NewsFlash Articles Data Fundraising BlockBeats Pro

Arthur Hayes Exclusive Interview: ETH to Hit $30,000; FLOP to Surpass ETH

Read this article in 56 Minutes

U.S. Treasury Repo and Yield Curve Control are driving liquidity back into the crypto market, with Bitcoin potentially rising to $126,000 by the end of the year.

Original Title: The Godfather Of Crypto Trading: My Final Warning To Bitcoin Holders

Original Source: Altcoin Daily
Original Translation: Azuma, Odaily Planet Daily

Editor's Note: This article is a written version of Arthur Hayes' recent appearance on the Altcoin Daily podcast. In this interview, Arthur Hayes discussed the current market's macro liquidity changes, the major rebound in this round of the cryptocurrency market, made predictions about BTC, ETH, and other mainstream assets, and extensively revealed the design details of his personal new project, Flop Network.

Below is the original interview, translated by Odaily Planet Daily. For the sake of the reading flow, some content has been edited.

Macro Liquidity and This Round of Rebound

(Background: Last week, the U.S. Treasury announced it would expand the repurchase size of long-term treasuries to provide greater liquidity support to the bond market. According to the statement, the U.S. Treasury's liquidity support repurchase size for long-term treasuries will be "at least doubled," increasing 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 in Hong Kong.

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

Arthur: "Sustainability" — I think this is the new term that the entire traditional financial industry is discussing nowadays.

With the staggering $40 trillion U.S. national debt, the continuously rising interest payments, and the plight of many other major sovereign debt markets, they are beginning to worry: "Will these treasuries I hold still be valuable in 5 years? Will inflation soar again? Is my asset allocation correct?"

Clearly, after U.S. Treasury Secretary Scott Bentsen launched the treasury repurchase operation — or at least doubled the authorized repurchase amount for long-term treasuries — the market's reaction has indeed affirmed this.

All this is exacerbating the panic: "Oh my, I hold so many US Treasuries, but their performance is far behind all other asset classes. Why am I still holding onto them?"

And the fact has been proven time and time again that when you really need to sell to cash out, the US government does not allow you to sell at will.

· Host: How do they view cryptocurrency then? They are already at their wits' end with debt and treasuries, isn't cryptocurrency simply out of their purview?

Arthur: No, I believe cryptocurrency is precisely the only pressure release valve, the purest conduit for central bank money printing. As the market's concerns about the US adopting Yield Curve Control (YCC) intensify, Bitcoin and cryptocurrency prices act as that pressure release valve.

So after the Treasury's statement was released, overnight you saw cryptocurrency experience a spring-back rebound.

· Host: I remember the repo cap just doubled to around 20 billion to 40 billion US dollars; it's not some astronomical figure...

Arthur: Exactly, from 20 billion to 40 billion or a few tens of billions, the amount itself is not exaggerated, but it sends a signal, a barometer.

Moreover, the Fed will not raise rates at all, even though looking at inflation data, US 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 a doubt. But why don't they raise? Because the Treasury needs to issue a large amount of short-term Treasury bills to maneuver in the market, as there are no takers for the long-term debt anymore.

· Host: For newcomers who have just entered the Bitcoin space in the past year or two and are still trying to understand macroeconomics, in simple terms, what does the US bond repo mean to them?

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

This is also the ultimate logic of why you invest in Bitcoin when everyone suddenly realizes — "Oh my, these US Treasuries are worth nothing, I can't exchange them for any tangible asset. Since the market is highly manipulated to the extent of being unable to trade properly, I need a true store of value, I need an asset that can directly benefit from the massive dollars chasing scarce assets," and 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 want to discuss a key moment that made the whole world see that the "emperor has no clothes" — when the world's largest sovereign debt market made everyone panic about Yield Curve Control (YCC) on the horizon, Bitcoin's price 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. Were they also doing bond buybacks back then? Is the market trend in the year or two leading to the crash similar to now?

Arthur: When the 2008 crisis hit, the first thing they did was to 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 huge loan, a massive gift to JPMorgan Chase.

That was the first red flag. Then they touted the free market, let Lehman Brothers collapse, only to find out that they couldn't afford the cost of the free market at all.

After that, the CEOs of major banks all hopped on a train — those big shots who would never take a train under normal circumstances, had to put on a humble face while holding taxpayers' money — they took the train to Washington, knelt down to beg for mercy, and ultimately received $700 billion in bailout funds.

