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More →Arthur Hayes Plans to Build Derivatives Around AI Compute
Arthur Hayes published a new essay on October 27 outlining futures and perpetual swaps tied to Flop Network’s proposed compute market, where AI agents would pay for computing power using FLOP. The plan aims to establish a reference price for compute that traders could use to build financial contracts around the resources AI systems consume. In a post on X, Hayes called his essay “The Trifecta” and <a href="https://x.com/CryptoHayes/status/2114857087004201325?s=20" rel="nofollow" target="_blank">described</a> it as a blueprint for entrepreneurs seeking to build derivatives for the AI agent economy. His central idea is that a liquid spot market for computing power could <a href="https://cryptohayes.substack.com/p/the-trifecta" rel="nofollow" target="_blank">provide</a> the pricing benchmark needed for futures and perpetual swaps. The proposed Flop Reference Compute Rate (FRCR) would be calculated hourly using a volume-weighted FLOP price per GigaFLOP of computing capacity. Quarterly futures would settle on the last Friday of March, June, September, and December, with contracts using US dollars for margin and profits. Hayes explained that the dollar-based structure would require a quanto derivative, a contract whose payout uses a different currency from its underlying asset. Because the compute market would be priced in FLOP while traders could prefer dollar-denominated returns, pricing the contract would require an adjustment for the relationship between the FRCR and the FLOP-to-dollar exchange rate. The proposed perpetual swap would use an eight-hour time-weighted average of the difference between its trading price and the FRCR to calculate funding payments. As with crypto perpetuals, traders on the expensive side of the contract would pay those on the cheaper side, depending on the premium. Market makers could recreate futures exposure by buying or supplying Flop Compute Units (FCUs), which represent reserved inference capacity for a specified AI model and delivery time. Hayes’s design also requires suppliers to post FLOP bonds, which they risk losing if they fail to deliver the promised computing work. The derivatives proposal depends on Flop Network first establishing a functioning spot market. Hayes argues that existing indexes tracking chip rental prices and individual AI token prices provide incomplete information because both are derivatives of the underlying cost of computation. Under his design, network blocks would record inference tasks, the computing work completed, and the fees paid to miners. Those receipts would help calculate the exchange rate between FLOP and computing capacity, giving buyers and suppliers a common reference. Hayes <a href="https://cryptopotato.com/arthur-hayes-called-ai-a-bubble-now-hes-launching-an-ai-project/" rel="nofollow" target="_blank">introduced</a> Flop Labs in August 2026, describing its proposed native token FLOP as “food for your AI agent.” In an August 27 explanation, the project <a href="ht
Zcash Co-founder Sean Bowe Proposes Ending ZCG Funding Stream, Citing $125M Treasury
Zcash (ZEC) co-founder Sean Bowe proposed on Monday to end the 8% block reward share paid to Zcash Community Grants (ZCG), saying the program already holds over $125 million. Bowe filed the change as a draft Zcash Improvement Proposal (ZIP) that would send that reward share to the Network Sustainability Mechanism (NSM) until the stream’s scheduled end. That mechanism withholds the coins from issuance and starts paying them back out as block rewards in February 2031. Under the draft, ZCG would keep its existing treasury and could still approve grants from it. “The program was never designed to handle this amount of funding,” Bowe wrote on X. It’s time to turn off the ZCG funding stream. ZCG has over $125M in funding, and will receive millions more before the spigot is turned off. The program was never designed to handle this amount of funding. — Sean Bowe (@ebfull) <a href="https://x.com/ebfull/status/2114911107718742451?ref_src=twsrc%5Etfw" rel="nofollow" target="_blank">October 27, 2026</a> Bowe’s figure comes from a dashboard linked on ZCG’s website. It listed 91,453 ZEC and $8.8 million in cash at an October 21 block. Approved grants still unpaid came to $2.4 million. Bowe valued the coins at $1,300 each to reach $125.3 million. The same dashboard counts another 110,049 ZEC due to ZCG before the stream ends on November 24, 2028. According to the draft ZIP, at the dashboard’s price of $1,241.61, those coins are worth $136.6 million, more than the program holds now; and, according to a Financial Privacy Foundation report, ZCG spent $1.53 million in the first quarter of 2026 <span>against that intake</span>. The stream adds 144 ZEC a day, which Bowe put at $68.3 million a year at the same coin price. Bowe’s draft landed alongside other proposals on the Zcash forum. For instance, Maxime Desalle’s proposal would also send ZCG’s remaining treasury to the NSM. Desalle cited a February coinholder vote in which 98.6% opposed Zcash Shielded Assets. ZCG approved another $455,000 for Shielded Assets work in June, he said. Turnout was 7.25% of circulating ZEC, per the Zcash Foundation. In June, ZCG approved $455,000 for a QEDIT test network covering Shielded Assets and other deferred features, its minutes show. Josh Swihart, founder and CEO of Zcash Open Development Lab (ZODL), said: “It’d be a mistake to kill only one part of the dev fund.” He added the 12% Coinholder-Controlled Fund, which accrues about 216 ZEC a day, should end too. Swihart’s company is the one former Electric Coin Company staff <a href="https://cryptopotato.com/zcash-governance-crisis-forces-full-exit-of-electric-coin-company-staff/" rel="nofollow" target="_blank">formed</a> after a governance dispute. Responding to Swihart’s plan, Bowe wrote that he would also personally back a separate proposal to strip ZCG’s existing treasury. Ian Miers, one of Zcash’s founding scientists, objected to the NSM as the destination, stating that the reserve ultimately pays miners and could
French asset management company: Economic data support a Fed rate hike, but it is expected to hold steady.
