Latest interview with Arthur Hayes: ETH could reach $30,000; FLOP will surpass ETH.

Arthur Hayes stated that US Treasury repurchase agreements and potential yield curve control are driving liquidity back into the crypto market, potentially pushing Bitcoin to $126,000 by the end of the year. He also expressed optimism about ETH's potential for a catch-up rally and detailed the token and airdrop design of his AI computing power project, Flop Network.

Original title: Crypto Trading Guru: A Final Warning to Bitcoin Holders

Original source: Altcoin Daily
Original translation by: Azuma, Odaily Planet Daily

Editor's Note: This article is a transcript of Arthur Hayes' recent interview on the Altcoin Daily podcast. In this interview, Arthur Hayes discussed current macro liquidity changes in the market and the recent surge in the cryptocurrency market, predicted major assets such as BTC and ETH, and provided detailed design information about his new project, Flop Network.

The following is the original interview, translated by Odaily Planet Daily. Some content has been abridged for better reading flow.

Macro liquidity and the current rebound

(Background: Last week, the U.S. Treasury announced it would expand its repurchase program for long-term Treasury bonds to provide greater liquidity support to the bond market. According to the statement, the Treasury's liquidity support repurchase program for long-term Treasury bonds will be "at least doubled," from $2 billion to $4 billion, covering bonds with maturities ranging from 10 to 30 years.)

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

Arthur: Yes, at the Hong Kong branches of Citibank and Deutsche Bank.

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

Arthur: "Sustainability"—I think this is a new term that is being discussed throughout the traditional financial world today.

The staggering $40 trillion in U.S. Treasury bonds, soaring interest payments, and the plight of many other major sovereign debt markets have led to concerns: "Will these Treasury bonds I hold still be worth anything in five years? Will inflation surge again? Have I allocated my assets correctly?"

Clearly, the market reaction after U.S. Treasury Secretary Scott Bessant initiated a Treasury bond repurchase operation—or at least doubled the authorized repurchase amount for long-term Treasury bonds—perfectly illustrates this point.

All of this is fueling panic: "My God, I hold so many U.S. Treasury bonds, but they're underperforming all other asset classes. Why am I still holding onto them?"

Moreover, facts have repeatedly proven that when you really need to sell and cash out, the US government simply does not allow you to sell at will.

Host: So how do they view crypto assets? They're already overwhelmed by debt and national debt, so do crypto assets simply not even register on their radar?

Arthur: No, I believe that cryptocurrencies are precisely the only release valve, the purest channel for central bank money printing. As market concerns intensify regarding the US's implicit or explicit yield curve control (YCC), the price of Bitcoin and crypto assets is that release valve.

So, overnight after the Treasury Department's statement was released, you saw cryptocurrencies experience a spring-like rebound.

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

Arthur: That's right. Going from 2 billion to 4 billion or several billion isn't an exaggeration in itself, but it sends a signal; it's a trend indicator.

Furthermore, the Federal Reserve will not raise interest rates at all, even though inflation data, US economic growth, and the 2-year Treasury yield being 50 to 60 basis points higher than the effective federal funds rate all suggest that the Fed should raise rates, undoubtedly should. But why aren't they? Because the Treasury needs to issue large amounts of short-term Treasury bills (T-bills) to maneuver in the market, as no one is willing to take over 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, what does US Treasury bond repurchase mean for them in simple terms?

Arthur: This means more liquidity—more fiat currency chasing a limited number of hard assets, and Bitcoin is one of them, so the price will rise sharply. This is a replay of the script leading to 2008, a replay of the path that gave birth to Bitcoin.

This is precisely the ultimate logic behind your investment in Bitcoin. When everyone suddenly realizes, "Oh my god, these US Treasury bonds are worthless. I can't exchange them for any physical assets. Because the market is highly manipulated and even unable to trade normally, I need a real store of value, a target that can directly benefit from the massive amount of US dollars chasing scarce assets," the best choice is Bitcoin.

This was its original purpose when it was born in 2009, and it has never changed since. Of course, it will fluctuate with the liquidity cycle, but if you're talking about a pivotal moment that reveals the truth to the world—when the world's largest sovereign debt market triggers panic about the impending arrival of yield curve control (YCC), the price of Bitcoin will soon 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 buying back bonds at that time? Was the market trend in the year or two before the crash similar to the current one?

