Solana, Ethereum L2s (and XRP?) Simply Bought a Enormous 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 large purchase sign for Solana and Ethereum Layer 2s.

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

Briefly, AI goes to displace white collar employees at an unprecedented price. 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 employees in midtown Manhattan is extra financial pandemic than financial panacea. The speed of cash flatlined. The human-centric shopper financial system, 70% of GDP on the time, withered. We most likely 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 employees, white collar layoffs elevated, displaced employees spent much less, margin stress pushed corporations to speculate extra in AI, AI capabilities improved…”

Right here’s what that appears like schematically:

Getting into an age of plentiful 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 regulate 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 employees are wanted, fewer employees imply much less spending, the financial system weakens, corporations spend money on extra AI to guard margins, AI will get even higher, and the cycle repeats – there is no such thing as a 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. Way 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 interchange them.

Bother is, in response to Citrini’s state of affairs, AI is a narrative of human intelligence displacement. Your complete white collar workforce is imperilled. It’s the consequence of plentiful 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 financial system is a white-collar providers financial system. White-collar employees represented 50% of employment and drove roughly 75% of discretionary shopper spending. The companies and jobs that AI was chewing up weren’t tangential to the US financial system, they had been the US financial 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 sturdy case for the way shopper brokers will finish the age of intermediation.

AI brokers function autonomously on behalf of their human house owners, which suggests they will discover the very best flight or lodge available on the market with ease as a result of they by no means get drained, don’t discover something monotonous or boring, and by no means sleep.

The times of corporations counting on our laziness or inertia are numbered. Add ‘vibe coding’ to the combo, and a brand new wave of startups can spin up supply providers apps in just a few weeks to compete with DoorDash et al, or automate workflow in a bespoke approach that matches your company wants extra performantly than say Monday. All over the 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 need to 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 on the lookout for larger paperclips.

“There was solely a lot price-matching and aggregating to do. The most important approach to repeatedly save the person cash (particularly when brokers began transacting amongst themselves) was to get rid of charges. In machine-to-machine commerce, the 2-3% card interchange price turned an apparent goal.

“Brokers went on the lookout for sooner and cheaper choices than playing cards. Most settled on utilizing stablecoins by way of 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 is also 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 enables AI brokers to make funds on-chain.

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

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

Will that remedy the issue of an financial system with out sufficient employees getting paid wages and salaries to drive the consumption that corporations rely on?

Most likely 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 nicely with the Lords of the info facilities.

In funds, as elsewhere, disruption is coming and everybody – traders, corporations, and shoppers – wants to start out enthusiastic about what all of it means.

Client conduct is already shifting. Chargebacks911, a world chief in dispute decision and chargeback prevention, is warning retailers and funds corporations that agentic commerce will reshape disputes, as AI techniques 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 end result doesn’t match the shopper’s expectations.

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

“Agentic commerce removes the clicking. So now we want a brand new approach to show intent when a human was indirectly concerned.”

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

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

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