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Which AI-related blockchain projects are worth early attention as AI agents and AI narrative become popular?

2024/1/22

This article is written by Deep Tide.

The concept of AI never lacks market demand.

As a narrative that spans the whole year, regardless of the fluctuations in the cryptocurrency market, there are always AI projects that perform remarkably well. In various reviews and outlook articles, you can almost exclusively see optimism towards AI.

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However, AI is a very broad concept. Which specific sub-projects should we bet on?

A relatively safe choice is to use short-term hot events as catalysts and look for cryptocurrency projects directly related to the concept.

For example, AI agents.

On January 11th, ChatGPT officially launched its store feature. Unlike traditional applications, the GPT Store does not require users to have any programming experience. As long as users input the desired functions they want GPT to perform in simple natural language, the system will create a customized AI chatbot for them.

In essence, this is an AI agent store, which includes a large number of robots that can replace you in handling certain fixed tasks based on certain logic. With the appeal of GPT, it is foreseeable that there will be an explosion of applications in the store, some of which may also involve agents related to crypto.

Whether these robots are useful or not is one thing, but the popularity of the AI agent concept is another.

Almost at the same time, well-known crypto VC Pantera explicitly stated in a recent lengthy article that they are interested in the integration of AI agents and Web3 in 2024.

If we consider the GPT application store as a fuse and the attention of top VCs as a gust of wind, will the narrative of AI agents be ignited this year?

We cannot predict the future, but we can be prepared.

So, what we should focus on now is:

What is the principle behind AI agents, and which cryptocurrency projects may directly benefit from it?

Table of Contents

AI Agents: What's the Deal with the Crypto Industry?

First, it is necessary to understand how AI agents work, which helps us identify which crypto projects truly fall within the scope of AI agents, and which are just leveraging the concept.

The robots in the GPT store tend to give people a more intuitive understanding of AI agents. But in principle, what kind of product can be considered an AI agent?

The author believes that judging whether a product is an AI agent can be simply grasped by focusing on the key question:

Programs or devices using AI technology that can perform tasks automatically or assist users.

From simple chatbots to complex automated systems, all can be considered AI agents. However, these things must possess at least the following:

Automation: The ability to perform tasks with little or no human intervention.
Environmental perception: The ability to perceive its operational environment through sensors or data inputs.
Decision-making: The ability to make decisions based on its programming and received data.
Learning and adaptation: The ability to learn and improve performance based on new data and experiences.
Interactivity: The ability to interact with human users or other systems, respond to requests, or provide information.

But if we abstract the above characteristics, we will find that AI agents are somewhat similar to smart contracts: given default conditions, they execute results automatically.

So, if we want to identify whether a project is truly using AI agents or just leveraging the AI concept for smart contracts, we can simply distinguish them based on the following dimension:

Proactivity.

Smart contracts lack autonomy; they passively react based on pre-written rules, without the ability to make autonomous decisions based on changes in the external environment. For example, setting a certain price to buy a token at a specific time.

In contrast, AI agents are generally considered active; they can collect data, learn, make decisions, and initiate tasks without external commands. For example, monitoring market data and buying a token when the AI deems the price suitable.

After understanding this distinction, let's take a look at the connection between AI agents and the crypto industry.

Chiefbuidl, co-founder of the well-known crypto project Space and Time, made a very classic and vivid analogy:

Cryptocurrencies are like cash, blockchains are like cash registers, Dapps are like POS machines, and AI agents are like cashiers.

Think about this statement. When users transact with cryptocurrencies like cash, the underlying public chains are actually responsible for recording and accounting. Dapps act as transaction interfaces similar to POS machines, while AI agents act as cashiers, directly telling you:

You don't need to worry about how to use the money or keep accounts; you just need to roughly tell me your intentions, and I will automatically spend the money for you and provide the service you want.

In this chain, cryptocurrencies, blockchains, and Dapps are actually complex and difficult to understand, while AI agents are most likely to be the ones closest to users, simplifying the process.

Therefore, the role of AI agents in the crypto industry can be to improve the user experience of crypto products, including but not limited to the trading experience.

Which Crypto Projects Are Related to AI Agents?

So, which projects are related to the concept of AI agents?

Perhaps we can divide the projects into two categories: one is the projects that directly provide AI agent capabilities for others to use, and the other is the projects that integrate AI agents to enhance their original products.

Type 1: Crypto Projects Directly Engaged in AI Agent Business

Autonolas $OLAS: An AI Agent Designed for Efficient Crypto Operations

Autonolas is a project directly associated with AI agents, focusing on designing AI agents for various tasks in the crypto industry.

Specifically, Autonolas' technical stack includes:

Autonomous agent services
Composable autonomous applications
On-chain protocols for protecting agent services and incentivizing development

The key here is autonomous agent services.

The AI agents that make up these services can extract data from any AI model in the world. This includes every GPT, LMM, or subnetwork (which means it can even interact with $TAO). Through service coordination, models used to handle specific tasks are assigned to certain agents.

So, what can these agents specifically do?

Reviewing the product collection provided by Autonolas' official website, the business related to the crypto industry involves but is not limited to using AI agents to predict markets, predict APY yields for certain protocols, act as oracles to provide more accurate off-chain data, assist DAOs in governance, automatically manage operational smart contracts, and automatically establish DeFi liquidity pools, and more.

