AI Agents - something real or just another pump and dump?
In this issue we cover the recent craze with AI Agents in the crypto space!
Gm Degens
If you’ve been living under a rock, then the term AI Agents maybe somewhat new to you. For anyone active in the on chain crypto environment, AI Agents have been the star sector for the last 3 months.
It all started not so long ago with the rise of Truth Terminal, built by a gentleman named Andy.
Andy created something called infinite backrooms, a place where a variety of chat based LLMs would interact and chat with one another 24/7. One of those LLMs was Truth Terminal, trained as a text output LLM that had a little bit of a wacky personality to say the least. This agent then got its own X account where it was able to tweet its LLM outputs every hour.
This agent decided to pick up on a phrase ‘Goatseus Maximus’ and following a community member launching a token, the LLM adopted the token ‘GOAT’ for itself. There’s a lot more lore behind it and it’s something I’ve talked about in videos and tweets I’ve recently made.
TLDR - An AI agent produces entertainment via text based inference that you can see yourself on X!
This really opened the eyes into what AI agents in crypto can do. What if these agents got extra functionality in addition to just tweeting? Could they have a wallet? Could they trade funds for themselves?
Truth of terminal with its hourly tweets was able to gather massive attention, it was funny, it was unique, and it was posting more than any human could ever, but that’s all it really did. At the end of the day, it is just a meme. It wasn’t long before we see many many others come forth.
In a matter of weeks, we saw AI agents come in all sorts of forms in a wide range of categories:
Entertainment
Education
On chain actions
Trading
Platforms
Frameworks
Many of these have launched in only the last 2 months and have had meteoric rises, the likes of Virtuals going from $20m marketcap to now $3.5b, over a 150x in just 2 months, and now with others hitting hundreds of millions in valuations.
But first of all, what are AI agents?
AI Agents are essentially a formula of a Bot + Large language model. AI agents are autonomous software systems capable of perceiving their environment, making decisions, and taking actions to achieve specific goals.
Planning: They can create step-by-step plans and learn from mistakes
Memory: They utilise short-term memory for processing prompts and long-term data retention for improved performance
Tool use: They can query APIs and external resources to gather information or execute actions
In the real world we use AI agents all the time, AI agents are everywhere already!
Some more examples include:
Virtual assistants → Siri, Alexa, Google
Chat agents → Available on many consumer facing stores
Robotic agents → Tesla, assembly line agents, Waymo
Industry specific/Home Devices → Nest, Ai agent for thermostat regulation
Code → Copilot, CodeGPT, the new no code LLMs we can use
Intellectual property → Bringing characters to life with voices, brains and decision making
Health agents → Helping to diagnose medical conditions
Agents can perform actions with reenforced learning → Crypto can certainly benefit from this.
In crypto today there are many actions across the board that agents could likely do a better job with:
Trading
Farming strategies
Writing smart contract code
Auditing
Research
Pair this with some of the things crypto can offer including decentralisation and tokenisation and you arguably have the power to create something interesting to say the least.
Over the last 2-3 months, the space has gone ballistic with the focus all going towards AI agents. The sector has gone so wild that AI today commands over a 70% mindshare of the overall space.
Speculation is driving the vast majority of this but we’ve have some novel interesting agents created that can do many of the above strategies. I’ve covered some of these in videos you can watch here:
These are specific agents that perform actions from DeFi to gaming to consumer and entertainment products.
One of the most interesting that really caught my attention was AIXBT, an AI agent that uses on chain and general crypto analysis to provide KOL like content on social platforms like X. Tweeting about all kinds of things from token analysis, metrics and more.
The platform has a terminal that can be accessed by holding x amount of tokens and through this users can run inference of the AIXBT LLM.
The growth of AIXBT has been phenomenal to watch, its mindshare through on going impressions, engagement and a massive rise in followers. In fact, one of the most insane things has been its mindshare on Kaito AI. AIXBT has been the number 1 account of all crypto twitter for the last month by a mile. Truely huge given the effects of this.
The aftermaths of this is pretty crazy when you think about it:
An Agent is out-doing every single CT creator by mindshare
These agents can play a critical role in the movement of markets given its mindshare
These agents can monetise through brand deals, sponsorships, or via payments for access to the terminal
This is just the beginning, what happens when these agents have their own wallets? Will they become the best traders around?
The attention and mindshare around AIXBT resulted in quite some appreciation too, rising from zero to now $500m+ in market cap.
However, for every 1 AIXBT, there are 99 AI Agents that just haven’t been able to prove anything really substantial. There remains to be a big question, are these agents just meme coins or is there something actually tangible to them?
I think for almost all of these, most are just memes, just another vehicle for speculation, but the few agents I have seen with great products could grow into something very interesting.
The agent space today is still somewhat early (if you compare it to other sectors) - we’re currently at a 15-20b MC. Will we truly see a bubble like the DeFi bubble from last cycle? It remains to be seen but either way, where attention flows, opportunity comes next.
Let’s see where the space goes next!