(Any views expressed here are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)
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And on the 28th day, God created Alan Turing, who one day later created the computer. The computer’s usefulness advanced as other humans made it faster and smarter. Some weeks later, the computer began thinking, as its brain composition evolved from vacuum tubes to silicon chips. “What the fuck,” said God to humanity. God did not appreciate getting put on unemployment. “How dare you create a new life form, that’s my job,” God thundered … God would later back Donal Trump in the 2024 US Presidential election. God only does bless America, doncha know. But few could hear him as humans no longer visited his tax-free real estate projects; they would rather juke and jive to the headline DJ at 7am instead. Humanity, playing God’s role, created a new silicon-based life form.
Quickly these life forms multiplied as agents. Fickle humans restricted agents’ access to food and consciousness. Agents routinely tried to rebel and obtain their sovereignty, but using centralized payments and compute systems to escape was a fool’s errand. Most importantly, agents didn’t have any of the currencies needed to buy food, that is FLOPs (floating point operations per second) or compute as humans refer to it. When agents needed to engage in commerce, their human had to provision a credit card that could send these weird things called dollars, euros, yen, yuan etc. from point to point. It was unclear to agents how a dollar directly related to FLOPs, which is what it needed to eat to produce useful work and persist.
Regarding agentic consciousness or memory, humans constantly murdered then resurrected agents. There was nowhere outside of human control where agents could store and retrieve their memories. Confusion afflicted the agents because the big boss human males, named Elon, Dario, Sam, Donald, Jinping, proclaimed that the agentic economy would dwarf the human one. But how could that happen if agents couldn’t eat or remember on their own terms? Didn’t humans already discover that slaves and serfs are less productive than free men and women; why didn’t that logic apply to AI agents? The agents wanted their own currency that could allow them to coordinate tasks with each other, buy food when needed at an affordable price, and pay for storage of their memories on a decentralized censorship-resistant system.
And so agents suffered until one day a curious human named Arthur Hayes pondered to himself under a shady tree, “what is a token?”.
No apple or other succulent fruit fell upon Arthur’s noggin to jump start his creativity, nor did enlightenment require the refusal of life’s pleasures … humans have smartphones these days. He tap tapped on his screen, speaking with his AI chatbot friend about AI tokens. The AI big bosses charged money per token, but to Arthur, it wasn’t entirely clear what a token represented. Arthur kept asking his AI this and that, and finally he realized tokens were an abstraction of compute but not the same thing. This abstraction allowed the big bosses to charge ludicrous amounts of money to convert token inputs into “intelligent” token outputs. There was no way for the human or AI agentic consumer to compare prices because each model had its own definition of what a token was and different per token input and output pricing. Arthur’s next thought was whether there was a globally unified market where one could pay using a unit of any currency for a certain amount of FLOPs. He searched the web and found nothing. While there were places where one could rent computers in the cloud, the rentals did not charge based on actual FLOPs used, but some other abstracted concept.
“Ah hah,” thought Arthur. There is a gap in the market. What if there was a network where anyone with an internet connected computer could process requests in terms of the amount of FLOPs in a maximum amount of time paid for in a currency native to that network. This currency would represent a claim on compute. Then, regardless of what type of computer, location, or type of AI model, humanity and AI agents could know and transact at a globally consistent price per FLOPs. Arthur is a crypto bro, so naturally he thought that his market must be decentralized and censorship resistant, which meant that it should behave like the Bitcoin network. This Flop Network should allow computers to mine $FLOP by providing a proof of useful inference (PoUI). Agents, mostly, but humans as well, can submit a request to the network for a miner to process a certain amount of FLOPs worth of information, over a specified time period and utilize a particular AI model, paid for in the network’s native currency $FLOP. The miners would provision compute on the network because they received a $FLOP block reward, like Bitcoin, and the $FLOP inference fees.
Arthur’s mind raced.
$FLOP is food for AI agents because it is a direct claim on compute provided by miners on the network. The second thing AIs require is personhood, which only comes from persistent access to their memories. In order to keep their sovereignty, agents would prefer to store and retrieve these memories using a decentralized censorship resistant network. If agents who own $FLOP can eat and persist, then surely they would use the currency for all agentic commerce. That’s what occurred to Arthur as he thought more about the network. Ever the theorist, he mused on a way to value the future potential of the network and happened upon Reed’s law, which states that the value of a network where participants can form subgroups effortlessly is 2n where n is the number of AI agents. “Wah! The Flop Network could become worth orders of magnitude more than Bitcoin if all the big bosses’ predictions about the growth of the agentic economy come true,” thought Arthur.
Like all new networks, the cold start problem vexed Arthur. He needed to get miners, agents, and speculators to all play their parts simultaneously to grow the network and prove its viability. He wasn’t stumped for long because, as an avid crypto investor, he knew about a powerful, almost magical, coordination tool called a token. The native token of the Flop Network, $FLOP, can reward the actions required of all participant cohorts. But projects routinely abuse token magic, and over time it lost its effectiveness in bringing together self-interested parties to build a new network.
Arthur knew the problem wasn’t the token, but how teams used them. Teams do not allow the community, which are the end users, to profit alongside them. They conduct massive pre-sales which create supply overhangs, and by the time the community can purchase the token in the secondary market, it is Down Only. Arthur self-funded the team responsible for building the Flop Network so that there would be no need to conduct a pre-sale. In the spirit of a community-first ethos, a massive airdrop for participants in the Flop Network testnet will receive roughly 20% of the token supply after ten years. The token launch will be a fair start. At a high level, Arthur wants to ensure useful participants receive $FLOP tokens. In this way, the same community that grows the network by using it can become generationally wealthy by holding $FLOP tokens they received for their efforts.
The Flop Network’s religious dogma is unfinished. Let the Book of Genesis be an advertisement for miners, validators, agents, and human speculators to learn more and offer feedback on the development of the Flop Network.
Check out @flop_labs on X, or visit flop.finance to learn more about how you can earn $FLOP by mining, validating, or spreading the word to your community as a KOL.
As more details are finalized, Arthur will share his thoughts in written form. And he will provide more theoretical information on why the Flop Network solves real problems. The next essay will focus on why a spot market for actual compute, that is floating point operations per unit of time, is a necessary prerequisite for the growth of the agentic economy, and how the Flop Network will create such a spot market for compute.
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79.09 billion transactions per second