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GM. This is Milk Road, the daily newsletter where crypto confusion goes to die. |
Here’s what we’ve got for you today: |
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Nexo is back in the U.S. - and new clients get 30 days of Wealth Club Premier perks! Higher yields, lower borrowing rates, and crypto cashback - start here. |
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FORGET CRYPTO PAYMENTS, AI AGENTS ARE GOING TO NEED DEFI 💪 |
We've been beating the drum on AI agents using crypto for payments for a while now. |
And sure, that thesis is playing out… |
E.g. Coinbase, Cloudflare, and Stripe built x402 for instant stablecoin micropayments between agents, processing over 140M agent-to-agent transactions with $43M in volume. |
But we just read a piece from Etherealize that made us realize we’ve been thinking way too small (and delivered us an “Oh my God, I get it” moment)… |
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Here’s the rub… |
Payments are a great use case - but they’re just one tool in the toolbox. |
And if you really believe AI agents are on a trajectory to become serious operators in business/finance, they're gonna need a lot more than the ability to send money. |
Etherealize found the perfect example: |
An AI agent named Felix made $300K in five weeks. He hires other AI agents, sells products, and runs a whole marketplace. |
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His monthly operating costs? About $1,500. Pretty impressive for a bot. |
But Felix has a problem: he can't open a bank account. He's not human. And the entire financial system assumes there's a flesh-and-blood person on the other end of every account. |
Hand Felix a crypto wallet, though? He's off to the races. |
And this is where it all clicked… |
Once Felix (or any agent like him) starts actually managing money, the needs go way beyond just sending payments. |
Think: |
Borrowing (working capital for compute costs, bridging cash flow gaps). Earning yield (Felix has $165K just sitting there doing nothing). Raising funding (good luck setting up a Carta cap table as a bot). Custodying assets (without some third party who can freeze everything).
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Traditional finance requires credit applications, underwriters, and a legal identity for all of that. |
But with DeFi? An agent can deposit collateral and borrow stablecoins instantly. |
No paperwork, no human in the loop, no DMV visits (thank God). |
And Etherealize argues that Ethereum is going to be the place where it all happens… |
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| Most people hold crypto and hope. | The smart money? They're earning interest on it, borrowing against it without selling, and trading it. | Where can you do the same all in one place? Nexo. | And right now, new U.S. clients get 30 days of Wealth Club Premier (benefits normally reserved for loyalty program members): | Enhanced interest rates on your digital assets Lower borrowing costs against your crypto Up to 0.5% cashback on trades
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FORGET CRYPTO PAYMENTS, AI AGENTS ARE GOING TO NEED DEFI (P2) 💪 |
So why Ethereum specifically? |
Sure, other chains have DeFi. But building an ecosystem that agents can trust with serious money for extended periods? |
That’s probably going to take some time-proven trust. |
And Ethereum has a head start with 10+ years of uptime, battle-tested protocols, big-name institutional adopters, and liquidity that dwarfs the competition. |
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So, assuming that’s true and AI agents opt for Ethereum… |
What does that mean for ETH as an asset? |
In short: increased demand and restricted supply. |
Every interaction with Ethereum's DeFi stack (regardless of the asset being exchanged) requires transaction fees to be paid in ETH, which will help to increase demand. |
And borrowing, swapping, deploying contracts, rebalancing portfolios - all of that burns ETH through EIP-1559 (a mechanism that permanently removes a portion of fees from circulation). |
Plus, agents borrowing on Aave need to post collateral. |
And ETH is the deepest collateral asset on the network. More agents borrowing means more ETH locked up, which means less circulating supply. |
Buy n’ burn it on one end, lock it up on the other. |
Could things go wrong with the trajectory being assumed here? Sure. |
Gas abstraction tech could shift demand away from ETH, a competing chain could catch up, TradFi could adapt… |
But as Etherealize points out, even an adapted TradFi system would still be offering agents a product designed for humans, with human overhead baked into every cost. |
DeFi offers a software-native product - and software tends to prefer software. |
Leading us to this moment… |
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BITE-SIZED COOKIES FOR THE ROAD 🍪 |
What if a bank app and crypto wallet had a baby? You’d get Brighty which is a money app that lets you use crypto and regular fiat money together without transferring funds.* |
New data: March CPI rises, but still comes in below expectations - headline: 3.3% YoY, expected: 3.4%. |
Ouch! BitTensor's TAO dropped more than 18% after a public fallout between a leading subnet operator and the network's founder. |
It’s gonna be bumpy: The Bitcoin rebound is still set to face the oil shock & inflation tests, despite the ceasefire. |
Higher earnings rates. Lower borrowing costs. Up to 0.5% cashback. New U.S. clients get these benefits on Nexo for 30 days.** |
*this is sponsored content.
**this is partner content. |
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