Not every AI agent needs its own cryptocurrency: CZ
Artificial intelligence (AI) agents are increasingly seen as pivotal in the evolving landscape of decentralized finance (DeFi). As the market shifts, prominent voices in the crypto sphere are advocating for a renewed focus on the intrinsic utility of these agents rather than merely launching new tokens to generate funds.
Recent data from CoinMarketCap highlights a troubling trend: AI-related tokens have suffered a significant downturn, plummeting by over 21% in cumulative market capitalization to about $27 billion. This decline is not only part of the broader cryptocurrency market correction but also stems from what Changpeng Zhao, founder and former CEO of Binance, describes as a misfocus on token creations over real utility. Zhao posits that while cryptocurrencies serve as the currency for AI systems, the proliferation of new tokens isn’t necessary for every AI agent. Instead, these agents could efficiently charge fees using existing cryptocurrencies for the services they provide.
Zhao’s perspective came in a March 17 post on X, where he emphasized, “Launch a coin only if you have scale. Focus on utility, not tokens.” This advice resonates amidst a backdrop of waning interest in AI-based cryptocurrencies, which have lost more than 61% of their all-time high valuation of $70.4 billion since December 7.
Venture capital’s enthusiasm for AI agents remains notable, with firms like Pantera Capital and Dragonfly expressing interest in future investments, although they have yet to commit as evidenced by a recent panel discussion at Consensus 2025 in Hong Kong. This cautious optimism suggests a potential for growth if utility begins to take precedence in the development of AI applications within the crypto ecosystem. For instance, the 0G Foundation has launched an $88 million fund aimed at nurturing AI-powered DeFi agents.
On the technological front, AI agents are now capable of executing autonomous transactions on the blockchain without direct human input. One of the more intriguing instances of this capability involved Luna, an AI agent operating on the Virtuals Protocol, which engaged STIX Protocol for image generation, showcasing this seamless operational relationship. Adjusting payments and services without human intervention marks a significant leap forward in efficiency and productivity in the blockchain sector.
However, recent reports suggest that demand for such applications might be faltering, highlighted by a 97% drop in revenue for the Virtuals Protocol, illustrating the challenges faced by AI agents in sustaining interest and viability in a fluctuating market. Despite such setbacks, analysts are forecasting a significant rebound for AI cryptocurrencies, especially as platforms like ai16z and decentralized trading protocols such as Hyperliquid prepare for anticipated growth in 2025. Alvin Kan, COO of Bitget Wallet, noted that narratives surrounding AI-driven investments and decentralized agents could spur a technical paradigm shift, albeit with associated risks.
The AI agents’ progression into services and utility-centric roles may determine their future within the crypto landscape, as both developers and investors seek to navigate the delicate balance between innovation and sustainable growth. The path forward will require a careful recalibration of priorities—leading to a potential renaissance in how AI aligns with blockchain technologies and the broader financial ecosystem.
