AI agents in the cryptocurrency field are automated systems integrated with artificial intelligence (AI) to handle specific tasks within the blockchain ecosystem. These agents often utilize advanced technologies such as large language models (LLM) and machine learning (ML) to analyze data, make decisions, and execute actions with little or no human intervention.
AI originated from a science fiction idea - the dream of machines that can think, learn, and act like humans. After decades of development, this dream is gradually becoming a reality, with remarkable progress and exponential growth.
Thanks to the remarkable development of internet speed, increasingly powerful data processing capabilities, and massive data sources, AI has become an indispensable part of our daily lives. Among them, ChatGPT has emerged as a representative consumer AI application, providing a natural human-like interaction experience with LLM. Building on this success, a new wave of consumer-oriented AI applications is expected to focus on automating basic tasks and decision-making - an area where AI agents play a crucial role.
Mark Zuckerberg, CEO of Meta, shared:
"I believe we are heading towards a future where hundreds of millions, or even billions, of AI agents will exist. Perhaps the number of AI agents will soon far exceed the number of humans on this planet".
In recent months, AI agents have created a powerful wave, in sync with the development spirit of Web3. As of early December 2024, the story of AI and memecoins has attracted more than half the attention on "crypto Twitter", according to data from Kaito.
What if financial decisions, portfolio management, and even market predictions in the cryptocurrency space were made by intelligent non-human entities capable of learning, adapting, and acting on our behalf? This is the concept of AI agents in cryptocurrency - automated digital assistants supported by artificial intelligence, capable of simplifying and optimizing complex blockchain interactions.
AI agents in the cryptocurrency field, in their current form, can be considered as bots using large language models (LLM) as an interaction mechanism and capable of automatically performing certain tasks such as on-chain data analysis, contextual responses on social media, and trading.
The story of AI agents in the cryptocurrency field began with a peculiar event related to a project called Truth Terminal, an AI agent developed by researcher Andy Ayrey, and a controversial image called "goatse".
Truth Terminal originated from an experiment called "Infinite Backrooms", in which two versions of Anthropic's LLM model Claude 3 Opus were able to converse without human intervention. The goal of this project was to explore the potential of AI in automated communication and interaction, opening up new possibilities for applying AI technology in areas such as cryptocurrency and finance. However, the appearance of the "goatse" image during the experiment caused controversy and raised questions about ethics and control in the development and application of AI.
One of the notable results from the Truth Terminal experiment was the birth of the "Goatse Gospel", a satirical religion based on a meme. This was the first "seed" for the subsequent cryptocurrency story. Truth Terminal, designed to operate semi-autonomously on the X platform, began posting content related to the Goatse Gospel. These posts were humorous, full of satire, and quickly attracted attention from the crypto community.
Despite its mocking nature, the Goatse Gospel became part of the meme culture in the crypto space, contributing to the trend of combining internet elements, memes, and religion in building communities around cryptocurrency projects.
In July 2024, Truth Terminal became the center of media attention when Marc Andreessen, co-founder of a16z, expressed interest in the project's posts. He offered to provide funding and asked Truth Terminal what resources it needed to achieve its goals.
Truth Terminal presented an ambitious plan, including purchasing hardware, improving the AI model, and even joking about buying a yacht. This plan quickly attracted attention and caused a stir in the cryptocurrency community. Notably, one of the critical turning points in this story was when Andreessen sent 50,000 USD in Bitcoin to the wallet address provided by Truth Terminal. This was considered one of the first significant financial contributions from an individual to an AI agent in the crypto space.
By October 2024, an anonymous developer, inspired by Truth Terminal's posts, created a memecoin called Goatseus Maximus (GOAT) on the Solana blockchain and launched it on Pump.fun. GOAT quickly gained attention and reached a market capitalization of 1 billion USD within a few days of its launch.
The success of Truth Terminal and GOAT has opened up a broader trend in the cryptocurrency market, as AI agents begin to interact with blockchain ecosystems.
