Solana, Ethereum L2s (and XRP?) Simply Received a Big Purchase Sign From Citrini Analysis

Everyone seems to be speaking concerning the Citrini Analysis report that despatched the market right into a tailspin yesterday. Buried in its 7,000 phrases of knowledge is a big purchase sign for Solana and Ethereum Layer 2s.

The report, entitled The 2028 World Intelligence Disaster, is a piece of fiction that explores a future state of affairs by which AI disruption results in what it describes as a “destructive suggestions loop with no pure brake”.

Briefly, AI goes to displace white collar staff at an unprecedented charge. It ought to have been apparent, however we waited till 2028 for the penny to drop…

“It ought to have been clear all alongside {that a} single GPU cluster in North Dakota producing the output beforehand attributed to 10,000 white-collar staff in midtown Manhattan is extra financial pandemic than financial panacea. The rate of cash flatlined. The human-centric client economic system, 70% of GDP on the time, withered. We in all probability may have figured this out sooner if we simply requested how a lot cash machines spend on discretionary items. (Trace: it’s zero.)

“AI capabilities improved, corporations wanted fewer staff, white collar layoffs elevated, displaced staff spent much less, margin stress pushed corporations to speculate extra in AI, AI capabilities improved…”

Right here’s what that appears like schematically:

Coming into an age of considerable intelligence

There is no such thing as a self-correction as we’d count on to see in a typical cyclical recession.

It goes one thing like this: development (or different financial exercise) slows, charges alter downwards, permitting companies to return to increasing output, till overproduction kicks in once more, and so forth.

Within the AI doom loop, AI improves, fewer staff are wanted, fewer staff imply much less spending, the economic system weakens, corporations put money into extra AI to guard margins, AI will get even higher, and the cycle repeats – there isn’t any pure break.

We thought it was a sectoral story. I’m not in Software program-as-a-Service (SaaS), so there’s no want to fret. However it’s greater than software program. Rather more. It was a comforting notion that AI would usher in an period of artistic destruction, as seen in previous technological assaults on the previous methods of doing issues.

Sure, AI will destroy jobs, however, as prior to now, new jobs and hitherto unimagined industries would emerge to switch them.

Bother is, in line with Citrini’s state of affairs, AI is a narrative of human intelligence displacement. All the white collar workforce is imperilled. It’s the consequence of considerable intelligence.

The authors of the Cetrini report remind us that superior economies just like the US are service-based. The report breaks that down so everybody can perceive:

“The US economic system is a white-collar providers economic system. White-collar staff represented 50% of employment and drove roughly 75% of discretionary client spending. The companies and jobs that AI was chewing up weren’t tangential to the US economic system, they had been the US economic system.”

Sadly for all of us – white collar, blue collar, no matter – machines don’t purchase stuff.

AI brokers destroy intermediation – bye bye bank cards, good day stablecoins

The report makes a strong case for the way client brokers will finish the age of intermediation.

AI brokers function autonomously on behalf of their human homeowners, which suggests they will discover one of the best flight or resort in the marketplace with ease as a result of they by no means get drained, don’t discover something monotonous or uninteresting, and by no means sleep.

The times of corporations counting on our laziness or inertia are numbered. Add ‘vibe coding’ to the combination, and a brand new wave of startups can spin up supply providers apps in a couple of weeks to compete with DoorDash et al, or automate workflow in a bespoke approach that matches your company wants extra performantly than say Monday. In every single place, charges are being compressed to close zero.

After which we come to our buddies, the banks. Why pay charges to Mastercard and Amex when you should use a stablecoin operating on a low-fee blockchain like Solana, or an Ethereum Layer 2 like Base, Arbitrum, Optimism, or Polygon?

“As soon as brokers managed the transaction, they went searching for greater paperclips.

“There was solely a lot price-matching and aggregating to do. The most important strategy to repeatedly save the consumer cash (particularly when brokers began transacting amongst themselves) was to eradicate charges. In machine-to-machine commerce, the 2-3% card interchange charge grew to become an apparent goal.

“Brokers went searching for quicker and cheaper choices than playing cards. Most settled on utilizing stablecoins through Solana or Ethereum L2s, the place settlement was near-instant and the transaction value was measured in fractions of a penny.”

And what agentic AI will do for stablecoins may be utilized to cross-border fee protocols like Ripple’s XRP Ledger, though it doesn’t get a point out on this report.

Coinbase has already begun experimenting with a protocol that permits AI brokers to make funds on-chain.

The tokenization, disintermediation, agentic AI narrative to beat the bear market blues

Crypto has been searching for a “new” narrative to carry the fog of the bear market. Nicely, it’s been hiding in plain sight: tokenization, disintermediation, and Agentic AI.

Will that clear up the issue of an economic system with out sufficient staff getting paid wages and salaries to drive the consumption that corporations rely on?

In all probability not, however because the report contends, we’ve obtained time to determine an answer for that. Taxing the hyperscaler ‘robber barons’ is usually recommended, however that’s unlikely to go down properly with the Lords of the info facilities.

In funds, as elsewhere, disruption is coming and everybody – traders, corporations, and customers – wants to start out fascinated with what all of it means.

Shopper conduct is already shifting. Chargebacks911, a worldwide chief in dispute decision and chargeback prevention, is warning retailers and funds corporations that agentic commerce will reshape disputes, as AI methods transfer from recommending purchases to executing them. Chargebacks are fee reversals initiated by a cardholder’s financial institution.

For years, most chargebacks fell into three classes: fraud, service provider error, or purchaser’s regret. Agent-initiated transactions create a fourth state of affairs. The acquisition is technically authorised, however the consequence doesn’t match the client’s expectations.

“The funds business has at all times handled the press because the sign of intent,” says Monica Eaton, founder and CEO of Chargebacks911.

“Agentic commerce removes the press. So now we’d like a brand new strategy to show intent when a human was in a roundabout way concerned.”

Regulate your checking account, and welcome to the longer term.

Report co-author Alap Shah, explains extra concerning the concepts within the report, reminiscent of AI-induced ‘ghost GDP’, the place worth accrues on the stability sheets of the hyperscalers however doesn’t present up within the “human-centric client economic system”:

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