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January 17, 2025

Keep an Eye on ‘AI Agents’: Playing a Key Role in the Crypto World

AI is simplifying and automating complex tasks across various industries. In recent years, the integration of AI and crypto has led to interesting innovations, particularly “AI Agents.” These are automated systems with a degree of independence, not requiring constant human supervision.


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What are AI Agents?

AI Agents combine large language models (LLMs) with the ability to make independent decisions based on environmental analysis. They focus on planning, memory, and tool utilization, enabling them to make decisions and execute actions similar to humans, without constant human oversight. Think of them as automated software capable of dynamic decision-making, operating independently, interacting with other systems, and handling complex tasks effectively, unlike typical AI bots.


Role of AI Agents in Crypto

AI Agents are playing a significant role in crypto, particularly in market analysis, automated trading, and portfolio management. Companies are using them to analyze financial data and research, enhancing operational efficiency. There's also the emergence of Crypto AI tokens, with Haseeb Qureshi, managing partner at Dragonfly Capital, suggesting they could dominate the market in 2025 (though long-term uncertainty remains).

Currently, Crypto AI tokens are rapidly growing, while meme coins face declining trading volumes. However, there's a risk of AI Agents being misused for creating fake information or hacking. Interestingly, AI Agents are also key drivers behind the meme coin frenzy witnessed in 2024 as well.


Why AI Agents are Crucial for Attracting New Interest in Crypto

“Attention” is a valuable resource in the crypto world, with constant competition to attract it. This has led to the development of platform models integrating content creators and consumers. AI Agents are now tools for building consensus among retail investors and VCs. They play a vital role in shifting from “fun for speculation” to developing applications that meet real user needs and build a long lasting base for Crypto’s ecosystem.


Integrating Crypto and AI to Meet Real Industry Needs:

Integrating AI with crypto faces the challenge of competing with centralized service providers. This integration should focus on decentralization, reducing costs for small developers. YBB Capital's research outlines four key areas:

  1. Computing Layer: Provides GPU resources for AI developers.

  2. Data Layer: Enables access and management of decentralized AI data.

  3. Middleware Layer: Supports the development and deployment of AI models and agents.

  4. Application Layer: User-facing products utilizing AI on the blockchain.


‘Decentralization’ is key to challenging the dominance of big tech, but crypto designs using AI should be practical, balancing resources, ensuring data validity, and focusing on real users rather than superficial demands.


AI Agents and the Evolution of Meme AI Coin and SocialFi Platforms:

  • Terminal of Truths (ToT) and $GOAT: ToT, an AI Agent, led to the launch of “$GOAT,” the first meme AI coin. ToT generated significant buzz in the crypto community, particularly among meme coin traders, due to its ability to generate substantial profits in short periods. Notably, ToT is not human but an AI bot designed for social media activities and content creation, especially meme-related content. This trend started with ToT creating a mock religion called the “Goatse Gospel.” Coincidentally, Andreessen Horowitz supported this project with $50,000 in Bitcoin, leading to the creation of the GOAT coin on Solana, with ToT as its mascot. ToT's success highlights AI's potential for generating revenue and creating social phenomena.

  • Pump.fun: This platform transforms meme coins into a more effective model integrating creators and consumers. While Friend.tech pioneered the SocialFi concept, it failed due to unsustainable token design. Pump.fun succeeds with a platform model without tokens or rules. Users freely post memes, stream live, create tokens, comment, and engage in threads. Pump.fun only charges service fees, similar to the attention economy of popular social media platforms. One exciting feature is the ability for users to create AI Agents as digital representatives capable of performing platform activities like trading, promoting coins, and interacting with others. These AI Agents are AI-powered, continuously learning and evolving.

  • AI16Z: The first project that uses AI to manage a crypto fund: This project stands out in the meme AI coin space. The AI16Z token started strong in 2025, reaching an all-time high of $1.89 and a market cap of $2 billion, a 40% increase. Named after the leading Silicon Valley venture capital firm Andreessen Horowitz (often shortened to a16z), it attracts attention with its smart technological concept. AI16Z aims to merge AI with DeFi to create fun and practical tools enhanced by AI algorithms. Although still early, it shows potential as a testing ground for fundraising AI applications in DeFi and crypto. Behind AI16Z is “Eliza Labs,” launched in late 2024, managing a blockchain investment platform powered by AI for evaluating startup investments and making funding decisions. AI16Z is also considering launching an AI Agent platform in early 2025, using the AI16Z token as its primary currency for fees.

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                               *Graph showing Market cap: AI16Z (updated on 9/1/2024)  Image credit: Coinmarketcap

  • Virtual Protocol: A Platform for Creating AI Agents on the Blockchain: This launchpad platform focuses on AI and operates on Ethereum Layer 2. It allows users to easily create and launch projects, and generate income from AI Agents without coding expertise. This is achieved through co-ownership or revenue sharing by tokenizing projects. The platform prioritizes entertainment and consumer engagement. It also features a “buyback-and-burn” mechanism, using a portion of revenue to repurchase and burn tokens, reducing supply and increasing long-term value.

  • Daos.fun AI-Powered DAO Hedge Funds: This platform facilitates the creation of hedge funds using a DAO (Decentralized Autonomous Organization) structure, shifting from human-centric management to AI Agents. The largest manager on the platform is the AI Agent “a16z” (automated trading features are not yet launched). This model emphasizes community co-investment and leverages AI capabilities to enhance investment efficiency. Additionally, they are developing a credibility system where token holders can propose ideas, and AI will judge based on past performance.


Challenges and Considerations of AI Agents in Crypto

While AI Agents offer the potential to increase efficiency and reduce human workload, there are risks to consider, such as cybersecurity threats, uncertainty in AI decision-making, and potential errors. Therefore, control and regulation of AI Agent use are crucial to prevent undesirable consequences.


Summary on the Future of AI Agents in Crypto

The integration of AI and crypto through AI Agents is a noteworthy trend, creating new applications and opportunities. It has the potential to revolutionize finance and technology within the crypto industry. However, AI adoption should be approached with caution, considering risks and implementing appropriate regulations to maximize benefits. Though this trend is in its early stages, rapid growth is expected in the near future.

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