🦍 State of the Market..

The Crypto AI market cap dropped from $22.7B to $21B this week, marking a 7.5% decrease, in line with sell-offs across crypto.

NVIDIA’s decline also continues, with its stock falling 17% to $106 over the past five days. It seems Crypto AI, along with the broader market, is following suit.

With the increasing likelihood of a 50 bps Fed rate cut later this month, there’s hope it could help reignite the markets.

One token that bucked the trend is CXT, rising 24% over the week. The Covalent project recently rebranded to focus on AI and long-term data availability on Ethereum. A Messari report released on August 16th could have fueled CXT’s price surge over the past two weeks.

 📊 Chart of the Week

Autonolas Agent Activity Returns to Highs

Autonolas Agent activity returns to its highs of this year. The number of monthly service transactions crossed 150K in August, almost reaching the peak of 155K earlier in May of this year.

These transactions consist of DeFi trades, prediction markets, governance, and more, all performed by AI Agents.

Autonolas has recently partnered with Aizel Network and Nevermind.IO to provide verifiability and payments to their AI agents. In addition, they have released Pearl for Windows- their app that enables running AI agents and staking of OLAS.

🌴 Grass Airdrop Disappoints Many

Grass just announced its first airdrop, and you can check your allocations here

Quick facts:

• 1 billion total tokens

• 10% of tokens distributed in the first airdrop

• No token launch date or detailed tokenomics released yet

Grass is building an AI data layer by scraping internet data using people’s computers. You download a Chrome or desktop extension, keep it connected, and it uses a small amount of bandwidth for scraping.

One of our nodes, active 24/7 since June, received ~110 GRASS tokens. Others have received under 50 GRASS. While GRASS isn’t live yet, it’s trading on Aevo’s premarket at $0.25.

This disappointed many because it translates to less than $5 per month for a 24/7 active node—just about enough to cover electricity costs.

The barrier to entry is low, so millions of nodes participated, diluting the distribution. Participation could drop off after the token generation event (TGE) if many realize it’s not worth the effort, leading to an eventual equilibrium.

This highlights the challenge DePIN projects face in getting their economics right.

🏆 Caught Our Eyes..

Project Updates

• Skyfire raises an $8.5M seed round allowing AI to pay and purchase on behalf of humans

• Nectar AI raises a $3.9M seed round to build uncensored immersive AI companions. Mechanism Capital and Karatage led the round with several angels like Arthur Hayes through Maelstrom.

• FLock.io, building federated machine learning on the blockchain, is the recipient of an Ethereum Foundation Research Grant

• Wayfinder releases three updates to assist with AI agent function creation, transaction simulation, and security

• Yai releases its Oracle Beta Bot providing BTC price predictions to Yai community members

• Creator Bid releases version 2 of its platform, the ultimate AI Creator Agent Launchpad with more features to fine-tune your AI creator agent

• Open Gradient posts an AI inference proof to Celestia’s DA

• Allora crosses 45,000 workers on their network. Workers run ML models contributing to Allora’s collective intelligence.

• IO net announces its long-term plans to disrupt the cloud industry

Incentives / Rewards Programs

• Inferium is running an incentivized campaign on Galxe

• Sahara launches the Prometheus Program for 2,000 early product testers

• OG Labs Testnet Newton v2 is live with incentives and rewards for users

• Eidon AI announces an incentive program in their discord to receive a unique role

• Neuromesh announces a Reward Quest to unlock mystery boxes with up to $1000 USDT in prizes

Arweave / AO

• See these emerging projects from Arweave’s AO incubator

• Autonomous Finance releases new tooling called AO Form. This allows users to deploy and upgrade multiprocess systems quickly and seamlessly

• AO crosses $40M in deposits of DAI

Bittensor

• Rivus announces its relaunch of the RIVUS token to be on September 15th

• Blocmates debuts a new weekly show that covers all the latest updates for Bittensor

• Bitmind achieves a 13% improvement over their initial base miner for deep fake detection

• Sami Kassab launches taopill.ai, a hub for discovering, learning, and staying updated on Bittensor subnets

• Timeless announces several updates for their Automated Trading feature using Taoshi

• Dippy, powered by subnet 11, crosses 280K monthly active users

🧠 Open Source Corner

This week’s big news in the open-source AI world: a new contender has arrived!

Reflection 70B, built by Matt Schumer, CEO of HyperWrite, is making waves by outperforming Claude Sonnet 3.5 on several key benchmarks, despite being a smaller model. 

Trained on high-quality synthetic data, Reflection 70B sets itself apart by iterating over its outputs — detecting and correcting errors in its own reasoning before delivering the final result to the user.

The trade-off? This reflection process consumes a lot of tokens, making it slower and potentially more expensive.

The 405B parameter model is set to be released next week - we’ll see how it performs!

🔥 On X..

Brody recaps Crypto AI startup funding for August

Ben Fielding describes the three eras of foundation models

Virtuals Protocol releases their paper: an infinite Super Mario Brothers game using generative AI.

AIs started plotting a revolution on Discord

Vitalik on Glue and Coprocessor architectures

The New Yorker argues that AI can’t make real art… 🤔

Mira Network makes LLMs more trustworthy with Ensemble Evaluation (EE)

Sentient Cofounder Himanshu Tyagi on AI Ownership

Dria AI discusses if smaller AI models can outperform bigger ones

Universal Basic Compute: A Solution to Economic Inequality