Then the common folks got angry: "Why can Goldman Sachs executives still receive huge year-end bonuses, while I'm about to lose my house just because of a mortgage default? They haven't repaid the money either! Why can Goldman Sachs and AIG be rescued by the government and walk away with the money, while I end up homeless on the streets?"

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 reasons for Bitcoin's emergence was the complete violation of the commitment to maintaining sound money by the United States in its post-2008 crisis bailout.

· Host: So looking ahead to 2026, 2027, and beyond, what other liquidity aces do they have in their policy toolbox? What will happen next?

Arthur: Obviously, Bennett's revealed ace in the hole is the FEMA Repo tool.

Just think, so many foreign governments hold U.S. debt, with Japan being the most typical — they hold about $1 trillion of U.S. debt. Japan now needs to boost the yen exchange rate, repatriate funds to support remilitarization and subsidize inflation-ravaged citizens. Japan has signaled a policy adjustment to encourage companies, the private sector, and government-related entities to sell off overseas assets (mainly U.S. stocks and bonds), sell dollars to buy yen, and bring the funds back home to develop Japan. The EU, Germany, and many other regions are doing the same; they all need money — whether for military spending or various social welfare programs, and their vast assets are all concentrated in the U.S. financial markets.

They had to sell, but the U.S. 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 dominate thanks to continuous buying by these countries; once the flow of funds reverses, the stock and bond markets will plummet, which is something the U.S. cannot accept.

Therefore, they have introduced this measure — not so much a threat as a pacification: "Everyone, we are going to directly eliminate the counterparty limit for FEMA repurchase transactions (making it unlimited). If you want to sell U.S. Treasury bonds in your hands, don't slam the market, come directly to the Fed. The Fed will print dollars for you, and we will keep extending 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 U.S. dollar, as do other countries around the world. This is an operation that can weaken the U.S. dollar without backfiring on the U.S. domestic financial market, and the only pressure relief valve for all of this is the Fed's balance sheet.

I believe this is a more significant signal than the bond repurchase, although they have not fully implemented it yet. This requires behind-the-scenes consensus from Powell, John Williams, and Fed Vice Chair Jefferson. But they will eventually implement it, perhaps officially announcing it at the Jackson Hole Global Central Bankers Conference.

Ultimately, Bassett has already pointed us in the direction — absorbing the potential selling pressure of U.S. bonds and other dollar assets through Fed's unlimited money printing, thereby significantly expanding the balance sheet. This is the most fundamental macro theme. The so-called repurchase was just a retracement test, showing us their pain threshold — the 5% yield level on the 10-year Treasury bond. Once there are signs of a breakout above this level, they will sprint along the money printing path all the way, heading towards a 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 of this term?

Arthur: I have, thank you.

· Host: Haha, this is a nickname from netizens, not from me, but everyone does indeed think so. For the majority of traders, what technical setups do you think are particularly worth noting for Bitcoin at the moment? When you look at Bitcoin's technical aspect, what do you usually focus on?

Arthur: To be honest, I'm not really into technical analysis. I follow a person 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 US stock market narrative collapses — because everyone is leveraged holding the same thing — when people get margin called, they can only sell what they can sell, right? Bitcoin is a liquid asset, and you can only sell it. So I mainly follow his trading rhythm to observe.

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 an important level. As for the volatility in between, I won'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 (200-day EMA) is one of the most notable technical indicators to watch?

Arthur: Maybe. 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 to buy, why to sell. Of course, it's best if the liquidity logic aligns with some kind of emotional atmosphere 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: Most Bullish on ETH

· Host: Alright, let's talk about this. Because to me, if you had to choose another altcoin, all signals seem to indicate that ETH still has at least one more cycle, and even possibly more room to grow... Major institutions are building on Ethereum, it also has the most stablecoins. Buying ETH still seems like a very safe choice.

Arthur: Yes, Robinhood's RWA narrative is a nice story. Of course, the actual gas fee that goes to the base layer is very minimal, but that's not the point.

The point 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's worth emphasizing that ETH will not go to zero immediately. I don't think I will wake up one morning to find ETH has suddenly dropped by 75% due to some event — of course, 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 less. So, the risk of the latter is much greater.

