Despite Ethereum ETF approval, ??unicorn projects are in trouble

Gm Fintech Architects —

Today we are diving into the following topics:

• Long Take: In this article, we discuss the financial challenges of unicorn Web3 projects in the context of the recent approval of the ETH ETF. Despite a $2.5 trillion overall market valuation, many new crypto projects, such as Arbitrum, face poor price performance, with token prices dropping 50% over three months even as usage increases. This disparity is attributed to a low float, high valuation issue where only a small percentage of tokens are trading, leading to market inefficiencies. We compare this to traditional IPO processes, suggesting that crypto could benefit from programmatic vesting schedules and professional pricing strategies. Implementing mechanisms like bonding curves and on-chain vesting could help stabilize token prices and improve market dynamics.
• Short Take: The Next Generation of AI Agents with Google's Project Astra and OpenAI's GPT-4o

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Long Take

The Problem

We have just crossed the line into approval for the ETH ETF, driving prices up to new highs, as well as a political step change in the treatment of crypto in Washington.

In an unlikely turn of events, the winds have shifted towards innovation and digital assets are now a bi-partisan consensus. BlackRock and Fidelity will be the champions of mega-cap crypto assets, continuing to push forward this bull market. There is $2.5 trillion of digital assets — on par with the last cycle high — but a market with decreasing regulatory overhang, and many bad actors weeded out.

And yet, many market participants are frustrated with the financial performance of new projects launching their tokens.

Take for example something as respected as Arbitrum, one of the first EVM roll-ups to add millions of transactions and users to Ethereum. This is a real product, with a technological advantage. Let’s assume that the fundamentals are sound. Then why does the token price look like this?

Over the last 3 months, token price has fallen almost 50%. Meanwhile, the market capitalization has risen from $2.25B to $3B, with a high of $4.5B. If we look at activity onchain, transaction are steadily increasing, which suggests more usage and adoption. So what is going on?

Short Take

AI: The Next Generation of AI Agents with Google's Project Astra and OpenAI's GPT-4o

The largest AI companies in the world have both just launched new capabilities in their flagship products — OpenAI unveiled GPT-4o, and Google provided an update on its Project Astra.

In our previous AI analysis, we highlighted Google’s Gemini 1.5 Pro and its ability to manage 1MM tokens. Now, Google doubled Gemini’s context window to 2MM tokens, enhanced its code generation, logical reasoning, audio and image understanding, allowing users to customize chat agent personas. And Google’s Project Astra, set to launch later this year, promises to be their most powerful AI assistant yet.

Meanwhile, OpenAI has introduced GPT-4o, which integrates text, vision, and audio processing within a single framework. GPT-4o can sense and express emotions, making interactions more natural and intuitive, and the model is also significantly faster and more cost-effective, offering 2x the speed, half the cost, and 5x the message limits compared to GPT-4 Turbo.?

As a result of stronger inference capabilities, we will see more advanced AI assistants that develop plans and act on behalf of users by understanding their context and preferences, using third-party services, and interacting with other agents or humans. In the context of financial services, one of the intriguing opportunities is AI agents that manage the full financial situation of their clients, including applying new investment ideas and executing transactions. At some point, their interactions become the core of an AI commerce economy, where agents transact with agents.

Plenty of venture capital has gone into AI agent concepts, but not until recently has real intelligence been available for integration into these bots.

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???Podcast Conversation: Building Artificial Intelligence we can trust using ZK Proofs, with EZKL CEO Jason Morton

In this conversation, we chat with Jason Morton - CEO at EZKL, Founder at Zkonduit, and an Associate Professor at Penn State. EZKL aims to simplify the implementation of ZK cryptography, allowing developers to focus on building applications instead of delving into complex mathematical theories.

It achieves this by taking a high-level program description and generating the necessary components for ZK verification. This initiative aims to allow developers to concentrate on creating applications without needing to delve deeply into the complex underlying mathematical theories.

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• Read our Disclaimer here — this newsletter does not provide investment advice
• Contributors: Lex, Laurence, Matt, Farhad, Danny, Michiel, Michael