Arthur Hayes Ten Thousand Words Interview: ETH to $30,000; FLOP Will Surpass ETH

This article is from:Altcoin Daily

Compiled by | Odaily Planet Daily (@OdailyChina); Translator | Azuma(@azuma_eth)

Editor's Note: This article is a transcribed and edited version of Arthur Hayes's recent interview on the Altcoin Daily podcast. In this interview, Arthur Hayes discusses the current changes in macro liquidity and the significant rebound in the cryptocurrency market, makes predictions about mainstream assets like BTC and ETH, and provides detailed insights into his new project, Flop Network.

Below is the original interview, compiled by Odaily Planet Daily. For readability, some content has been edited.

Macro Liquidity and This Round's Rebound

(Context: Last week, the U.S. Treasury announced it would expand the scale of its long-term bond repurchases to provide greater liquidity support to the bond market. According to the statement, the U.S. Treasury will "at least double" its liquidity support repurchase scale for long-term bonds, increasing it from $2 billion to $4 billion, covering bonds from 10-year to 30-year maturities.)

• Host: Let's get started. Arthur, your career began as a trader at Citibank, right?

Arthur: Yes, at Citibank and Deutsche Bank's Hong Kong branches.

• Host: As someone from the traditional financial system (TradFi), how do you think these traditional institutions currently view the headlines in the cryptocurrency market? Looking at the crypto market from the perspective of 2026, what are they thinking?

Arthur: "Sustainability" — I think that's the new buzzword the entire traditional financial circle is discussing now.

With $40 trillion in U.S. Treasury bonds, rising interest payments, and the troubles in many other major sovereign debt markets, they're starting to worry: "Will these Treasury bonds I hold be worth anything in 5 years? Will inflation spike again? Am I allocated correctly?"

Clearly, after U.S. Treasury Secretary Scott Bessent initiated the Treasury repurchase operations — or at least doubled the authorized repurchase amount for long-term bonds — the market reaction confirmed this point.

All of this is fueling panic: "Oh my god, I hold so many U.S. Treasuries, but they're performing far worse than all other major asset classes. Why am I still holding them?"

And time and again, it's proven that when you actually need to sell and liquidate, the U.S. government simply won't allow you to sell freely.

• Host: How do they view crypto assets? They're already overwhelmed by debt and Treasuries. Do crypto assets even register on their radar?

Arthur: No, I believe cryptocurrency is precisely the only release valve, the purest channel for the release of central bank money printing. As concerns about the U.S. implementing implicit or explicit yield curve control (YCC) intensify, Bitcoin and crypto asset prices are that release valve.

So after the Treasury statement, you saw crypto assets bounce back overnight like a spring.

• Host: I remember the repurchase amount was only doubled to around $2 billion to $4 billion, not some astronomical figure...

Arthur: Right, doubling from $2 billion to $4 billion or tens of billions, the amount itself isn't huge, but it sends a signal, it's a bellwether.

Furthermore, the Fed won't hike rates at all. Looking at inflation data, U.S. economic growth, and the fact that the 2-year Treasury yield is 50 to 60 basis points higher than the effective federal funds rate, the Fed should have hiked, there's no doubt. But why aren't they? Because the Treasury needs to issue massive amounts of short-term T-bills for various maneuvers in the market, as the long-end debt has no buyers.

• Host: For newcomers who've entered the Bitcoin space in the last year or two and are still trying to understand macroeconomics, simply put, what do U.S. Treasury repurchases mean for them?

Arthur: It means more liquidity — more fiat chasing a limited pool of hard assets, and Bitcoin is one of them, so prices will rise significantly. This is replaying the script leading up to 2008, replaying the path that gave birth to Bitcoin.

This is also the ultimate logic for investing in Bitcoin. When everyone suddenly realizes — "Oh my god, these U.S. Treasuries aren't worth anything, I can't exchange them for any real assets, and because the market is so manipulated I can't even trade them properly. I need a real store of value, something that directly benefits from massive amounts of dollars chasing scarce assets" — the best choice is Bitcoin.

