Part 2: Minds and Machines - Why TVL is the Reality TV of Web3 Metrics

Revenue, engagement, and AI-driven transparency are taking over the spotlight in blockchain’s next act.

Feb 05, 2025

I’ve condensed 90 minutes of nuanced discussions on Web3, agents, decentralized AI, and the future of autonomous entities into a handful of (hopefully digestible) paragraphs. This is just the beginning. You can watch, read, or listen to Part 1.

If you’re intrigued, you might also enjoy exploring When AIs Learn to Ape, The Rise of Machine Economies, or Decentralizing Consciousness. Stay updated in real-time by following Tom Serres on X.com or LinkedIn.

The Stream That Brought Minds and Machines Together

If you joined the Crypto Native: On-chain Live – Minds and Machines livestream, you were in good company. Over 3,500 viewers tuned in live, and the replay numbers continue to climb. This wasn’t just another discussion about decentralization; it was a roadmap for the future of blockchain and AI, featuring some of the sharpest minds in the space. The panel included Fabian Vogelsteller from LUKSO, Cameron Dennis from NEAR Protocol, Kyle Langham of DFINITY, and Wesley Donehue of Nautilus Asset Management, who brought his signature wit and sharp insights to the table.

For those who missed it, we’re picking up where Part 1 left off. While the first installment explored the game-changing intersection of blockchain and AI, cultural tokens, and the challenges of regulation, Part 2 digs into metrics, the evolution of identity, and how AI might finally bring blockchain into the mainstream. If you’re ready to see where Web3 is really heading, let’s dive in.

Why TVL is the Vanity Metric We Need to Leave Behind

If there was one thing the Minds and Machines panelists agreed on, it was that Total Value Locked, or TVL, has become the ultimate vanity metric in Web3. Cameron Dennis didn’t mince words, stating, “TVL is a vanity metric. It doesn’t show real engagement or ecosystem health.” He hit the nail on the head. TVL might grab attention in flashy dashboards and headlines, but it’s far from the gold standard we pretend it is.

Fabian Vogelsteller elaborated on how easy it is to inflate TVL numbers. By temporarily incentivizing liquidity, projects can make their metrics explode without actually delivering any value. He made it clear that metrics like revenue and real engagement are much harder to fake and far more meaningful. “Revenue tied directly to gas fees or cycles burned is an honest indicator of whether a protocol is truly being used,” Fabian explained.

This sparked a lively discussion among the panelists, who all agreed that TVL is little more than a superficial snapshot. One compared it to a movie trailer that looks incredible until you watch the full film and realize all the good parts were in the teaser. The panel emphasized that meaningful engagement, users actually interacting with the system, and revenue driven by real utility are the benchmarks that truly matter.

The discussion turned to how AI could help fix the problem of inflated metrics. Decentralized AI agents could serve as auditors, combing through on-chain activity to expose bot-driven interactions and phantom metrics. These agents could flag fake activity, highlight genuine user participation, and ultimately reveal which projects are delivering real value. It’s a future where transparency isn’t just a goal, it’s a built-in feature.

If you’re curious about how AI can transform Web3’s approach to analytics and metrics, check out Data Sovereignty in Web3: Balancing AI’s Data Needs with User Control. It dives into how AI can bring accountability and clarity to blockchain ecosystems, helping us leave vanity metrics behind for good.

Universal Profiles and the Evolution of Web3 Identity

One of the most compelling ideas to come out of the livestream was Fabian Vogelsteller’s vision of universal profiles. He described them as a kind of digital passport for Web3, integrating financial, social, and reputational layers into a single, interoperable profile. “We are still in the early stages of blockchain’s potential, but universal profiles could be the foundation for scalable ecosystems,” he explained.

Universal profiles solve a major pain point in Web3: fragmentation. Right now, users juggle multiple wallets, addresses, and accounts across different platforms. It’s messy, confusing, and a huge barrier to adoption. Universal profiles promise to simplify all that by creating a unified identity that works seamlessly across platforms. Fabian emphasized that these profiles could include metadata like proof of humanity or compliance, making them essential for building trust and accountability in decentralized ecosystems. “Metadata can transform blockchain accounts into dynamic tools for decentralized applications,” he added.

Kyle Langham expanded on this concept, pointing out that universal profiles could also host lightweight AI models tailored to specific use cases. These AI agents, combined with blockchain’s transparency and security, could create scalable solutions for developers while simplifying the user experience. It’s a vision of Web3 that feels less like a technical headache and more like the seamless experience users have been waiting for.

For those who want to explore how identity is evolving in Web3, I recommend reading The Foundations of Tokenized Real-World Assets. It offers a deep dive into how blockchain infrastructure is paving the way for innovation and scalability.

AI as the Key to Blockchain Accessibility

Blockchain’s biggest challenge has always been its steep learning curve. Between confusing interfaces, complex terminology, and unpredictable gas fees, the space is intimidating for newcomers. The panel spent significant time discussing how AI could make blockchain as intuitive as online shopping.

Cameron Dennis painted a picture of AI tools acting as user-friendly intermediaries between people and decentralized systems. “AI can simplify crypto interactions for average users by automating complex tasks and making blockchain more accessible,” he explained. Imagine an AI agent that handles your portfolio, executes transactions, and explains complex protocols in plain English. Suddenly, blockchain starts to feel a lot less daunting.

Kyle Langham took this idea further by describing a future where AI drives agent-to-agent commerce. These agents could handle everything from negotiating deals to managing supply chains and settling payments, all powered by stablecoins. “Agent-to-agent commerce will revolutionize decentralized trade,” Kyle said. The efficiency gains could be massive, reshaping entire industries and creating new possibilities for decentralized economies.

Fabian Vogelsteller closed the discussion by emphasizing the importance of inclusivity and accessibility. “Making blockchain systems accessible is critical for building trust,” he said. When systems are easy to use and open to everyone, they become more than just tools, they become the foundation for transformative change.

Why Metrics and Accessibility Will Shape Web3’s Future

As we wrapped up Part 2 of Minds and Machines, it was clear that the future of Web3 will be defined by the metrics we prioritize and the systems we build to make blockchain accessible. TVL might still make headlines, but it’s revenue, meaningful engagement, and tools like universal profiles and AI-driven agents that will drive lasting success.

If Part 1 explored the bold potential of decentralized AI and cultural tokens, Part 2 grounded those ideas in the practical realities of making blockchain work for everyone. From redefining how we measure success to creating systems that are easy to use, these are the steps that will determine whether Web3 truly goes mainstream.

If you missed Part 1, I highly recommend reading it to see how all the pieces fit together. And for more on these evolving conversations, visit Crypto Native, where we continue to break down the complexities of Web3 and help you stay ahead of the curve. The decentralized future is here, and it’s time to make sure you’re part of it.

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