Alchemy Is Building the Wallet Layer for Agentic Commerce You Can Trust

Host Justin Friedman interviews Blake Duncan, Alchemy’s Lead Agent Experience Engineer, about what happens when AI agents replace humans as the economic decision-maker. They start with fundamentals: What makes a smart wallet “smart” and how the x402 protocol will enable the pay-per-use Internet as agents increasingly outnumber human visitors.

Blake argues that mainstream adoption will accelerate when wallets and applications turn on smart features and improvements in user experience, such as sponsored gas fees that enable embedded wallets to work seamlessly on-chain. Justin interrogates the potential for micropayments to reinvent the economics of the Internet, where fraction-of-a-cent transactions will fund API calls and research tasks that could never be possible using legacy methods of payment.

Blake walks through Alchemy’s suite of solutions for agentic commerce: AgentCard (a payment card for agents); Agent Pay (enabling merchants to accept x402 payments); and Agent Wallet (a developer-facing embedded smart wallet). He articulates a vision for how smart wallets can enhance trust by integrating guardrails to properly scope what an agent is allowed to spend, and how that model can flex when an agent hits constraints on preset limits.

They close on the potential for convergence between two parallel paths to crypto adoption: the familiar lane of stablecoin-linked cards and other familiar user experiences; and the AI-native lane, which imagines a future where humans can depend on their agents to perform tasks beyond simply shopping on the Internet, while spending money efficiently and responsibly.

Learn More

Alchemy: How to Build Onchain Agents: Wallets, Payments, and Real-Time Data - https://www.alchemy.com/blog/how-to-build-onchain-agents

The Block: Alchemy and Privy roll out technical integration to smooth pain points of 'onchain finance' - https://www.theblock.co/news/business/2026-04-28-alchemy-and-privy-roll-out-technical-integration-to-smooth-pain-points-of-onchain-finance-399239

Connect with the Host & Guest

Justin Friedman: https://www.linkedin.com/in/justingfriedman/

Blake Duncan: https://www.linkedin.com/in/blake-c-duncan/

Follow Blake on X: @BlakeCDuncan https://x.com/BlakeCDuncan

Follow Alchemy on X: @Alchemy https://x.com/alchemy

About Crossing the Chasm

Crossing the Chasm is a special series with Rain focused on what it actually takes for stablecoins to become the default for everyday payments. Instead of rehashing benefits or highlighting pilots, the series breaks down the real work behind winning on Main Street, from upgrading payment rails and navigating regulation to embedding stablecoins into products people already use. Through conversations with builders and operators, we explore how tokenized money moves from early adoption to practical, widespread use across businesses and consumers.

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Transcript

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Justin Friedman 2:21

Welcome to Crossing the Casa, a series from This Week in FinTech where we look at the technologies moving payments beyond traditional rails. I'm your host, Justin Friedman. Today's guest is Blake Duncan, lead agent experience engineer at Alchemy, where he builds the wallet and payments infrastructure that enables AI agents to make stablecoin payments and execute on-chain transactions with scoped, replicable access. Blake has devoted his career to a particular problem: making wallets simple enough that people stop thinking about the mechanics, first for humans and now for machines. Today, we're talking about what happens when the customer checkout is an AI agent, how it pays, who's responsible when something goes wrong, and whether this might just be the fastest adoption curve that crypto has seen so far. Blake,

Introduction to Blake

Justin Friedman 3:12

welcome to Crossing the Chasm.

Blake Duncan 3:15

Yeah, thank you so much, Justin. I'm very excited to be here today and talk about all things agentec finance.

Justin Friedman 3:21

We are thrilled to have you. What is the overall through line of your work?

Blake Duncan 3:27

Yeah, um, when I got into the blockchain space, um, I think I was very lucky to join an organization like the Ethereum Foundation and be on a research team where we were looking into um advanced wallet functionality. And being on that team, I realized how much work there needed to be done to improve the UX of interacting in blockchain environments with wallets. Learned a lot at the Ethereum Foundation and from there kind of decided that I wanted that to be like the lane that I worked in prof professionally. And I have followed that ever since, all the way up until now, where I'm at Alchemy working on agent experience, but also one of the leading products that we're

The Wallet Mission

Blake Duncan 4:08

working on is the agent wallet.

Justin Friedman 4:10

Before agents even really enter the conversation, I think it's worth grounding things in what is a wallet itself.