That was its purpose when it was born in 2009, and it hasn't changed since. Of course, it will fluctuate with liquidity cycles, but if you're talking about a critical moment that makes the world see "the emperor has no clothes" — when the world's largest sovereign debt market makes everyone start panicking that yield curve control (YCC) is imminent — Bitcoin's price will soon soar to hundreds of thousands of dollars.

• Host: You were on the front lines of the market when the 2008 financial crisis hit. Were they repurchasing bonds back then? Was the market action similar a year or two before the crash?

Arthur: When the 2008 crisis hit, the first thing they did was bail out Bear Stearns — not a direct bailout, but letting Jamie Dimon acquire Bear Stearns for a bargain price of $2 per share, with the Fed providing huge loans, a complete sweetheart deal for JPMorgan Chase.

That was the first danger signal. Then they claimed to believe in free markets, let Lehman Brothers fail, and realized they couldn't bear the price of a free market.

Subsequently, the CEOs of major banks all boarded trains — these big shots who would never normally take trains, but had to act humble because they were taking taxpayer money — they took trains to Washington, knelt down and begged, and eventually got the $700 billion bailout.

Then ordinary folks were furious: "Why do Goldman Sachs executives still get huge year-end bonuses, while I lose my house to the bank just for missing a mortgage payment? They didn't repay their money either! Why do Goldman and AIG get government bailouts and walk away with money, while I end up on the streets?"

That's the backdrop for Bitcoin's birth. I don't know Satoshi Nakamoto, but if you read the phrasing between the lines of the whitepaper and its release timing, you'll understand that one of the direct triggers for Bitcoin's creation was the U.S.'s complete betrayal of its promise to maintain sound money during the post-2008 crisis bailouts.

• Host: Looking ahead to 2026, 2027 and beyond, what liquidity tools are left in their policy toolbox? What happens next?

Arthur: Clearly, the ace up Bessent's sleeve, as he heavily hinted, is the FEMA repurchase facility.

Think about it, there are so many foreign governments holding U.S. Treasuries, Japan being the most typical example — they hold about $1 trillion. Japan now needs to boost the yen exchange rate, needs capital repatriated to support remilitarization, subsidize citizens suffering from inflation. Japan has already signaled policy adjustments to encourage companies, the private sector, and government-related institutions to sell overseas assets (i.e., U.S. stocks and bonds), sell dollars to buy yen and bring them back to build Japan. The EU, Germany, and many other regions are in the same boat, they all need money — whether for military spending or various social benefits, and they have huge amounts of assets concentrated in U.S. financial markets.

They have to sell, but the U.S. absolutely cannot bear its biggest buyers becoming the biggest sellers, because that would completely destroy the market. The reason U.S. stocks and bonds have dominated for the past two to three decades is precisely because of these countries' continuous buying; once capital flows reverse, the stock and bond markets would be bottomless, something the U.S. absolutely cannot accept.

Hence, they introduced this measure — not a threat, but reassurance: "Everyone, we are going to remove the counterparty limit for the FEMA repurchase facility (making it unlimited). If you want to sell your U.S. Treasuries, don't dump them in the market, come directly to the Fed. The Fed will print dollars for you, and we will roll over this loan. You take the dollars and sell them in the forex market to get your local currency."

The U.S. government wants to weaken the dollar, and so does the rest of the world. This is an operation that weakens the dollar without backfiring on the U.S. domestic financial market, and the only release valve to bear all this is the Fed's balance sheet.

I think this is a much more significant signal than Treasury repurchases, although it's not fully implemented yet. This requires backroom consensus from Wash, John Williams, and Fed Vice Chair Jefferson. But they will eventually implement it, perhaps formally announcing it at the Jackson Hole Economic Policy Symposium.

Ultimately, Bessent has pointed the way for us — dramatically expanding the balance sheet via unlimited Fed money printing to absorb potential selling pressure on U.S. Treasuries and other dollar assets. This is the core macro narrative. The so-called repurchases are just a pullback test, letting us see their pain threshold — the 5% level for the 10-year Treasury yield. Once yields show signs of breaking above that level, they will race down this money-printing path until they reach outright, overt yield curve control.

