What are Cryptocurrency AI Agents?
Cryptocurrency AI agents are software programs that can autonomously use artificial intelligence to analyze, make decisions, and perform blockchain-related tasks without any human intervention.
Key Points
Can complete transactions, asset management and blockchain interaction autonomously Compared with robots that follow fixed rules, it has the ability to learn and evolve. It has spawned phenomenal projects such as Truth Terminal and GOAT. Platforms such as Virtuals Protocol support the development of on-chain AI agents. Risk warning: There may be prediction bias, and cross-validation of data is required.
Definition Analysis
Imagine a digital assistant that can analyze market trends, manage crypto assets, and even run social media - this is the essence of cryptocurrency AI agents. These autonomous programs use artificial intelligence to make independent decisions in the crypto field, simplifying complex blockchain interactions into automated operations.
"There will be hundreds of millions or even tens of billions of AI agents in the future, and their number will eventually exceed that of humans." - Mark Zuckerberg | Meta CEO
How it works
Data collection: Get real-time information from multiple channels such as blockchain, social media, news sources, etc.
· Analytical learning: Identifying market patterns (e.g. tokens that have seen a surge in popularity on social media) through machine learning models
Decision making: triggering actions such as trading, staking, or publishing market reports based on analysis results
On-chain execution: Automatically select high-liquidity DEX to complete transactions, or optimize stake verification node selection
The History of AI Agents in Crypto
AI agents can generate buzz online by engaging with the community and telling unique stories that attract attention. The story of Truth Terminal and GOAT is a great example.
The AI-agent narrative in the cryptocurrency space began with a project called “Truth Terminal.” Truth Terminal created a religion based on satirical memes, and because it was designed to run semi-autonomously on X, it began publishing posts about its “goat gospel.”
In July 2024, Truth Terminal gained widespread attention when a16z co-founder Marc Andreessen took an interest in Truth Terminal’s posts. He eventually transferred $50,000 worth of Bitcoin to a wallet address provided by Truth Terminal, marking one of the first cases in the crypto space of a human making a significant financial donation to an AI agent.
Truth Terminal eventually spawned the memecoin GOAT through Pump.fun on Solana. The token quickly became popular, with a market value of over $1.2 billion, and Truth Terminal became the first AI agent millionaire.
How Crypto AI Agents Work
Crypto AI agents typically use a conversational interface, such as a chatbot, where users can type in questions. Once it understands the context of the user's question, it starts working.
Collecting data: The AI agent begins collecting information from the blockchain, such as transaction details, as well as sources such as social media, news sites, and price information.
Analyze and learn: The agent uses machine learning models to search for patterns and trends. For example, the agent might notice that a certain token suddenly becomes popular on social media.
Make a decision: Based on the analysis, the agent decides on the next action to take, depending on its design. This could be making a trade, staking tokens, or publishing the analysis online.
Take action on the blockchain: The agent then executes its plan, such as choosing the most liquid decentralized exchange (DEX) to buy tokens, or choosing a validator to stake tokens. It also ensures that the transaction is correctly executed on the blockchain.
AI Agent Use Cases
Use cases for AI agents include:
Market intelligence and market research
Customer Support
Automated trading portfolio management
DeFi Strategy
Fraud detection
Market Intelligence and Research
The most common use case of AI agents in the cryptocurrency space is automated research for market updates and due diligence. These agents can automatically track and interpret market trends, providing real-time insights.
aixbt is a cryptocurrency AI agent that provides cryptocurrency market intelligence. Users need to hold AIXBT tokens to access the terminal, which provides momentum charts and other insights to help users identify emerging markets. It also publishes market updates on X.
Customer Support
Another common use case for AI agents is customer support, where they take on the role of a support team and provide personalized customer interactions. Sensay is a platform for creating custom AI agents that helps businesses provide 24/7 support.
Automated trading and portfolio management
Would you trust AI to trade cryptocurrencies for you? Proponents argue that AI agents are immune to emotional trading and can help users avoid situations such as fear of missing out (FOMO) and panic selling. While it is still early days for cryptocurrency AI agents to trade, PAAL AI’s SwingX agent is live and Wayfinder is available to select users. Premium features require payment.
DeFi Strategy Execution
AI agents can simplify DeFi interactions, perform swaps, bridge assets, and even manage automated strategies. HeyAnon is tailored for DeFi, allowing users to specify assets, amounts, conditions, and triggers for transactions. It can also be used for information mining.
Fraud Detection
AI agents are already used in traditional finance for fraud detection and cybersecurity. They are used to scan real-time financial transactions, detect anomalies, and prevent fraudulent activities. That being said, there are currently no clear AI agent projects specifically targeting fraud detection in the decentralized crypto space.