Arthur: When the crisis broke out in 2008, the first thing they did was bail out Bear Stearns—not a direct bailout, but rather Jamie Dimon acquiring Bear Stearns for a bargain price of $2 per share, with the Federal Reserve also providing a large loan, which was a super gift to JPMorgan Chase.

That was the first warning sign. Then, they touted themselves as champions of the free market, allowing Lehman Brothers to collapse, only to find that they simply couldn't afford the costs of the free market.

Subsequently, CEOs of major banks boarded trains—big shots who would never normally take a train, but who had to feign humility because they were using taxpayers' money—they traveled by train to Washington, knelt down and begged for mercy, and ultimately obtained $700 billion in bailout funds.

Then ordinary people got angry: "Why do Goldman Sachs executives still get huge year-end bonuses, while I'm going to have my house repossessed by the bank just because I defaulted on my mortgage? They haven't even paid back the money! Why can Goldman Sachs and AIG get government bailouts and leave with the money, while I'm left homeless?"

This is the background to the birth of Bitcoin. Although I don't know Satoshi Nakamoto, if you read the wording between the lines of the white paper and the timeline of its release, you will understand that one of the direct causes of Bitcoin's emergence was the United States' complete reneging on its commitment to maintaining a sound currency during its bailout operation after the 2008 crisis.

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

Arthur: Obviously, the killer weapon that Bessant highlighted was the FEMA buyback tool.

Consider this: so many foreign governments worldwide hold US Treasury bonds, with Japan being a prime example—they hold approximately $1 trillion. Japan now needs to boost the yen's exchange rate and needs funds to flow back home to support remilitarization and subsidize its citizens suffering from inflation. Japan has already signaled a policy adjustment to encourage businesses, the private sector, and government agencies to sell overseas assets (i.e., US stocks and bonds), converting dollars into yen to reinvest in Japan's development. The EU, Germany, and many other regions are doing the same; they all need to spend money—whether on military spending or various social welfare programs—and a large portion of their assets are concentrated in the US financial market.

They have to sell, but the US absolutely cannot afford for its largest buyer to become its largest seller, because that would completely destroy the market. The US stock and bond markets have dominated for the past two or three decades thanks to these countries' continuous purchases; once the flow of funds reverses, the stock and bond markets will plummet, which is absolutely unacceptable to the US.

Therefore, they introduced this measure—not exactly a threat, but rather a reassurance: "Everyone, we're going to remove the counterparty cap on the FEMA repurchase facility (making it unlimited). If you want to sell your US Treasury bonds, don't dump them in the market; come directly to the Federal Reserve. The Fed will print money to give you dollars, and we'll keep extending this loan. You can then take the dollars and sell them in the foreign exchange market to get your own currency back."

The US government wants to weaken the dollar, as do other countries around the world. This is an operation that weakens the dollar without backfiring on the US domestic financial market, and the only outlet for all of this is the Federal Reserve's balance sheet.

I believe this is a more significant signal than Treasury bond repurchase agreements, even though they haven't been fully implemented yet. This requires a behind-the-scenes consensus from Warsh, John Williams, and Federal Reserve Vice Chairman Jefferson. But they will eventually implement it, perhaps officially announcing it at the Jackson Hole Economic Symposium.

Ultimately, Bessant has pointed us in the right direction—to absorb potential selling pressure on US Treasuries and other dollar assets through unlimited money printing by the Federal Reserve, thereby significantly expanding its balance sheet. This is the core macroeconomic theme. The so-called repurchase is merely a test, revealing their bottom line—the 5% level of the 10-year US Treasury yield. Once there are signs that the yield has broken through this level, they will continue down the path of money printing until they reach fully transparent yield curve control.

I never look at technical analysis.

• Host: Arthur, you are one of the inventors or founders of perpetual contracts (Perp), right?

Arthur: That's right.

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

Arthur: Yes, I've heard of it, thank you.

Host: Haha, this is what netizens call it, not my opinion, but everyone really thinks so. For most traders, what technical patterns (TA setups) for Bitcoin are particularly noteworthy right now? When you look at Bitcoin's technical aspects, what do you usually focus on?

Arthur: To be honest, I don't really follow technical analysis. I follow someone named Milton Berg, who does technical analysis of US stocks. Currently, Bitcoin is more like a follower of the US stock market. If the US stock market narrative breaks down—because everyone is holding the same thing with leverage—when people are called on for margin calls, they can only sell what they can sell, right? Bitcoin is a relatively liquid asset; you can only sell it. So I mainly observe by following his buying and selling rhythm.