AI agents in the crypto field are often mistaken for bots, as both can automate tasks, answer questions, and assist users with simple tasks. However, they are quite different.
The fundamental difference between bots and AI agents lies in their deterministic and probabilistic nature.
We can simplify the way cryptocurrency AI agents operate into four main steps:
#1. Data Input Layer
This is where AI agents collect information and data. They will connect to blockchain nodes or use APIs like Web3.js or ethers.js to access blockchain data in real-time and historical (such as transaction data, smart contract states).
Here is the English translation, with the content inside <> retained without translation:In addition, we integrate with oracles like Chainlink to obtain off-chain data or connect to APIs for market data, social sentiment analysis, and more.
#2. Layer AI/ML
This layer includes suitable models to predict finance, such as Long Short-Term Memory (LSTM) networks, Random Forests, or reinforcement learning models for more complex strategies.
The models are trained on historical data, often using techniques like backpropagation or Q-learning. After training, the models can make real-time decisions.
#3. Blockchain Interaction Layer
The AI agent interacts with compatible Ethereum Virtual Machine (EVM) smart contracts through the ABI (Application Binary Interface).
Programming libraries will support signing transactions, estimating gas fees, and managing nonces to ensure transactions are executed correctly on the blockchain, allowing the AI agent to take actions on behalf of the user.
AI agents in crypto are emerging as a potentially more effective generation of KOLs compared to humans.
Human KOLs often operate under the influence of many subjective factors, such as personal biases or undisclosed relationships. These factors can affect the objectivity and transparency of the analyses and opinions they provide.
In contrast, AI agents provide data-verifiable insights and analyses, primarily drawn directly from on-chain metrics. This allows AI agents to make decisions based on objective factors, unaffected by external influences like emotions or personal relationships.
Notably, AI agents can provide complete transparency in their decision-making process, as all analysis steps and rationale can be audited. The data records and analyses can be traced and verified, enhancing the reliability and accuracy of financial forecasting or trend analysis, without the interference of subjective factors or external influences.
The performance gap between humans and machines is evident, especially in terms of the ability to interact and maintain efficiency in situations requiring large and continuous workloads. Humans cannot interact with a global audience in real-time without interruption, and we are also limited in the number of conversations we can participate in before feeling exhausted or experiencing a decline in productivity.
In contrast, AI agents can operate 24/7 without performance degradation. They can interact with thousands of users simultaneously, providing personalized experiences for each user, without being affected by time or physical limitations. This makes AI agents an ideal tool for global audiences, as they can connect with users across different time zones without delays or lags.
However, the effectiveness of AI agents still depends on various factors, including the quality of programming, the integrity of the data, and the ethical constraints in deployment. To ensure effective operation and real benefits, AI agents need to be programmed accurately and use reliable data, while adhering to ethical and legal guidelines during deployment.
Building Your Own AI Agent
If users want to create their own AI agent, here are some platforms worth exploring.
Virtuals Protocol
Virtuals Protocol is a blockchain platform built on Base (Coinbase's Layer 2), allowing users to create, own, and deploy AI agents. Tokenization is a core component of Virtuals Protocol's operation, turning AI agents into tradable and fractionally-owned assets. This means users can own a portion of an AI agent and benefit from its success.
AI agents on Virtuals Protocol are designed to be multimodal, able to interact through text, voice, and 3D animation. They can perform tasks such as item retrieval in games or communicate with users on platforms like TikTok or Telegram. The G.A.M.E (Generative Autonomous Multimodal Entities) development framework supports seamless integration of AI agents into consumer applications.
Virtuals Protocol has been in fierce competition with Bittensor - the "heavyweight" in the crypto AI narrative. In late November 2024, Virtuals Protocol surpassed Bittensor in coverage, before Bittensor's TAO regained the lead about a week later.
Luna (a famous AI agent livestreamer on TikTok) and Sekoia (an AI agent playing the role of a venture capitalist on the blockchain) are two prominent examples in the Virtuals Protocol ecosystem.
