Sunny Ray interviews Patrick Dugan of TradeLayer about his firsthand experience living under capital controls in Argentina and Chile, and why it shaped his push for what he calls crypto-dollarization. Dugan explains how hedging on Bitfinex, using early Tether remittances, and surviving a robbery in 2013 set the course of his career. He describes his work at the Omnilayer Foundation, where Tether was born, and why Bitcoin DeFi lost ground to Tron, Ethereum and Solana. Dugan outlines TradeLayer as a money layer with derivatives that can mint synthetic dollars, and explains his current grant-funded research on UTXO deposits and withdrawals with BitVM. He also discusses Bit Agent, a lightweight AI agent for everyday phones, and his AI control research using tiny recursive models trained on story worlds inspired by game designer Chris Crawford. Sunny shares his own story of fighting India's central bank in court on human rights grounds and winning in 2020.
Robbed at gunpoint, living under capital controls, Patrick Dugan built a case for dollarizing Bitcoin and now wants AI agents to serve everyday people.
What are you building today and what problem are you solving?
I've built nearly everything I can with TradeLayer, but go to market is hard. I'm researching how to make Bitcoin deposits and withdrawals secure with a UTXO design and BitVM, and building Bit Agent, an AI agent that runs on a phone so everyday people can use crypto without needing to handle the complexity themselves.
What did you see in 2014 that made you start researching futures?
I was hedging on Bitfinex to move money and access cash in Argentina. I realized that what I was doing could be generalized into a protocol. I was working out the math of what became the inverse quoted contract, where the denomination is really dollars and the Bitcoin notional fluctuates.
What did living under capital controls teach you that a chart never would?
It showed me this technology is a fundamental necessity. Taking pesos out of an Argentine ATM could cost you around 40% versus market value. Bitcoin's real utility is serving refugees and people under controls, and that needs liquidity from institutional bids too. Controlling your money is a human right.
What did being close to Omnilayer teach you about how demand shows up?
People go where the need is served best. My Tether distributions on Bitcoin got stuck in the mempool for two weeks because I paid tiny fees, while Ethereum took over issuance. Later I used Tether on Tron because people were comfortable with it. Bitcoin DeFi missed that need, and something went wrong there.
Can you explain TradeLayer in a couple of sentences?
It's basically a money layer. I added derivatives, and you can mint currency based on those derivatives. A dollar derivative lets you issue synthetic dollars with a 1x hedge, like a savings strategy on Bitfinex. I solved Bitcoin's slow, expensive trading with a Lightning-style co-signing mechanism.
What are you testing by training tiny recursive reasoning models on story worlds?
Story worlds are replayable scenarios with choices, outcomes and moral quandaries. I train models under different constitutions and use their reasoning traces as training data. I've found LLM alignment is not reliable enough, so I pivoted to AI control. These small models train in RAM, which could make everyday PCs the substrate for AI swarms.
Why has the Bitcoin industry drifted from serving everyday people?
We've leaned on gambling and glitzy, mercenary marketing, and meme coins made it worse. Meanwhile government-endorsed fintech in places like the Philippines and Bolivia is beating us at serving people. We need to stop being myopic about wealthy conference crowds and think about a billion people using this technology.
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