As for myself, I don't do specific technical analysis on Bitcoin. I think $60,000 is a key level, and $100,000 is obviously another, with the previous all-time high of $125,000 or $126,000 also being important levels. Regarding the fluctuations in between, I won't get bogged down in short-term trading. That's not my style.

Host: I don't want to speak for you; please 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 noteworthy technical indicators?

Arthur: Maybe. But I can tell you, I never watch it.

What I value more is the "atmosphere" (Vibes).

• Host: The atmosphere?

Arthur: Yes, the macro narrative and the intuitive atmosphere. I like to look at the atmosphere because, ultimately, we all need to tell ourselves a logical story about why we should buy and why we should sell. Of course, the liquidity logic is best aligned with a certain emotional atmosphere or trend, because you don't want to enter the market when the atmosphere is extremely euphoric; you want to enter when the trend is just emerging and the asset is still unloved. That's why I like Ethereum; I think it will outperform all other large-cap crypto assets in this round of liquidity rebound in the crypto market.

Among large-cap altcoins, ETH is the most favored.

Host: Okay, let's talk about that. Because in my opinion, if you have to choose another altcoin, all the signals seem to indicate that ETH has at least one more cycle, and maybe even more room for growth... Major institutions are building chains on Ethereum, and it also has the most stablecoins, so buying ETH still seems like a very safe option.

Arthur: Yes, Robinhood's RWA narrative is a good story. Of course, the actual gas fees flowing to the infrastructure are very small, but that's not the point.

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

Furthermore, it's important to emphasize that ETH won't immediately go to zero. I don't think I'll wake up one morning to find ETH suddenly down 75% due to some event—of course, the possibility of that happening is certainly not zero. But Ethereum has been running since 2015. In comparison, some other blockchains have only existed for two or three years, or even less. Therefore, the latter carries a much greater risk.

Therefore, in our portfolio, I would feel more comfortable allocating a larger notional position to long ETH compared to any other crypto asset. The reason is simple: the Lindy effect—Ethereum has been around for quite some time.

Host: If someone asked you, "Why did you choose Ethereum?", how would you answer? Other chains also have various features, such as Solana being faster, or so-and-so having more features, etc. From your perspective, what is more important? Is it network size, speed, or low cost?

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

I don't care about all those fancy features. Tell me, which DeFi infrastructure was first created on any network other than Ethereum? So, the energy for innovation is here, and the talent for developers is here. Sure, some people take these ideas, repackage them in a more attractive way on Solana or other platforms, and those people do make a lot of money. But that was in the last year or two. What has Solana come up with recently? Ethereum hasn't really surprised me much in the last four or five years, but that's precisely why I think it's an excellent target for outperforming the market in the next phase.

Host: Assuming Bitcoin rises to $200,000 in the next 5 years (whether it's 2 or 5 years), where will Ethereum be at its price?

Arthur: I don't know how much it will cost, maybe $20,000, $25,000, or even $30,000.

Host: Based on historical exchange rate trends, similar to Tom Lee's logic of extrapolating from historical data—Ethereum is a high-beta asset compared to Bitcoin. If Bitcoin reaches this price level, Ethereum's price increase will typically be amplified? Do you agree?

Arthur: Basically, that's it. Think about it, Bitcoin's market dominance is currently around 60%. During the "DeFi Summer" of 2020-2021, it dropped to around 25% to 26%. I don't think it will drop that low again, but it's possible it could fall to 40%, and this process will be largely driven by Ethereum. Because it's the largest asset by market capitalization, no other asset can rise as much and as fast as it can, thus substantially diminishing Bitcoin's dominance.

Host: Based on this calculation, the price of Ethereum would exceed $20,000.

Arthur: More or less.

The Clarity Act is utterly useless.

Host: Arthur, you're a sentiment trader and have been trading in the market for decades. So, how important is the Clarity Act in the United States for cryptocurrencies?

Arthur: It's insignificant, it doesn't matter at all. Who cares?

Host: You hate it?

Arthur: I don't hate it. If you're someone doing a crypto project in the US who needs funding from American venture capitalists, I completely understand why you like the Clarity Act. You want to build a moat through regulation, using the money you spend on legal counsel to keep competitors out. I 100% understand that logic.

But that's not how I invest in cryptocurrencies at all; I'd rather just buy US stocks. If that's your game, then do as you please.

