Hi Gene, thanks for making it to Toronto for the Chia Toronto 2026 meet up. It was great catching up with you and others on the CNI team to chat about recent developments and upcoming features on the Chia blockchain.
Editor’s note: Embedded links below were added by XCH.today for context.
I think top of mind for readers is the current state of the Permuto AC/DC product. Since the switch to be a 40’ Act filer, we are now several months beyond the original timeline expectations shared in March 2026. What can you share about the delay and the most recent progress?
There has been more good faith back and forth than we expected on one issue. It’s important to note that this is not a blockchain issue but a UIT issue around how fees are handled as UITs have unique restrictions on fees that were last modified to support Invesco’s QQQ exemptive relief..
Once we see the exemptive relief request on EDGAR, do you expect the rest of the timeline to play out as previously laid out?
The timeline should be basically the same with the caveat that the S-6s will take a few weeks after the exemptive relief application is filed. We expect the timeline driver to still be the exemptive relief application timeline however.
How does the CLARITY act impact CNI and Permuto’s ambitions? Is there any consideration to how the act defines requirements to be considered a mature blockchain system and how those requirements have changed with later amendments of the act?
As I’ve said a lot, CLARITY is a nice-to-have, not a need-to-have. It does have some especially nice-to-have things for us around directing the SEC to modernize certain regulations that are somewhat annoying as currently written. That would only be codifying what is already going on at the SEC but I certainly think the bill text helps give a push to that process there.
We’re comfortable that the final definition of a “mature blockchain system” is going to be something easily attainable for the Chia blockchain as the driver behind the percentage of holdings in earlier drafts is primarily driven by voting centralization concerns and XCH is not a voting token. It’s also important to note that the “mature blockchain system” is no longer in the current Senate draft and the new regulatory brackets will generally not affect XCH as even the one percentage which we are still likely not going to be tested at is 49% single entity ownership.
Editor’s note: At the time of writing, the Chia Network strategic reserve is under 36% of the total amount of outstanding XCH. The “one percentage” referenced comes from this definition of a distributed ledger system under “coordinated control”:
The extent to which a person or group of persons under common control has beneficial ownership of, in the aggregate, more than 49 percent of the total amount of outstanding units of the ancillary asset or voting power with respect to any governance system that relates to the distributed ledger system.
Sec. 10104(b)(2)(C) — page 94
Digital Asset Market Clarity Act, H.R. 3633, 119th Cong. (2026)
With the Permuto Volatility Cup recently wrapped up, did you get the participation and learnings you hoped to get from that competition? What’s next for the svPerps platform/product?
We fixed some key bugs and learned a lot about how to shape the market. Statistical Volatility Perps have never been done before so we needed to learn what was working and not working, especially the rules of the exchange. What we’ve learned, especially, is that the underlying market open when trading 24×7 was originally tough for traders, the exchange, and market makers alike. We’ve just shipped some changes that we think will optimize that very critical time for this product and continued security and infrastructure upgrades and build out that were not contest critical in the background. The next step is to do a second contest that will only be one 5-day trading week to confirm the changes we’ve made coming out of the first. Once that’s complete we will be ready for real money trading shortly thereafter.
Given the current XCH price and the remaining strategic reserve (prefarm), what’s the plan to ensure CNI can continue to support blockchain development and adoption?
The number one plan is building CNI revenue as fast as possible and we expect to be able to do that with the fees from the AC/DC trusts. As we get there, we’re being smart about expenses. We also believe that getting the exemptive relief application on file will re-open the door to equity investment – which has basically been shut since FTX.
In Toronto, I had a chance to chat with Bram in depth about all the technical breakthroughs of the finalized Proof of Space format. Do you expect this hard fork to meaningfully improve the value proposition of the Chia blockchain and what gives you confidence that enough farmers will actively replot to the new format?
