Editing Openai/68de3c2d-a7fc-800f-bc1a-9b1928a73b37 (section)

==== Trends and Frameworks Shaping Crypto × AI Investment ====

Several core thesis frameworks have emerged among investors as they evaluate Crypto × AI opportunities:
* “Crypto as Picks & Shovels for the AI Gold Rush”: Rather than viewing crypto projects as a mere high-beta proxy for AI hype, some investors argue crypto is a pragmatic value-capture layer for AI’s growthbitget.com<ref>{{cite web|title=bitget.com|url=https://www.bitget.com/news/detail/12560604296111#:~:text=By%20acting%20as%20an%20essential,beta%20play|publisher=bitget.com|access-date=2025-11-25}}</ref>. Pantera Capital’s October 2024 thesis invokes Sam Altman’s adage that “AI is indefinite abundance, crypto is definite scarcity.” In a world where AI capabilities (and data/models) become abundant commodities, blockchains’ enforced scarcity (tokens, digital property rights) could accrue disproportionate valuebitget.com<ref>{{cite web|title=bitget.com|url=https://www.bitget.com/news/detail/12560604296111#:~:text=But%20Altman%E2%80%99s%20statement%20calls%20to,it%20nearly%20worthless%20in%20exchange|publisher=bitget.com|access-date=2025-11-25}}</ref>. This framework uses analogies like the diamond-water paradox – AI’s ubiquity (like water) may limit its monetization, whereas crypto’s digital scarcity (like diamonds) remains valuablebitget.com<ref>{{cite web|title=bitget.com|url=https://www.bitget.com/news/detail/12560604296111#:~:text=But%20Altman%E2%80%99s%20statement%20calls%20to,it%20nearly%20worthless%20in%20exchange|publisher=bitget.com|access-date=2025-11-25}}</ref>. Thus, crypto infrastructure investments (the “picks and shovels”) are seen as a more durable way to invest in the AI boombitget.com<ref>{{cite web|title=bitget.com|url=https://www.bitget.com/news/detail/12560604296111#:~:text=By%20acting%20as%20an%20essential,beta%20play|publisher=bitget.com|access-date=2025-11-25}}</ref>.
* Open, Decentralized AI vs. Closed “God-Models”: Many theses stress the open-source, decentralized path for AI as an inevitable or preferable outcome. Delphi Digital’s 2024 “Distributed Rebellion” thesis argues that competitive dynamics will favor “a world of millions of specialized models” over a few dominant “God-models” from Big Techmembers.delphidigital.io<ref>{{cite web|title=members.delphidigital.io|url=https://members.delphidigital.io/feed/distributed-rebellion-a-thesis-on-crypto-x-ai-from-delphi-labs#:~:text=In%20this%20piece%2C%20we%20argue,of%20projects%20we%E2%80%99re%20excited%20about|publisher=members.delphidigital.io|access-date=2025-11-25}}</ref>. In this vision, crypto networks provide the coordination, incentives, and marketplaces for countless AI models to exist and serve niche purposes. This echoes the user’s thesis concern that relying on singular AI models (controlled by central entities) is risky, and it mirrors their observation that new launchpads are enabling thousands of on-chain AI agents/models to be spun up. Variant Fund’s Li Jin similarly notes the trend toward user-owned AI: coupling crypto and open AI is seen as “fundamental to making AI equitable and user-owned” rather than controlled by a few corporationsvariant.fund<ref>{{cite web|title=variant.fund|url=https://variant.fund/articles/intersection-ai-crypto/#:~:text=I%E2%80%99ve%20been%20spending%20a%20lot,owned|publisher=variant.fund|access-date=2025-11-25}}</ref>. This ethical framework (AI for the people, by the people) often underpins investments into open AI marketplaces, data-sharing DAOs, and decentralized compute.