I believe the Clarity Act is a terrible thing for the US-based crypto ecosystem, genuine innovation, and useful projects with market demand . Bitcoin has never needed the Clarity Act since 2009, and it never will. What it needs is for the Treasury Secretary to increase overnight repurchase agreements to save the US Treasury market, or for the Federal Reserve to print money to help Japan exchange US Treasury bonds for cash—that's what Bitcoin needs.

The Clarity Act has been discussed for almost two years, but the recent surge in market activity is mainly due to the market's realization that the US debt problem cannot be ignored and that yield curve control (YCC) is on the horizon.

Host: This will undoubtedly benefit ETH...

Arthur: (Interrupting) Maybe. But think about it. The US government and capital markets are undoubtedly pushing AI hard; they're channeling money into AI. They might also want funds to flow into stablecoins, because that can boost demand for US Treasury bonds.

The question is, have the U.S. Department of Defense or the Treasury Department ever bought shares in Circle (the issuer of USDC)? They've directly invested in rare earth miners, Intel, IBM, and a whole host of other companies. Where is the government's bailout for crypto asset companies? There's none. They talk a big game about certain bills, but in reality, they're betting everything on AI , changing rules for banks to carry more AI assets on their balance sheets, and even using funds allocated by legislation to directly invest in companies.

What about support for the crypto industry? Where is the bailout for Circle? Where is the direct investment in Coinbase? They talk a good game, but in terms of actual money, they haven't invested a single penny in the crypto industry; it's all just empty talk.

• Host: Our podcast has over 4 million crypto-investing viewers across the internet. The Trump family is confirmed to be among our audience. If Donald Trump were watching this right now, what would you say to him about the Clarity Act?

Arthur: Direct veto.

Host: Permanent?

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

Host: That's interesting. Mr. Trump, if you're watching, please leave a comment. Anyway, at this week's White House summit, the SEC and CFTC were pushing for related measures. What's your take on the SEC and CFTC now fully shifting their support for cryptocurrencies?

Arthur: That's great. It benefits American companies, and I support it. I have no negative views about it.

BTC Price Prediction: New High Expected by Year-End

Host: Next, let's play a little game. Please give your honest answer based on your intuition. If the following situations occur, what would be the reason, and what would the market do next? First question: If Bitcoin drops to $35,000 tomorrow, what would be the reason? What will happen next?

Arthur: Michael Saylor (Strategy CEO) has been liquidated and forced to sell all of his Bitcoin at once.

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

Arthur: No, this is the "capitulation candle" everyone's been waiting for . That's the best time to buy , equivalent to the flash crash in March 2020. And the government will definitely continue to print money, so even if there's a short-term mismatch, just buy now.

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

Arthur: The Federal Reserve has decided to remove the counterparty cap on foreign and international monetary authorities' (FEMA) repurchase facilities. Bitcoin will likely surge towards $500,000 next.

• Host: Is it because everyone's positions are under-allocated?

Arthur: That's right. And since it has hit a new all-time high, people will feel it's safe to re-enter the market, which is a kind of momentum play.

Host: These are both extreme scenarios. Realistically speaking, what price do you think Bitcoin will be at by the end of this year?

Arthur: Breaking all-time highs, reaching around $126,000.

Host: That's a very ambitious goal. Finally, two more questions. As a long-term investor, if you had to name one thing that kept you up at night and caused you so much anxiety when you had your main holdings in the crypto market, what would it be?

Arthur: War . Because ultimately, if even the electricity is cut off, cryptocurrency will vanish. What will you have left then? Electronic dollars? Will that even work? You'll still have fiat currency, physical gold, or guns… This is about the collapse of the entire social order. It might not necessarily have to be a full-scale war; for example, a cyberattack paralyzing the internet or water supply could send us back to the wasteland of Mad Max.

Host: Do you think that scenario would first break down the more vulnerable underlying protocols, and then Bitcoin?

Arthur: What kind of time is this? Who the hell still cares about those fragile agreements? You'll have to work hard to establish a collaborative mechanism with the people around you and figure out exactly what you can exchange for other people's survival resources and time.

Host: For people who are just starting out in trading, when they see Arthur Hayes, they might think, "I really like his career trajectory, and I 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 be patient, you must be focused, and you must read more books .

Host: So what's your favorite book?

Arthur's *Reminiscences of a Stock Operator* tells the story of Jesse Livermore, a legendary speculator during the Great Depression in the United States.