I Never Look at Technical Analysis

• Host: Arthur, you are one of the inventors or founders of Perpetual Contracts (Perps), right?

Arthur: Yes.

• Host: Some people even call you the "Godfather of Perpetual Contracts." Have you heard that?

Arthur: Yes, thank you.

• Host: Haha, that's what the internet bestowed, I didn't say it, but people really think so. For the general trading community, what Technical Analysis (TA) setups for Bitcoin do you find particularly noteworthy at the moment? When you look at Bitcoin's technicals, what do you usually focus on?

Arthur: Honestly, I don't really look at technical analysis. I follow a guy named Milton Berg, who does TA for U.S. stocks. Right now, Bitcoin is more of a follower of the U.S. stock market. If the U.S. stock narrative breaks — because everyone is levered long on the same stuff — when people get margin calls, they have to sell what they can sell, right? Bitcoin is a relatively liquid asset, you can only sell it. So I mainly watch his buy and sell rhythms.

As for myself, for Bitcoin, I don't do specific technical analysis. I think $60k is a key level, $100k is obviously one, and the previous all-time high of $125k or $126k is also a major milestone. As for the fluctuations in between, I don't obsess over trying to scalp them. That's not my style.

• Host: I don't want to put words in your mouth, 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: Maybe. But I can tell you, I never look at it.

I pay more attention to "Vibes."

• Host: Vibes?

Arthur: Yes, macro narrative and intuitive vibes. I like to watch vibes because, ultimately, we all tell ourselves a logical story about why to buy or sell. Of course, it's best if the liquidity logic aligns with some kind of emotional vibe or trend, because you don't want to enter when the vibe is extremely euphoric, but rather when a trend is just emerging from the waterline and the asset is still unloved. That's why I like Ethereum (ETH). I think in this crypto market liquidity rebound, it will outperform all other large-cap crypto assets.

Large-Cap Altcoins, Most Bullish on ETH

• Host: Okay, let's talk about that. Because in my opinion, if you have to choose another altcoin, all signals seem to indicate that ETH has at least one more cycle in it, maybe even longer development space... Institutions are building chains on Ethereum, it has the most stablecoins, buying ETH still seems like a very safe bet.

Arthur: Yes, the Robinhood RWA narrative is a nice story. Of course, the actual gas fees flowing to the base layer are really minimal, but that's not the point.

The point is the narrative. And in this cycle, ETH hasn't broken its 2021 all-time high of $5,000. In contrast, almost all other major ultra-large-cap crypto assets have already broken their previous all-time highs in this cycle. So ETH is lagging. That's exactly why I like it.

And it's important to emphasize, ETH isn't going to zero anytime soon. I don't think I'll wake up one morning to find ETH down 75% because of something — of course, the probability is not absolutely zero. But Ethereum has been running since 2015. In comparison, some other blockchains have only existed for two, three years, or less. So, the risk is much greater for the latter.

Therefore, in our portfolio, compared to any other crypto asset, I'd be more comfortable allocating a larger nominal long position to ETH. The reason is simple, the Lindy Effect — it's been around for so long.

• Host: If someone asks you "Why choose Ethereum?" how would you respond? Other chains have various features, like Solana is faster, this one has more bells and whistles, etc. From your perspective, what's more important? Network size? Speed? Low cost?

Arthur: I think the question boils down to who has the largest developer community. The answer is Ethereum.

I don't care about all those other flashy features. Tell me, which DeFi infrastructure was originally created first on a network other than Ethereum? So, the innovative energy is here, the developer talent is here. Sure, people will take those ideas, wrap them up more sexily and appealingly on Solana or other platforms, and those people have indeed made big money. But that was the past couple of years. What has Solana come up with lately? Ethereum hasn't really surprised me much in the past four to five years either, but precisely because of that, I think it's an excellent candidate to outperform in the next phase.

• Host: Assuming Bitcoin reaches $200,000 in the next 5 years (whether 2 or 5 years), what price level would Ethereum be at?

Arthur: I don't know what the price would be, maybe $20,000, $25,000, even $30,000.

