The Rise Of AI Agents And Their Impact On Crypto And Web3

Key Takeaways:

• AI agents are autonomous, proactive systems that can plan, execute tasks, and adapt to new situations, unlike traditional bots which are limited to pre-programmed tasks.

• AI agents are driving innovation in the crypto space by enabling faster transactions, smart contract interactions, and potential integrations into platforms like Coinbase, Circle, and Solana, potentially transforming the industry.

• Despite their potential, AI agents face challenges such as misinformation (hallucination), blockchain scalability issues, and regulatory concerns that need to be addressed before widespread adoption in crypto and Web3.

The rise of AI agents has recently sparked a heated debate in the tech and crypto/Web3 sectors. These advanced systems have proven capable of performing tasks and making decisions autonomously, opening up new possibilities for industries!

Right now, crypto-based companies such as Coinbase and Circle are looking to roll out their own AI agents, fueling a wave of AI excitement within the industry.

In this article, we are going to talk about AI Agents and why they are one of the biggest narratives in crypto right now. With my experience in crypto for the last eight years, I have not seen this many new developers rushing into the space since the early days of decentralized finance (DeFi)! Let’s break down what you need to know about this narrative.

What Are AI Agents?

An AI Agent is a piece of software designed to perform tasks autonomously. Unlike traditional software that follows a strict set of rules, AI agents make decisions based on their understanding and interactions with the world. They use technologies like large language models (LLMs), such as ChatGPT from OpenAI, Claude from Anthropic, or Gemini from Google, to process and understand information and determine the best course of action.

According to Research and Markets, the AI agents market is projected to grow significantly, from $5.1 billion in 2024 to $47.1 billion by 2030, with a Compound Annual Growth Rate (CAGR) of 44.8%.

By 2030, AI agents could automate up to 70% of traditional office tasks, as forecasted by McKinsey & Company, predicting that AI could add $7 trillion to the global economy. AI will outperform and outwork any human employee, reshaping the workforce and creating opportunities for businesses to thrive.

Notably, companies like Salesforce are already capitalizing on this narrative by hiring talents to sell AI products, with the company's CEO stating that they are "taking advantage of the AI momentum."

What Makes AI Agents Different From Bots?

Before diving into the specifics of AI agents, it is important to understand what distinguishes them from traditional bots.

An AI agent is an autonomous software that can plan, execute tasks, and work toward specific goals without human intervention. In contrast, bots are more rigid and limited to pre-programmed tasks. But with AI agents, they can adapt, create strategies, and perform complex transactions that bots cannot handle.

Imagine having a digital assistant. Instead of giving them an order like, "Ask [name of person] if they are available on this date, then send them a calendar," yes, they would perform the task, but you are essentially providing a preset list of instructions on what they need to do.

Instead, you could give the assistant a more ambiguous goal. For example, “Hey, I need to book some time with Tyler whenever I’m free in the next month or so. Can you go ahead and organize the schedules?”

Now, the AI agent can take that, understand the objective, and determine what steps it needs.

Step One: Check your calendar for availability.
Step Two: Check Tyler's calendar for availability.
Step Three: Determine the amount of time.
Step Four: And so on…

This way, the assistant acts more autonomously and understands the objective rather than just following a very specific set of rules.

What About Trading Bots?

The same goes for traditional trading bots as well! 

Trading bots execute strategies within fixed parameters. AI agents, on the other hand, can actually generate things—they can make their own content, manage their own wallets, and yes, even create their own tokens and meme coins, all with minimal human input in the background.

So, they are kind of like influencers who carry a cryptocurrency wallet, but powered by AI. Think of them as personalities that can interact with users, trade cryptos, and actually build communities—because that’s kind of what they are: AI personalities.

The Growing Popularity And Impact Of AI Agents In Crypto

AI agents can do much more, and this relates to an age-old pain point of the crypto industry, which is user-friendliness.

Broadly speaking, blockchain technology is very powerful but it is not exactly user-friendly. But AI agents on the other hand, they do not seem to mind. Some of these them actually own wallets and can deploy smart contracts. So essentially, they can interact with the blockchain on your behalf by swapping coins or even creating their own meme coins (of course if that is what you tell them to do).

But as an AI assistant, this could actually make crypto much easier for the average person, and could bring a massive influx of users into the space. 

It makes you wonder about the future of crypto and all financial markets, though. Maybe we will move to a world where the biggest users of crypto are just bots and AI agents, and they just do all the stuff for us.

Risks And Concerns Surrounding AI Agents

You may wonder if these AI agent-based cryptocurrencies or AI bots on social media platforms are truly autonomous AI agents or if there is just a human sitting behind the terminal, or even worse, sending out the tweets and stuff.

Well, you are not the only one wondering, and that is why regulations are currently being made to ensure trusted execution in these different environments where AI agents operate.

A trusted execution environment (TEE) is a special hardware configuration that should guarantee the AI agent is actually autonomous. It is not a proof of humanity but a proof of non-humanity—of artificiality. Think of it like a Worldcoin (WLD) for AI agents, if you will.

Additionally, there are also issues surrounding the scalability of blockchains to handle millions of AI agents performing complex tasks.

Moreover, there are also concerns about AI agent regulation, particularly regarding their interactions with crypto protocols and the need for cross-chain compatibility. Given that the technology is still in its infancy, AI 2.0 faces many obstacles before becoming a fully functional and reliable system.

What This Could Mean For The Future Of Crypto And Web3?

While it is hard to predict exactly how all of these will shape the future of crypto, the intersection of these two technologies could lead to a significant transformation. AI-focused cryptocurrencies could see a surge in value, while major crypto platforms are already exploring how AI agents can be integrated into their everyday operations.

Notably, stablecoin issuer Circle has introduced the concept of AI agents operating and trading independently with USDC, and US-based crypto exchange Coinbase is exploring similar opportunities.

Furthermore, blockchain platforms like Solana (SOL) and Injective (INJ) are launching frameworks for AI agents, creating a potential for long-term growth in this space.

The full implications of AI agents in the crypto market remain to be seen, but there is no doubt that we are witnessing the early stages of what could be a revolutionary shift.

How To Approach This Narrative? – Compelling AI Agent Projects In Crypto And Web3

In the crypto space, platforms like the Eliza framework or the Virtuals Protocol framework are examples of AI agent projects that aim to create tools that allow developers to build and deploy AI agents faster.

Eliza’s platform aims to launch AI agents and autonomous agent applications in calling and launching smart contracts. The Eliza framework is rapidly integrated with multiple blockchains and enables cross-chain tooling, which is another pain point of the crypto economy.

Eliza’s development is very high in the GitHub repositories and may be on its way to becoming a standard for scalable AI tooling!

The second AI agent project I want to highlight is Virtuals Protocol (VIRTUAL). This a user-friendly AI agent Launchpad built on Ethereum's Layer-2, Base. With Virtuals Protocol, even the less-gifted developers can actually quickly create an AI agent.

That said, there are more AI agent projects in the crypto space. For more information, you can check out a list of AI agent projects on CoinGecko.

Final Thoughts

AI agents are sitting at the perfect intersection of artificial intelligence, cryptocurrencies, and internet culture, and this combo is sparking a new wave of excitement! One way or the other, this technology could solve one of crypto's biggest problems: usability.

We can also see how a sector outside of crypto wherein AI is starting to use the enormous block space capacity that crypto developers have built out in recent years.

While the technology is still in its infancy and faces challenges like regulatory concerns and blockchain scalability, the future still looks promising!