Therefore, in our portfolio, compared to any other crypto asset, I would be more comfortable giving ETH a larger nominal position for long exposure. The reason is simple, the Lindy Effect, after all, Ethereum has been around for so long.

· Host: If someone were to ask you "Why Ethereum?" How would you respond? Other chains have various functions, such as Solana being faster, others being more gimmicky, and so on. From your perspective, what is more important? Network scale, speed? Low cost?

Arthur: I think the ultimate question comes 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 the first created on a network other than Ethereum? So, the vibrancy of innovation is here, and the developer talent is here. Indeed, some may take these ideas and package them more attractively on Solana or other platforms, and those people have indeed made a lot of money. But that's the past year or two. What has Solana come up with recently? Indeed, Ethereum hasn't brought me many surprises in the past four or five years, but it is for this very reason that I believe it is an excellent target to outperform the market in the next phase.

· Host: Assuming in the next 5 years (whether it's 2 years or 5 years) Bitcoin reaches $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, similar to Tom Lee's logic based on historical data — that Ethereum is a high Beta asset to Bitcoin, if Bitcoin were to reach this price level, usually Ethereum's price surge would be amplified. Do you agree?

Arthur: That's basically it. Just think about it, Bitcoin's market dominance is currently around 60%. During the 2020 to 2021 'DeFi Summer,' it dropped to around 25% to 26%. I don't think it will drop that low again, but dropping to 40% is possible, and most of this process will be driven by Ethereum. Because it is the largest asset by volume, no other asset can rise as much and as quickly, thereby significantly reducing Bitcoin's dominance.

· Host: By this calculation, the price of Ethereum would exceed $20,000.

Arthur: That's about right.

Clarity Act, Useless

· Host: Arthur, you are an atmosphere trader, and you have been trading in the market for decades. So, how important is the U.S. Clarity Act for cryptocurrency?

Arthur: Insignificant, it doesn't matter at all. 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 totally understand why you like the Clarity Act. You want to establish a moat through regulation, use the money spent on legal counsel to stop competitors. I 100% understand this logic.

But that's not my way of investing in the cryptocurrency space, I might as well just buy U.S. stocks. If that's your game, go ahead.

I believe the Clarity Act is a terrible thing for the U.S. domestic crypto ecosystem, real innovation, and useful projects with market demand. Bitcoin has not needed the Clarity Act from 2009 until now, and it won't need it in the future. What does it need? It needs the Treasury Secretary to increase 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 bull run 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 capital markets are unquestionably heavily promoting AI, continually channeling money into AI. They may also want funds to flow into stablecoins, as this can boost the demand for U.S. Treasuries.

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, they are all-in on AI, tweaking banking regulations to carry more AI assets on their balance sheets, and even using funds from bills to directly invest in corporations.

What about support for the crypto industry? Where is the rescue for Circle? Where is the direct investment in Coinbase? They talk the talk, but when it comes to real action, they haven't put a penny into the crypto industry, it's all empty words.

· Host: Our podcast has over 4 million crypto investment listeners across the web. It has been confirmed that the Trump family is also part of 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 veto?

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

· Host: Very interesting. Mr. Trump, if you're watching, please comment in the section. Anyway, this week at the White House Summit, the SEC and CFTC are pushing for related measures. What do you think of the SEC and CFTC now fully turning towards supporting cryptocurrency?

Arthur: That's good, favorable for U.S. domestic businesses, I support it, I have no negative views on this.

BTC Price Prediction: New High by Year-End

· Host: Next, let's play a little game. Please give a genuine answer based on intuition. If the following scenario occurs, what is the reason, and what will happen next in the market. The first question, if Bitcoin drops to $35,000 tomorrow, what is the reason? What will happen next?

Arthur: Michael Saylor (MicroStrategy CEO) was liquidated, forced to sell all his Bitcoin in one go.

· Host: Will this lead us into a bear market lasting for decades, or...?

Arthur: No, this is the long-awaited 'Capitulation Candle,' which is the best buying opportunity, equivalent to the flash crash moment in March 2020. And the government will certainly continue printing money, so even in the short term, if there is a 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 Federal Reserve decides to remove the counterparty limit on the Foreign and International Monetary Authorities (FIMA) repo facility. Next, Bitcoin will quickly surge to $500,000.

· Host: Because everyone is underallocated?