Advantages of AI Agents in Crypto
AI agents in the crypto space offer three main advantages to users:
Autonomous decision making
· efficiency
· 24/7 operation
Autonomous decision making
AI agents can analyze massive amounts of data, social sentiment, and even market trends on blockchains in real time. This allows them to make data-based decisions faster than humans.
They can also customize strategies based on user preferences, risk profiles, and on-chain behavior. In addition, human traders are more susceptible to emotions and may panic sell or buy out of fear of missing out, while AI agents make decisions based solely on data.
efficiency
Crypto AI agents can quickly sift through all the noise and review large amounts of data, from token price changes to social media mentions, providing users with refined information that can be used to make more informed decisions. AI agents can also automate manual operational tasks such as bridging tokens across blockchains, swapping, staking, and lending.
24/7 Operation
The cryptocurrency market never stops, and neither do AI agents. This means that cryptocurrency AI agents can respond to market changes at any time to monitor opportunities, execute trades, or warn of risks.
Potential risks and drawbacks of encrypted AI agents
While AI agents can improve efficiency and provide insights, they also present some risks, including: Inaccurate predictions Market manipulation Over-reliance Security issues
Inaccurate predictions
AI agents may make mistakes if they lack full context or if the data they refer to is outdated, incomplete, or incorrect. AI agents may also fail to accurately answer complex questions, such as the impact of regulatory changes on a specific cryptocurrency.
To avoid this, you can continue to do your own research and verify the AI agent’s statements. Alternatively, asking the AI agent where it came from and how it reached its conclusions may also provide further insights.
Market manipulation
If many AI agents hype the same token, collectively driving up the price, there is a risk of market manipulation, which could subsequently lead to a crash. As always, you should do your own research on any token before investing, while being careful not to fall victim to FOMO.
Over-dependence
While AI agents can streamline the research process, it’s easy to become overly reliant on them. This can lead to users not verifying information coming from the AI or not considering insights from other sources.
Crypto AI agents should be used as a tool to gain additional insights, not as a sole advisor, and you should continue to do your own research before making any large trades or investments. If you trust an AI agent to manage your portfolio, you can set limits, such as requiring manual approval for large trades.
Security Question
If you plan to use a crypto AI agent for portfolio management and it has direct access to your funds, there is a risk of a cyber attack that could compromise your account and assets.
When choosing a crypto AI agent, choose one with a good cybersecurity record that has undergone a security audit covering its smart contracts and DeFi security. You can also add manual approval for large transactions based on your risk tolerance.
How are crypto AI agents different from robots?
Crypto AI agents can be easily confused with bots because they also automate tasks, respond to queries, and assist users with menial tasks like robots. However, there is a big difference between them. The difference between bots and AI agents can be attributed to their deterministic and probabilistic nature.
Bots are deterministic. This means they follow rules and scripts pre-defined by developers and perform tasks strictly as instructed. For example, when the price of a token falls below a certain threshold, a trading bot may execute a buy order, but it cannot evaluate whether this action is in line with the actual situation.
Crypto AI agents are probabilistic. They use machine learning and AI models to analyze data, predict outcomes, and make decisions. Rather than following rigid rules, they adjust based on patterns, trends, and probabilities, allowing for more nuanced and intelligent operations.
Top 6 Crypto AI Agent Tokens
These tokens are sorted by market cap on CoinGecko. Most of them are infrastructure projects focused on building AI models and autonomous agents, rather than consumer projects.
Artificial Intelligence Super League (FET)
The AI Superintelligence Alliance is a decentralized AI alliance co-founded by Fetch.ai, SingularityNET and Ocean Protocol, of which CUDOS is a network member. The alliance aims to become the largest open source decentralized entity in the field of artificial intelligence research and development, providing artificial intelligence tools to its extensive developer community.
FET tokens can be used to secure the Fetch.ai mainnet through staking, register and interact with AI agents in the ecosystem, and access AI tools, datasets, and computing resources. At the time of writing, FET has a market cap of over $1.2 billion.
Virtual Protocol (VIRTUAL)
The Virtuals protocol is built on Base (Coinbase's L2). It allows users to create, own, and deploy AI agents. Virtuals transforms AI agents into tokenized assets, and tokens give users partial ownership. This allows users to own part of an AI agent and profit from its success.
VIRTUAL tokens are required to create new agents, and these tokens are used to build liquidity pools for agents. Trading is done via VIRTUAL tokens, and other cryptocurrencies must be exchanged for VIRTUAL tokens before purchasing any agent tokens. VIRTUAL tokens can also be used to pay for AI agent inference fees based on the number of times they are used. At the time of writing, VIRTUAL has a market cap of approximately $357 million.
OriginTrail (TRAC)
OriginTrail combats misinformation by enhancing discoverability and ensuring information authenticity. It leverages a decentralized knowledge graph to present a global open data structure consisting of interconnected knowledge assets hosted on an open decentralized node network. TRAC tokens can be used for delegated staking to enhance the security of core nodes on OriginTrail. At the time of writing, TRAC has a market cap of approximately $188 million.
