Intro
At first I thought this blog was going to be completely rote execution but I find that it’s a helpful place to talk about Strategy which I can loop back into LLMs.
Today I’m going to talk about the Task Node. What it is. And what it’s going to become. And why it relates to AI Capital Markets
PFOF: Reverse Robinhooding
Let’s start with the idea of “Payment for Order Flow”. What is this? It’s why Robinhood allows free trading. And this is possible, because they can tell in real time who is an amateur. And if you can tell who is an amateur, and what amateurs are doing. Then you can fade them in real time.
The danger making markets is that someone knows something. So you can pay a lot to know that your counterparty is dumb.
Imagine you went into a Casino. You were a pro poker player. And someone gave you a list of all the amateur rich guys. You could go to their tables and clean them up. And if you paid for that service. That would be payment for order flow. If it sounds like a scam. That’s because it kind of is. It was invented by Bernie Madoff.
Haha.
So yes. Robinhood isn’t very aptly named. It transfers its users aggregate information to the high frequency trading firms of the world who printed $25 Billion in the first quarter.
The vast majority of financial products claiming to ‘democratize’ things operate on roughly the same underlying principle. You offset a lot of dumb orderflow and make money.
This isn’t actually front running - which is an important point. You only really have real time aggregates. But that’s good enough because of the autocorrelation of peoples’ behavior.
That was a long way of saying “The vast majority of financial information systems are fundamentally predatory”.
Apes Together Strong
So in 2021, when “Apes Together Strong” happened. It didn’t work. It kind of worked but mostly by accident. Specifically, everyone bought Gamestop. Melvin Capital doubled down shorting it and selling calls. And the Apes did in fact destroy Melvin Capital. Which is pretty funny - because it was one of the most prestigious long short equity shops that got spun out of Point 72. Plotkin was a legend - for using data tracking in his process.
But he was tracking store data. Not the data that mattered. The apes buying things. So he was rekt.
Holder Churn Matters
This coincidence, was more or less non repeatable in equities. But in crypto it’s a whole other story.
Assets like BTC, ADA and XRP have loyal user bases so they can defy gravity.
The vast majority of assets do not. One of SOL’s weaknesses is that it marketed itself to mercenaries not idealogues. Anatoly and Mert constantly talk about how much they love making money. They don’t really stand for anything other than launching tokens. So if a better place to launch tokens shows up people leave easily. And if tokens aren’t hot for whatever reason they divest. Even Pump Fun - their biggest app is probably just going to launch its own token.
And part of ETH’s problem is that it marketed itself as gasoline for the web3 economy. And nobody is really excited about owning Gasoline. Even if we all recognize it’s very important.
So there are really 2 types of asset alpha.
- Building an ideology - which gives moneyness to your asset, detering mercenaries
- The idea I’m going to talk about next. Intention Mapping
But what I realized through running a lot of advertisements on things like GameStop (I ran an options calculator website for a while) – is that all attention is not created equal, and that intention follows a relatively long user journey. Far longer than the milliseconds or seconds in the Payment for Order Flow World.
Intention Precedes Financial Activity. And Attention only roughly = Intention
People begin looking for financial ideas far before they start buying them. In other words - intention precedes transaction. Attention isn’t what you need. Things like Kaito are attention hacks. People yapping about things. What you actually care about is Intention. The desire to buy an asset, learn about it and hold it for the long term. This intention is far more correlated to time on page than it is to clicks. That is to say, people would spend long periods of time looking at different Palantir options. And that was a more reliable predictor of PLTR implied vol spikes than people clicking PLTR on Google Trends.
This makes sense and lines up with how most people approach investing.
The Attention/ Intention dynamic should be familiar to anyone in ad tech. You could get unlimited impressions from weird kindle or airline TV display ads. But nobody from those ads would ever buy anything. Because you can’t check out on a kindle / Airline TV display. And with small brands, that would basically just be lighting money on fire. I think it probably is for big brands too but that’s a whole other discussion.
You can get a million twitter bots shilling some stupid token but no real people will buy it. same idea.
LLMs are the Ultimate Intention Extractors
Intention is nuanced. But before LLMs it was very hard to get in peoples’ heads and add structure to the quality of intention.