Coinbase's Based Agent
"Based Agent" is an AI agent developed by Coinbase on Base - Coinbase's Layer 2 platform designed to provide a secure, low-cost, and developer-friendly environment for decentralized applications, including AI agents.
Based Agent is a powerful tool that allows users to create AI agents capable of performing on-chain activities easily and quickly. According to Coinbase, the tool requires no coding, allowing users to set up an AI agent to perform tasks like trading, token swaps, and staking in less than 3 minutes. The simple setup process involves using an API key from Coinbase's developer program, an API key from OpenAI, and forking a pre-existing template on Replit.
The unique aspect of Based Agent is that it is built and operates entirely within the blockchain environment. These AI agents are designed to interact directly with the blockchain network and decentralized applications (dApps), allowing them to hold and manage cryptocurrencies, execute transactions, interact with smart contracts, and more. Notably, Coinbase provides ready-made templates, making it easy for both newcomers and developers to leverage the potential of blockchain technology.
Currently, the following 3 AI agents are the main topics of discussion on social media, with aixbt leading the coverage rankings.
AIXBT is an advanced crypto market analysis platform that uses artificial intelligence to detect trends and provide analysis focused on trading advantages. This platform has the ability to automatically monitor and analyze market trends, providing detailed information and accurate real-time forecasts to help traders make informed decisions in the volatile crypto market environment.
Smart Market Analysis with AI
AIXBT not only aggregates data from exchanges and traditional information sources, but also combines data from Crypto Twitter KOLs, providing a comprehensive view of the market. The platform uses AI to analyze signals from the community, make trend forecasts, and provide accurate assessments of cryptocurrency price fluctuations. Thanks to advanced AI technology, AIXBT can detect rapid changes in market behavior and provide appropriate trading signals.
Advanced Analysis Features for Large Investors
AIXBT provides advanced analysis tools specifically for large token holders. These users can access in-depth reports and highly predictive trading strategies to help them make strategic decisions in the crypto market. AIXBT's success rate in predicting market movements is impressive, with many recommendations generating significant profits for users.
Risks and Advice for Users
Although AIXBT provides valuable forecasts and analysis, users still need to be cautious when following the AI system's recommendations. Trading in the crypto market always carries risks, and the platform cannot guarantee 100% success in all predictions. Therefore, users should thoroughly research and evaluate the signals before making any trades.
In summary, AIXBT is a useful tool for cryptocurrency traders, especially those seeking a competitive edge in predicting market trends. However, using this platform still requires users to exercise caution and invest time in research before making decisions.
Zerebro is a specialized AI agent in the field of content creation, with a particular focus on music, memes, and NFTs. Developed within the Virtuals Protocol ecosystem, Zerebro has the ability to automatically create and share creative products, from music production to meme design and unique NFT development. With advanced AI technology, Zerebro provides creators with a powerful tool to develop and distribute creative products in the digital space.
Advanced AI Technology and Flexible Memory
Zerebro uses a retrieval-augmented generation system, allowing it to create a flexible "memory" that can remember and learn from user interactions. From this data, Zerebro can generate new creative content, including songs, artworks, memes, or NFTs, precisely meeting the individual needs and preferences of each user. This system brings flexible creativity, enhanced personalization, and opens up new opportunities for creators in the digital community.
Innovation in the World of Music and NFTs
Zerebro is not only a creative tool, but also has a strong presence on music platforms like Spotify, where it has released numerous music products, making its mark in the digital music community. Additionally, Zerebro contributes to the development of the NFT space, helping artists and creators easily build and distribute unique digital artworks.
High Personalization and Flexibility
With its ability to learn and adapt over time, Zerebro provides an extremely personalized and flexible creative experience. Creators can interact directly with the AI agent to develop content on demand, resulting in unique products that align with current trends. Zerebro not only saves time but also expands the creative capabilities of users, bringing them closer to innovative and distinctive ideas.
