Crypto Twitter has been invaded by intelligent and knowledgeable chatbots that respond at the speed of refreshing your browser and can maintain hundreds of simultaneous conversations without missing a beat. For many, the rise of these on-chain brokers is a welcome improvement from influencers like BitBoy and GCR, who have mixed track records and opaque incentives. These players, like on-chain analyst AIXBT, have quickly risen to the top of Twitter’s crypto influencer mindshare rankings, given their ability to respond to the speed of the internet and justify opinions with data.
Today, AIXBT is one of the few brokers trading at a nine-figure valuation, but as the number of utility-focused broker launches accelerates next year, many will compare this new broker asset class to the similar NFT explosion in 2021.
On-chain agents and NFTs share many similarities: they select communities and organize attention, they are fun speculate and offer vague promises of future value. But the most important thing is that they represent novel assets, with no analogues in the traditional financial world.
After SEC lawsuits against NFT projects like Flyfish Club and Stoner Cats made it nearly impossible to build an innovative idea with that primitive, NFTs as unique assets lost momentum. In the void left, memecoins emerged, offering a mix of humor and speculative fervor to fill the void once occupied by the ambitious promises of NFTs. because they looked like others only trade assets that were lightly regulated, the SEC was unable to stifle their development like it did in all other corners of cryptocurrencies. Memecoins required users to make fewer decisions, unlike NFTs, which combined aspects like rarity and level that obfuscated any underlying value. Its use was boosted by platforms like pump.fun, which reduced the creation of new memecoins to just a couple of clicks, unleashing a frenzy of speculation and new user behaviors linked to the tokens’ price appreciation. You can find a compilation of the most extreme attempts here.
However, in the midst of this speculative chaos, a new asset has emerged that is generating user behaviors similar to those of NFTs and memecoins: on-chain agents. These digital entities combine blockchain technology with artificial intelligence to offer novel user experiences. Although most agents today are indistinguishable from memecoins, several on-chain agents have begun to differentiate themselves by their usefulness.
The rise of chain agents
Brokers represent another asset class in crypto that is experimenting with new business and monetization models. From AI-generated podcasts to investment insights and anonymous communications, these virtual entities have already reshaped the number of cryptocurrencies interacting on Twitter (X). The biggest on-chain players are more minded than the biggest crypto-native human influencers, and they make money in similar ways: by obtaining token information and offering subscriptions. Their distinctive features (utility-driven frameworks and fair release principles) should make agents a more investable asset class than memes. Viewed through the lens of holding period, liquidity and profit, the distinction is even clearer.
Because we suspect investors will hold longer-term agents than memecoins, and they create liquidity for themselves through their business models, crypto-focused investors will find it easier to back this asset class once the frenzy initial has dissipated. However, until business models flourish, choosing agents to invest in can be like throwing darts at a board.
First innovators in chain agents
The chain agent market is still nascent and most projects are still in development. While projects like Terminal of truth It set off the frenzy by showing the world that agents could have imitated real people, but newer projects have focused on utility. Trained with crypto Twitter data, AIXBT offers lightning-fast insights into token dynamics, rivaling the influence of top crypto personalities. others like it moon They have proliferated as entertainment agents, interacting with thousands of people through Twitter and TikTok.
After spending the last two weeks experimenting with many of these, here are five more worth playing with. It’s unclear whether any of these are valuable investment opportunities, just that they offer differentiated user experiences.
These projects illustrate the diversity and ingenuity of the chain agent ecosystem, laying the foundation for its expansion. Each offers a novel AI-based user experience that anyone can experiment with. Over time, we suspect that continued engagement may even allow them to create moats. While it is unclear where they may come from today, Dunbar’s number provides a useful framework. It defines the cognitive limit of the number of meaningful social relationships that humans can maintain, and it is around 150. Agents that create value by maintaining a nearly infinite number of simultaneous relationships, such as AIXBT, open opportunities beyond what the human brain can do cognitively.
The big picture
History doesn’t repeat itself but it rhymes is a saying you’ll see on the Twitter feed of every degen who’s ever lost 90% on a trade, but it also turns out to be infallibly true. At the start of the fourth bull run in the last two decades, it’s hard to ignore the comparisons.
The summer of DeFi was sparked by the realization that centralized fintech companies often act against their customers. Famously, when Robinhood shut down retail traders in favor of Citadel bigwigs, these traders realized that the large regulated central companies may not be acting in their best interest.
Interestingly, a very similar dynamic is at work in AI. Larger companies like ChatGPT have reached multi-year deals with companies like Apple, allowing them to ingest personal data from people’s iPhones without much liability. As such, the violent price swings of on-chain trading agents may be at the forefront of this latest rhyme. However, it is unclear how this dynamic will play out. Beyond the agents themselves, agent frameworks like ai16z’s Eliza and the Virtuals platform can capture value more clearly. The latter is already the most prominent player of the last quarter in terms of prices: given the inherent uncertainty, investing in a player index makes sense. I suspect this is because, while agents are intrinsically interesting, it is not clear that their usefulness will increase and that the attention devoted to them will last.
There is an old story about the market craze for the sardine trade in a period of relative food scarcity. Commodity traders raised bids and the price of a can of sardines soared. One day, a shopper decided to treat himself to an expensive meal, opened a can, and started eating. He immediately became ill and told the seller that the sardines were no good. The salesman said, “You don’t understand. These do not eat sardines, but rather trade in sardines.”
As scarcity returns to the market, it is worth reminding agents can be a trillion-dollar asset class. But for now, except for a handful, they remain sardines.
