drop upon listing, with code commits on GitHub dropping to zero... You name it; probably every project is like this, and the audience has surely seen it all before.
· Host: This is a common tactic in the industry.
Arthur: That's right, but the original cryptocurrency, Bitcoin, didn't start that way. You earned Bitcoin by participating—as a miner providing power and computational resources to the network in exchange for coins.
Of course, Bitcoin took several years to bootstrap enough currency liquidity and product-market fit (PMF) to get the flywheel spinning. However, the AI Agent coin's standard will soon be set, and we can't wait that long. We can't have a fixed block release schedule and wait five years to see if it has any value. So, we're using a Token to incentivize those who perform beneficial actions—we're planning a large-scale airdrop.
You can't simply buy FLOP; instead, you receive FLOP for performing actions that benefit the network. Miners set up machines and validate our technology in a test environment, and we reward them with FLOP; AI Agents make free calls, and we also reward them with FLOP... Feel free to experiment, even if you run "Hello World" 500 trillion times on the testnet—I don't mind, as that is the real compute you can access.
Integrate FLOP into your testing framework and workflow to explore what you can achieve, whether as a human directing an AI Agent or as an autonomous AI Agent. We will airdrop the tokens to you for free, and our hope is that when the Mainnet launches and this currency truly holds market value, you will want to use it because you already own it.
This is the rough logic of the Flop Network's tokenomics. Although the whitepaper has not been formally released, this is our core idea. For speculators, I believe this is a very rare opportunity for you to participate in building the next-generation foundational network for the known universe's next form of life (AI) at zero cost.
Think about it, Musk, the CEO of OpenAI, and Dario, the CEO of Anthropic, take all your data, and then sell it back to you at a $2 trillion valuation during the IPO.
My proposition is: come join, do useful work, help grow this network, and you'll receive this currency through an airdrop; once the Mainnet is live, you can also buy directly, with no VC needing to cash out first or any priority queue ahead of you. We develop together as a true community, either succeed together or fail together.
The reason I designed it this way is because it's the only way it works, the only way to beat those centralized behemoths that use absurdly valued stocks to poach talent. This is the core vision of the Flop Network.
· Host: Just to confirm my understanding, I have a question. If you want to invoke Claude or any other AI right now, you need to purchase computing power, which is currently priced in the form of tokens. However, there is currently a lack of a unified market and clear value measurement standards among various companies or applications. So what you are trying to do is create a computing power trading market, allowing everyone to trade these computing power tokens?
Arthur: You can process any type of data, but it will all be priced based on a truly fundamental core metric — Floating Point Operations per Second (Flop). You can broadcast a request to the network: "I want to run this many Flops, the latency requirement is this, and the AI model to be invoked is this."
After that, you can connect with miners off-chain to process the data, and the proof of actual execution will be published on-chain to be packed into blocks, with miners receiving token rewards based on this. This is the "Useful Proof of Computation" blockchain.
· Host: Who is the main target of the Flop Network? Is it aimed at blockchain or enterprise, individual users, or AI agents? Who will be the core participants and users of the Flop Network?
Arthur: AI agents.
· Host: So this is built for a future world where the number of AI agents far exceeds the human population?
Arthur: That's right.
· Host: Arthur, you also mentioned an airdrop, what is the specific ratio? Is it a 5% airdrop, 30%? How many tokens will your team retain?
Arthur: The airdrop ratio is approximately — of course, all of this may be adjusted later because our purpose in making it public is to collect feedback — around 20% of the total 10-year supply.
As it is fundamentally anchored to a commodity (computing power), it will have ongoing inflation, strictly speaking, it is not a "currency." So our goal is to allocate 20% of the 10-year supply for the airdrop.
As for how we make money, we have a private company called Flop Labs, and we will extract a very small percentage share from each block subsidy reward in the first two years (before the first halving), with this percentage going to zero after two years. So either we grow big and strong, or we get nothing — this is our monetization mechanism.
