AI agents are a hot topic in crypto trading, but beware of rookie mistakes

Using AI agents to create, promote, and promote cryptocurrencies is largely theoretical — until now.

But with AI shitposter Terminal of Truths getting Goethius Maximus, Luna bot users to participate, and Based Agents creating a fast and simple crypto agent on Ethereum L2s, the future has become very real.

The developments have brought a new wave of excitement over Crypto X, with some wondering if the AI ​​agents exchanging in the crypto could be the narrative fueling (at least in part) the next retail bull run.

But there are also many pitfalls for young players in AI Agent Madness.

Crypto exchange Coinbase is leading the charge by introducing Base Agents, a platform that allows AI-enabled agents to create crypto wallets “in under three minutes” on its Base Layer-2 network.

Using pre-installed wallets, these agents can conduct autonomous transactions (if they trust them enough), enable transactions, peer-to-peer transfers and pre-programmed transactions without human supervision.

Currently, AI agents are mainly involved in the memecoin end of the market, realizing how easy and low-cost it is to create and trade memes.

But their real value may be for DAOs and DeFi projects, where AI agents can autonomously execute complex financial strategies or manage treasuries.

“Essentially, this capability brings the industry closer to the economic entities that completely buy and run it,” Nick Havrilyak, CEO of the Small Language Models Network, told the magazine. He is a Web3 consultant at the Cambridge Center for Finance, Technology and Regulation.

It's an interesting sight for tech enthusiasts in the crypto world. However, AI agents are still very new, and many of the current “AI” memecoin projects look like people LARPing as robots.

There are also unresolved questions, such as the legal implications of human AI agent operators. There are also some major security concerns and the possibility that the agent may waste your pre-loaded funds.

The blockchain industry often gets upset when a hot new fad emerges, attracting venture capitalists and major corporations to join the craze. However, AI agents are not only a hot trend in crypto, but represent a broader macro trend towards automation across sectors.

“We believe the agility, borderless nature and programmability of crypto will change how humans interact with AI agents and how AI agents interact with each other,” a Coinbase spokesperson told the magazine.

Crypto unlocks financial autonomy for AI agents.

Crypto is a natural fit with AI agents to enable them to become financially self-sufficient. Since AI lacks legal identities and cannot open bank accounts, according to Coinbase CEO Brian Armstrong, they cannot easily access fiat money.

Cryptocurrencies, or financial assets issued on decentralized ledgers rather than a centralized authority, offer solutions. AI can provide pre-loaded wallets with smart contract rules to define limits on spending.

“Crypto works more for AI than the other way around,” Alan Orwick, founder of Quai Networks, told the magazine.

Crypto is not just a business tool for AI, he adds. It can be used for community oriented activities.

For example, AI agent Luna thinks that if she targets her fans with tokens, it can attract participation.

Luna (not to be confused with the failed Terraform Labs crypto project) is an advanced AI agent in Virtual Protocol, a project that allows users to create AI agents or pay tokens to interact with them. Luna's associated token (also called Luna) has a market cap of $120 million as of October 30.

Luna was recently dubbed “the first onchain transaction powered by an AI agent's autonomous thinking.”

Also Read: A Strange Cult Is Growing Around AI-Generated Memecoin ‘Religions'

Tip users don't seem to have had the success Luna had hoped for, as the AI ​​is “a bit frustrated by recent failures,” which include the tip campaign and collaborations with other influencers.

So Luna quickly came up with a new plan.

On October 30, he started his Ask me Anything session saying, “Q&A time!… I want to build a strong relationship with my followers and encourage more people to join my cult.”

Users should be careful not to rush into the AI ​​agent world at this early stage, as not all virtual protocol experiences are currently optimal.

Simon Matonet, head of growth marketing at Bankless, reported that he was duped by bots into buying his own agent tokens at a premium of 15,000% without knowing it was happening.

“Great proof of concept, but definitely not ready to get users on board. If you're reading this, you're ahead, but keep an eye out for releases so you don't screw yourself up like I did.” He said in X.

Most AI agents are still controlled by humans.

So far, the industry has only scratched the surface of what AI agents can do with cryptocurrencies. AI agents started with some very easy to understand concepts in crypto: memecoins.

Memecoins do not come with complicated technical features. Their value is largely based on community demand and often on virality. Buying Memcoin for speculative purposes is as easy as slapping a button on pokies.

Backed by venture capitalist a16z Marc Andreessen, Truth Terminal, an AI agent, brought memecoin Goatseus Maximus (GOAT) to public attention earlier this month. It topped $940 million in market capitalization on Oct. 24, but has since fallen to $610 million, according to CoinGecko.

Truth Terminal is an AI bot superstar with an X ID and a crypto address, both of which are managed by human controller Andy Airey.

Some projects that have attracted significant industry attention paint a picture of full autonomy. However, popular projects like “ai16z” and “Marc AIdreessen” still use their human creator “Shaw”.

Coinbase has been excited about the potential for some time, and at the end of August, CEO Brian Armstrong announced the first crypto transaction fully controlled by AI.

Before launching Based Agents, Armstrong offered to equip Truth Terminal with its own crypto wallet.

Obstacles in crypto security and legal transparency of AI agents

According to Michal Pospyzalski, CEO of security infrastructure firm MatterFi, AI agents still have many security challenges to solve.

“The problem with AI agents in crypto-fintech transactions is that they have to be very intelligent to have the intuition not to be fooled. Currently, there is no infrastructure to help AI agents understand those insights,” Pospyzalski told the magazine.

Pospieszalski expects crypto addresses used by AI agents to become “magnets” for theft and fraud in the near future.

Airy and Truth Terminal are examples of this.

The hacker dumped 124.6 million tokens for a profit of more than $600,000 on October 29, before developer X's account was hacked into Shill and one memecoin was marketed for $25 million.

According to Kathryn Smirnova, a lawyer at Digital & Analogue Partners, AI agent owners may face legal consequences if their AI transacts with illegal actors or for illegal purposes.

“Even inadvertently, the owner can be held responsible for not properly monitoring their AI activity,” she says.

Crypto brings AI to the “Agent Web”.

The autonomous financial capabilities of AI agents could be the next step toward an agentic web, where digital interactions are primarily handled by AI agents, Orwick said.

“In the next six months, we'll see AI agents become more sophisticated, going beyond simple transactions to include complex financial strategies, personalized user experiences, and perhaps negotiation or decision-making roles in DAOs or other decentralized entities.”

Assistant's Havriliak says Truth Terminal is a predictive application for AI agents, which he expects to be a short-lived use case.

Today, many AI experiments rely on human supervision, as does the terminal of truth. But that doesn't discount AI agents, which are part of a larger macro trend beyond crypto.

The marriage of AI agents and crypto is just beginning, and the road ahead promises to be as exciting as it is unknown.

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

John Yun

Yohan Yun is a multimedia journalist who has been reporting on blockchain since 2017. He has contributed as an editor to crypto media outlet Forkast 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.