• Host: Based on historical exchange rate trends, like Tom Lee's logic of extrapolating from historical data — Ethereum is a high-beta asset to Bitcoin. If Bitcoin reaches that price, typically Ethereum's price appreciation elasticity is magnified? Do you agree?

Arthur: Basically, yes. Think about it, Bitcoin's market dominance (Bitcoin Dominance) is around 60% now. During the "DeFi Summer" of 2020-2021, it dropped to around 25%-26%. I don't think it will drop that low again, but dropping to 40% is possible, and most of that process would be driven by Ethereum. Because it's the largest asset by market cap, no other asset can rise enough, fast enough to materially reduce Bitcoin's dominance.

• Host: Crunching the numbers, Ethereum's price would then exceed $20,000.

Arthur: Roughly, yeah.

Clarity Act, Completely Useless

• Host: Arthur, you're a vibe trader, and you've been trading in the markets for decades. So, how important is the U.S. Clarity Act for cryptocurrency?

Arthur: Negligible, completely irrelevant. Who cares?

• Host: You hate it?

Arthur: I don't hate it. If you're a crypto project in the U.S. needing to raise money from U.S. VCs, I completely understand why you'd like the Clarity Act. You want to use regulation to build a moat, use money spent on legal lawyers to block competitors. I 100% understand that logic.

But that's absolutely not how I invest in the crypto space. If that's the game, I might as well just buy U.S. stocks. If that's your rulebook, go for it.

I think the Clarity Act is a very bad thing for the U.S. domestic crypto ecosystem, real innovation, and useful projects with market demand. Bitcoin from 2009 until now didn't need the Clarity Act, and won't need it in the future. What does it need? It needs the Treasury Secretary increasing overnight repurchase sizes to save the Treasury market, or the Fed printing money to help Japan swap Treasuries for cash — that's what Bitcoin needs.

The Clarity Act has been talked about for almost two years, but the core reason for our recent big rally is still the market realizing the U.S. debt problem cannot be ignored and yield curve control (YCC) is coming.

• Host: It would undoubtedly be good for ETH...

Arthur: (Interrupting) Maybe. But think about this: The U.S. government and capital markets are undoubtedly pushing AI hard, they are directing money non-stop into AI. They might also want capital to flow into stablecoins because that boosts Treasury demand.

But the question is, has the U.S. Department of Defense or Treasury bought equity in Circle (the issuer of USDC)? They've directly taken stakes in rare earth miners, Intel, IBM, and a bunch of other companies. Where's the government bailout for crypto asset firms? Nowhere. They talk big about certain bills, but in reality, they're all-in on AI, changing rules for banks to carry more AI assets on their balance sheets, even directly taking equity stakes in companies with allocated bill funds.

What about support for the crypto industry? Where's the bailout for Circle? Where's the direct capital injection for Coinbase? They talk a big game on the surface, but at the real money level, they haven't invested a cent in the crypto industry; it's all lip service.

• Host: Our podcast has over 4 million crypto-investing audience members across the internet. It's confirmed the Trump family watches our show too. If Donald Trump is watching right now, what would you want to say to him about the Clarity Act?

Arthur: Veto it.

• Host: Permanently?

Arthur: I didn't say permanently, just veto it.

• Host: Very interesting. Mr. Trump, if you're watching, please comment. Anyway, at the White House summit this week, the SEC and CFTC are pushing related measures. What's your take on the SEC and CFTC now fully pivoting to support crypto?

Arthur: It's fine, good for U.S. domestic businesses, I support it, I have no negative view on that.

BTC Price Prediction: Will Break New Highs by Year-End

• Host: Next, let's play a little game, please answer honestly based on intuition. If the following happens, what's the reason, and what happens next? First question, if Bitcoin drops to $35,000 tomorrow, what's the reason? What happens next?

Arthur: Michael Saylor (MicroStrategy CEO) gets liquidated, forced to sell all his Bitcoin at once.

• Host: Would that send us into a multi-decade bear market, or...?

