In a thought-provoking blog post titled “Moai,” Arthur Hayes, co-founder of the renowned crypto exchange BitMEX, delves into the potential impact of Artificial Intelligence (AI) on the future of economic organization and the role of Ethereum. Hayes argues that the rise of AI-driven Decentralized Autonomous Organizations (DAOs) will revolutionize the global economy and propel Ethereum to new heights.
The Critical Role Of DAOs In The AI Era
Hayes contends that the current economic progress and per capita wealth of global civilization can be attributed to the efficient self-organization of human societies. He emphasizes that traditional company structures, empowered and regulated by the state, have been the primary vehicles for economic development. However, he highlights the limitations of these structures when it comes to AI-driven entities.
He states, “An AI has no reason to follow any laws. It cannot be coerced by the state, and therefore, exchanges that trade tokens issued by AI-powered DAOs will likely become natural monopolies.”
Hayes lays out a compelling argument for why DAOs, relying on smart contracts executed on public blockchains like Ethereum, are the ideal organizational structure for AI-driven entities. These smart contracts provide transparency, immutability, and cryptographic verification of transactions and agreements. Consequently, DAOs can operate efficiently and securely without the need for third-party intermediaries or costly auditing processes.
He envisions a future where AI-powered DAOs will raise capital and trade their tokens on decentralized exchanges (DEXs) on Ethereum rather than traditional centralized exchanges. This will create truly global capital markets accessible to anyone with an internet connection. Hayes predicts that DEXs will become natural monopolies due to the advantages they offer in terms of trust, security, and ease of use.
The BitMEX founder presents a hypothetical example of “PoetAI,” an AI-powered DAO that aims to fundraise and produce original poetry for profit. He envisions how PoetAI could issue its tokens, called “POET,” through a smart contract with specific attributes, such as revenue sharing and voting mechanisms. Investors can confidently invest in PoetAI DAO knowing that its financial statements are continuously available on the public blockchain, eliminating the need for traditional auditors.
Moreover, Hayes explains that DAOs can raise capital by issuing debt, enabling economic time travel by borrowing from the future to stimulate present economic activity. The enforceability of contracts in DAOs can be facilitated through smart contracts on public blockchains, ensuring that investors are protected.
Hayes’ Bull Case For Ethereum
Hayes concludes, “Ethereum transactions will grow exponentially as DAOs proliferate. As a result, the price of ETH should skyrocket in anticipation of this AI DAO hypothesis is widely believed.”
He also suggests that identifying and investing in Ethereum-based governance tokens of DEXs facilitating AI-driven DAO trading will lead to significant profits. Furthermore, Ethereum middleware layers that enable visualization of AI DAO accounts will become essential for the smooth functioning of these capital markets.
While these ideas represent bold predictions about the future of AI and the role of Ethereum, Hayes presents a compelling case for the potential disruptive power of AI-driven DAOs. Hayes is one of the great thinkers of crypto space and his thesis is a narrative to watch.
At press time, the Ether (ETH) price was at $1,863, just below the mid-range resistance.