Sup, nerds!

Here’s what you’re getting in today’s edition:

• 💅 This is cool: The ‘eBay’ of AI training data

• 🔎 This seems important: Bitcoin crashed (here's why)

• 🤝 Partner: Exploring DeFi Technologies (a free webinar you don’t want to miss!)​

• 🔪 Let's dissect this: How to legitimize meme coins

Terms used in this edition (click for an explanation, or ​ask Web(GPT)3!​):
Decentralized, Blockchain, Meme Coins, Web3.

💅 This is cool:

The ‘eBay’ of AI Training Data (And Why the World Needs It)

In one sentence: Bagel is a decentralized marketplace for AI training data, which allows more people to build/compete in the AI space (instead of just tech giants and nation states).

Your mom was right: there is such a thing as too much internet.

(And each person’s tolerance is different).

Some folks can spend most of their waking hours online, and at worst, their taste in memes will become weirdly niche…while others dissolve almost instantly when facing the internet’s continuous ‘fire hose’ of information.

Like Chevy’s 8th grade science teacher who became convinced England wasn’t a real place, but actually a set on a Hollywood sound stage.

(True story. Shout out to Mr. Kertser).

Turns out ‘striking the right balance of internet,’ isn’t just a human problem.

ChatGPT has been trained on pretty much all of the internet’s scrape-able knowledge, and has gone a bit loopy as a result.

Sure, it gets a lot of things right…but it can also become a little ‘Kertser-esque,’ and give very wrong answers, with unwavering confidence.

The solution: 

Create purpose-built AI chat bots off the back of smaller, cleaner, and more targeted data sets.

…only problem is - there isn’t exactly an ‘eBay for AI training data.’

(At least, that’s what we thought).

Turns out the team behind the Bagel Network has just locked in $3.1M of pre-seed funding to grow their ‘decentralized blockchain-powered marketplace, for machine learning datasets,’ (aka: ‘the eBay of AI training data’).

What’s really important here is that it’s decentralized.

Because ‘access to intelligence’ is a vector of control.

We’ve seen individuals/companies/countries amass crazy wealth and power by organizing a bunch of smart people, and leveraging their knowledge.

And AI doesn’t just allow ‘access to intelligence,’ but ‘access to super intelligence.’

(Something that could create massive disparity, when left only in the hands of a few).

And while a decentralized network of clean n’ polished data doesn’t solve the issue outright, it does help to level the playing field:

• The more people have access to diverse training data →

• The more people can compete in the AI/machine learning space →

• The less control is gifted to tech giants and nation states by default…

Nice!

🥇 Want the news before anyone else?

🔎 This seems important:

“I Thought the Bitcoin ETF Was Meant To INCREASE Prices, Not Tank Them!?”

In one sentence: A bunch of investors are selling out of the Grayscale BTC ETF, which created downward pressure on BTC’s price, which caused a wider market sell-off.

ICYMI: Bitcoin tanked and took the rest of the market with it.

So, what the hell happened?

In a word? Grayscale.

Grayscale’s spot Bitcoin ETF was originally a ‘trust,’ which meant that they:

Bought a whole bunch of Bitcoin (one time only) → locked it in a ‘trust’ → then sold shares of said trust.

The big difference between trusts and ETFs is: 

When you sell buy/sell shares in a Bitcoin trust, the BTC that each share represents isn’t actually being bought/sold. With Bitcoin ETFs, it is.

Long story longer: Bitcoin ETFs actively effect the price of BTC, while trusts do not.

“Ok, but how did this cause a price collapse?”

Well, over the past few years, the BTC trust never quite had as much demand as Bitcoin itself. So if folks wanted to sell their shares in the trust, they had to offer them at a lower price than what they were worth, in order to entice buyers.

There was literally a 50% discount at one point, where you could buy Bitcoin at half-off the market price, if you bought it via the Grayscale BTC trust.

(And that’s exactly what people did!)

Unfortunately, that discount ended once Grayscale converted its trust into an ETF - and on top of that - when the conversion happened, Grayscale didn’t lower its fees to compete with other Bitcoin ETFs…

So you have:

1. A bunch of people who have made a silly amount of money (on paper), by buying Bitcoin at 50% off, via the trust.

2. Grayscale refusing to lower its fees.

What do you get as a result?

A group of investors that are more than happy to sell out and avoid getting price gouged. Only problem for the rest of the market is…

Unlike a trust, when folks sell their Grayscale spot Bitcoin ETF shares, Grayscale has to sell the underlying Bitcoin as well.

And over the past few days, we’ve seen billions being sold by Grayscale on behalf of its customers - which inspired the rest of the market to sell off in anticipation of lowered prices.

Alright, now you know!

🤝 Partner:

Exploring DeFi Technologies (a free webinar you don’t want to miss!)

If you haven't heard of DeFi Technologies yet, you’re missing out! 

But it doesn’t have to be that way…

As the Decentralised Finance ecosystem continues to grow and expand, DeFi Tech actively explores opportunities to drive innovation and develop creative, innovative, sustainable solutions, connecting investors to the future of finance.

Valour (a subsidiary of DeFi Tech) offers exchange-traded products (ETPs), listed on regulated stock exchanges across Europe, that enable individuals and institutions to invest in digital assets simply and securely.

The good news is, Russell Starr (Head of Capital Markets at DeFi Tech) is hosting a webinar on January 30th at 10am PT/1pm ET to discuss all of the opportunities he sees for 2024. 

Join the DeFi Tech team for a sneak peak into what they - as an industry leader - are focused on achieving throughout the year.

The presentation is just 30 minutes, followed by a 15-minute Q&A session.

Click the big red button below to register (it’s free)!

🔪 Let's dissect this:

How To Legitimize Meme Coins

In one sentence: The Avalanche Foundation is buying up millions of dollars worth of meme coins, in order to legitimize and support well behaved/culturally relevant meme projects.

One of the industry big dogs, the Avalanche Foundation, has just announced it’s buying up millions of dollars worth of meme coins.

Why? ‘For the culture.’

It’s pretty nuts.

That said, meme coins have an interesting dichotomy in the Web3 space…

On one hand, they bring in a ton of new users and traffic. But, on the other, they’re extremely volatile and often fueled by pure hype, with no real utility. 

So then why are we strangely excited about this?

Ok, hear us out…

Remember the show Scared Straight - where parents would send their mis-behaving kids to visit prison, and have them ‘scared straight’?

Well, to us, seeing meme coins embraced by a major project like Avalanche, feels akin to those mis-behaving kids, visiting prison.

You change their environment → you change the way they behave → you change the way the rest of the world sees them.

Take Dogecoin for example: it was created as a joke, but became more and more resilient as it was endorsed by more and more people over the years.

And it looks like this is the trajectory Avalanche wants to set for other meme coins.

The foundation plans on purchasing coins that reach certain standards and expectations, but are also seen as culturally relevant.

It’s weird. But we like weird!

Meme Coins, Explained.