Arthur: No, that's the "capitulation candle" everyone's waiting for, the best time to buy the dip, equivalent to the March 2020 flash crash. And the government will definitely keep printing money, so even if there's a short-term mismatch, just buy the dip directly.

• Host: If Bitcoin surges to $120,000 tomorrow, what would be the reason? How would the market react?

Arthur: The Fed decides to remove the counterparty limit for the Foreign and International Monetary Authorities (FIMA) repurchase facility. Next, Bitcoin races towards $500,000.

• Host: Because everyone is under-positioned?

Arthur: Exactly. And once it breaks the all-time high, people will feel safe getting back in, it's a momentum play.

• Host: Those are both extreme scenarios. Realistically, where do you see Bitcoin by the end of this year?

Arthur: Break the all-time high, around $126,000.

• Host: That's an ambitious target. Two final questions: As a long-term investor, if you had to name one thing that keeps you up at night, worrying when you have your main positions in crypto, what would it be?

Arthur: War. Because ultimately, if the electricity gets cut off, cryptocurrency ceases to exist. What do you have left then? Digital dollars? Will those work? Or rely on fiat, physical gold, or guns... It's about the collapse of social order. It doesn't necessarily have to be total war; maybe some cyberattack cripples the internet or water supply, sending us straight back to a Mad Max-style wasteland.

• Host: Do you think that situation would first break the more fragile underlying protocols, and then Bitcoin?

Arthur: At that point, who the hell cares about fragile protocols? You'd be desperately trying to establish collaboration mechanisms with people around you, figuring out what can actually trade for others' survival supplies and time.

• Host: For people just starting to trade now, they see Arthur Hayes and might think, "I like this guy's trajectory, I want to learn to trade like him." What advice do you have for them?

Arthur: Patience and focus. The market exists to take your money, not to help you make money.

So, you must be patient, you must be focused, and you must read a lot.

• Host: What's your favorite book then?

Arthur: "Reminiscences of a Stock Operator," about the legendary speculator Jesse Livermore during the Great Depression.

Starting Again, Flop Network

• Host: Arthur, let's talk about your new project. I heard you're launching an altcoin. Can you tell the audience about it?

Arthur Hayes: It's called Flop Network. The name Flop comes from floating-point operations per unit of time, which is what I usually call computing power.

The core logic is this. One day I was thinking, what is the value of a Token? I spend a lot of money on those AI chatbots; they charge per Token, but what exactly is a Token? I couldn't find a unified standard; each model's underlying data structure defines a Token differently.

Okay, I started to realize maybe I was asking the wrong question — because I know that whatever Tokens you're processing, you're essentially instructing a computer to do work, and the computer's workload is floating-point operations per unit of time (Flop). So my next question was, is there a unified global market where I can check the price of Flop priced in a certain currency?

I looked around and couldn't find such a market that would let me directly purchase computing power on a computer network with dollars, yen, Bitcoin, or stablecoins, in a verifiable way. It was an interesting discovery — currently, there is no way to directly convert a monetary unit into computing power in one step.

Then I thought, the AI Agent payment system in the future will be massive, right? Whatever currency ultimately becomes the universal currency for the Agent economy — whether the network is owned by a public company, a centralized enterprise, or a decentralized network like Flop Network — its scale will be enormous.

Because I believe the judgment of all advocates — the AI Agent economy is and will be a huge thing in the present and near future. But ultimately, why do humans use a certain currency?

You can use dollars to pay someone because they are willing to accept dollars and know that if they want to turn dollars into calories (food), it's a one-step process — go directly to the supermarket, hand over dollars, buy food, sustain human survival. That's why people are willing to work for and accept dollars, not something else.

Applying this logic to AI Agents detached from the human context — what AI Agents need to consume is computing power (floating-point operations per second). Therefore, the currency they use in the Agent economy is best able to be exchanged for computing power in one easy, transparent, unrestricted step.

Nothing existing on the market today can do that. So I thought, if I were to build a monetary payment network or commercial network for intelligent agents, it must be directly pegged to computing power. Therefore, the first thing to build is a spot market for computing power with a native currency. That's Flop Network.

