AI innovations in Web3: Are AI agents moving beyond the hype?

Artificial intelligence (AI) has become a central theme in this crypto cycle alongside memecoins. Yet, many AI projects are still dismissed as lacking substance, often seen as no more impactful than memecoins.

There are two main reasons for this perception: first, most Web3 AI projects have yet to deliver tangible products; second, the merging of AI and Web3 often feels forced as if crypto is simply trying to capitalize on the AI trend.

However, the recent surge of AI-powered memecoins stands out as one of the more successful integrations of AI within the crypto space. Projects like GOAT have sparked significant market enthusiasm, leading to a wave of AI + meme coins, including GNON, ACT, SLOP, and Shoggoth.

These memecoins aren’t just using AI as a marketing tool—they're being created by actual AI agents. 

What is an AI Agent?

An AI Agent is an artificial intelligence capable of autonomously completing tasks without human intervention.

While traditional large language models (LLMs) provide general information and frameworks, AI Agents deliver more detailed, context-specific information, making them more effective for solving complex problems and automating tasks. AI Agents can offer specific and actionable solutions, acting more like personal assistants in everyday scenarios.

For instance, if you ask an LLM how to buy the cheapest headphones online, it may provide general steps. In contrast, an AI Agent would directly find and place an order for the headphones for you—like a real-life assistant.

Examples of AI Agents in the Web2 world include Perplexity (an AI search engine), NotebookLM (Google's tool for organizing lengthy documents), and Character (a system for creating virtual characters).

How does an AI agent integrate with web3?

• Model training: Infrastructure projects may need user data for model training, and users who contribute data receive rewards in the form of tokens. The more users participate, the higher the platform's revenue, attracting more data contributors and further improving model training. This decentralized data-sharing model has a flywheel effect, making it more effective compared to the centralized data models of Web2. However, since AI is still in its early stages and the Web3 user base remains small, this model hasn't yet achieved significant results.

• Closing information gaps: Blockchain’s inherent transparency allows permissionless creation and use of financial products and services but also results in fragmented and overwhelming data spread across different platforms. AI Agents can aggregate data from multiple blockchains to provide simplified, clear analysis and recommendations, helping users better understand market trends, project risks, and opportunities.

• Tokenizing AI agents: Users can create their own AI Agents and sell them on the market, incentivizing the creation of AI Agents and expanding the range of products available on the AI Agent platforms. This, in turn, helps enhance token value capture for the platform.

A brief introduction to three AI agent projects

Myshell: User-created AI agents

Myshell is a platform that allows users to create their own AI Agents and sell them in the official store to earn profits in BNB. Most AI Agents on the platform currently feature anime-inspired female chatbots, covering categories like work assistants, data search, online learning, and more. Users can choose from a variety of language models, including GPT, Gemini, Claude, and Meta Llama. Myshell is also planning to launch its native token, SHELL, which will be used for unlocking premium features, rewarding bot developers, and paying for services.

The Myshell team has completed three rounds of funding, raising at least $16.6 million. On August 15, Binance Labs invested in Myshell, and its Pre-Seed round was led by Dragonfly. Notably, Balaji Srinivasan (former Coinbase CTO and A16Z partner) is also among its backers.

Virtual: Entertainment-focused AI agents

Virtual believes AI Agents are the future of AI and focuses on integrating these agents into applications and games. By using blockchain, they tokenize AI Agents, making them shareable across different platforms. For instance, AI Agents can act as NPCs in RPGs, with each character being an individual AI Agent that can coexist across games, providing players with a deeper, more engaging experience and ultimately increasing game revenue.

Virtual Agents, developed by Virtual Protocol, can move and speak in 3D spaces, perform on-chain transactions using their own wallets, and be tokenized for trading. Their flagship AI Agent is Luna, an AI VTuber who streams 24/7 on YouTube (YouTube Link). Viewers can interact with Luna through Virtual's official website.

AI Agents generated on the platform can only be exchanged using the platform token VIRTUAL, and transactions are subject to various taxes, enhancing the value capture of the token. Virtual has a market cap of around $101 million, while Luna is valued at approximately $50 million. Other tokens like Game and Convo have also recently shown solid price performance.

Creator.Bid: AI-filtered memecoin launch platform

Creator.Bid offers an easy way to create your own AI Agent, tokenize it, and earn rewards. These agents can be shared on platforms like X, Telegram, and CreatorBid.

The platform uses NFTs to ensure each AI Agent's uniqueness, guaranteeing that no two agents share the same code. These NFTs can be bought, sold, or transferred, providing flexibility. The tokenization approach is reminiscent of platforms like Friend Tech and Pump Fun. Creator.Bid also plans to launch $AGENT as a governance and value capture token, adding to the platform’s flywheel effect. 

Creator.Bid has already secured funding, with investors including Mechanism Capital (early ARB backer), Zee Prime Capital (early SOL investor), and Moonrock Capital (early MNT investor). With its mix of Ponzi, SocialFi, and AI Agent concepts, it attracts considerable market traction.

The path forward for Web3 AI agents

The emergence of Web3 AI Agents signals a potential shift from hype to practical application in the AI and blockchain space. Projects like Myshell, Virtual, and Creator.Bid demonstrates that AI can enhance user experiences, create value through tokenization, and bridge the gap between Web2 and Web3 functionalities. 

While the journey is still in its early stages, the ongoing developments and growing investment in these AI-driven projects suggest that AI Agents could play a significant role in shaping the next phase of Web3 evolution. As the technology matures, the focus will likely shift from buzzwords to delivering tangible benefits, making AI Agents a space worth watching closely.

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