Blake Duncan 4:17

Um so if you've ever used a blockchain to send funds, um, you've probably spun up a crypto wallet. And in doing so, you might get what we call a seed phrase, which is just 12 words that is essentially like a password to your wallet. And from that password, we can derive a what we say is a private, a public-private key pair, which is really just your password generating like an address for you to work on chain. That is literally all that a wallet is. Your wallet is just your your password and your address. And with that, a traditional wallet can do two things. It can move your funds on chain and it can interact with programs that live on the blockchain. And I think people, when I say programs on the blockchain, that is a little abstract. I think a good example for that could be I think a lot of people have heard about what's called a stable coin nowadays. And stable coins themselves are actually just a program on the blockchain. And that program contains a mapping of addresses to balances. Um, say if I wanted to update my stablecoin balance, an example could be USDC. Um, I would use my crypto wallet, which is just a password and address. I would use that password to instead or to trigger a transaction that updates my balance in that program that lives on the blockchain. Um that's all great and fine. Um, but that

What A Wallet Really Is

Blake Duncan 5:46

I think there is one like really big UX restraint there, and that is that um the wallet itself is not programmable. So you don't get experiences that people might be used to with traditional web products today. If you were to lose that password, any funds that you have in that wallet is gone. If you were to leak that password and someone steals your funds, there's no way to get it back. So when we talk about smart wallets, it's actually making the wallet itself programmable to add functionality that gives users experiences they might be used to with traditional products, such as um how you sign in to your wallet or trigger transactions. So instead of using that seed phrase or that private key to like sign a transaction on chain, you can actually use the face ID on your iPhone. Um, and that is actually like one of the things that we're like most excited about. Creating these um experiences that it doesn't feel like you're using this technology that is not familiar to you. Um so yeah, when I when I talk about smart wallets, it's really about adding those features that hopefully make the experience better for the end users.

Justin Friedman 6:59

So you've talked a little bit about essentially the software here, but what about the asset? Uh what do cryptocurrency and stable coins bring to the table that isn't possible with traditional fiat currency?

Blake Duncan 7:15

Yeah, I think when we're talking about the the currency itself, um so every blockchain has a what we call like a native currency to the blockchain. Um so uh I think some one blockchain or the two really big blockchains that I think a lot of people are familiar with are Bitcoin and Ethereum. Um if we're speaking about Ethereum, the native currency for Ethereum is Ether. And Ether is a currency that can be used, a lot of people use it as a store of value, but it actually has fundamental value as part of the blockchain. Um it's what you use to pay for interactions on the chain. So when you pay for fees, um like nothing you you nothing you do on the blockchain is free. You need to pay to have your transactions processed,

Smart Wallets And Better UX

Blake Duncan 8:00

and that is done in the native currency of Ether. Um as uh a lot of people that have followed the space know that these prices can be pretty volatile. Um they have ups and downs with like the markets, and um, that's where I think stable coins have gotten a lot of adoption. Um, it kind of gives you the more uh level playing field when it comes to currencies on the blockchain. Uh stable coins are just tokens that exist on-chain that are backed by um traditional fiat. So that's why a lot of the ones that we use today, um, like I think one of the biggest ones that a lot of people um might be familiar with is USDC. Um, and that is a stablecoin that is backed by the US dollar uh that was developed by a company called Circle. Um but they enable more of like the instant finality transactions without the volatility that you might get from a native currency on a blockchain.

Justin Friedman 8:57

Great. Yeah, I think our listeners are pretty familiar with stable coins and USDC in particular. Um so thanks for that explanation. So over time, I as I understand it, Alchemy's approach to wallets has shifted from trying to own the full embedded experience to now partnering with specialists on things like the signing layer and focusing your energy on building the API layer around it. Do I have that right?