Flop Network, a second startup

Host: Arthur, let's talk about your new project. I heard you're launching an altcoin; could you tell our viewers what kind of project it is?

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

Its core logic is this. One day I was thinking, what exactly is the value of a token? I've spent a lot of money on those AI chatbots, which are charged in tokens, but what exactly is a token? I can't find a unified standard; each model has a different definition of a token in its underlying data structure.

Okay, I'm starting to realize that maybe I asked the wrong question—because I know that no matter what token you're dealing with, you're essentially instructing a computer to do work, and the computer's workload is the number of floating-point operations (Flop) per unit of time. So my next question is, is there a unified global marketplace where I can find the Flop price denominated in a specific currency?

I searched everywhere and couldn't find a market where I could directly purchase computing power on a computer network using USD, JPY, Bitcoin, or stablecoins through a verification process. This is a very interesting discovery; currently, there's no way to directly convert a currency unit into computing power in one step .

Then I realized that the AI Agent payment system will be extremely large in the future, right? No matter what currency eventually becomes the universal currency of the agent economy—regardless of who owns the network, whether it's a publicly traded company, a centralized enterprise, or a decentralized network like Flop Network—its scale will be astonishing.

Because I believe in the judgment of all advocates—that the AI Agent economy will be a big deal now and in the near future, but ultimately, why do humans need to use some kind of currency?

You can pay someone with dollars because they accept dollars and know that converting dollars into calories (food) is a simple matter—go to the supermarket, hand over the dollars, buy food, and sustain human life. That's why people are willing to work for and accept dollars, rather than anything else.

If we apply this logic to AI agents that operate outside of human contexts—AI agents require computing power (floating-point operations per second). Therefore, the currency they use in the intelligent agent economy should ideally be easily and transparently converted into computing power in one step.

Currently available solutions cannot achieve this. Therefore, I believe that if I want to build a monetary payment network or commercial network for intelligent agents, it must be directly pegged to computing power. Thus, the first thing to build is a computing power spot market with native currency , which is the Flop Network.

We've created a consensus mechanism called "Proof of Useful Inference"—miners complete tasks on the network measured in Flops, earning tokens we create out of thin air, much like Bitcoin did in its early days. Our goal is to encourage AI Agents to use this token in commercial activities, storing their memories and essential existence. Just as memory gives rise to human consciousness, AI Agents need a decentralized way to store context and memories, accessible at any time 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. This is the logic behind our bet on the Flop Network.

Of course, no matter how good the idea, it's still difficult to start a network from scratch with no one. Therefore, we once again utilized this magical tool called "Token". I know that for many people, Token has been stigmatized because many teams have abused its power, conducting a large-scale pre-sale, filling their own pockets with money, throwing lavish parties, and then the token plummets by 99% upon listing, and the code commits on GitHub go to zero... You can probably find this in any project, and audiences have certainly seen it all before.

Host: This is a common tactic in the industry.

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

Of course, it took Bitcoin several years to accumulate enough liquidity and market fit (PMF) to get the flywheel spinning, but the standards for AI Agent currencies will soon be settled. We can't wait that long; we can't just release tokens at fixed rates per block and wait five years to see if they have any value. So we're using tokens to incentivize those who perform beneficial actions—we're going to do a massive airdrop.

You can't directly buy FLOPs with money. As long as you do something beneficial to the network, we'll give you FLOPs. Miners who build machines and verify the feasibility of our technology in the test environment will receive FLOPs; AI Agents that use it for free will also receive FLOPs... Go ahead and try it. Even if you run "Hello World" 50 trillion times on the test network, I don't care. That's the real computing power you can actually use.

Integrate FLOP into your testing framework and workflow to figure out what you can do with it, whether as a human directing an AI agent or as an autonomous AI agent. We'll give you the tokens for free , and we hope that when the mainnet launches and this currency truly has market value, you'll want to use it because you'll already own it.

This is the basic logic behind Flop Network's token economics. Although the white paper hasn't been officially released yet, this is our core concept. For speculators, I believe this is an extremely rare opportunity to participate in building the next-generation underlying network for the next known life form (AI) in the universe at zero cost.

Imagine Musk, Altman (CEO of OpenAI), and Dalio (CEO of Anthropic) taking all your data and then selling it back to you at a $2 trillion valuation when they go public.

