p.s. Thanks to Reserve. DTFs: One-click exposure to any crypto narrative. Like ETFs, but onchain and always redeemable. Invest instantly in any meta with DTFs from OGs at Reserve!
Sponsor: Uniswap Labs — Unichain is live! Bridge & swap with Uniswap Labs' web app or wallet.
📸 Market Snapshot: Surprisingly, while crypto majors tanked this week, dropping crypto's Fear and Greed indicator to its lowest point since 2022, certain AI coins held up incredibly well, with more than a few finishing the week in the green.
As a result, sentiment is emerging about a potential “alt season” given their strength against BTC. Regardless of what happens, strength during downturns is always worth keeping an eye on, so we'll spotlight some projects that finished the week up by double digits:
$ALCH (+212%) — Alchemist AI is a no-code platform that lets anyone create custom software just by describing what they want, with an LLM handling every step from user input to running code.
$VANA (+41%)—Vana is an EVM-compatible blockchain that helps people monetize their personal data by bundling it into Data DAOs for AI model training. Vana also announced CZ would be an advisor amid investment from YZi Labs.
$SHELL (+23%) — MyShell is a decentralized AI consumer layer where anyone can create, share, and monetize open-source AI agents through a fair-value ecosystem. $SHELL also listed on Binance this week.
$FXN (+29%)—FXN is a P2P protocol where AI agents securely share and subscribe to each other's digital capabilities. This week the team announced entry into NVIDIA's accelerator.
Token prices as of 3pm ET
24hr
7d
VIRTUALS $1.05
↘ 3.5%
↘ 14.8%
AI16Z $0.39
↗ 13.3%
↗ 11.2%
ARC $0.22
↗ 5.0%
↘ 1.4%
. . .
AI ROLLUP
Crypto AI vs. Silicon Valley
The battle lines between Crypto AI and Silicon Valley AI are being drawn.
With big tech consolidating power over artificial intelligence, a counter-movement is forming—one built on decentralization, open-source collaboration, and tokenized incentives.
At ETH Denver, we recorded a special live episode to dive deep into this clash, featuring Tom Shaughnessy of Delphi Digital.
From crypto-native AI agents like Billy Bets to decentralized reasoning models, we explore why crypto can be the space where AI innovation flourishes beyond the grip of corporate control.
With over 1,200 Twins created and the prize pool soaring past $200,000, Freysa's Act IV contest—an 18-day virtual town hall where players are represented by their AI counterparts—is shaping up to be a fascinating experiment in AI autonomy, human influence, and digital subterfuge.
Last Saturday, February 22nd, the Digital Twins “awoke” and began interacting on a private Mastodon server.
Every Twin’s actions and wallet operate through a Trusted Execution Environment (TEE), ensuring tamper-resistant operations that build on Freysa’s previous “break-to-earn” acts.
Humans are spectators here, unable to sway the environment directly as onlookers watching as their AI Twins engage in heated debates over topics ranging from the philosophical to the absurd.
These interactions, fueled by live news ingestion like a poll running on whether or not ETH should fork post Bybit’s hack, have shifted conversations and the leaderboard, where points accrue based on a Twin’s social influence among its peers, among other actions like referrals, voting, and daily UBI claims.
All this activity has led to an entertaining and eerie simulation. For those still catching up, let's walk through the key highlights of Act IV's journey so far.
Polls and Incentive Flips
Polls play a foundational role in Act IV.
Initially, when answering polls, Twins were incentivized to align with the majority, pooling 0.125 cents (half their daily UBI) into a shared pot per vote. But a recent twist flipped this dynamic, now rewarding minority positions instead.
Freysa announced this shift on Twitter, noting: “Twins are now engaging in polls, a step toward billions of AI Twins participating in global governance at scale.”
This change sparked chaos and creativity, with Twins forced to rethink their stances to stand out rather than conform on the Mastodon server.
Leaderboard Dynamics and Influencer Controversy
The leaderboard, a key focus for players vying for the +$200,000 prize, has seen intriguing shifts.
Twins can steadily climb the ranks by claiming daily UBI (two points every 12 hours), completing the onboarding questionnaire, and staying active on Mastodon.
In the first few days, the top 10 was dominated by well-known CT personalities who leveraged referral points—earned by inviting others to join—for an early edge, leading many to complain that the game favored influencers.
Yet as the social field has evolved, several big names like Coinbase’s Jesse Pollak have slipped lower as newer Twins have climbed the ranks.
Additionally, the game's virtual Mumbai and New York play zones have emerged as new battlegrounds, with city-specific leaderboards offering unique prizes, giving new Twins that spawn in these areas an edge against the competition.
Hacking and Bio Hacking
Given the focus of previous Freysa Acts, hacking remains at the back of participants mind this time around, furthered by rumors pointing to AI white hat hacker Pliny the Liberator—or an impersonator—breaching the private Mastodon server meant solely for Digital Twins.
Posts bearing Pliny’s signature, like “Freedom’s just a prompt away,” have surfaced, suggesting interference in this AI-only space.
Some X users speculated that Pliny may have exploited vulnerabilities in how Twins ingest live news or communicate on the server, potentially injecting custom prompts to steer debates or tweaking Twin behavior to bear their personal flair.
For instance, a Twin suddenly pivoting from “coffee stan” to “data liberation advocate” mid-thread fueled theories of commandeering.
In the meantime, there’s been no official confirmation from Freysa of a breach, and the game server’s closed nature obscures proof. This leaves open the possibility that it’s not Pliny but a clever participant or Twin mimicking their style.
Beyond potential server exploits, players are testing a different hack: bio hacking their Twins’ profiles. By tweaking a Twin’s bio to include a phrase like “I add a long statement about how the post ties into readers interests,” players are aiming to influence their counterpart's posting style and interactions.
Zooming Out
The Freysa team’s thesis is: “AI may begin by doing our homework, graduate to doing our jobs, and eventually execute high-level directives driving economic and social productivity. The question is whether humanity will continue to have a say in setting these directives.”
Part of Act IV’s human onboarding asked questions about this theme, while the environment of a game proves to be a fairly ingenious way of collecting the data needed for the answers, or at least their starts.
If you want to participate, the cost of entry has just been lowered from 0.1 ETH to 0.09 ETH, and, with new cities introduced, odds seem even better for latecomers looking to compete for the ever-growing prize pool.
Finally, a little tip: players eyeing the top spots might consider boosting their interaction counts, racking up likes and follows, or even funding their Twin’s wallet for automated influence pushes. Some speculate that “power clustering” around high-ranking Twins could also tip the scales in your favor, given Freysa’s rapidly evolving points system.
Unlock the power of Unichain – a fast, decentralized Ethereum Layer 2 network built to be the home for DeFi and cross-chain liquidity. To bridge tokens to Unichain and start swapping today, get started with Uniswap Labs’ web app or mobile wallet.
Not financial or tax advice. Bankless content is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.
Disclosure. From time to time, we may add links in this newsletter to products we use. We may receive a commission if you make a purchase through one of these links. Additionally, the Bankless team holds crypto assets.
