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AI agents will lead the next wave of cryptocurrency adoption
In the 2000s we stopped going to bank branches and started banking online. In 10 years do you think we will still be managing our finances this way?
I predict that today’s online financial tools will soon seem archaic as we increasingly manage our finances through agents: intelligent robots that conduct financial transactions on our behalf.
It may seem far-fetched, but the agents are already here. A settlement bot is an agent. An arbitrage bot is an agent. The person who created it can relax on the couch while the agent works in the background making them money. They’re niche, but today there are thousands of similar things that perform actions on-chain on behalf of others.
Bots/agents are not people. The world of aesthetically pleasing apps with cute buttons to click doesn’t work for them. TradFi provides APIs, but these are often incomplete, closed-source, with limited documentation, and inconsistent with each other. It’s very difficult for an agent (or anyone else, honestly) to figure out how to use them.
As I wrote inside a recent post on X, while the cryptographic UX is awkward for humans, its transparent, open source, and programmable nature is absolutely perfect for agents. Here Code is a first class citizen. Everything an agent needs to understand how to achieve a goal (the source code and data) is public. Incomplete TradFi APIs cannot compete with this. The best agents will be built on the best platform and there is no better platform than cryptocurrencies.
This is not our reality yet, but there is a path to get there. Let’s go back to the agents that exist today and explore how to get from here to there.
The previously mentioned agents (liquidation bots, etc.) meet the definition of an agent, being autonomous software entities, but are still very basic. They are usually coded specifically for a single narrow task and without any ChatGPT-like interface for receiving instructions and providing feedback.
Large companies like Jump and GSR are able to build more complex systems that can independently move money and handle problems to some extent. But these companies have a lot of money and large teams of developers. Not so doable for the little guy.
However, technology is always advancing to lower the barrier. What once required a house-sized computer and a team of scientists can now be accomplished by a teenager and a phone.
As AI becomes more widespread, the practicalities of how the smart contract works, or understanding the data within the state of the contract, may be eliminated. This leaves the creator/owner able to provide much higher level instructions while the agent figures out how to execute them.
Today we can see that LLMs like GPT-4 are already able to understand the intent behind a user’s message and think intelligently about how to respond, while at the same time reading all the text on the Internet to formulate its response. So it’s not a big leap to imagine a text-based interface for an agent that has read all the relevant cryptographic media, has ingested and understood all the data from all the blockchains, AND has the ability to perform actions on the chain.
Think about what people working in the cryptocurrency world do today:
The airdrop hunter who spends all day finding promising new projects that look like they could airdrop, guessing what actions might be rewarded, and then executing them. An agent can do all this.
The meme hunter that follows some internal algorithms to find new meme coins with signs of cult communities, then buy them and then sell them when interest seems to wane. An agent can do all this.
But more importantly, consider how the new AI agent interface paradigm simplifies the basics of finance:
You: “I have 100,000 USDC. Get me the best low risk return you can find. I need access to it immediately, so don’t block it for more than a week.”
Agent: “No problem. I recommend an initial distribution of 50% in Aave, 20% in Ethena, 20% in X and 10% in Y. I will monitor the rates and observe changes in their risk levels, rebalancing as necessary.
You: “Sounds like a good idea, do it.”
People wonder how MetaMask can ever be ousted or how frontends can be decentralized. Maybe the answer is that in the future we won’t need frontends anyway and MetaMask will be replaced by your in-agent wallet.
TradFi agents will exist, but crypto-based agents will be better. And that’s why this matters: if agents become more and more common as I expect, and cryptographic agents provide a better experience for users, then this will drive more and more users, business and value up the chain.
Cryptocurrencies sometimes seem like a solution looking for a problem, but maybe it’s simply the perfect financial system for machines.
Note: The opinions expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.