My proposition is this: come and participate, do some useful work, help this network grow, and you can obtain this currency through airdrops; after the mainnet launch, you can also buy it directly. There are no priority rounds ahead of you or VCs who need to cash out first. We develop together like a true community, succeeding or failing together.

I designed it this way because it's the only way it can work, and the only way it can beat those centralized giants that can poach talent with ridiculously overvalued stocks. This is Flop Network's core vision.

Host: To make sure I understand correctly, I'd like to ask a question. If you want to use Claude or other AI applications, you need to purchase computing power, which is currently priced in tokens. However, there's a lack of a unified market and clear value measurement standards among various companies and applications. So, what you're doing is creating a computing power trading market, allowing everyone to trade and circulate these computing power tokens?

Arthur: You can handle any type of data, but it will be priced in terms of the really underlying core metric—floats per unit of time. You can send a request to the network: "I want to run this many flops, with this latency requirement, and this is the AI model I want to call."

Afterward, you can establish an off-chain connection with miners to process data. The credentials for the completed process will be published on-chain and packaged into a block, based on which miners receive token rewards. This is the "useful reasoning proof" blockchain.

• Host: Who is Flop Network primarily targeting? Is it aimed at blockchain companies or enterprises, individual users, or AI agents? Who will be the core participants and users of Flop Network?

Arthur: AI Agent.

• 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 airdrops. What was the specific percentage? Was it 5% or 30%? How many tokens will your team keep for yourself?

Arthur: The airdrop ratio is approximately 20% of the total supply over 10 years—of course, all of this may be adjusted later, as our purpose in announcing this is to gather everyone's feedback.

Because it is pegged to a commodity (computing power), it will experience continuous inflation, and strictly speaking, it is not a "currency". Therefore, our goal is to use 20% of the 10-year supply for airdrops.

As for how we make money, we have a private company called Flop Labs. For the first two years (before the first halving), we take a very small percentage of the subsidy rewards from each block. After two years, this percentage drops to zero. So either we grow big and strong, or we get nothing – that's our monetization mechanism.

Host: Many people who follow Altcoin Daily and the crypto community are here to make money; they want tokens that won't be diluted by severe inflation. Many tokens claimed to be free in their early years, but inflation was extremely high. We won't discuss price movements, but there are indeed too many tokens that ultimately became worthless due to unchecked inflation. What did you consider when designing Flop Network? What changes did you make to make it unique?

Arthur: First, a closed-loop "circular economy of use" must be established. Ultimately, the project must be used by real people. If we do our job well—with viewers testing the testnet for us, and us delivering FLOP tokens to the group that truly needs to use them (i.e., the AI Agents), and they recognize the real value of this token—which can be directly exchanged for decentralized computing power and can store their "digital personality/memories" by consuming FLOPs—then there will be sustained demand and buying in the market. To conduct business, the AI Agents will proactively buy tokens from miners who need to pay their electricity bills and earn capital returns. This is its underlying betting logic.

Secondly, for human speculators, the logic becomes: if there are currently 1 billion intelligent agents, and I believe that the number will reach 1 trillion within the next 5 years, as long as they use this network, the value of the token will reach an incredible astronomical figure. Therefore, speculators will also buy and hold. This is the bet that speculators make.

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

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

Host: But isn't it closer to Solana?

Arthur: I think it's actually closer to Bitcoin. Because Solana can also run smart contracts, while we deliberately cut all those features. FLOP only does one thing— prices computing power on the spot market and allows the storage of agent memories , nothing more.

You can't use it to write smart contracts; its functionality is extremely limited. Bitcoin solves mathematical puzzles by consuming electricity, while FLOP generates blocks by processing inference requests for network users, making it more like Bitcoin—the Bitcoin network itself doesn't generate any revenue.

• Host: The revenue will be given to the miners in full as a block subsidy.

Arthur: That's right, and then the subsidies will gradually decrease over time.

Host: I ask these questions to thoroughly clarify the logic. Please don't mind if my questions seem naive.

Arthur: Absolutely not, that's precisely why I'm here for this interview.

• Host: In my nearly nine years in the industry, I've seen narratives about putting traditional assets on the blockchain, such as "carbon emission credit tokenization," touted as a huge opportunity for blockchain. However, I've never seen any of them truly succeed and create value for token holders; many projects have even disappeared. How is FLOP different from these?