Blake Duncan 9:22

Yeah, I would say so. Alchemy got into the wallet space and specifically the smart wallet space three to four years ago. And in doing so, um, the smart wallet space was like a very nascent technology, um, still really kind of like in a research phase. Um, so there wasn't a lot of groundwork that had already been laid. Um so Alchemy had to really build from the ground up. And that is why um Alchemy started with a full stack solution to smart contract wallets, and we did so through what we call an embedded wallet product. Um and embedded wallet specifically means that we allow applications to um basically attach a wallet inside of their product. So you can go to an application, sign in with Google, and behind the scenes, your user gets a smart contract wallet. And that's what we say when it's an embedded wallet. That's different than using a like standalone wallet, like people might have heard of MetaMask, where that lives outside of the application or a wallet that lives in your phone that lives outside the application. Um so we built the full stack around embedded smart contract wallets, all the way from the contracts that live on chain to the signing layer. Um we were wrapping up, um, we were actually using a company called Turnkey to help out with our signing layer there. And then we built all the interfaces on top of that for applications to interact with um these wallets. And over time, that the space has matured a lot. Um, there's a lot more players in the space, and that has allowed us to actually take a step back and focus on what our um specialty is at Alchemy, which we are an infrastructure company. And so now we focus on what we call our wallet APIs, which works in tandem with companies that still have that signing layer. So, like the wallet layer. We can actually use those signers, um, a company like Privy, for example, where you could sign into

Why Stablecoins Matter On-Chain

Blake Duncan 11:31

an application, still get a wallet inside your application. That wallet can use our APIs to upgrade to a smart wallet, get all of the advanced features that we're talking about, and we also will process transactions and stick in more of that infrastructure lane, uh, which is our bread and butter at Alchemy.

Justin Friedman 11:48

And you count on a partner like Privy to essentially be the front end. So despite years of progress, mainstream adoption doesn't seem to have arrived quite yet. So is this a technology problem that is yet to be solved? Is it a package packaging problem? Is it a user trust issue? Is it just that the commercial marketplace hasn't quite figured out the value prop of this new technology? Where do you need to go in terms of um increasing the usage of smart wallets?

Blake Duncan 12:27

Yeah, I think that is a really good question. And there's a lot of angles that I could attack that. Um I think uh my high-level opinion on what the issue is is it is kind of becoming a packaging problem. I think we have a lot of the technology there in order to do what we would want with a smart wallet to provide the experiences that um a user would expect. Um, but I don't think we have gotten to the place where everybody hasn't adopted those standards and packaged it in a way that um really it's transferable across applications, across wallets. Uh, a good example of this is um wallets and applications need to enable smart wallet functionalities in tandem. Um so let's say if you want to support gas sponsorship, um, which is we were talking about earlier, um gas is the fees that you pay in the native currency on a blockchain. Um an application can actually sponsor your gas for you, which is a great UX improvement for applications that work on chain because you don't have to expect your user to have the native currency in their wallet. Um but in order to sponsor the gas for your customers, they need to be using a wallet that supports gas sponsorship. So um both the wallet and the apps need to work in tandem. Um and I think we are getting to that space. There's a lot of standards right now that are uh making it easier for wallets and apps to agree on how to play in this space. Um but yeah, there is a little bit of nuance there because there are some technical hurdles that we're still working through. Uh there's a standard called frame transactions, which the um EVM ecosystem, which is the Ethereum ecosystem, is trying to push through to standardize smart contract wall functionalities. But at the core level, I do think we have the technology that we want right now. It's just getting the buy-in and the packaging from all of the players in the space.

Justin Friedman 14:29

This issue of sponsored gas is interesting to me because I imagine a pretty mundane consumer transaction of walking up to the checkout counter at a bodega and presenting my credit card, and the cashier says, Do you have a dollar to spend to you know cover the cost of your credit card transaction? And I have to fish out a dollar bill from my wallet, and I'm like, I'm here to pay with a credit card, but now I have to give you a dollar bill on top of that. And so obviously that's a ridiculous example, and and nobody's doing that. We're used to just presenting our credit cards and it simply works. And so I think what you're illustrating is the smart wallet version of that.

Blake Duncan 15:16

Yeah, I mean, I think that is actually a great example of the friction that apps that have tried to build on blockchains have had to go through. Um, and that is why gas sponsorship is by far the most adopted smart wallet feature. Um apps are willing to pay for the gas of their users so that you don't have to have the extra expectation that your user has some other currency in their wallet when they come to use your product.

Justin Friedman 15:47

Okay, let's introduce a concept as we start to get into uh the area of identic payment. What is X402 and how might it enable what some people call the pay-per-use internet?

