Crypto Twitter is overrun with chatbots that are aware, react to your browser’s refresh rate and can maintain hundreds of simultaneous conversations without disappearing. For many, the rise of these on-chain agents is a welcome upgrade from influencers like BitBoy and GCR, with mixed track records and opaque incentives. These agents, like on-chain analyst AIXBT, have quickly risen to the top of crypto twitter influencers mindshare ranking, due to their ability to respond at the speed of the internet and justify opinions with data.
Today, AIXBT is one of the few agents trading at a nine-figure valuation, but as the number of utility-focused agentic launches accelerates next year, many will compare this new agentic asset class to a similar explosion of NFTs in 2021.
On-chain agents and NFTs share many similarities: they curate communities and organize attention, they happy to speculate and offer vague promises of future value. But the most important thing is that they represent novel assets, which have no analogue in the traditional world of finance.
After SEC lawsuits targeting NFT projects such as Flyfish Club and Stoner Cats it became almost impossible to develop an innovative idea with that primitive, NFTs because the unique assets lost their momentum. In the vacuum left, memecoins have stepped forward, offering a mix of humor and speculative fervor to fill the void once occupied by the ambitious promises of NFTs. Because they look like everyone else trade-only partially regulated assets, the SEC was unable to stop their growth like they did in every other crypto corner. Memecoins require users to make fewer choices, compared to NFTs that combine aspects like rarity and level that obfuscate any underlying value. Their use has been fueled by platforms like pump.fun, which have reduced the creation of new memecoins to just a few clicks, prompting a frenzy and new user habits associated with the appreciation of the price of tokens. You can find a compilation of more extreme attempts here.
However, in the midst of this speculative chaos, a new asset has emerged that is driving similar user behaviors to NFTs and memecoins: on-chain agents. These digital entities combine blockchain technology with artificial intelligence to deliver new user experiences. While most agents today are unfamiliar with memecoins, many on-chain agents have begun to differentiate themselves through utility.
The Rise of On-Chain Agents
Agents represent another asset class in crypto experimentation with new business and monetization models. From AI-generated podcasts to investment insights and anonymous communication, these virtual entities have already changed how many interact with crypto Twitter (X). The largest on-chain agent has a mindshare greater than the largest human crypto-native influencersand earn money similarly: by token-gating information and offering subscriptions. Their unique features — utility-driven frameworks and fair launch principles — should make agents a more investable asset class than memes. Seen through the lens of hold period, liquidity, and utility, the difference is even clearer.
Since we suspect that investors will hold agents longer than memecoins, and they create liquidity for themselves through their business models, crypto-focused investors will be more likely to withdraw this asset class once the initial frenzy has died down. Until business models evolve however, choosing agents to invest in can be likened to throwing darts at a board.
Early Innovators in On-Chain Agents
The on-chain agent market remains emerging, with most projects still in development. While projects like Truth Terminal stop the frenzy by showing the world that agents can mimic real people, new projects focus on utility. Trained on data from crypto Twitter, AIXBT delivers lightning-fast insights into token dynamics, addressing the influence of key crypto personalities. Others like it Luna spread as entertainment agents, interacting with thousands of people through twitter and TikTok.
Having spent the last two weeks experimenting with many of them, here are five more worth playing. It’s not clear if any of these are valuable investment opportunities, but they just offer a different user experience.
These projects illustrate the diversity and intelligence of the on-chain agent ecosystem, laying the foundation for its expansion. Each offers a novel AI-powered user experience that anyone can experiment with. Over time, we suspect that continued contact may allow them to create moats. Although it is not clear where they come from today, Dunbar’s number provides a useful framework. It defines the cognitive limit to the number of meaningful social relationships that humans can maintain, and is around 150. Agents that create value by maintaining an almost infinite number of simultaneous relationship, like AIXBT, opens up opportunities beyond what the human brain can handle.
The Big Picture
History doesn’t repeat itself but it rhymes is a saying you see on the twitter feed of every degen who has ever lost 90% on a trade, but also proves true. At the start of the fourth bull run of the last two decades, the comparisons are hard to ignore.
The summer of DeFi was set by the realization that centralized fintech companies are often working against their customers. Famously, during Robinhood stop at retail traders in favor of the big guns at the Citadel, these traders realize that the big controlled central companies may not be acting in their best interests.
Interestingly, a similar dynamic is happening in AI. The biggest companies like ChatGPT have made multi-year deals with companies like Apple, allowing them to ingest people’s personal iPhone data without much liability. Because of this, drastic price changes in agents traded on-chain may be ahead of the latest poetry. However, it is not clear how this dynamic will work. Beyond the agents themselves, agent frameworks like ai16z’s Eliza and the Virtuals platform can gain value more clearly. The latter was the breakout performer of the last quarter price-wise: given the inherent uncertainty, investing in an index of agents makes sense. I suspect that this is because while agents are inherently interesting, it is not clear that their usefulness will compound and that the attention devoted to them will last.
There is an old story about the market’s fascination with the sardine trade during a time of relative food scarcity. The traders bid them a bargain and the price of a can of sardines went up. One day, a shopper decided to treat himself to an expensive meal and actually opened a can and started eating. He immediately fell ill and told the shopkeeper that the sardines were not good. The seller said, “You don’t understand. It doesn’t eat sardines, they trade sardines.”
As scarcity returns to the market, agents should be concerned can become a trillion dollar asset class. But for now, just save up, more sardines.