We created the "Proof of Useful Inference" consensus mechanism — miners complete tasks for this network measured in Flops, earning tokens we create out of thin air — just like Bitcoin back in the day. We aim to push AI Agents to use this token in their commercial activities and use it to store their memories and essence of existence. Just as memory gives human consciousness, AI Agents need a decentralized way to store context and memory, allowing them to access it anytime without anyone's permission. When "AI's food" (computing power) is combined with "AI's memory" (storage), you have an absolute reason to hold and use this token. That's the logic we're betting on with Flop Network.

Of course, a good idea is still hard to launch a network from scratch, with zero people. So we're again utilizing this magical tool called "Token." I know for many, Token has been stigmatized because many teams have abused its power, doing a massive presale, stuffing their pockets with money, throwing lavish parties, then the token lists and crashes 99%, GitHub commits go to zero... You can pick almost any project and it's probably like that; the audience has surely seen it a lot.

• Host: It's a common, old script in the industry.

Arthur: Exactly, but the original, Bitcoin, didn't do it that way. You earned Bitcoin by participating — as a miner providing electricity and computing power to the network, thus earning the currency.

Sure, Bitcoin took years to accumulate enough monetary liquidity and product-market fit (PMF) to spin up the flywheel, but the standard for AI Agent currency will be set quickly. We can't wait that long, we can't have a fixed per-block emission and wait five years to see if it has value. So we're using Token to incentivize beneficial behavior — we're doing a massive airdrop.

You can't directly buy FLOP. If you do something beneficial for the network, we give you FLOP. Miners set up machines and validate our tech works in a test environment, we airdrop you FLOP. AI Agents come and make free calls, we airdrop you FLOP... Go ahead and try, even if you run 50 trillion "Hello World" calls on the testnet, I don't care, that's real computing power you can actually call.

Integrate FLOP into your testing frameworks and workflows, figure out what you can do with it, whether as a human directing AI Agents or as an autonomous AI Agent. We will give you the tokens for free. Then what we hope is that when the Mainnet goes live and this currency has real market value, you'll want to use it because you already own it.

That's the general logic of Flop Network's tokenomics, although the whitepaper isn't officially out yet. For speculators, I think this is an extremely rare opportunity to get involved at zero cost in building the next-generation underlying network for the universe's next known life form (AI).

Think about it, Elon Musk, Sam Altman (OpenAI CEO), and Dario Amodei (Anthropic CEO) take all your data and then sell it back to you at a $2 trillion valuation when they IPO.

My proposition is: Come participate, do some useful work, help this network grow, and you can get this currency via airdrop; after mainnet, you can also buy it directly. There are no priority rounds or VCs needing to exit ahead of you here. We grow together as a real community, either we succeed together or fail together.

I designed it this way because it's the only way it can work, the only way to beat those centralized giants who can hire people with absurdly valued stock. That's the core vision of Flop Network.

• Host: To make sure I understand correctly, let me ask a question. If you want to call Claude or various AIs now, you need to buy computing power, and these are currently priced in Tokens, but there's a lack of a unified market and clear value measurement between different companies or applications. So you're creating a computing power trading market, allowing people to trade and circulate these computing power Tokens?

Arthur: You can process any type of data, but it will be priced in the truly underlying core metric — floating-point operations per unit of time (Flop). You can post a request to the network: "I want to run this many Flops, latency requirement is this, AI model to call is this."

After that, you can establish an off-chain connection with miners and process the data, the proof of actual execution is posted on-chain and packed into a block, and miners earn token rewards accordingly. That's the "Proof of Useful Inference" blockchain.

• Host: Who is Flop Network primarily for? Is it for blockchains or enterprises, for individual users, or for AI Agents? Who will be the core participants and users of Flop Network?

Arthur: AI Agents.

• Host: So this is built for a future world where AI Agents far outnumber the human population?

Arthur: Exactly.

• Host: Arthur, you also mentioned an airdrop. What's the specific proportion? Is it a 5%, 30% airdrop? How much will your team keep?

Arthur: The airdrop proportion is roughly — of course, this could all change later, as we're announcing it to gather feedback — roughly 20% of the total 10-year supply.