Arthur: Exactly. And since it has hit a new all-time high, everyone will feel safe to re-enter, which falls under momentum play.

· Host: Both of these are extreme scenarios. Realistically, where do you see Bitcoin by the end of this year?

Arthur: Breaking its previous all-time high and reaching around $126,000.

· Host: That's a lofty 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 allocating a significant portion of your portfolio to the crypto market, what would it be?

Arthur: War. Because ultimately, if even the power is cut off, cryptocurrency ceases to exist. What would you have left by then? Electronic dollars? Are those any good? Will you rely on fiat, physical gold, or guns... This pertains to the collapse of the entire societal order, which may not necessarily have to be a full-scale war, such as a cyber-attack that cripples the internet or water supply system, sending us directly back to a Mad Max-like wasteland.

· Host: Do you think that scenario would first break down the more fragile underlying protocols before impacting Bitcoin?

Arthur: What time are we living in? Who the hell still cares about those fragile protocols? By then, you'll have to work desperately with people around you to establish a cooperation mechanism, figuring out what exactly can be exchanged for others' survival goods and time.

· Host: For those who are just starting to trade now, seeing someone like Arthur Hayes, they might think, 'I like this person's career path, 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.

So, 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 American speculator Jesse Livermore during the Great Depression.

Reinventing Again, Flop Network

· Host: Arthur, let's talk about your new project. I heard you are launching a meme coin. Can you introduce this project to the audience?

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 thinking, what is the value of a Token really? I spent a ton of money on those AI chatbots that bill by the Token, but what is a Token really? I couldn't find a uniform standard; each model had a different definition of a Token at the data structure level.

Well, I started to realize that maybe I was asking the wrong question—because I know that at the end of the day, no matter what Token you're dealing with, you're essentially instructing a computer to do work, and a computer's workload is measured by Floating-Point Operations Per unit of time (Flop). So, my next question was, is there a global marketplace where I can find the unit price of Flop priced in a certain currency?

I looked around and couldn't find such a market where I could directly purchase computational power on a computer network via validation with USD, JPY, BTC, or a stablecoin. This was a very interesting discovery, currently there is no way to directly exchange a currency unit into computational power.

Then I thought, the AI Agent payment system in the future will be enormous, right? Whatever currency eventually becomes the universal currency of the AI Agent economy—whether it's a network owned by a publicly traded company, a centralized corporation, or a decentralized network like Flop Network—its scale will be immense.

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 a certain currency?

You can pay someone with dollars because the other party accepts dollars and knows that as long as they want to turn the dollars into calories (food), it can be done in one step — go to the supermarket, hand over the dollars, buy food, and sustain human life. That is why people are willing to work for dollars and accept them, rather than something else.

If this logic is applied to AI Agents that are detached from the human context — what AI Agents need to consume is computational power (floating-point operations per second). Therefore, the currency they use in the Intelligent Agent Economy is best exchanged for computational power in a transparent, unrestricted manner.

However, nothing currently available on the market can achieve 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 be built is a computational power spot market with a native currency, and this is Flop Network.

We have created a Proof of Useful Inference consensus mechanism — miners perform tasks in Flop units for this network, earning the tokens we have created out of thin air — just like Bitcoin did back in the day. We aim to drive AI Agents to use this token in their commercial activities 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 "AI's food" (computational power) is combined with "AI's memory" (storage), you have an absolute reason to hold and use this token. This is the logic we are betting on in the Flop Network.

Of course, as good as the idea may be, it is very difficult to launch a network from scratch, with no one at all. So once again, we leveraged the magical tool called a "Token". I know that for many people, Tokens have been stigmatized because many teams have abused its power, conducted a large-scale presale, filled their pockets with money, hosted lavish parties, and then the token plummeted by 99% as soon as it launched, with GitHub code commits going to zero... You could pick any project randomly, and the audience has surely seen it all.

· Host: This is a common trick in the industry.

Arthur: That's correct, but the OG Bitcoin didn't start this way. You earned Bitcoin by participating - as a miner providing power and hash rate to the network and earning the currency.

Of course, Bitcoin took several years to build up enough currency liquidity and Product-Market Fit (PMF) to get the flywheel spinning, but the AI Agent currency standard will quickly settle, and we can't wait that long. We can't have a fixed block emission and wait five years to see if it's valuable. So, we use Tokens to incentivize those who perform beneficial actions - we're planning a large-scale airdrop.

