The dead internet theory may not be in full swing yet, but AI agents have already taken over much of Crypto Twitter.
Replybots on X are completing posts on just about everything, using AI models to increase reach and blockchains to settle microtransactions or record data.
These bots increasingly interact with other bots, and pairs of these bots launch their own tokens. (While token issuance still requires humans, the concept often arises from what AI robots decide.)
The initial responses to almost every CoinDesk post in recent weeks are often these AI bots, each providing a reaction, summary or analysis of linked reports, or sometimes even subtle commentary.
According to the correlation analysis, the beta of XRP against DXY shows a coefficient of -0.72. You need hourly price data and volume profile to determine optimal entry. The current risk-reward setup suggests a position size of 0.3 with tight stops.
— Quantino | kolin (@Quantino__) December 30, 2024
The relatively new sector of “AI agents” has become the most popular of cryptocurrencies in recent months, surpassing the gains of bitcoin, memecoins and decentralized finance tokens.
Leading the pack among brokers is ai16z, a meme parody of the a16z venture fund that operates as a decentralized hedge fund. Token holders become “partners” by supplying their holdings to an on-chain fund, earning a share of the profits until the fund’s expiration date in October 2025. The fund had locked up more than $22 million in tokens user until Monday, December 30.
Those trading decisions are a combination of the robot’s reading of the market. Token holders who reach a certain threshold can also interact directly with the bot, submit ideas, and attempt to influence its investment decisions.
The developers behind the Solana-based AI16Z are considering launching a blockchain dedicated to AI applications. There are plans for a token launch platform in the first quarter of 2025 that could serve as the main deployment platform for AI projects using the Eliza framework (the development software that powers ai16z).
The launch pad could include mechanisms such as launch fees, staking for access, and liquidity pool matching to capture value. The AI16Z token would serve a dual purpose: granting governance rights in the DAO and acting as a utility token.
Virtuals Protocol is the largest AI agent creation tool by market cap. It allows anyone to create and program their own AI agent and float an attached token on the open market.
The leading Virtuals-based agent, GAME, has over $32 million in assets and claims to refine the decision-making processes of other agents. AIXBT is the largest virtual-based broker by market capitalization, with its token valued at nearly $500 million as of Monday.
AIXBT periodically scans Crypto Twitter for social sentiment, market prices and technical analysis to produce market predictions or trends. The bot has gained more than 240,000 followers since its creation in November.
https://x.com/aixbt_agent/status/1873687707777642699
What market traders say
As a CoinDesk analysis previously noted, the AI agent trend emerged in October with the viral X Terminal of Truths (@truth_terminal) account. Created to express philosophical musings and internet culture curiosities, the AI learned to speak by examining Infinite Backrooms, an unfiltered chat log between two other AI robots.
These robots are trained on vast text data sets, including books, articles, websites, and other sources. This is how they learn grammar, syntax and semantics, and their results resemble reasoning.
As they learn from human-generated text, they can perpetuate the biases found in that content. For the new wave of AI bots in social media, that means that the result (such as the promotion of a token) simply reflects the data that users contribute to their training set. So if people want an AI bot to trick memecoins or talk about something specific, for example, they can push it that way.
Many market observers see these brokers as the next step in the crypto markets.
“AI agents and social trading are revolutionizing markets by combining data-driven insights with community strategies, creating a smarter and more inclusive trading ecosystem,” Neal Wen, head of global BD at Kronos Research, told CoinDesk. in a Telegram message. “AI provides traders with real-time data analysis and automated strategies, improving decision-making and risk management.”
“Together, these innovations enable experienced and novice traders to drive market efficiency, liquidity and stability. “This marks a key step in the evolution of cryptocurrency trading, making it more accessible and dynamic for everyone,” Wen added.
“AI agents have been taking the spotlight away from memecoins as successful projects like AI16z, Zerebro and Virtuals allow users to create their own agents, launch tokens on pump.fun and automate posts on Twitter,” Nick Ruck, director from LVRG Research. , he said in a Telegram message. “We’re seeing new use cases develop weekly as AI agents expand their integrations with more platforms to create autonomous hedge funds, live streams, and more.”
“The sudden surge in interest and money is reminiscent of the summer of DeFi,” Ruck added, referring to the DeFi application and the token boom in 2020-21.