Since it's pegged to a commodity (computing power) at its base, it will have ongoing inflation; strictly speaking, it's not really a "currency." So our goal is to allocate 20% of the 10-year supply to airdrops.

As for how we make money, we have a private company called Flop Labs. We'll take a very small percentage of each block's subsidy reward for the first two years (before the first halving), and after two years, that percentage goes straight to zero. So either we make it big or get nothing — that's our monetization mechanism.

• Host: Many people following Altcoin Daily and the broader crypto space want to make money; they want tokens that won't be severely diluted by inflation. Many tokens claim to be free in the early years but have extremely high inflation. Not talking about price action, but indeed, too many tokens become worthless due to uncontrolled inflation. What have you focused on in designing Flop Network? What changes have you made to make it different?

Arthur: First, you must establish a closed-loop "circular economy of use." Ultimately, the project must have real users. If we do our job well — the audience helps us test on the testnet, we put FLOP tokens into the hands of the group that actually needs to use it (i.e., AI Agents), and they recognize the practical value of owning a token that can be exchanged in one step for decentralized computing power and can store their "digital personality/memory" by spending FLOP — then there will be sustained demand and buying pressure in the market. AI Agents, to conduct commercial activities, will proactively buy tokens from miners who need to pay electricity bills and earn capital returns. That's the underlying bet.

Second, for human speculators, the logic becomes — if there are 1 billion agents now, and I think there will be 100 trillion in 5 years, as long as they use this network, the token's value will reach an unimaginable astronomical number. So speculators will also buy and hold. That's the bet a speculator makes.

• Host: I recall in past interviews, one of your biggest criticisms of mainstream cryptocurrencies was that they didn't adopt a buyback-and-burn model like Hyperliquid. You said Solana should write token buybacks into the protocol base to drive up the price. Will FLOP adopt a mechanism similar to Hyperliquid?

Arthur: No, because FLOP is not a for-profit business entity. Hyperliquid is a profit-making entity; it's an exchange that generates revenue. But the FLOP protocol itself does not generate any revenue.

• Host: But it's closer to Solana?

Arthur: I think it's actually closer to Bitcoin. Because Solana can also run smart contracts, and we deliberately cut out all those functions. FLOP does one thing only — price the spot market for computing power and allow storage of agent memories, that's it.

You can't write smart contracts with it; it's extremely minimal. Bitcoin consumes electricity to solve math puzzles, while FLOP produces blocks by processing inference requests for network users, so it's more like Bitcoin — the Bitcoin network itself also has no operating revenue.

• Host: Revenue goes in full as block subsidy to miners.

Arthur: Exactly, and the subsidy diminishes over time.

• Host: I'm asking these questions to thoroughly understand the logic; forgive me if they're naive.

Arthur: Not at all, that's exactly why I'm doing this interview.

• Host: In my nearly 9 years in the space, I've seen narratives like "tokenizing carbon emission credits," claiming to be a huge blockchain opportunity, but I've never seen one actually succeed and create value for token holders; many projects even disappear. How is FLOP different from these?

Arthur: There are similarities and fundamental differences. Ultimately, the core premise is — do you believe there will be an AI Agent economy in the future, and the value flowing between AI Agents will far exceed the human economy?

If you believe that, then they must build their commercial system using some kind of currency. What will that currency be? FLOP is vying for the position of that ecosystem currency. Others are trying too; everyone has different theoretical paths for achieving value accrual.

Our logic is that AI Agents hold FLOP, just as humans hold fiat. Humans hold fiat because they can cross the street and buy calories for survival; as an AI Agent, it doesn't need calories, it needs to initiate computation requests to fulfill its duties as an economic entity, which requires paying currency. Therefore, the universal currency for the AI Agent economy should logically be the token that can be directly exchanged for computing power. That's the core hypothesis. If this premise doesn't hold, the whole project collapses. But if you believe the AI Agent economy will surpass or approach the human economy, and AI Agents must consume computing power, then it follows that the currency they use must be exchangeable into computing power via the shortest path.

• Host: Do you think FLOP can enter the top 10 cryptocurrency market caps in the future?

