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It's still just the beginning for the AI revolution but we some early opportunities have been appearing. This Vault includes the leading projects combining Artificial Intelligence, blockchain and crypto to disrupt the digital world and enable an entirely new economy.
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Artificial Intelligence is finally here and poised to change the world as we know it. With the advent of public AI platforms such as ChatGPT, Bard and Midjourney, the industry has seen an influx of hype, buzz, and an enormous amount of capital. This come at a time where crypto is also getting closer to mainstream adoption. Both these digital technologies are starting converging, leading to a powerful technological combination set to unlock a wealth of new opportunities. Let us walk you through the dynamics of this Vault, the biggest opportunities of the fusion of AI and crypto, and how this unique Vault captures these via the included assets.
The AI & Crypto Vault provides exposure to the leading projects in the cryptocurrency market building protocols that unlock new products and services based on the two technologies. The Vault only includes assets of projects that are building solutions in-line with the 5 key areas of opportunity for the merger of the two technologies.
For an asset to be included, it needs to have been tradeable for at least 3 months on at least 3 different exchanges. The underlying protocol of each asset needs to live (possibly in beta) and building a solution aligned with the below theses. In terms of allocation, the Vault can minimally include 5 assets with a maximum of 12. The allocation of each asset is market-cap weighed, with a minimum allocation of 7.5% and a maximum of 25%. The Vault manager provides an update regarding the Vault on a weekly basis and may rebalance the assets in the Vault on a bi-weekly basis.
The exponential growth in AI applications is fuelling a massive demand for computing power in the form of high-performance graphics cards (GPU). While there's a current shortage in the supply of GPU's, there are enough GPU's available globally for to meet AI's needs, but supply and demand are not matched efficiently. To bridge this gap, decentralized marketplaces for compute such as Render and Akash enable an optimal allocation of unused or underutilized resources.
In addition to hardware, data is a vital resource for AI, and the blockchain-based Ocean Protocol is working on unlocking this potential. By creating a data economy where information can be freely and securely shared, Ocean Protocol makes it possible to train AI models on data that would otherwise be hard to access.
One of the biggest ideas in the fusion of AI and crypto is the concept of an autonomous, cognitive, and trusted economy. Such an economy will be based on AI agents that can autonomously perform tasks and transact with each other. Low hanging use case for this in a crypto context are AI agents that handle tasks such as trading, investing, farming, and liquidity provision autonomously.
SingularityNET and Fetch AI are projects pioneering in this front, aiming to create the infrastructure where AI agents can autonomously transact. By leveraging blockchain's inherent transparency and trust mechanisms and smart contracts, these AI agents can execute microtransactions in a fast, secure, and efficient manner. This opens up a whole new realm of economic activities, where AI agents can participate in sectors from finance to entertainment.
As the digital world expands, so do its challenges. Deep fakes are a growing concern, and cryptographic solutions can be instrumental in tackling this issue. Cryptographically secured identification and the use of public keys for real-world identity verification can establish trust in the digital realm. While it's essential to consider network effects and government backing before investing in these areas, they represent promising venues for the application of blockchain technology.
Generative AI is another key aspect of this convergence, as demonstrated by projects like Midjourney and ChatGPT. The idea is to allow users to pay for usage and computing demand, while contributors can get rewarded for their input. This model brings a new dimension to the AI ecosystem, where incentives play a crucial role in reinforcing learning and improving the quality of AI models. Token incentives can lead to a new paradigm of development, where crowd-sourced human feedback is used to enhance AI systems.
As the adage goes, "software is eating the world," and AI tooling is set to supercharge this phenomenon. This also applies to blockchain and crypto, and we're expecting a rapid increase in the amount of code and applications being rolled out over the next few years as developers become increasingly productive though their AI co-pilots. By allowing machines to execute complex tasks, developers can focus on innovation, thereby accelerating the overall pace of technological progress.
This Vault is classified as very high risk. Each asset included in this Vault belongs to an early-stage startup, which generally have high failure rates. While the thesis above is well-defined, there might be unforeseen constraints which could render various solutions unfeasible. Additionally, the crypto market as a whole is subject to technological, regulatory and extreme volatility risk.
With the spotlight on AI applications leading to speculation about the potential of a merger between AI, blockchains, and cryptocurrencies, what are the potential synergies and possibilities?
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Artificial Intelligence (AI) has taken the spotlight and the powerful new technology is also poised to make a substantial impact on the crypto market. In this article, we describe 10 projects fusing the technologies.
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