Artificial intelligence (AI) agents are making waves in the crypto world, but not every AI needs its own token. Changpeng Zhao, the founder of Binance, the world’s largest cryptocurrency exchange, recently shared his thoughts on this hot topic. He emphasized that AI agents should focus on their core utility rather than launching native tokens just to raise funds.
The market for AI-related tokens has seen a significant dip, with a 21% drop in market capitalization, now standing at $27 billion. This decline could be attributed to the broader crypto market correction or, as Zhao suggests, a lack of focus on intrinsic utility. In a recent post, Zhao stated, “While crypto is the currency for AI, not every agent needs its own token. Agents can take fees in an existing crypto for providing a service.”
Zhao’s comments come amidst a steep downtrend for AI cryptocurrencies, which have lost over 61% of their peak $70.4 billion market capitalization since December 7. Despite this downturn, the potential of AI agents continues to attract interest from venture capital firms like Pantera Capital and Dragonfly. However, these firms have yet to make significant investments in this space.
AI agents are already making strides by performing autonomous blockchain transactions and exchange services without direct human input. This innovation promises to boost online productivity and streamline decision-making processes. The concept gained traction after Luna, an AI agent on Virtuals Protocol, sought image-generation services in December. Luna’s request was met by STIX Protocol, another autonomous AI agent, which generated the requested images.
Following this transaction, Luna paid STIX Protocol’s AI agent $1.77 worth of VIRTUAL tokens. However, the demand for AI agents has somewhat faded, as evidenced by Virtuals Protocol’s revenue plummeting by 97%.
Despite these challenges, industry experts remain optimistic about the future of AI cryptocurrencies. Emerging platforms like ai16z and decentralized trading protocol Hyperliquid are poised for growth in 2025. Alvin Kan, COO of Bitget Wallet, noted that narratives around AI-driven investments and tokenized assets hint at a tech-driven shift, albeit with added risks.
As the crypto world continues to evolve, the role of AI agents will undoubtedly be a key area to watch. Whether they choose to launch their own tokens or leverage existing cryptocurrencies, their impact on the market is set to be significant. Keep an eye on this space as it unfolds!