According to a report from BiJie.com, Kevin Thozet, a member of the investment committee at French asset management company Carmignac, said in a report that U.S. inflation remains clearly above the Federal Reserve's 2% target, and based on economic data alone, another Fed rate hike would not be an unreasonable choice. Therefore, he believes the reasons why the Fed may keep rates unchanged on Wednesday need to be found elsewhere. Thozet said financial conditions have already tightened, stock markets have shown volatility, and stress is beginning to appear in peripheral areas of the credit market. These factors provide a reason for the Fed to pause rate hikes, but this does not necessarily mean the Fed will shift to a more accommodative monetary policy stance.
JPMorgan: Gold still has more downside risk
According to CoinWorld news, the head of Asia interest rate and foreign exchange strategy at JPMorgan Private Bank said in an interview that after the recent round of selling, gold still faces downside risks, market liquidity is relatively thin, and there is still room for interest rates to rise. She pointed out that gold will only form a solid bottom when interest rates peak. The bank expects the Federal Reserve to raise rates in December and in the first quarter of 2027, pushing the 10-year U.S. Treasury yield from its current level slightly above 5% to a peak of 5.25% to 5.5% by mid-year. Rising yields will weaken the investment appeal of gold, a non-yielding asset. But she believes that once the Federal Reserve ends its tightening cycle, gold is expected to strengthen significantly later next year, as demand for it as a hedge against economic and policy risks persists over the long term.
AI market rally ends global credit spread widening
Coin World news, Cailian Press, October 28 — The recovery in AI trading is reviving risk appetite in credit markets, ending the longest stretch of widening spreads on global investment-grade bonds in 20 months. Whether this recovery can be sustained depends on AI companies' earnings reports and Federal Reserve policy, as investors weigh strong economic growth and attractive yields against the surge in borrowing to finance AI technology buildout. Hyperscale tech companies may increasingly rely on equity markets to raise funds for AI initiatives, a signal that is also positive for credit markets; Meta's $25 billion stock offering could reduce its need for debt financing.
PEPE price rose nearly 12% in 24 hours.
CoinWorld data: According to Crypto.News, the price of PEPE has risen nearly 12% over the past 24 hours and is currently around $0.0000048, mainly driven by news of a major position associated with TRON founder Justin Sun that has attracted traders. Over the past day, the meme coin's trading volume approached $476 million, with a market capitalization exceeding $2 billion. According to blockchain analytics firm Arkham Intelligence, Sun-related wallets hold about $51.25 million worth of PEPE, accounting for approximately 2.82% of its supply. In addition, on October 28, another whale deposited about 366.97 billion PEPE into Coinbase, worth approximately $1.64 million, potentially signaling an imminent sale.
On-chain financial brokerage network Spicenet completes a $5 million Series A funding round.
On-chain financial brokerage network spicenet announced the completion of a $5 million Series A funding round, led by dao5 with participation from babylon and astrarizon. Together with its previously raised $3 million seed round co-led by hack vc and magnus capital, its cumulative total funding has reached $8 million. The new capital will be used to launch the cross-venue margin account spice edge, issue the ecosystem token spice, and inject initial liquidity into products built for its network. spicenet is built on a dedicated L1 settlement layer supported by celestia, and its core products also include the cross-chain one-click interaction protocol spice flow, as well as spice stocks, a consumer-grade tokenized stock application currently in development.
The U.S. Department of Justice appeals the ban on Claude, while federal procurement departments negotiate a 40% discount agreement.
On October 26, the U.S. Department of Justice filed an appeal seeking to restore a federal-wide ban against Anthropic. The next day, the General Services Administration (GSA), which handles government procurement, announced an expansion of its partnership, allowing government agencies to use Claude at a 40% discount, paying only for actual usage with no minimum spending commitment. In February of this year, the GSA had publicly supported Trump's ban on Anthropic and removed Claude from the government procurement list. In March, a California court halted the full ban, and the GSA restored procurement eligibility in April. In August, the court further ruled that the government's broad ban was unlawful. Although the Department of Justice has appealed, the ruling does not automatically become invalid as a result. Anthropic disclosed that approximately 500 U.S. federal, state, and local government organizations currently use Claude, with usage by federal civilian agencies growing about 20-fold over the past year.
Yardeni: The AI bubble is deflating, but it hasn't burst yet.
CoinWorld news, analyst Ed Yardeni said the AI bubble is deflating but not bursting, due to increasingly strict financing scrutiny of CRWV and NBIS. He noted that the bond market will adjust.
Two dormant PEPE whales transferred 2.27 trillion PEPE, worth approximately $10.19 million.
BiJie Network data: Two dormant PEPE whales transferred 2.27 trillion PEPE tokens today, worth approximately $10.19 million at current prices.