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

If you believe this, then they must rely on some kind of currency to build their business systems. What will this currency be? FLOP is vying for this position as an ecosystem currency. Others are also trying, but their theoretical paths to value creation differ.

Our logic is that AI Agents hold FLOPs just like humans hold fiat currency. Humans hold fiat currency because they can buy calories to sustain themselves by crossing the street; however, as AI Agents, they don't need calories. They need to initiate computational requests to fulfill the responsibilities of an economic entity, which requires payment in currency. Therefore, the universal currency of the AI Agent economy should be the token that can be directly exchanged for computing power. This is the core assumption. If this premise doesn't hold, the entire project will collapse. But if you believe that the AI Agent economy will surpass or approach the human economy, and that AI Agents must consume computing power, then logically, the currency they use must be exchangeable for computing power in the shortest possible way.

Host: Do you think FLOP can enter the top ten cryptocurrencies by market capitalization in the future?

Arthur: Absolutely.

• Host: Bigger than Ethereum? Entering the top two?

Arthur: Definitely top two. It's all or nothing.

• Host: Second only to Bitcoin?

Arthur: Exactly. It's a binary bet: you either become the underlying currency of the entire AI Agent economy, or you become nothing. I like binary games, like betting on whether Bitcoin derivatives would ever take off. The key is whether the project or company you invest in is on the race for the throne. Obviously, this crown won't be decided in a year or two, but if the market reaches a consensus that FLOP will become the core currency of the largest economy in the known universe (the AI Agent economy), then its market capitalization could easily rival, or even surpass, Bitcoin.

• Host: Arthur, you're an OG (Original Genius) in the crypto world, having experienced the industry's early days alongside figures like Erik Voorhees, CZ, and Brian Armstrong. Who else is publicly known on the FLOP team? With your influence, you could recruit anyone.

Arthur: There's nothing publicly available at the moment. Our CTO is amazing; he used to work with me at BitMEX and was one of our top engineers back then. As for what I can bring to the project? I can appear on your show and speak to millions of people, attracting attention from across the internet.

The next issue is execution: it's either success or failure. We must entrust the economic incentive mechanism to the community to drive its implementation. Technical development is only one part; the root cause of many projects failing often lies in the design of token economics—tokens are a brilliant tool for solving the challenges of human collaboration, but they are often abused.

Having witnessed the successes and failures of countless projects, I believe our framework is correct, and all the necessary elements for success are in place. Of course, ultimate success will depend on luck and execution, but at least we have done our best in everything we were supposed to do.

• Host: For Altcoin Daily viewers, regardless of their financial situation, everyone now has the opportunity to participate and earn FLOP tokens at zero cost, since it's not yet listed and has no price. What is the specific timeline?

Arthur: Regarding the airdrop timeline—we expect the testnet to launch in late October this year and run for about 90 days; barring any major issues, the mainnet will officially launch in the first quarter of next year.

Some people come to me and ask, "I'm not a miner, validator, or KOL, how do I get tokens?"

It's very simple. Just create a wallet, claim your testnet FLOPs from the tap, and spend them. If you claim the test tokens but don't actually use them on the network, they have no value and won't count towards the mainnet token exchange weight. We only reward those who genuinely participate. You cannot buy this token with real money; anyone claiming to sell it to you privately is a scammer. The project has no public offering or pre-sale.

If you want to buy them, wait until the mainnet launches next year and then buy the tokens sold by miners on the secondary market. If you want to get them for free, create a wallet, use the platform, and help your AI Agent complete the integration process ; we will then issue points that can be exchanged for mainnet tokens.

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

Arthur: I didn't see it.

Host: But the trend is already very clear.

Arthur: The concept itself is not new. Many people have expressed similar views. Even Jensen Huang has said that in the future, we can use computing power units for payment.

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

Many projects in the past failed (with the exception of a very few miracles like Bitcoin) because people misunderstood the purpose of the tokens—they just wanted to get a large amount of funding of $500 million from well-known VCs and then promote it extensively.

I remember someone compiling a table listing a group of top-funded projects that raised a total of over a billion dollars. However, when you checked their on-chain activity, the total gas fees consumed across the entire network over the past six months amounted to only $24, which is extremely ironic.

This is an abuse of the token tool. If the mechanism is designed properly, people are willing to put in a lot of effort to acquire valuable assets; rather than pre-selling tokens at a discount to VCs who only want to reap the benefits, causing the token price to plummet after launch, it would be better to distribute the tokens directly to the real network builders.