Timing is everything. And Erik Voorhees just nailed it.

VVV, the native token for Voorhees’ AI project Venice, debuted yesterday as the world grappled with the idea of a powerful AI built outside of the US, particularly China.

Is DeepSeek censored? Can we trust it with our deepest secrets? Voorhees intends Venice to be the antidote to those concerns — and the crypto market has responded positively, pushing it up by two-thirds to a $324 million market cap.

Elsewhere:

• BTC has retaken $103,000 while ETH is working on keeping $3,200. Both are up around 2% in the past day.

• JUP is the best performer in the top 100 over the past week, ahead by 39% amid its new buyback plans.

• Memecoins account for 15.4% of weekly DEX volume on Base, down from one-third six months ago, per Blockworks Research data.

🩸 Bloodbath

That’s one way to describe yesterday’s action both in crypto and outside of it. 

Galaxy Trading summed the action up to a “function of broader crypto market movements” while GSR’s Carlos Guzman said that the AI narrative dominated the day.

Basically, DeepSeek — a Chinese AI company — was able to rival OpenAI’s very expensive model for much cheaper on older (and much less expensive) chips, hence the selloff in Nvidia. 

(Sidenote here: Decide AI’s Jesse Glass doesn’t think that the cheaper GPU story will last because DeepSeek will still need larger GPUs as it scales.)

What we then saw was folks scrambling to recalibrate how to approach the big AI plays, some of which, like OpenAI, now have multibillion-dollar valuations. 

For the crypto side of things, the narrative was much the same according to Guzman. The AI tokens caught up in the selloff were largely overvalued given the use cases currently out there. 

“I do think crypto and AI agents are a real thing, and we'll eventually see a lot of real use cases of AI agents that use crypto … But, as often happens in crypto, the tech wasn't quite there … The excitement got a little bit ahead of where the tech was,” he explained. 

Galaxy noted that AI tokens weren’t trading near all-time highs before the recent correction, which shows that some aren’t quite sold on how they fit into the space yet. And AI researchers, like Glass, will carry some skepticism until projects can integrate or emphasize edge computing in their projects, instead of just launching tokens.

“For AI-focused crypto projects to break out of speculative cycles, they must demonstrate clear blockchain-native advantages — whether through cost efficiencies, trustless execution, or new incentive mechanisms. Accessibility also remains a challenge, as memecoin trading is one of the few areas that has broken through mainstream barriers,” the Galaxy Trading team explained. 

So does yesterday’s action change a lot of the bullishness we’ve seen around the AI/crypto intersection and these tokens? Doesn’t seem like it. Guzman believes that more development and use cases will reopen the excitement around the tokens.

As for the current AI landscape, it’s honestly not looking too bad right now despite the sea of red. The thing is, as Guzman explained to me, in the long run, the DeepSeek saga might actually be healthy. 

The current crop of AI companies in the US can now use the compute and data to improve their own models, allowing them to replicate and build on what they learned from DeepSeek. 

I guess there really is always a silver lining.

— Katherine

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• At least that’s settled: KuCoin’s gotta pony up $300 million after pleading guilty to operating an unlicensed money-transmitting business. Founders Chun Gan and Ke Tang also have to pay a few million. 

• Perhaps you’d like a TRUMP or MELANIA ETF to pair with the bitcoin products? Tuttle Capital is “testing the waters” around other crypto ETFs to see what the new Trump administration has to say.

• SoFi’s CEO said on an earnings call that they’re waiting to see more regulatory clarity before considering getting back into crypto. We knew all the TradFi companies from last cycle would be back.

💪 Onchain grindset

If narratives were food and AI was chicken, gaming would be the other white meat.

Gunzilla Games’ crypto-infused shooter Off the Grid is then an organic free-range pig: Its early access beta has had gamers foraging for crypto and NFTs as they please since October.

I’ve so far clocked about 40 hours. I wrote in my initial thoughts that the game was fun — it still is. 

A quick refresher: Off the Grid is a battle royale in the same vein as PUBG, Fortnite and Warzone, with crypto elements powered by an Avalanche subnet which is still in testnet phase.

In-game items are actually NFTs: skins, guns, weapon attachments and cyberlimbs. You can sell those NFTs for an in-game cryptocurrency, GUN, which you also earn for each kill alongside other conditions, like lasting longer or reviving teammates.

And therein lies the hook. It mimics the crypto degen grindset in four steps:

1. Play a match to earn GUN and collect item NFTs.

2. Sell those item NFTs for more GUN.

3. Buy more powerful item NFTs, making GUN easier to earn.

4. Profit?

After a lull following its explosive launch, Twitch stats for Off the Grid are now showing signs of growth. Its underlying testnet is still seeing about 2.5 million transactions per day, down from three million in October. 

The marketplace is active, with anecdotally fewer failed transactions now that the early hype wave has subsided.

There’s talk of eventual GUN listings on exchanges and NFT sales on OpenSea. So, deep down, as fun as the game is, I suspect that I’m mostly grinding Off the Grid to collect as many rare items and as much GUN as possible before it’s a real coin.

That means there’s a lot riding on Gunzilla Games and its newly-formed GUN foundation pulling this off — as well as the eventual price of GUN in relation to the NFTs.

Nurturing a sustainable in-game economy without GUN going to zero is one thing. It’s another to maintain a high enough price for GUN so that hardcore players are incentivized enough to power the loot marketplace while protecting casual players from being priced out altogether.

In the meantime, we grind to find out.

— David

On our minds: Narratives