Blake Duncan 16:02

Yeah, of course. Um X402 is a protocol that I'm actually very excited about. Um to yeah, I think to give a primer that people might click with. Um so let's take a step back and let's say that you're using the internet today. Um, and you go to some website and it can't find a resource that it's looking for. You people might be familiar with a 404 error code. Um, and that's essentially

Alchemy’s Wallet Strategy Shift

Blake Duncan 16:31

that website letting the browser and the user know that whatever you're looking for it can't find. That's an aircode that was built into the internet protocol from the beginning. And the people that were designing the internet protocol also designed for a payment needed code, which was 402. Um, however, ever since the advent of the internet, we haven't really had the technology to settle transactions over the internet in that way. Um, that's why we've come to a world where we're familiar with like subscriptions. Um, you've got companies like Stripe that facilitate credit card checkouts. But actually, like in the internet protocol, you can't really settle a transaction. And Coinbase came out with this um protocol called X402, which is trying to revamp that 402 aircode and start it back up again. And um essentially what happens here is for merchants that have enabled the X402 protocol, if you go to an API or a resource and it's a paid resource, um, they can return this air code. And that's just basically letting you know the information that's needed to pay for that resource. And an agent that's requesting these API endpoints or these products can use a crypto wallet to sign an authorization to pay for that resource with the funds in their wallet. So that's at a high level what X402 is. It's allowing a um a native payment over the internet protocol.

Justin Friedman 18:05

So much of the internet is driven by either free content that's just available to the general public, which is often uh driven by advertising revenue. And when there's not advertising revenue, sometimes things get put behind a paywall, and you talked about subscription access. So does X402 allow for a complete paradigm shift to how information, content, features, services are delivered over the internet?

Blake Duncan 18:37

Yeah, that is a great point, and I think it does allow for a paradigm shift. And I think we actually are going to need a paradigm shift. Um I think advertisements have allowed for internet native products to obviously get revenue and grow and be profitable. But going forward, as I think we actually recently might have crossed uh the threshold where more internet traffic comes from AI agents than it does from humans. And as you might expect, AI agents actually don't care about advertisements. Um that revenue stream for internet products and software um might not be as sustainable in the future as it is today.

Justin Friedman 19:19

So, what does that mean for the internet economy of the future?

Blake Duncan 19:25

Yeah, I think it's gonna mean that a lot of services and products that make their business online, they're gonna have to rethink how they price their products. And it might be on a more pay-for-play um basis. So things like X402 will enable these AI agents to pay for the information that they need in real time. But I think it's it's also an exciting space for merchants and products to actually adopt these technologies and adopt uh protocols like X402 and end up accepting these type of payments.

Justin Friedman 19:59

Interesting. So it seems to me that none of this can work on traditional payment rails. They're just not set up to support the decision structure of an agent. And so we have cryptocurrency and we have stable coins entering the mix. I'm

Smart Wallet Adoption And Packaging

Justin Friedman 20:21

really interested in the concept of micropayments and the economics of micropayments. Can you explain what those what what is that concept and what does it enable that we don't see on the internet yet today?

Blake Duncan 20:34

Yeah, of course. Um so I think the issue that micropayments is trying to address is that um as you start to offer more fine-grained access to resources, um, you might actually try to price things differently than you traditionally have. Where, say, for example, if I go to some service online and I buy like a monthly subscription and I pay $20 a month, um, a merchant is probably paying the 3% credit card processing fee for that. Um but when it comes to how AI agents are gonna work um across the internet, they might not be interested in a monthly subscription. They actually just they they were given a task and they need the information, the resources, the tools to execute that task now. And that's kind of where the micropayments paradigm comes in, where you want to allow these agents to pay exactly for the resources that for that that they need at that moment. And this is where stable coins come in. Um, because you can get to um a level of granularity for these payments that you can't really get to with traditional payments. Uh, for example, the stablecoin USDC, uh, it's valid up to six decimal places. So you can, I'm not saying that a merchant would actually do this, but you can sell it. That's pretty micro. Yeah, yeah. You could sell an API endpoint for like one API request for 0.00001 cents. Um so it's it's enabling this new type of ecosystem where you can have subset transactions and you could pay for more real-time access to things.

Justin Friedman 22:18

I mean, the the most interesting thing to me is that with credit card interchange fees, there's generally a fixed portion and then there's a variable portion. And that fixed portion is enough to sort of justify processing the transaction at all. And that itself is really a barrier to micropayments. So being able to go out six decimal places really does change the game. Can you um give any other examples of what micropayments might look like and and what are the use cases?