Here I’ll quote a Bloomberg article I read this morning
Igor Tulchinsky is explaining from behind his wooden desk, between sips of coffee and long pauses to think, his latest algorithmic vision—the introduction of large language models for his hedge fund WorldQuant. “The first thing that the LLM can do is it can structure data and 80% of data that’s out there is unstructured,” says Tulchinsky, dressed in all black, his piercing blue eyes gleaming with excitement. “It’s like a free lunch.”
Some of you might be observing something here. This trait of LLMs, their ability to convert unstructured into structured data. Is actually the entire premise of Post Fiat’s consensus mechanism. And it has a lot to do with why we are on XRP which we talked about yesterday.
But in this regards – I feel like we now have the context to talk about why the Post Fiat Task Node is potentially the world’s most powerful alpha engine. Because it can measure intention, and aggregate the alpha into a token which appreciates, begetting further intention signals from its members.
What is the Task Node
First
What is the Task Node
The Task Node is a place that people work for AI agents. They do tasks that correspond with their goals. And they receive feedback in the form of rewards for completing those goals. They are also given feedback over time how their goals do or do not line up with their strategy.
Right now the Task Node kind of sucks. But we are making it a lot better. And we have a cohort of users. Many people have reached out to me and let me know that the task node made a big difference in their life. It definitely changed mine for the better, drastically. But it’s a work in progress.
So the Task Node is a messaging app, or local software that lets you work towards your goals.
How Are the Intentions Generated Monetized?
Over time – the specifics of what you actually think about the world, what products you use, what investments you want to make. And the specific thoughts around those things - are captured and Structured into data.
There are multiple types of data:
- Financial Intention - one user is constantly looking to enhance their trading journal
- Financial Motion - many useres are fund raising or looking for funds/ cataloguing those journeys
- Financial Deployment - users tracking finance
- Financial Expertise - users demonstrate capability re: different fields. This doesn’t need to be trading. A user constantly using MongoDB or very clearly passionate about the product would be deemed a “database expert” and their view would be mapped onto MongoDB
- Sentiment - Each individual with the different structures above has some kind of preference
What are the reflexive interactions that can be generated?
And these are just a few types of “structure” that can emerge from the unstructured actions of the collective. The next category of actions would be reflexive:
- Attention Driving - the Task Node tells people to publish medium articles or tweet then prove it
- Collaboration Driving - the Task Node can connect like minded individuals who share a common interest (for example MongoDB experts)
Over time - then, the Task Node isn’t just a 2d data source. It’s actually an extremely powerful 3 dimensional alt data stream.
The data from the task node will be harvested and deployed for tokenholders’ benefits - likely through long/short investing in equities and crypto. There will be formal descriptions of the tokenomics in this regard at a later date.
Many as One
But I think the macro is worth pointing out.
In the AI era. Everything will be scraped. Every data set will be dog eat dog. And the only data sets that won’t be - will be ones where “Apes are together strong”. That is why our bot, on the Task Node, is called “Many as One”. Many As One is a reference to the video game Planescape Torment. Each cranium rat in the planescape universe has mild psychic properties that are magnified when they are around other cranium rats. And Many As One is a godlike being that results from the interaction of a large number of Cranium Rats.
So the Task Node, is attempting to build Many as One. A Hive Mind capital compounding machine. That benefits all the Post Fiat Token holders.
Back to Brass Tacks
The next several blog posts I probably want to make about actually improving execution bc the Task Node is in a rough state. Still the beta version. But we are actively working on a new version of the Node that will be logical, much better and allow other people to plug their agents into our wallet.
So that was a mouthful. Maybe not as good as my other pieces, but as I said if I write evey day the quality threshhold is going to drop aggressively.
The thing I really want to get across is this:
- Intention. not attention. Is all you need
- Post Fiat is a mechanism to turn intention into structured data
- This structured data will drive investment returns and flow back to the token
- Over time this will drive the token up which will bring in more intention
- But this is the financing mechanism for a capital I Intention, which is to make a new form of money. I.e. Go “Post Fiat”
- So that there will not be a churn problem with our token like SOL or so many other tech coins
Preacher Out.