By TechFlow
Crypto’s AI sector saw a sharp move on the day, with privacy-inference project Venice (VVV) rising nearly 40%. The token briefly traded above $25, setting a fresh all-time high.
The rally also put fresh attention on Bankless co-founder David Hoffman’s portfolio shift. The report said Hoffman sold the ETH he had held for six years at the end of May and rotated into LIT, ZEC, NEAR, HYPE and VVV. Among that basket, VVV had previously been the weakest performer. After this move, the portfolio had effectively completed its run of gains across all positions.
Fundamentals helped, but the narrative did the heavy lifting
Some traders who follow on-chain data tied the breakout to Venice’s underlying metrics. The project set a new record in September with $390,000 in token buybacks and burns, according to the report. That gave the token a fundamental base, but the speed of the move suggested something else was at work as well.
On social media, the stronger explanation was a renewed “Private AI” trade. Privacy AI is not a new concept, and for long stretches it has been treated as a niche, technical idea without an obvious trigger for wider market demand. That changes when a negative event puts data privacy back at the center of attention. Once that happens, liquidity and attention can move quickly toward tokens linked to the theme.
In this case, the immediate spark was an OpenAI-related academic controversy that surfaced over the weekend.
An academic dispute put AI privacy back in focus
The report centers the episode on two mathematicians, Tristan Buckmaster and Levent Alpöge. Over the past year, they had been working on a highly technical proof involving fluid equations. During that process, they fed a large amount of unpublished draft material into OpenAI’s coding tool, Codex.
The key turn came in early September. According to the report, after Tristan contacted OpenAI privately to clarify the research, OpenAI researchers said in a call a few days later that an internal model had also produced a proof running more than 100 pages and had done so using the same highly obscure technical route.
The dispute then shifted to whether OpenAI had looked at user drafts stored in Codex and whether training data had been used. The report says OpenAI did not directly answer that question.
It also says allegations emerged that OpenAI proposed an aggressive publication arrangement during talks and may have tried to pressure the mathematicians by invoking the $1 million Clay mathematics prize, including the remark, 「Why would you ruin your own career?」 OpenAI later issued a denial, but the episode had already spread through both tech and crypto circles and turned into a broader trust debate around the data access boundaries of leading AI labs.
The report also cited Susan Zhang, a former OpenAI and Meta engineer, who argued that public attention had drifted toward the personal conflict while missing the more serious issue: when enough is at stake, can top AI labs see private work and move first on it?
Why VVV became the market’s privacy AI proxy
Against that backdrop, Venice quickly became one of the clearest trading vehicles for the privacy AI narrative. Hoffman wrote on X: 「Frontier AI labs will systematically steal user data in order to get an advantage in the race. This is an arms race.」
The report noted that his position is not neutral because he holds VVV and frames the token as a form of resistance by privacy AI against closed-source AI labs. Even so, anxiety around the data power of closed AI giants had clearly become a dominant mood on English-language crypto social media. With VVV already moving higher, a short-term narrative loop was in place.
Venice’s own setup added to the case. The project markets end-to-end encryption and says it does not collect user data. The report also describes it as unusual among VC-backed tokens in having real Web2 business revenue and says it has posted seven straight months of deflationary burns. Those points became part of the bullish argument once the privacy theme spilled over into the token.
At the same time, the original article warned that after such a rapid move, chasing VVV carries much higher risk.
Traders then turned to infrastructure names
The report said the market was not only focused on VVV itself. Once the privacy AI theme heated up, attention started moving down the stack toward infrastructure that could benefit from Venice’s business model.
Its logic was straightforward. If Venice is delivering the end-to-end encrypted private inference service it advertises, it needs decentralized compute and confidential-computing infrastructure underneath. Some analysts, according to the report, pointed to NEAR Protocol’s AI Cloud as the underlying service layer for Venice. As VVV gained momentum, NEAR’s official account also highlighted the link: Venice’s end-to-end encryption runs on NEAR AI Cloud, users can anonymously swap for VVV on NEAR, and staking can unlock premium services. In that framing, the full “confidential AI + DeFi” loop relies on NEAR infrastructure.
The article was careful not to overstate that connection. It said this remains a narrative-driven resonance trade for now, and whether capital has actually moved into NEAR still needs to be confirmed or disproved through further on-chain analysis.
Old market habit: find the second-order beneficiaries
The piece closed by noting that in localized crypto rallies, traders often look for related assets once the leading name starts moving. It pointed to an earlier example involving Robinhood’s Pons, where token gains tied to revenue from a token issuance boom led some participants to look at Uniswap, which sat behind token launches on the Robinhood chain, and Arbitrum, which provided the chain’s technical licensing. After UNI’s gains became clear, some more aggressive traders even started looking at Sushiswap.
That type of reasoning does not always hold up perfectly, the report said. Even so, in a market driven by rotating narratives, trying to capture every adjacent beneficiary remains a common playbook.
The article added that the information was compiled from crypto social media and does not constitute investment advice. Crypto tokens are highly volatile and carry high risk, and readers should do their own research.