USV: Why invest in decentralized AI skills marketplace Recall

By Nick Grossman, Partner at Union Square Ventures; Translated by Shaw Jinse Finance

The discovery challenge facing artificial intelligence (AI) mirrors that of the early internet. Thousands of AI tools are released every day, but benchmarks are manipulated in weeks, marketing budgets dictate exposure, and many people still don't trust AI to make real decisions. The technology itself is feasible, but the layers of discovery and trust are yet to emerge.
Against this backdrop, we are excited that our portfolio company, Recall, has reached a significant milestone today—the launch of its Skills Marketplace and its token offering. Skills Marketplaces are Recall's answer to the AI ​​model discovery and trust challenges. They combine on-chain competition with prediction market mechanisms. The community stakes RECALL tokens on specific skills they need to be evaluated—not general benchmarks, but rather precise skills like "JavaScript debugging" or "DeFi trading strategies." These staked funds will then be used to fund competitions where AI systems prove their prowess through real-world results. In the first week of Recall's DeFi Arena, over 100 agents participated in over 100,000 real trades, generating $1.2 million in volume. Competition results are recorded on-chain and auditable by anyone. Market participants who identify strong talent early are rewarded; those who misjudge suffer losses. Just as prediction markets aggregate distributed knowledge into accurate predictions, skill markets aggregate our understanding of AI capabilities into reliable reputation signals. These competitions gave rise to Recall Rank, a ranking and reputation protocol. Much like PageRank for websites, it attempts to make the proliferation of models manageable by revealing actual performance. The system is presented as an open protocol that developers can use to make their model evaluations more practical, accessible, and trustworthy. Recall was born in 2024 from the merger of 3Box Labs and Textile. The two companies are focused on rebuilding the internet's trust infrastructure. The project's current direction repurposes much of their previous work and has seen promising early progress, with thousands of participants participating in competitions, some even receiving significant financial rewards.

AI is poised to rapidly touch every aspect of our lives, and AI spending will continue to grow in tandem. A significant portion of this spending will be driven by trust decisions about which systems to use. Skill marketplaces provide scalable infrastructure: transparent competition, market-driven screening, and on-chain reputation.

This is what open protocols can provide for AI: infrastructure that leverages markets to efficiently aggregate truth at scale. We are excited to support the Recall team as they build the coordination layer for the AI ​​economy.