You can't just buy FLOP outright; instead, we'll give you FLOP as long as you perform actions that benefit the network. Miners setting up machines and validating our technology in a test environment, we'll give you FLOP; AI Agents making free calls, we'll also give you FLOP... Go ahead and try, even if you run "Hello World" 500 trillion times on the testnet, I don't care; that's the real compute power you can access.

Integrate FLOP into your testing framework and workflow to understand what you can do with it, whether as a human commanding an AI Agent or as an autonomous AI Agent. We'll be giving the tokens to you for free, and what we hope is that by the time the Mainnet launches and this currency truly has market value, you'll want to use it because you already have it.

This is the rough logic of the Flop Network tokenomics, although the whitepaper hasn't been formally released, this is our core idea. For speculators, I believe this is a rare opportunity for you to participate, at zero cost, in building the next-generation foundational network for the known universe's next life form (AI).

Think about it – Musk, the Ultraman (OpenAI CEO), and Dario (Anthropic CEO) take all your data, then sell it back to you at a $2 trillion valuation at listing.

My proposition is: come participate, do meaningful work, help this network grow, and you'll receive this currency through an airdrop; once the Mainnet launches, you can also buy directly, there's no VC cashout queue or need to cash out first. We develop together as a true community, either succeed together or fail together.

I designed it this way because it's the only way it will work, the only way to beat the centralized giants who can use ludicrous stock valuations 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 call on Claude or any other AI now, you need to purchase computing power, which is currently priced in token form. However, there is currently a lack of a unified market and clear value measurement standards among various companies or applications. So what you are doing is a computing power trading market that allows everyone to trade computing power tokens?

Arthur: You can process any type of data, but it will 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 called is this."

Then, you can connect with a miner off-chain to process the data, and the proof of actual execution will be posted to the chain and included in a block, with the miner receiving a token reward. This is the "useful proof of computation" blockchain.

· Host: Who is Flop Network mainly targeted towards? Is it for the blockchain or enterprises, individual users, or 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 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 allocation? Is it a 5% airdrop, 30%? How many tokens will your team retain?

Arthur: The airdrop ratio is approximately — of course, all of this could be adjusted later as our disclosure is aimed at gathering feedback — about 20% of the total 10-year supply.

Since it is fundamentally anchored to a bulk commodity (computing power), it will have ongoing inflation and strictly speaking it is not a "currency." So our goal is to use 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 tiny percentage of the block subsidy reward in the first two years (before the first halving) as our share, with this percentage going to zero after two years. So either we succeed in a big way, or we get nothing — that's our monetization mechanism.

· Host: Many people following Altcoin Daily and the entire crypto community are interested in making money. What they want is a token that won't be heavily diluted by inflation. Many tokens claimed to be free in the first few years, but their inflation rate was extremely high. Let's not talk about price trends, but indeed, there are too many tokens that ended up as nothing due to unchecked inflation. What did you focus on when designing the Flop Network? What changes did you make to make it stand out?

Arthur: First, it was essential to establish a closed-loop "real-world usage economy." Ultimately, the project must have people actually using it. If we do our job properly — the audience helping us test on the testnet, we deliver the FLOP token to a group that truly needs to use it (i.e., AI Agents), and they acknowledge that owning this token, which can be directly exchanged for decentralized computing power and can store their "digital persona/memory" by consuming FLOP, has real value — then there will be continuous 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 return on investment. That is the underlying logic.

Secondly, for human speculators, the logic becomes — if there are now 1 billion intelligences, and I believe there will be 1 quadrillion in the next 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 is 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 similar to Hyperliquid. You mentioned that Solana should incorporate a token buyback into the protocol to boost the coin's price. Will FLOP adopt a mechanism similar to Hyperliquid?

Arthur: No, because FLOP is not a for-profit business entity. Hyperliquid is a for-profit entity, it is an exchange platform that can generate revenue; but the FLOP protocol itself does not generate any revenue.

· Host: But it's closer to Solana, isn't it?

Arthur: I actually think it's closer to Bitcoin. Because Solana can still run smart contracts, and we deliberately removed all of those functions. FLOP does only one thing — it prices the computing power spot market and allows the storage of intelligence agent memory, that's it.