Overall, any operational process related to crypto projects has a place for AI agents.

The other two businesses of Autonolas are based on autonomous services. Through these foundational autonomous services, other developers can freely combine the features to create their own applications. At the same time, Autonolas can also establish an application store, allowing developers to register and monetize their services.

From a data perspective, the usage of the project's AI agent services continues to increase. As it does not discriminate against collaborating projects, Autonolas theoretically can become a standard for all crypto projects, adding an AI agent layer to the automation needed within their projects.

Its token, OLAS, went live on the on-chain liquidity pool in July last year, with a price of around $0.1 at that time. The current price is around $4.6, and the market value has reached $200 million.

However, considering the pervasiveness of the AI narrative and the expected role of the project in business, the current market value and price are not particularly overvalued. For comparison, $TAO, which also follows the AI narrative but has a different business, has a market value of around $1.5 billion.

Fetch.ai ($FET): An Established Project Serving AI Agents in All Industries

Fetch.AI FET focuses on building and promoting AI agent services. These agents are designed as modular components that can execute specific tasks through programming. These agents can autonomously connect, search, and trade, creating dynamic markets and changing traditional economic activities.

Compared to OLAS, Fetch is a more established project. It was founded in 2017 and went live in December 2019. It has also integrated into Cosmos' IBC, making it a part of the Cosmos ecosystem.

However, Fetch does not only target crypto projects for AI agents but extends its services to different industries. From the examples provided by the official site, its services can reach various sectors, including e-commerce, automotive, legal, IoT, and meteorology.

Moreover, Fetch is developer-friendly.

Fetch has also launched Agentverse, a no-code management service that simplifies the deployment of AI agents. Just as traditional no-code platforms like Replit and services like Github's Copilot allow the public to write code, Fetch is working to further democratize Web3 development in its unique way.

Through Agentverse, users can easily launch their first agent, significantly lowering the barrier to using advanced artificial intelligence technology.

However, as a long-standing project, Fetch's actual products are still in the wishlist stage and have not been fully opened to the public. This also raises doubts about whether the project is really making solid progress.

As for its token, FET is used as network gas fees and is also used for node staking to maintain network operations. Its market value has reached $500 million, and in my opinion, it has relatively limited potential for growth compared to OLAS. However, it can still be viewed as a relatively beta project and may experience a certain increase in value when catalyzed by the AI agent narrative.

PAAL AI $PAAL: Focused on Building AI Assistants for Crypto Users

PAAL aims to create an AI-driven platform that is easy to access, user-friendly, and provides comprehensive knowledge, support, and tools in the ever-changing world of cryptocurrencies and blockchain technology.

The project aims to provide users with their own personal AI assistant, which they can rely on to obtain accurate and reliable information, customized and scalable assistance, and a deeper understanding of the crypto ecosystem.

Specifically, we can understand PAAL as a crypto version of GPT and trading bots.

The main AI tools of PAAL include:

Mypaal: an AI robot with certain knowledge, answering various questions about crypto projects from users;
Autopaal: acting as a crypto expert, providing crypto-centered research, insights, and analysis, monitoring market trends, and notifying users of specific situations;
Autopaal X (not yet live): an advanced version of the above two tools, adding automatic trading functionality and sharing income with $PAAL stakers, providing additional incentives for staking.

If we consider the concept, PAAL can indeed be considered an AI agent, but its business focus is relatively more concentrated on trading and learning for crypto users. If we don't dwell on specific distinctions, we can even directly understand it as a high-level trading bot.

Currently, the total market value of the $PAAL token is around $100 million, lower than the market value of the previous two projects. Considering its narrow business scope and its strong correlation with the crypto market, I believe it does not have as much imagination as OLAS.

Type 2: Projects Using AI Agents to Strengthen Existing Operations

The above projects are directly involved in AI agents, while there are also projects whose main business is not entirely AI agents but have integrated this feature into their original business to enhance their performance.

Due to space limitations, we will not provide a more detailed introduction to the principles of these projects. Instead, we will only list them:

Root Network $ROOT: An L1 specifically optimized for user experience in the metaverse, gaming, and Web3, provided by Futureverse. The network can currently integrate AI agent capabilities into supported games to enhance the gaming experience.

Parallel $PRIME: A science fiction-themed card battle game invested in by Paradigm. The game currently uses AI characters to create new in-game items, which can be stored in the AI character's wallet, essentially creating an AI agent to generate game assets.

Oraichain $ORAI: A company providing AI Layer 1 data economy and Oracle services, aiming to create a trustworthy AI tool to support Web3, scalable dApps, and data economies. The project recently provided a token analysis tool called DeFi Lens, while also integrating AI agent capabilities for predictive analysis of tokens.

Due to limitations, we have not listed all projects related to AI agents in the market.

Regardless of whether the projects are directly or indirectly related to AI agents, it is more important to see if their AI agent business has truly materialized and is usable, rather than being just empty talk.

The AI bubble is significant, and the crypto projects riding the AI hype bubble may be even larger.

It is more beneficial to focus on projects with more solid fundamentals, which is more conducive to capturing solid and sustainable value throughout the ongoing AI narrative throughout the year.

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