Camila Grigera Naón
25 January 2025, 01:17 GMT+0000
Mohammad Shahid
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In brief, experts believe that AI agents will greatly enhance the crypto market and blockchain systems. These smart tools can improve investment strategies and execute trades more efficiently. They also help detect and address potential threats.
BeInCrypto spoke with Ilan Rakhmanov, the founder of ChainGPT. They discussed how AI agents will impact the industry and the risks that need careful management for safe deployment.
The AI Agents Market is Growing
AI agents are changing the game in blockchain technology and the cryptocurrency market. These systems operate independently, making decisions and completing tasks on their own. They boost intelligence, adaptability, and fairness in financial processes. Unlike traditional AI bots, AI agents can adapt to various tasks and manage complex processes autonomously.
A recent report from Franklin Templeton highlighted the potential of AI agents. It stated, “We can envision a future where AI agents transform content creation on social media and play crucial roles across industries. Like today’s human influencers, these agents could launch their own brands, products, music, movies, and more, driving significant economic value.”
According to CoinGecko, AI agents gained traction after the launch of Truth Terminal’s GOAT token on Solana last October. Currently, AI agent tokens have a market cap of over $12 billion. This growth is impressive, especially since this market segment was largely non-existent just a year ago.
Right now, more than 150 crypto tokens related to AI agents are listed on CoinMarketCap. This reflects the rapid rise of AI agent projects and their potential for the future. Notable examples include AiXBT, ai16z, Virtuals Protocol, and Zerebro. Platforms like ChainGPT, Dall-E, and Midjourney are also driving innovation in this field.
Given this dynamic growth, it’s clear that AI agents will continue to influence the world of AI and crypto as adoption increases.
Changes in Crypto Market Dynamics
Last year, these autonomous systems were mainly used for content creation and social media engagement. However, AI agents in crypto trading might become a defining trend in 2025. While they share some features with AI trading bots, AI agents represent a more advanced technology.
The hallmark of crypto AI agents is their autonomy. They can operate independently, continuously monitor market conditions, and execute actions based on predefined parameters without needing constant user input. This level of independence sets them apart from traditional trading bots, allowing them to act as self-sufficient assistants for managing cryptocurrency portfolios and executing trading strategies.
“AI-powered trading bots are changing the way crypto markets function. They offer fast, precise, and data-driven decision-making. They can analyze market trends, execute trades, and manage portfolios much more efficiently than humans,” Rakhmanov explained.
These tools can learn from historical market data and refine their predictive models. This machine learning capability allows automated trading systems to operate continuously, spotting trading opportunities that may not be immediately clear to human traders.
Moreover, AI agents can also enhance other areas of the cryptocurrency ecosystem, particularly decentralized finance (DeFi) protocols.
Simplifying DeFi Protocols
AI agents’ ability to perform tasks quickly makes them essential in the DeFi sector. “AI has become a household name, and its impact is now reaching the world of decentralized finance. By automating and optimizing processes, AI is making DeFi smarter and more efficient,” Rakhmanov noted.
Crypto AI agents follow a three-step process: data collection, data analysis, and automated execution. First, the AI agent gathers extensive data from various sources, including market trends and blockchain transactions. Then, it analyzes this data using advanced algorithms to identify patterns and determine the best course of action.
Finally, based on this analysis, the AI agent autonomously executes the necessary actions, such as placing trades or moving funds. “AI can enhance risk assessment in lending protocols by evaluating borrowers more accurately, leading to better decision-making,” Rakhmanov added.
These advancements make DeFi interactions much smoother. “These innovations are not only making DeFi systems more effective but also more user-friendly, paving the way for broader adoption by people from all walks of life.”
AI agents can also help attract a wider audience to Web3 technologies.
AI Agents Increase Accessibility for Users
Autonomous agents can make the industry more accessible by breaking down complex processes and executing them automatically. “AI agents can simplify interactions by providing real-time insights and personalized guidance tailored to each user’s needs,” Rakhmanov explained.
These agents can be vital for inexperienced users because they adapt to individual needs. “By focusing on user-centric design and leveraging AI, the cryptocurrency ecosystem can attract a broader audience and lower barriers to entry,” he continued.
AI agents can also streamline the onboarding process for new users. If they spread globally, such systems could encourage widespread adoption. “The convergence of AI and blockchain could democratize access to financial systems and empower individuals with tailored tools,” Rakhmanov said.
Enhancing Security and Scalability
AI agents play a crucial role in improving blockchain security. They enhance the security and scalability of entire networks, protecting both experienced and inexperienced users from risks. The security framework ensures that the agent operates safely, safeguarding user data and executed transactions.
Crypto AI agents include robust security measures, like encryption and multi-layer authentication, to protect user data. “On the security front, they can detect and mitigate threats in real-time by analyzing patterns and identifying anomalies,” Rakhmanov noted.
A blockchain integration layer connects the agent to blockchain networks, allowing it to interact with smart contracts and wallets. This layer facilitates interoperability across multiple ecosystems.
“For scalability, AI agents can optimize resource allocation and improve data validation processes,” he added. However, there are also security risks with AI agent integration. Due to their autonomous nature, crypto AI agents are vulnerable to cyberattacks. Potential vulnerabilities include smart contract exploits and market manipulation risks.
Network congestion can also hinder the performance of crypto AI agents. This issue is common on blockchains like Ethereum during busy times. Integrating AI agents across different blockchains can be challenging due to varying protocols and infrastructures.
Other Challenges with AI Agents
The benefits of AI agents are clear, but the technology is still in its early stages. There are limitations to consider. While the autonomous capabilities of AI agents offer efficiency, they also raise questions about accountability and risk management.
The performance of AI agents relies heavily on the quality of real-time data. Issues like inaccuracies in data from blockchain oracles can impact their decision-making. “Decentralization helps reduce some risks, but strong governance and ethical AI design are crucial to minimize unintended outcomes,” Rakhmanov noted.
Moreover, the constantly changing international regulations surrounding blockchain and AI present significant challenges for developing and deploying crypto AI agents. This context raises important questions about legal compliance, especially for those involved in financial operations.
“Proactive collaboration among stakeholders, including regulators and technologists, will be crucial to ensure equitable benefits for all.” Addressing these challenges early will be vital for the responsible development of these emerging technologies.