Arthur: Absolutely.

• Host: Bigger than Ethereum? Enter the top 2?

Arthur: Definitely top 2. Either it becomes everything, or it goes to zero.

• Host: Second only to Bitcoin?

Arthur: Exactly. This is that kind of binary bet: you either become the base currency for the entire AI Agent economy, or you're nothing. I like binary gambles, like betting on "will Bitcoin derivatives become a thing or not" back in the day. The key is, is the project or company you're investing in on a candidate track competing for the crown? Obviously, this crown won't be decided in a year or two, but if market consensus forms, believing that FLOP will become the core currency of the universe's largest economy (the AI Agent economy) in the future, then its market cap is easily comparable to, or even surpasses, Bitcoin.

• Host: Arthur, you're an OG in crypto, from the earliest days of the industry, alongside contemporaries like Erik Voorhees, CZ, Brian Armstrong, etc. Who else among the publicly known figures is on the FLOP team? With your clout, you could recruit anyone.

Arthur: None publicly at the moment. Our CTO is excellent; he worked with me at BitMEX before, one of our top engineers then. As for what I can bring to the project? I can come on your show and preach to millions, attract the attention of the entire internet.

Next is the question of execution: either we make it or fail. We have to put the economic incentives into the hands of the community to drive it forward. Technology development is just one part; many projects fail because of tokenomics — Token is a fantastic tool for solving human coordination problems, but it's often misused.

Having witnessed countless project successes and failures, I think our architecture is correct; all the necessary elements for success are in place. Of course, success ultimately requires luck and execution, but at least we've done everything possible to the extreme.

• Host: For Altcoin Daily's audience, regardless of capital, everyone now has a chance to participate at zero cost and earn FLOP tokens, as it's not yet listed and has no price. What's the specific timeline?

Arthur: Regarding the airdrop schedule — we expect to launch the testnet in late October this year, expecting it to run for about 90 days; if there are no major issues, the mainnet will officially launch in Q1 next year.

Some people will ask me: "I'm not a miner, validator node, or KOL, how do I get tokens?"

Simple: Just create a wallet, go to the faucet to get testnet FLOP and spend it. If you get test coins but don't actually interact and use them on the network, they have no value and won't count towards the mainnet token conversion weight. We only reward real participation. You can't buy this token with money; anyone claiming to sell it to you privately is a scammer; the project has no public sale or presale.

If you want to buy, wait until the mainnet launches next year and buy tokens miners are selling on the secondary market. If you want to get it for free, come create a wallet, use the platform, help your AI Agents integrate, and we will allocate a share of points convertible to mainnet tokens.

• Host: Dallas Mavericks owner Mark Cuban tweeted a week ago saying "AI compute will be the new cryptocurrency." Did you see that?

Arthur: No.

• Host: But the trend is clearly already obvious.

Arthur: The concept itself isn't new; many people have expressed similar views, even Jensen Huang has said you could pay in computing power units in the future.

The core question is, how do you implement it? How do you solve the large-scale coordination problem? The answer is still a public chain with a decentralized architecture paired with a native token, as long as the token mechanism is used properly.

The reason many past projects haven't succeeded (apart from rare miracles like Bitcoin) is that people got the use of tokens wrong — they just wanted to raise a massive $500 million from top VCs and then hype it up.

I remember someone made a table listing a bunch of top-funded projects, collectively raising over a billion dollars, then checked on-chain activity, and the total gas fees consumed across the entire network in the past six months was a pitiful $24, extremely ironic.

That's an abuse of the token tool. With the right mechanism design, people are willing to do a lot of work to acquire a valuable asset; rather than preselling tokens at a discount to VCs who just sit back, leading to a steady decline after listing, just distribute the tokens directly to the actual network builders.

• Host: Arthur, when the testnet airdrop starts in two or three months, I definitely want to have you back to discuss; there will surely be more details and progress. Finally, anything else to say to the Altcoin Daily fan army?

Arthur: Final reminder: Please follow us on X (@flop_labs) and keep reading my Substack column; I'll be discussing this topic heavily in the near future.