Blake Duncan 22:54

Yeah, exactly. Um so I actually did a demo last week um for the company using our agent wallet, where I think I was using Codex, and I gave it a wallet and I told it to use X402 to um pay for some resources. I wanted to do uh a little analysis of um the state of the Bitcoin market. Um and it went out and I I didn't ask for it to do anything crazy. I said just give me some some data on it. And it paid four cents for an aggregate of a bunch of API calls to give me information. And it came back with a pretty um interesting. I mean, the Bitcoin market had been kind of flat at the time, so it was basically just explaining why there. There's not much movement going on. But that's the type of thing where maybe the service that it used to get that information, historically, I would need a subscription to get that information. It was able to go out and pay one cent for one of those API calls. And it got the information it needed. And it came back to me and it distilled it down in a very uh coherent and readable format for me. So I think that's like a very practical example.

Justin Friedman 24:02

So, Blake, tell us about Alchemy's current product offerings and how you're attacking the payment paradigm that we have today, and while still imagining what could be

Gas Sponsorship As The Breakthrough

Justin Friedman 24:15

in the future.

Blake Duncan 24:17

Yeah, the way that we're thinking about it at Alchemy, we've we have like three products right now that are attacking this space. Um the first is our agent card, um, which is really trying to meet the market where it is and where users are and traditional payment rails are. So that is actually giving AI agents a credit card. Um so with this product, you can really do a lot of the traditional payments that you'd expect today. You could go like have a checkout flow somewhere and your agent has access to your credit card. Um so that is first um when it comes to how we're thinking about this, is just meeting our customers and the market where it is today and how traditional payment works. Um, we have another product called um agent pay. So this is actually going back to what we were talking about earlier with X402. Um it's really cool from like the agent side, but the agent can't do anything with X402 if there are no merchants that accept X402 payments. So we have a product called Agent Pay, which will set up um the API proxy in front of your products so that uh you can accept these X402 um payments. And so that's kind of like a transitional phase where we're trying to get more people and more uh merchants to accept this type of um payment processing. And then on the more experimental side, we have our agent wallet, which is what I've been working on. And this is more targeted, excuse me, it's more targeted towards our developers. And we're really trying to give uh AI agents access to a crypto wallet, a smart crypto wallet that has all of the information it needs to act on-chain. And from there, we're trying to learn how people are using these wallets on-chain. Um, so this one is a little bit more forward looking. Um, we this is where you would expect maybe as more merchants come online, they could use these X402 payments, but also they can just interact natively with the blockchain using a crypto wallet. Um, so that's kind of like the three angles that we're looking at this right now. So let's talk about guardrails.

Justin Friedman 26:32

Giving an agent permission to spend on its own raises questions for me. What happens when it overspends or gets tricked into spending money when something should have been free or is mispriced? How is Alchemy building in permissions and controls that enable the agent to do its job without slowing down the user too much, but also requires permission settings to be integrated?

Blake Duncan 27:04

Yeah, that's a really good question. And the way that we have been thinking about it is on the wallet side. Um, because that's really our specialty. It is in in the blockchain space and making sure that the wallet is locked down how um you would expect it to, so that an agent doesn't misuse your

X402 And Native Internet Payments

Blake Duncan 27:23

funds or um your savings. So the there's two main ways that we're thinking about this when it comes to wallets. Um it is static permissions that you give to a session for an agent. So a good example of this might be I have a research agent that I want to do daily research into a specific topic every day for the next week. Um I want to give it a budget of $10 a day. Um, that is a very tangible static permission that I can give it at the start of a session and say, like, you're not allowed to spend more than $10 a day. Go do whatever you want within those guardrails. Um, but if you try to go above that limit, you will be blocked. We won't allow you to use the wallet beyond that. Um so that is the first, and that's more for if you kind of know the guardrails that you want your agent to act in, you could set those permissions. Um we talk about on chain too, you can get really fine-grained here. You could set like specific contracts interactions that you allow the agent to do. Um but that is that is probably the most obvious thing to do for when it comes to guardrails. Uh, the other way that we're looking at this is also allowing an agent to ask for permission. So you could have some of these guardrails in place, but say you have a more abstract task that you want your agent to do, which I think is something that as these agents continue to get smarter and smarter, they're gonna continue taking these workloads off of humans and do things where they need to figure out what actually the next step is. Um, and you don't know all of the guardrails at the start of that task. So we um are also looking into how you lock down that and allow an agent to ask for permission, and then the agent can take action based on whether or not you grant or revoke the permission for that action.

