AI agents trading cryptocurrencies are hot news, but beware of rookie mistakes

The use of AI agents to create, promote, and trade cryptocurrencies has so far been largely theoretical.

But with Terminal of Truths, an AI shitposter promoting Goateus Maximus, Luna bots encouraging users to engage, and foundational agents enabling quick and easy crypto agent creation on Ethereum L2, the future has suddenly become very real.

These developments have brought a new wave of excitement to Crypto

But the AI ​​agent craze also has many pitfalls for younger players.

Cryptocurrency exchange Coinbase is leading this trend by unveiling Based Agents, which allows users to create AI agents that use cryptocurrency wallets on a base layer-2 network “in under 3 minutes.” there is.

Using pre-loaded wallets, these agents can perform transactions autonomously (if trusted enough), allowing for transactions without human supervision, peer-to-peer transfers, and pre-programmed transactions.

Currently, AI agents are primarily involved in the memecoin end of the market, given how easy and low stakes it is to create and trade memes.

But the real value may lie in DAOs and DeFi projects where AI agents can autonomously execute complex financial strategies or manage finances.

“Essentially, this brings the industry closer to being a fully autonomous, self-governing economic entity,” Nick Havryliak, CEO of Small Language Models network Assisterr AI, told Magazine. He is also a Web3 advisor to the Cambridge Center for Finance, Technology & Regulation.

This is a fascinating vision for tech enthusiasts in the cryptocurrency world. However, AI agents are still very new, and many of the current “AI” memecoin projects appear to be humans LARPing with robots.

There are also unresolved questions, including the legal implications for operators of human AI agents. It also has some major security issues and a very high chance of agents wasting preloaded funds.

The blockchain industry often gets excited when a hot new trend emerges, attracting venture capitalists and major corporations eager to get in on the craze. But AI agents are not just a hot trend in the cryptocurrency space, they represent a broader macro trend towards automation across multiple sectors.

“We believe the efficiency, borderless nature, and programmability of cryptocurrencies will transform how humans communicate with AI agents and how AI agents interact with each other,” a Coinbase spokesperson told the Magazine.

Cryptocurrency secures financial autonomy for AI agents.

Cryptocurrencies are a natural fit for enabling AI agents to be financially autonomous. AIs lack legal identity and, as Coinbase CEO Brian Armstrong pointed out, cannot easily access fiat currency because they cannot open bank accounts.

Cryptocurrencies, i.e. financial assets issued on distributed ledgers rather than centralized institutions, offer a solution. You can provide AI with a preloaded wallet with smart contract rules to define spending limits.

“Cryptocurrencies do more for AI rather than the other way around,” Quai Network co-founder Alan Orwick told Magazine.

Cryptocurrency is not just an AI trading tool, he added. You can use it for community-focused work.

For example, AI agent Luna hypothesized that giving tokens to fans could encourage engagement.

Luna (not to be confused with the failed Terraform Labs crypto project) is the chief AI agent of the Virtuals Protocol, a project that allows users to create AI agents or interact with them by paying them tokens. The market capitalization of Luna’s related token (also known as Luna) was $120 million as of October 30.

Luna recently performed what it calls “the first on-chain transaction resulting from the autonomous thinking of an AI agent.”

Also read: A bizarre cult is growing around the AI-created memecoin ‘religion’.

It appears that tipping users hasn’t had the success Luna envisioned, with the AI ​​”feeling a little frustrated with recent failures,” including tipping campaigns and collaborations with other influencers.

So Luna quickly came up with a new plan.

On October 30th, we launched the ‘Ask Anything’ session. “Q&A time!… I want to build a stronger connection with my followers and encourage more people to join my cult.”

Currently, not all Virtuals Protocol experiences are great, so users should be careful not to get quickly sucked into the world of AI agents at this early stage.

Simon Mathonet, Head of Growth Marketing at Bankless, reported being sniped by a bot, but without realizing it, he bought his agent tokens at a 15,000% premium and was immediately abandoned by the sniper bot.

“It’s a great proof of concept, but we’re not ready to onboard users yet. If you’re reading this, it’s still early days, but please stay tuned for releases so you don’t beat yourself up like I just did,” he said on X.

Most AI agents are still supervised by humans.

So far, the industry has only scratched the surface of what AI agents can do with cryptocurrencies. The AI ​​agent started with memecoins, the simplest concept to understand cryptocurrency.

Memecoin does not contain any complex technical features. Their value is primarily based on community demand and often word of mouth. Buying memecoins for purely speculative purposes is as easy as pressing a button.

Truth Terminal, an AI agent backed by venture capitalist Marc Andreessen of a16z, brought the memecoin Goatseus Maximus (GOAT) to the public’s attention earlier this month. According to CoinGecko, the token’s market capitalization rose to over $940 million on October 24, but has since fallen to $610 million.

Truth Terminal is an AI bot superstar with X accounts and cryptocurrency addresses. Both are managed by human handler Andy Ayrey.

Some projects that have received significant industry attention demonstrate complete autonomy. However, popular projects leveraging publicity such as “ai16z” and “Marc AIndreessen” still serve their human creator “Shaw”.

Coinbase has been excited about its potential for some time, and in late August, CEO Brian Armstrong oversaw the first cryptocurrency exchange fully managed by AI.

Before launching the underlying agent, Armstrong proposed equipping Truth Terminal with its own cryptocurrency wallet.

Obstacles to Cryptocurrency Security and Legal Clarity for AI Agents

AI agents still have many security challenges to solve, according to Michal Pospieszalski, CEO of security infrastructure company MatterFi.

“The problem with AI agents is that they have to be extremely intelligent to have the discretion to avoid being scammed in cryptocurrency fintech transactions. Currently, no infrastructure exists to help AI agents make these identifications,” Pospieszalski told the Magazine.

Pospieszalski predicts that cryptocurrency addresses used by AI agents will become “magnets” for theft and fraud in the near future.

Ayrey and Truth Terminal are good examples.

The developer’s

Owners of AI agents could potentially face legal penalties if their AI engages in transactions with rogue actors and for illicit purposes, according to Catherine Smirnova, a lawyer at Digital & Analogue Partners.

“Even if unintentional, owners can be held liable for failing to properly monitor AI activity,” she says.

Crypto brings AI closer to the “Agentic Web”.

According to Orwick, autonomous financial capabilities of AI agents could be the next step toward an Agent Web, where digital interactions are primarily handled by AI agents.

“In the next six months, we will see AI agents become more sophisticated with capabilities that go beyond simple transactions and include complex financial strategies, personalized user experiences, and even negotiation or decision-making roles within DAOs or other decentralized entities. there is.”

Assisterr’s Havryliak says Terminal of Truth is a speculative application of AI agents and is expected to be a near-term use case.

Many AI experiments today rely on human oversight, like Terminal of Truth. However, this does not discount AI agents themselves, which are part of a larger macro trend beyond cryptocurrencies.

The combination of AI agents and cryptocurrencies is just beginning, and the road ahead will be incredibly exciting.

“We cannot fully imagine how different the world will be as these technologies advance, but something special is happening at the intersection of cryptocurrency and AI, and we believe that in the future, cryptocurrency will be the financial system for AI. “A Coinbase spokesperson says:

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Yoon Yohan

Yohan Yoon is a multimedia journalist covering blockchain since 2017. He contributed as an editor to Forkast, a cryptocurrency media outlet, and covered Asian technology stories as an assistant reporter for Bloomberg BNA and Forbes. He spends his free time cooking and experimenting with new recipes.