The big change that PoSpace 2.0 brings beyond hardening PoSpace 1.0 is the ease of plotting on so many more devices and the new granularity of plot files. You don’t want to fully farm on your iPhone because you don’t want a local full node, but using your phone as effectively a push harvester for your farm or a lightly trusted tool means you can make some XCH with any available free space – not just hard drives. As to the farmer migration there are two things that make me comfortable it will be fine. First, there are a lot of hobbyists in Chia for the tech and the vision. They have already spinning disks or other infrastructure that’s often harder to dismantle and sell than just replot. Second, price is security budget. Right now that’s lower than we like, but the need for security by real applications can and will drive the price of XCH and as it appreciates after we get these major projects to start scaling, that price will bring new and ex farmers in. Said another way, adoption – that we know is coming from Permuto, Gaming, and additional projects should bring price appreciation and that helps heal farming, continuing to lower risks for more issuers and application providers to adopt the Chia blockchain.
I’ve seen CNI recently lean heavily into leveraging AI, especially when it comes to auditing and fixing security issues. As a self-proclaimed former AI skeptic, how do you view the role of AI in the future of the Chia project?
AI proved itself to me in late December of 2026. I had a bug in chia-blockchain that caused syncing to fail on slow network connections when it should not. I knew enough to know that it was wrong and mostly why but I didn’t really have the chops or the time to fix it but during the holidays it hit me that I could use it as a test case for solving this bug. In that time frame the AIs still felt better applied to smaller bounded problems so I made it make a test that failed for the reasons that the bug occurred. And with that I made it do test based development. It took some time but it came up with a solution – and mentioned another possible one – that worked. However, it required end users to set a timeout with not a lot of guidance on what they should set it to. So I went back with the same test and mentioned the other solution and it ended up monkey patching aiohttp (what Chia uses for websockets in node etc). In talking about it with one of the developers, he was worried that it would be brittle, so with the issue identified we asked the maintainers how they’d like it fixed. I was able to generate a very efficient fix, respond quickly and qualitatively to the maintainers’ questions and get a solid fix in core python.
(Editor’s note: The pull request in question)
That was then and made it clear that, at least for well bounded problems, the AIs could be super helpful. However, that continues to change in a positive way. Now the AIs are at a level where they can take on much less bounded work, and adversarially check each other’s work. We’re moving to a world that needs to change what the development process looks like and optimize AI assisted human review.
For Chia, it’s had a significant impact on hardening all of our blockchain software and keeping it safe from new security issues. It’s certainly sped up the amount of development we can get done in the same unit of time. It’s also enabled folks with more expertise but less programming capability to start to contribute more. What I’m very excited about is how it empowers users and farmers. There is always a sharp edge or an additional feature someone wants. Now it’s in their power to quickly build something for themselves and even upstream those back into the chia code base. It has really lowered the barriers to entry – and things like Rue, which the AIs seem to really understand, widen the developer base who have the skills to build Chialisp projects.
In recent years, the blockchain industry at large has struggled with finding meaningful real-world adoption. Given what you know now, what would be your answer to: “what’s the point of crypto?”
I think the three core values of any blockchain are: self custody, cross border commerce, and exchange. There are other use cases like identity management – but that’s often in support of things like exchanging regulated assets. Unfortunately most other blockchains don’t have great self custody, or enable markets directly and I believe that’s why they’ve struggled.
How do the original cypherpunk ethos fit into what CNI and Permuto is trying to do now in high finance?
I think strong self custody of your own stock portfolio for anyone anywhere is pretty darn cypherpunk. Permuto’s mission is a bit different in that it wants to fix some problems in finance more broadly but people should not forget that Permuto is Chia Network building its own best customer. What Permuto needs is what any asset provider is going to need to support a global One Market for currency, equity, debt, and commodities trading. Offers remain underappreciated – and we think Permuto will change that.
There are a number of community members/developers that continue to build on the Chia blockchain. What recent use cases have you found most interesting?
The most fun new thing is the Pot Potato. As I write it has already exceeded 1800 XCH. Beyond being fun, the technology behind it is so elegant and decentralized. It’s the kind of thing that can’t be easily done on other chains. The other two things I’m excited about is the next version of the DIG network and XCHandles. I love what DIG is trying to do to the publishing infrastructure of the internet. I’m not as big a fan of name protocols as many others but the way XCHandles is built is very cool and DIG also has those same sorts of big strides in on-chain functionality delivered via Chialisp.
Editor’s note: The majority of puzzles built to support DIG and XCHandles were written in Rue and compile to CLVM just as Chialisp does. You can also learn more about the XCHandles launch here.