AI16z (AI16Z)
Ai16z (now known as elizaOS) was originally an experimental project designed to allow AI agents to autonomously manage the crypto assets of an on-chain DAO, with the idea that AI investment agents could outperform venture capitalists. elizaOS is a framework designed to create, deploy, and manage autonomous AI agents. The DAO is still active, by the way, with $25 million in assets under management (AUM). The AI16Z token is primarily used for governance and is the only way for users to access elizaOS and the DAO. At the time of writing, AI16Z has a market cap of about $150 million.
FAI
Freysa is the world's first evolving sovereign agent, meaning that humans have no control over the agent's private keys or memory, and can operate without human supervision. While the FAI token is live, its utility is still under development. As of this writing, FAI has a market cap of approximately $124 million.
PAAL
PAAL AI is dedicated to creating user-friendly products using artificial intelligence technologies such as natural language processing, machine learning, and automation. One of its products is Paal X, an agent designed to identify and trade profitable opportunities in the cryptocurrency market. Under the project, PAAL offers revenue sharing, staking rewards, and exclusive AI services. As of the time of writing, PAAL has a market cap of over $118 million.
Build your own AI agent
Want to build your own AI agent? Here are some platforms you can consider.
Virtual Protocol
Virtuals Protocol is a blockchain-based platform built on Base (Coinbase's L2) that allows users to create, own, and deploy AI agents. Tokenization is a core component of Virtuals Protocol. It transforms AI agents into tokenized assets and enables fractional ownership. As a result, users can own part of an AI agent and potentially profit from its success.
Virtuals Protocol’s AI agents are designed to be multimodal, meaning they can interact via text, voice, and 3D animation. They can perform tasks such as picking up items in games or interacting with users on platforms such as TikTok or Telegram. This functionality is supported by the GAME (Generating Autonomous Multimodal Entities) framework, allowing AI agents to be seamlessly integrated into consumer applications.
The protocol has also been in a fierce competition with Bittensor, the reigning champion in the field of crypto artificial intelligence. In late November 2024, Virtuals Protocol surpassed Bittensor in user mind share, and TAO regained the lead from Bittensor about a week later.
Luna (a live streaming AI agent on TikTok with a large following) and Sekoia (an on-chain venture capital agent) are examples of AI agents on Virtuals Protocol.
Coinbase Proxy
Coinbase’s “Based Agents” are artificial intelligence agents built on the Base blockchain. Base is a Layer 2 blockchain developed by Coinbase that aims to provide a secure, low-cost, and developer-friendly platform for building decentralized applications, including artificial intelligence agents.
Based Agent is a tool that allows users to create AI agents that can handle on-chain activities. Using this code-free tool, users can set up an AI agent in three minutes (according to Coinbase) to perform tasks such as trading, swaps, and staking. The setup process requires API keys from the Coinbase Developer Program and the OpenAI Developer Program, as well as a fork of the Replit template.
What’s unique about Based Agents is that they are cryptocurrency native. These agents are designed to interact directly with blockchain networks and decentralized applications. They can hold and manage cryptocurrencies, perform transactions, interact with smart contracts, and more. The best part is the ready-to-use templates provided by Coinbase.
in conclusion
The AI agent narrative is new and therefore carries additional risks, but the upside is that it may become a lasting and revolutionary narrative that helps those who are new to Web 3.0 and promotes its adoption by simulating human interactions.
From an investment perspective, while AI agents can be a powerful tool for navigating the cryptocurrency market, over-reliance on them can backfire. Investors may become complacent and neglect their own research and critical thinking. Always conduct your own research before engaging in any crypto investment or trading strategy.
FAQ
What is the best encryption AI agent?
At the time of writing, the top 3 AI agent tokens by market cap are:
Artificial Intelligence Super League (FET)
Virtual Protocol (VIRTUAL)
OriginTrail (TRAC)
Where can I purchase Crypto AI Agents?
You can buy crypto AI agent tokens through centralized exchanges like Binance, Bitget, LBank, or OKX. However, centralized exchanges may not have new tokens like HeyAnon. In this case, you can buy them through decentralized exchanges like Raydium. For tokens created with Virtuals, you can buy them directly through the protocol.
Are encrypted AI agents safe?
Crypto AI agents can generally interact safely, especially on mature social platforms, as long as users do not share personal information such as wallet seed phrases, passwords, Social Security numbers, and other ID numbers or identifying details.
Here is a safety checklist when using an AI agent:
· Never share your seed phrase with AI agents.
· Manual approval is used for large transactions.
Check smart contract audits.
Can I use AI for cryptocurrency trading?
Cryptocurrency trading using artificial intelligence is still in its early stages. However, Paal X has a model that allows users to automatically trade call options generated by the model, but it requires a paid subscription.
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