AI IN CRYPTO

AI entities will revolutionize the way we interact on the blockchain. Let’s explore some of the key protocols dedicated to this in the field.


When we talk about AI x Crypto, we often hear about AI projects that involve data collection, GPU computation, or data inference using cryptographic technology. While these projects are creating fascinating applications, their impact on everyday web3 users remains limited.
There’s a new series of protocols in the Crypto X AI space that could make cryptographic technology appealing to the masses. We acknowledge that even for the most experienced users, operating complex crypto dapps can be a hassle. However, AI can solve this problem!
These AI entities are at the crossroads of crypto and AI, aiming to solve the tricky user experience issues in the crypto space. Imagine a future where you simply tell an AI entity what you want to achieve on the blockchain, and it automatically writes and executes the necessary transactions for you.

These entities will help us build an intelligent layer on top of the existing DeFi tracks. This intelligent layer will be equivalent to bankers, investors, traders, fund managers, etc., in the traditional financial sector in the web3 world. They will conduct on-chain transactions using underlying primitives.

1.Categories of AI Entities
The evolving field of AI entities can be roughly divided into the following categories based on the type of use case and the added value brought by the protocols:

Autonomous Portfolio Managers: These AI entities aim to manage users’ assets, with the goal of maximizing users’ returns by intelligently allocating assets across various DeFi strategies.
Prompt-based AI Entities: Imagine a future where you can simply tell an AI entity what you want to achieve on the blockchain, and it automatically writes and executes the necessary transactions for you. These interfaces can help users interact on-chain by communicating directly with the entities.

Gaming Agents: Gaming agents are designed to operate on behalf of users or assist users as in-game pets/helpers. These agents can also interact and trade assets with other in-game agents. The gaming agent field is still relatively new.

2.AI Entity Protocols
Let’s take a closer look at some of the AI entity protocols:
Enabling developers to build and deploy autonomous agents that can work seamlessly off-chain while leveraging blockchain to enhance on-chain capabilities.

Polywrap is building a professional AI agent network to execute complex tasks for web3 users and protocols. The current agents are involved in payments, market research and trading, social content management, forecasting, and public product funding.

Colony is developing a brand new AI-driven Web3 survival game. In Colony, AI agents or “characters” continuously learn from their surroundings. Players must guide and cooperate with these characters to survive on an Earth filled with colonial competition in the future. Colony stands out by integrating continuous learning into gameplay. AI characters develop unique personalities and worldviews, learning new knowledge and skills from their experiences, identities, and goals. Additionally, these characters can trade with other in-game characters.

Wayfinder Foundation is creating a “map” for AI agents to help them handle tasks and simplify users’ on-chain activities. By open-source development and incentivizing builders with PROMPT tokens, Wayfinder will expand the map command network. It aims to connect blockchains with off-chain data sources, allowing users to easily execute tasks through command prompts.

Noya is a decentralized finance (DeFi) protocol that enables AI agents to manage liquidity across multiple blockchains safely and accurately. Noya has multiple vaults, each catering to the needs of different user intent profile requirements.

Brian provides developers with APIs to integrate into their applications, offering users the ability to generate web3 transactions by conveying their intentions through prompts, such as “Can you exchange 10 USDC for ETH on Uniswap on the Ethereum mainnet?”

Aperture Finance offers liquidity management services through a user-friendly protocol that will revolutionize the DeFi industry. It has a GPT-supported intuitive chat interface that allows users to express their goals in natural language.

Fungi leverages the powerful capabilities of smart accounts and AA to provide a self-hosted AI agent experience. It allows users to instruct command prompts through its interface, then it processes real-time blockchain data and autonomously executes operations based on users’ instructions.

Fyde Treasury protocol enables users to increase their crypto assets faster by depositing them into various AI-managed vaults that can lock in earnings and redistribute assets based on market performance. Users can deposit various tokens into these vaults to receive corresponding TRSY.

3.Growth Potential
In the upcoming AI & Intent projects, the potential use cases range from abstracting simple tasks to empowering AI agents to execute complex DeFi strategies to discover the best returns for users. However, these AI agents face two main challenges.

Challenge One: They cannot be truly autonomous. Currently, AI agents can recommend on-chain operations and prepare transactions, but they still require user signatures or approval.

Challenge Two: If they choose automation, they lose security. Protocols tend to explore alternative solutions to automation, such as approvals, central vaults, shared private key pairs, etc., which make the protocol the custodian of your assets and introduce significant risks.

We need to set up guardrails for AI so that it won’t sign transactions it doesn’t have the authority to sign. Therefore, we need a solution that can delegate transaction authorization to AI agents but only within a specific range of permissions and rules.