· Host: Many of Altcoin Daily's audience and the broader crypto community are here to make money, seeking tokens that won't be heavily diluted by inflation. Many tokens claimed to be free in their early years but experienced high inflation, leading to many tokens ultimately becoming worthless. While we won't discuss price action, indeed, many tokens have collapsed due to unchecked inflation. What did you focus on when designing the Flop Network? What changes did you make to set it apart?
Arthur: First and foremost, it was essential to establish a closed-loop "real-use economy." Ultimately, the project must have real users. If we do our core job well — the audience testing for us on the testnet, delivering the FLOP token to a group that truly needs it (i.e., AI Agents) who recognize owning a token that can be directly exchanged for decentralized computing power and can use FLOP to store their "digital persona/memory" — then there will be ongoing demand and buying pressure in the market. AI Agents, in order to conduct business activities, will actively buy tokens from miners who need to pay electricity bills and earn a capital return. That's the underlying bet.
Secondly, for human speculators, the logic shifts to — if there are currently 1 billion intelligences, and I believe this will grow to 1 quadrillion in the next 5 years, as long as they are using this network, the token value will reach an incredible astronomical figure. So speculators will also buy and hold. That's the bet they make as speculators.
· Host: I remember in past interviews, one of your biggest criticisms of mainstream cryptocurrencies was that they did not adopt a buyback burn model like Hyperliquid. You have said that Solana should incorporate a token buyback into the protocol to drive up the price. Will FLOP employ a mechanism similar to Hyperliquid?
Arthur: No, because FLOP is not a for-profit entity. Hyperliquid is a for-profit entity; it is an exchange platform that generates revenue; but the FLOP protocol itself does not generate any revenue.
· Host: But it's closer to Solana, right?
Arthur: I actually think it's closer to Bitcoin. Because Solana can run smart contracts, and we deliberately cut out all of that functionality. FLOP only does one thing — it prices the compute spot market and allows for the storage of intelligence memories, that's it.
You can't use it to write smart contracts; its functionality is very limited. Bitcoin solves mathematical puzzles by consuming electricity, while FLOP mints blocks by processing reasoning requests for network users, making it more similar to Bitcoin — the Bitcoin network itself also has no operating income.
· Host: The income is directly provided as a block subsidy to the miner.
Arthur: That's right, and the subsidy will gradually decrease over time.
· Host: I'm asking these questions to thoroughly clarify the logic. Please don't mind if the questions seem naive.
Arthur: Not at all, that's exactly why I'm here for the interview.
· Host: In my nearly 9 years in the industry, I have seen narratives such as "tokenization of carbon emission credits" on-chain of traditional assets, claiming to be a huge opportunity for blockchain. However, I have never seen any that truly worked and created value for coin holders. Many projects have even disappeared without a trace. What makes FLOP different from these?
Arthur: There are similarities and fundamental differences. Ultimately, the core premise is — do you believe in the future existence of an AI Agent economy, and whether the value flow between AI Agents will far surpass the human economy.
If you believe in this, then they must build a commercial system with some form of currency. What would this currency be? FLOP is vying for the position of this ecosystem's currency. Others are also trying, and everyone has a different theoretical path to value anchoring.
Our logic is that AI Agents hold FLOP, just like humans hold fiat currency. Humans hold fiat because they can buy calories to sustain their lives just by crossing the street; as an AI Agent, it doesn't need calories, it needs to initiate computation requests to fulfill the entity's economic duties, which requires payment in currency. Therefore, the common currency of the AI Agent economy should be the token that can be directly exchanged for computing power. That is the core assumption. If this assumption is not valid, the entire project will collapse. But if you believe the AI Agent economy will surpass or come close to the human economy, and AI Agents must consume computing power, then logically, the currency they use must be able to be converted into computing power with the fewest steps.
· Host: Do you think FLOP can enter the top ten in the cryptocurrency market cap in the future?
Arthur: Absolutely.