Justin Friedman 29:52

Is one benefit of giving the agent as much autonomy as possible that they actually optimize the spend, if you give your agent a strict budget of, say, $10, then in your research, are you finding that the agent actually spends it more efficiently than a human being would?

Blake Duncan 30:11

I think that is still a developing topic. And I think it's changing week by week as these agents get smarter and smarter. Um, I would like to think that as they do get smarter, they're gonna optimize um for your own savings. I think a good example though is the research task that I gave an agent for our demo last week uh to look into the Bitcoin market. I I gave it a dollar and I said, like I didn't want it to do anything crazy. I was like, here's one USDC, go find the information that you need to like give me a coherent explanation of what's going on in the Bitcoin market. And it spent four cents. And I thought it was like a decent analysis that it gave me. Um so I do think that as these agents continue to get smarter, we're gonna be able to give a little bit more trust and leniency on how it acts on your behalf. Um but I still think like it's it's really good to set these guardrails.

Justin Friedman 31:07

So you you don't necessarily have to tell your agent, here's your allowance, don't spend it all in one place. Exactly. So in terms of dealing with the prospect that an agent might make a payment in error, whether that's overspending due to compromised instructions or just making a poor decision that a human being never would have made. In thinking about how to govern that decision tree, what are your customers demanding? What is it that they want to build into the wallets that they're deploying to enable their users to exercise that kind of control?

Blake Duncan 31:48

Yeah, I think that goes back to the guardrails. Um, because at Alchemy, building these wallets, what we are responsible for is whether or not we lock down the permissioning and the security of the wallet. Um I think our customers are working um on their own to fine-tune their agents, whether or not that be skills um or some other method that they're using to kind of train their LLMs to work within the guardrails that they want. But at Alchemy, we really want to make sure that we're offering a product that um is secure to give agents. I think like really the big thing that I want to make sure that we don't do with LLMs is give agents when we're talking about blockchain wallets or crypto wallets, is give them your raw seed phrase, um, which is what we were talking about earlier, which is the um basically password to your account. Um and the reason for that is LLMs can be unpredictable. Um, so that's why our architecture for our agent wallet does not actually expose any of that data to the LLMs. And then on top of that, we can guard what transactions um you actually allow your agent to take on your behalf. Um But I think so from the main standpoint, the customers are asking for us to provide a wallet product that gives them the fine-grained tuning that they want to give their agent.

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Justin Friedman 33:36

In past years, there was a lot of enthusiasm about consumers engaging in daily transactions using crypto. For example, you know, walking into a coffee shop and approaching the counter, ordering your latte, and then presenting a QR code or um an NFC device that made a Bitcoin payment for that cup of coffee. You're spending Bitcoin, the coffee shop is accepting Bitcoin as payment, and you have to use bespoke technology to make that happen. Hasn't really taken off. And so what we are seeing today is some really exciting use cases like stablecoin linked cards that allow the user to spend USDC and any merchant that accepts a Visa or MasterCard payment. And they don't even have to consider the blockchain technology underlying it. So what is your take on that easy to use crypto that you don't even know is their model for mainstream adoption?

Blake Duncan 34:45

Yeah. Um as the technology has continued to develop, I think traditional finance has realized that this technology actually does things better than the traditional finance system does. Um, it can remove a lot of intermediaries when it comes to settling payments. You could do cross-border payments, you can have instant finality. And so I think that's why a lot of like actual big institutions right now are at least dabbling in the space or trying to do settlement. That's why you have stable coin-backed cards. Um, institutions are able to offer experiences to customers that they're already used to and they already do with crypto rails behind the scenes. Um, it's actually pretty funny. Like, I think in the industry, we have a term called DeFi mullet, which is uh business in the front, which is traditional financial products in the front, but powered by crypto rails. And at the end of the

Micropayments Economics With Stablecoins

Blake Duncan 35:53

day, um, the customer might not even know that they're using these crypto products. Um, but they could get some added benefits with like um you can get uh stablecoin fees or um perks from using your stable coins. And I think that that is like the main driver of adoption right now, which is actually really exciting because it's a shift in paradigm where these institutions are using these rails. And the hope is that as the actual user experience for um consumers using crypto continues to improve, which is this kind of ties back to what we've been talking about wallets and making it easier and more um understandable for these end users. Hopefully they can actually start tying in more directly to crypto rails as well. Um, but that's been a little bit of a slow adoption.