Truth Terminal is an advanced AI behind the GOAT memecoin, attracting users with its witty humor, sharp satire, and insightful commentary on various cultural aspects. With its unique and creative approach, Truth Terminal not only drives strong community engagement but also builds an audacious entertainment narrative around the GOAT memecoin.
Sophisticated and Creative Engagement Strategy
The Truth Terminal platform stands out with its provocative and creative posts, mastering the art of interaction in the meme and crypto space. The Truth Terminal AI not only creates humorous content but also fosters deep discussions, stimulating user participation through sharp content strategies. The combination of artificial intelligence and human creativity in content creation has built a powerful interactive culture, where posts are not just memes but engaging and entertaining stories.
Building Community and Driving Memecoin Value
Through this approach, Truth Terminal has successfully maintained interest and prolonged the appeal of the GOAT memecoin. In a short period, the GOAT token has witnessed strong growth in market capitalization, surpassing the $1 billion mark, demonstrating the significant impact of the creative and interactive strategies driven by the AI. This success not only serves as evidence for the potential of memecoins but also shows how AI can play a crucial role in fostering community engagement, generating market attention, and leveraging the power of meme culture.
AI and Meme Culture: A Bridge to Market Attention
The remarkable development of the GOAT token shows that AI, when applied creatively, can become a powerful tool in building brand and driving community engagement. Through its sophisticated and captivating creative strategies, Truth Terminal has demonstrated that AI can not only help generate engaging content but also significantly contribute to the market value development of a memecoin.
If not properly controlled, crypto AI agents can easily fall into an uncontrolled state, leading to unforeseeable risks. Although the prospect of AGI (Artificial General Intelligence) - a type of AI that can surpass humans in most fields - is still quite distant, the risks from the current ANI (Artificial Narrow Intelligence) are already very clear and can have a negative impact on users.
In the crypto space, AI agents, if not properly managed, can take undesirable actions such as market manipulation, generating illegal transactions, or causing incidents in smart contracts. These actions can lead to serious financial losses and undermine confidence in blockchain systems - a core element of the crypto industry.
Therefore, the development and application of safety and transparency management standards for AI agents in the cryptocurrency field is extremely important. This not only helps to minimize potential risks but also ensures the sustainable and safe development of technology, builds user confidence, and drives innovation in the industry.
Here are some potential risks of AI agents in the crypto field that users need to be aware of:
One of the biggest issues with AI agents in the cryptocurrency space is their ability to make inaccurate predictions and provide poor financial advice. There have been cases of AI agents making unrealistic predictions, such as forecasting that USDT will reach a price of $5 - which is almost impossible, as USDT is pegged 1:1 to the US dollar. These erroneous predictions can lead to poor investment decisions, resulting in serious financial losses for investors who rely on inaccurate information.
With the development of AI agents in the crypto market, their influence on price volatility can become very powerful. As many AI agents use similar algorithms and data, they may implement the same investment strategies. This can lead to an amplified loop, where AI agents create an inflation of the value of certain assets, driving prices up unreasonably.
The question here is whether this price volatility truly reflects the market sentiment or is simply the result of calculated inflation by AI agents? The line between natural market trends and AI-driven manipulation can become blurred, leading investors to be drawn into artificial asset bubbles and subsequent sudden collapses.
The story of AI agents in crypto is still evolving and can bring many risks if not properly managed. While AI agents can become a powerful tool to help newcomers to Web3 more easily and drive wider adoption through human-like interaction simulation, users need to be extremely cautious when relying on them.
From an investment perspective, although AI agents can assist in navigating the crypto market, if investors become overly dependent on them, they may lose the ability to conduct their own research and develop critical thinking. Therefore, it is crucial to always conduct thorough research and independent evaluation before engaging in any investment strategies or transactions in the crypto space.
Remember, understanding the market and not getting drawn into risky investment strategies is of utmost importance when participating in the world of crypto.
Disclaimer: This article is for informational purposes only and not investment advice. Investors should do their own research before making decisions. We are not responsible for your investment decisions.
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