· Host: Bigger than Ethereum? Top two?
Arthur: Definitely a close second. Either be everything or be nothing.
· Host: Second only to Bitcoin?
Arthur: Exactly. It's that kind of binary bet: either you become the foundational currency of the entire AI Agent economy, or you become nothing. I like binary games, just like the bet on "whether Bitcoin derivatives will actually impact the climate" back in the day. The key question is whether the project or company you're investing in is on the path to compete for the throne. Obviously, this crown won't be decided in one or two years, but if the market reaches a consensus and believes that FLOP will become the core currency of the largest known economy in the universe (the AI Agent economy), then its market cap is fully capable of rivaling Bitcoin or even surpassing it.
· Host: Arthur, you are a veteran of the crypto community, having experienced the industry's early days, alongside figures like Erik Voorhees, CZ, Brian Armstrong, and others. Are there any other well-known individuals in the FLOP team? With your influence, you could recruit anyone.
Arthur: Currently, no one else is public. Our CTO is excellent; he previously worked with me at BitMEX and was one of our top engineers at that time. As for what I can bring to the project? I can appear on your show to present to millions of people and attract the attention of the entire internet.
Next is the question of execution: either we succeed or we fail. We must hand over the economic incentive mechanism to the community to drive its implementation. Technical development is only part of it; the root cause of many failed projects often lies in tokenomic design—Tokens are a brilliant tool for solving the problem of human collaboration but are often misused.
After witnessing the success and failure of countless projects, I believe our architecture is correct, and all the necessary elements for success are in place. Of course, whether it will succeed in the end will depend on luck and execution, but at least we have done everything that needs to be done to the fullest.
· Host: For Altcoin Daily viewers, regardless of the amount of funds, everyone now has the opportunity to participate at zero cost and earn FLOP tokens, especially since it has not yet been launched and has no price. What is the specific timeline?
Arthur: Regarding the airdrop timeline—we expect to launch the testnet in late October this year, with an expected duration of around 90 days; if there are no major issues, the mainnet will be officially launched in the first quarter of next year.
Some people may come to me and ask: "I'm not a miner, validator, or KOL, how can I get tokens?"
It's simple, just create a wallet, go to the faucet to receive testnet FLOP, and spend it. If you receive test coins but don't actually interact on the network, they have no value and won't contribute to the mainnet token distribution weight. We only reward those who truly participate. You cannot buy this token; anyone claiming to privately sell it to you is a scammer as the project has no public sale or presale.
If you want to buy, wait until next year when the mainnet launches and buy tokens from miners selling off on the secondary market. If you want to obtain them for free, then create a wallet, use the platform, help your AI Agent connect, and we will distribute score shares that are redeemable for mainnet tokens.
· Host: Mark Cuban, owner of the Dallas Mavericks, tweeted a week ago saying "AI hashpower will become the new cryptocurrency." Did you see it?
Arthur: I didn't see that.
· Host: But the trend is quite clear.
Arthur: The concept itself is not new; many people have expressed similar views, and even Huang Renxun mentioned that in the future, payments could be made in hash power units.
The key issue is how to practically implement it. How to solve the challenge of large-scale collaboration? The answer still lies in the public chain's decentralized architecture with a native token, as long as the tokenomics are well designed.
Many past projects failed (except for a few miracles like Bitcoin) because they misunderstood the token's purpose — they just wanted to receive a large $500 million funding from a renowned VC and then vigorously promoted the project.
I remember someone compiled a table listing a group of top-funded projects, totaling billions of dollars raised, but when checking on-chain activity over the past six months, the total Gas fees consumed by the network were only $24, which is extremely ironic.
This is the abuse of the token as a tool. As long as the mechanism is designed properly, people are willing to exert significant effort to acquire valuable assets. Instead of selling tokens at a discounted price to VCs who only sit back and watch the project, leading to a continuous downtrend after the token launch, it's better to distribute the tokens directly to the true network builders.
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