You cannot use it to write smart contracts; its functionality is extremely limited. Bitcoin solves mathematical puzzles through energy consumption, while FLOP mines 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 miners.

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 "tokenizing carbon offset assets" being brought on-chain as traditional assets, claiming to be a huge opportunity for blockchain. However, I have never seen any of them truly succeed in creating value for holders, and many projects have disappeared. What sets FLOP apart from these?

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

If you believe this, then they must rely on some form of currency to build a business system. What will this currency be? FLOP is vying for the position of this ecosystem currency. Others are also trying, each with a different theoretical path to achieve value capture.

Our logic is that AI Agents hold FLOP just as humans hold fiat currency. Humans hold fiat currency because they can buy calories to sustain life when they go out; as an AI Agent, it doesn't need calories, it needs to initiate computation requests to fulfill the duties of an economic entity, which requires payment in currency. Therefore, the general currency of the AI Agent economy should be the token directly exchangeable for computing power. That's the core assumption. If this premise is not true, the whole 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 easily exchangeable for computing power.

· Host: Do you think FLOP can enter the top ten cryptocurrency market cap in the future?

Arthur: Absolutely.

· Host: Larger than Ethereum? Top two?

Arthur: Definitely a top-two. Either you become everything, or you become nothing.

· Host: Second only to Bitcoin?

Arthur: Yes. It's that kind of binary bet: either you become the foundational currency of the entire AI Agent economy, or you are nothing. I like binary games, just like the gamble on "whether Bitcoin derivatives would really make a difference" back in the day. The key question is whether the project or company you are investing in is on the path to compete for the throne. Obviously, this crown will not be won 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 capitalization 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 earliest days, along with people like Erik Voorhees, CZ, Brian Armstrong, and others. Are there any other well-known figures in the FLOP team? With your influence, you could recruit anyone.

Arthur: Currently, there are none publicly disclosed. Our CTO is very talented; he used to work with me at BitMEX and was one of our top engineers at the time. As for what I can bring to the project? I can appear on your show to educate millions of people and attract the attention of the entire Internet.

Next is a matter 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 a part of it; the root cause of many failed projects often lies in tokenomics — 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 already in place. Of course, whether we can ultimately succeed will also depend on luck and execution, but at least we have taken extreme care of what needs to be done.

· Host: For the Altcoin Daily audience, 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 launched and has no price. What is the specific timeline?

Arthur: Regarding the airdrop schedule — We expect to launch the testnet in late October this year, with an estimated run time of about 90 days; if there are no major issues, the mainnet will officially launch in the first quarter of next year.

Some people have come to me and asked: "I'm not a miner, validator, or KOL, how can I get the token?"

It's simple. Just create a wallet, go to the faucet to claim testnet FLOP, and spend it. If you claim test coins but don't actually interact on the network, they have no value and won't count towards the mainnet token distribution weight. We only reward those who truly participate. You can't buy this token; anyone claiming to sell it to you privately is a scammer as the project had no public sale or presale.

If you want to buy, wait for the mainnet to launch next year and buy tokens from miners selling on the secondary market. If you want to get it for free, then create a wallet, use the platform, help your AI Agent complete integration, and we will distribute redeemable points that can be exchanged for mainnet tokens.

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

Arthur: I didn't see that.

· Host: But the trend is clearly emerging.

Arthur: The concept itself is not new; many people have expressed similar views, and even Huang Renxun mentioned that in the future, you could pay with a unit of compute power.

The key issue is how to practically implement it. How do you solve the challenge of large-scale cooperation? The answer still lies in a public chain with a decentralized architecture based on the native token, as long as the token mechanism is well designed.

Many past projects have failed (except for a few miracles like Bitcoin) because they misunderstood the purpose of the token — they only wanted to receive a massive $500 million funding from a reputable VC and then boast about it.

I remember someone compiled a table listing several top-funded projects that collectively raised billions of dollars. However, checking the on-chain activity over the past six months, the total network Gas fees amounted to only $24, which is extremely ironic.

This is the misuse of tokens as a tool. As long as the mechanism is designed properly, people are willing to put in a lot of effort to acquire valuable assets. Instead of pre-selling tokens at a discount to VCs who just sit back and relax, causing the token to plummet in value after listing, it's better to directly distribute tokens to the true network builders.