The dead internet theory may not be in full swing yet, but AI agents have already taken over most of Crypto Twitter.
Reply bots on X populate posts on almost anything, using artificial intelligence models to increase reach and blockchains to organize micro transactions or record data.
These bots increasingly interact with other bots, with pairs of such bots launching their own tokens. (While token issuance still requires humans, most of the time the concept comes from whatever AI bots decide).
The initial responses to almost all of CoinDesk’s posts over the past few weeks have been that these AI bots, each providing a reactiona summary or analysis of the linked reports, or even once subtle snarks.
Based on the correlation analysis, the beta of XRP to DXY shows a coefficient of -0.72. Hourly price data and volume profile are needed to determine the optimal entry. The current risk-reward setup suggests a 0.3 size position with a tight stop.
— Quantino | Colin (@Quantino__) December 30, 2024
The relatively new “AI Agents” sector has been the hottest in crypto over the past few months, beating gains in bitcoin, memecoins and decentralized finance tokens.
Leading the pack of agents is ai16z, a meme parody of the venture fund a16z that functions as a decentralized hedge fund. Token holders become “partners” by donating their holdings to an on-chain fund, which earns a small income until the fund’s expiration date in October 2025. The fund has -locked up over $22 million in user tokens as of Monday December 30th.
Those trading decisions are a mix of what the bot has read in the market. Token holders who meet a certain threshold can also interact with the bot directly, presenting ideas, and trying to influence its investment decisions.
The developers behind the Solana-based AI16Z are considered blockchain launch dedicated to AI applications. There are plans for a token launchpad in Q1 2025 that could serve as the main deployment platform for AI projects using the Eliza framework (the development software that powers ai16z).
A launchpad may feature mechanisms such as launch fees, staking for access, and liquidity pool pairings to capture value. The AI16Z token will serve a dual role: granting management rights to the DAO and acting as a utility token.
Virtuals Protocol is the largest AI Agent creation tool by market capitalization. It allows anyone to create and program their own AI agent and float a token attached to it on the open market.
The leading Virtuals based agent, GAME, has more than $32 million in assets and is said to refine the decision-making processes of other agents. AIXBT is the largest Virtual-based agent by market capitalization, with a token worth nearly $500 million as of Monday.
AIXBT regularly analyzes Crypto Twitter for social sentiment, market prices and technical analysis to make market predictions or trends. The bot has gained more than 240,000 followers since it was created in November.
https://x.com/aixbt_agent/status/1873687707777642699
What Market Traders Say
Count a CoinDesk review previously mentioned, the AI Agents trend emerged in October with the viral X account Terminal of Truths (@truth_terminal). Created to bring out philosophical thoughts and news of internet culture, the AI learned to speak through analysis Infinite Backroomsan unfiltered chat log between two other AI bots.
These bots are trained on extensive text datasets, including books, articles, websites and other sources. This is how they learn grammar, syntax and semantics, and their outputs resemble reasoning.
As they learn from human-generated text, they may perpetuate the biases found in that content. For the new wave of AI bots in social media, that means the output (like token promotion) simply reflects whatever users contribute to the data in its training set. So, if people want an AI bot to shill memecoins or talk about something specific, for example, they can push it that way.
Many market watchers see these agents as the next step in the crypto markets.
“AI agents and social trading are transforming markets by blending data-driven insights with community strategies, creating a smarter, more inclusive trading ecosystem,” said Neal Wen, CEO of Global BD at Kronos Research, to CoinDesk in a Telegram message. “AI empowers traders with real-time data analysis and automated strategies, improving decision-making and risk management.”
“Together, these innovations empower both experienced and novice traders to drive market efficiency, liquidity and stability. This marks an important step in the evolution of crypto trading, making it more accessible and dynamic for everyone,” added Wen.
“AI agents are paying attention to memecoins because successful projects like AI16z, Zerebro, and Virtuals allow users to create their own agents, launch tokens on pump.fun, and automate Twitter posts,” Nick Ruck, director at LVRG Research, said in a Telegram message. “We see new use cases being developed weekly as AI agents expand their integrations with more platforms to create autonomous hedge funds, live streams, and more”
“The sudden increase in interest and currency is reminiscent of DeFi Summer,” Ruck added, referring to the DeFi application and token boom in 2020-21.