Justin Friedman 36:44

My philosophy is that you have to do something to attract mainstream users to this technology, either rewarding them for trying something new and maybe giving up their credit card points that they would earn by using a traditional credit card uh that offers airline miles or other kinds of travel rewards, right? Or you have to add features, functionality, you know, smart wallet features that actually make the payment mechanism more powerful and more useful. So when you think about these familiar user experiences, is that a permanent architecture, or is that something that we need to kind of hew to as a transitional thing? And then it serves as a stepping stone to adopting something more crypto native in the future.

Blake Duncan 37:35

I think it is um some of the things that we we speak about when we talk about these user experiences. Um I think traditional web products have been optimizing these user experiences for decades now. And I think it is more of like blockchain technology catching up to those experiences. So when I talk about like um using face ID on your iPhone, um, I think that that is a great way for you to sign into a crypto wallet and use that. Um so I do think there is a little bit that the crypto space needs to do to meet customers where they are or meet end users where they are. Um and I think like the lane that I've been working in when it comes to the agentic space, I think it is it's interesting because some of those hurdles that you have for UX for end users, uh you don't necessarily have for agents. And that's where I get excited about like the X402, so agentic payments or agent-to-agent commerce. These are lanes that we could see much faster growth in adoption than maybe we could see today as we get these slow UX gains for our end users.

Justin Friedman 38:43

So adoption that's driven by AI agents themselves, not by convincing humans to trust Crypto UX or actually, you know, try some new payment method, is a really exciting pathway. So can you talk to me about how you see AI agents replacing the work that is today done by humans in executing payments and how will that shift our entire interaction with the internet and and just you know buying and consuming?

Blake Duncan 39:23

Yeah, for sure. Um I think as a uh a software engineer, I would definitely consider myself a power user of AI agents. Um today. Um AI writes nearly 100% of the code that I deploy to production. Um I still review it and make sure everything looks good, but I am not um typing out code anymore. Um and I think that as the AI continues to improve, there are going to be more and more industries that are trusting um AI to do more and more of their work. And when it comes to that work, uh you don't always want to have to have everything set up for your AI agent from the get-go. And so that's where I see the adoption curve for um agentic finance really um maybe trying to

Real Micropayments Demo With Agents

Blake Duncan 40:17

hit that adoption or hit that level of growth that we'd hope to see is when people start to trust their agent to do more work on their behalf. Um and then the agent can figure out what services it needs. Um I mean, today, like you can have say if you give your agent um a task to do some complex analysis of data. Uh an agent could uh pay for compute. Um, it could pay AWS to spin up an EC2 instance to like run this like complex computation and give you a deep analysis. I think that's the type of um transition that we will see as more industries and more people start to become power users of uh these agentic flows.

Justin Friedman 41:03

So, in terms of the AI native path to adoption, I think that there may be some exciting personal finance use cases. You you actually told me a story about taking $5 of USDC and asking your agent to invest it for you. So um walk us through how you demoed that.

Blake Duncan 41:27

Yeah, so this was one of the first demos that I did when we were developing the agent wallet. Um uh the crypto space can be pretty complex or convoluted to use. So if you're not familiar with it, um when it comes to there's all kinds of chains, there's all kinds of protocols, like DeFi has all these different protocols to earn yield. Um so one of the first tasks that I had my AI do when we got the agent wallet working was I gave it five USDC on one blockchain. Um, and then I asked it to look at the yield that it could earn across all of uh, I think I asked it to check like five different blockchains and find the best yield and then bridge those funds to that chain and deposit it into that pool to get me that yield. Um this is like a flow that traditionally uh either you you know what you're doing when you're moving these funds around, um, or it takes you a while to figure out and and set up your workflow to get it done. Uh this was like very exciting for me and a big unlock when I literally just gave an agent some funds and said, go figure it out. Um so that is like a use case that I am personally very excited about, and that I think AI agents are going to start doing more when it comes to personal finances and not just like on-chain finances.

Justin Friedman 42:56

So we've

Alchemy Agent Card Pay Wallet

Justin Friedman 42:57

talked about the familiar path to adoption and the more AI native path. Do you see these liens converging or will they continue in parallel? One maybe serving human spenders and one that is more equipped for agentic spenders.

Blake Duncan 43:17

I do think that they are going to eventually converge. Um, I think as people get more comfortable with these agentic flows, they're gonna want to use them more often. And I don't think you're gonna want to have to ask customers to make the trade-off between a traditional web application and giving your agent the ability to go do things on your behalf. Um, so I do see a world where products are gonna start needing to basically like have front ends that are familiar to their customers, but they might be using agentic flows behind the scenes. I think how that manifests itself is still to be seen, whether or not products that we gonna we use are gonna have um agents that they spin up on behalf of their customers, or maybe the products that you're familiar with today, you bring a personalized agent to those products, and that your agent can work with that product on your behalf. So I think they are going to join together at some point, and I think that is actually good for the end user because it enables um, it takes like a burden off of customers and allows um the these intelligent, autonomous uh tools to figure things out for you.

Justin Friedman 44:31

So much of our audience is fintech native, but maybe not necessarily crypto native. And these are often two different communities. People think about payment rails and compliance, not necessarily gas fees and smart contracts. So for a listener who hasn't been paying too much attention to the potential for agentic payments and commerce, what is the one thing that they should understand right now that's real world happening today?

Blake Duncan 45:03

Yeah, I think the the big distinction that I want to make for people that aren't following closely is when we talk about agentic commerce, we're not just talking about like a shopping bot. We're not just talking about giving ChatGPT the ability to go uh create your target um shopping cart and then check out on your behalf. We are actually talking about giving agents tasks to do and then figuring out how to execute those tasks. And if they need additional resources, API calls, additional tools to complete those tasks, we want them to have the ability to pay for those resources on your behalf. Um so I think this is all happening and it's exciting. I think it is worth being transparent that we are probably earlier in the adoption curve. Um, but uh yeah, it's something that I personally am going to be following closely and working in, and I'm very excited about.

Justin Friedman 46:03

The the question I have is even if the technology is a To spend money in micropayments, you know, uh avoiding the subscription need, those sorts of things. Are merchants on the other side of the transaction ready to sell you things in those micropayments? So my example is sometimes I'm trying to read a news article that's behind a paywall. And my option is either, you know, I've used up my free article for the month, and so I need to take on a subscription or just do without. How far away are we from seeing a real transition where I could actually do that pay-per-view?

Blake Duncan 46:48

Yeah, I think this is another um example where the the technology is there. Um we just need to get the word out and try to get more adoption. Um because it's one thing to get the the customers and the agents the ability to do it, but the merchants, merchants also need to um uh be willing to experiment with this new form of payment. And you might like be surprised as agents start searching the internet and being the driving factor of traffic. Um, maybe your business model changes changes for the better by charging instead of having a paywall to get

Guardrails Budgets And Permissions

Blake Duncan 47:25

a subscription, you have a paywall to pay for that specific article. Um and an agent might want that information and pay for it. Um yeah, so it's something that I think we are working on getting the the word out on and trying to get merchants on onboarded. And I would encourage anybody to check out like we do have a product that helps merchants with this called Agent Pay. Um and so the technology is there, we just need to bring more people on board.

Justin Friedman 47:57

If you think ahead three years from now, what do you most want to be true in e-commerce and this emerging agent economy?

Blake Duncan 48:07

I yeah, I think that's a good question and an exciting question. Um I think about it from the crypto and the AI lane. Um, and I it is really around the guardrails. Um, I want there to be enough guardrails around first AI so that we can trust these very smart and intelligent tools to work in the best interest of their users. Um and I also want when we have that trust, to have the trust to give these AI agents the ability to make payments on your behalf without having to worry about it blowing your life savings. Um so yeah, I see a world where everybody has their AI agent, everybody trusts their AI agent to work in their best interests, and those AI agents can make the necessary payments that they want for their users.

Justin Friedman 49:06

Blake, thanks for walking us through all of this from Wallet Fundamentals to X402 to where this is all headed. Where should people turn to follow your work or Alchemies?

Blake Duncan 49:20

Yeah, I I think I'm I'm very active on X right now. Um you could find me at Blake C. Duncan. It's my full name in my middle initial. Um and then I would encourage you to really reach out to anybody at Alchemy if you ever have any questions or visit our website and check out our dashboard, sign up, um, and let us know what you think of our products.

Justin Friedman 49:44

That's it for this episode of Crossing the Chasm. Thanks again to Blake Duncan and Alchemy. If you enjoyed this conversation, please follow the show, leave a review, comment, like, and we'll see you next time.