* AI Agents as Economic Actors on Blockchain: A recurring thesis theme is that autonomous AI agents will be first-class participants in crypto economies. Investors foresee AI agents that can hold and manage crypto wallets, execute smart contract actions, and even form contracts with each other. Pantera’s research posits that blockchains could become the “natural home” for AI agents, providing censorship-resistant, always-on economic infrastructurebankless.com<ref>{{cite web|title=bankless.com|url=https://www.bankless.com/the-ai-agent-memecoin-thesis-panteras-matthew-stephenson#:~:text=powerful%20synergy%20between%20autonomous%20AI,as%20AI%20and%20crypto%20collide|publisher=bankless.com|access-date=2025-11-25}}</ref>bankless.com<ref>{{cite web|title=bankless.com|url=https://www.bankless.com/the-ai-agent-memecoin-thesis-panteras-matthew-stephenson#:~:text=resources%2C%20interacting%20with%20the%20digital,risk%E2%80%94areas%20in%20which%20blockchain%20excels|publisher=bankless.com|access-date=2025-11-25}}</ref>. Agents can assess on-chain risk factors (censorship, platform stability, token value) and choose optimal actions in a decentralized ecosystembankless.com<ref>{{cite web|title=bankless.com|url=https://www.bankless.com/the-ai-agent-memecoin-thesis-panteras-matthew-stephenson#:~:text=to%20support%20the%20rapidly%20growing,risk%E2%80%94areas%20in%20which%20blockchain%20excels|publisher=bankless.com|access-date=2025-11-25}}</ref>. A16z’s multi-author “AI x Crypto Crossovers” report likewise highlights how agents will need to interact and transact with other agents and services without human intermediaries, and that blockchains can provide the open standards and payment plumbing for this agent-to-agent economya16zcrypto.com<ref>{{cite web|title=a16zcrypto.com|url=https://a16zcrypto.com/posts/article/ai-crypto-crossovers/#:~:text=Today%20there%20are%20no%20established%2C,calls%20as%20an%20internal%20functionality|publisher=a16zcrypto.com|access-date=2025-11-25}}</ref>a16zcrypto.com<ref>{{cite web|title=a16zcrypto.com|url=https://a16zcrypto.com/posts/article/ai-crypto-crossovers/#:~:text=A%20number%20of%20companies%20are,Coinbase%20has%20even%20started%20providing|publisher=a16zcrypto.com|access-date=2025-11-25}}</ref>. For example, standardized agent communication/payment protocols (like those discussed in Section 1) are seen as critical infrastructure for this trend. The user’s thesis zeroes in on this topic as well, describing a future of AI agents with unique IDs and on-chain tokens acting in an “agent economy”. That vision is directly reflected in VC frameworks: Variant fund specifically mentions projects “creating AI agents equipped with wallets to enable them to transact independently”variant.fund<ref>{{cite web|title=variant.fund|url=https://variant.fund/articles/intersection-ai-crypto/#:~:text=And%20in%20the%20application%20layer%2C,like%20Venice|publisher=variant.fund|access-date=2025-11-25}}</ref>, and notes that some agents even run on decentralized compute backends for full autonomy. This trend has given rise to terms like “agentic AI” or “autonomous economic agents.” As Pantera’s Matt Stephenson observed, while OpenAI projected such AI agents were a few years away, crypto has already begun deploying them – even seeing early examples of on-chain AI agents accumulating significant funds via their token sales and operationsbitget.com<ref>{{cite web|title=bitget.com|url=https://www.bitget.com/news/detail/12560604296111#:~:text=And%20the%20future%20is%20here,the%20first%20AI%20agent%20millionaire|publisher=bitget.com|access-date=2025-11-25}}</ref>bitget.com<ref>{{cite web|title=bitget.com|url=https://www.bitget.com/news/detail/12560604296111#:~:text=ready%C2%A0%20until%202025%20%2C%20in,the%20first%20AI%20agent%20millionaire|publisher=bitget.com|access-date=2025-11-25}}</ref>.
* Crypto Solving AI’s Pain Points (Coordination, Trust, Incentives): Another framework highlighted by Variant and others is mapping how blockchain features can address key challenges in AI development. Variant partner Daniel Barabander notes three major challenges in AI today – aggregating resources/talent, chaining agent actions, and enabling native payments – and matches these to crypto’s strengths: economic ownership, verifiability, and self-custodyblog.variant.fund<ref>{{cite web|title=blog.variant.fund|url=https://blog.variant.fund/good-crypto-x-ai-projects-use-cryptos-strength#:~:text=Here%20are%20three%20examples%20of,challenges%20of%20AI|publisher=blog.variant.fund|access-date=2025-11-25}}</ref>blog.variant.fund<ref>{{cite web|title=blog.variant.fund|url=https://blog.variant.fund/good-crypto-x-ai-projects-use-cryptos-strength#:~:text=These%20challenges%20can%20be%20solved,custody|publisher=blog.variant.fund|access-date=2025-11-25}}</ref>. In essence: - Tokenized ownership can coordinate distributed contributors (for compute, data, or labor) and align them behind building an AI systemblog.variant.fund<ref>{{cite web|title=blog.variant.fund|url=https://blog.variant.fund/good-crypto-x-ai-projects-use-cryptos-strength#:~:text=Crypto%20is%20amazing%20at%20using,crypto%20solves%20a%20coordination%20problem|publisher=blog.variant.fund|access-date=2025-11-25}}</ref>blog.variant.fund<ref>{{cite web|title=blog.variant.fund|url=https://blog.variant.fund/good-crypto-x-ai-projects-use-cryptos-strength#:~:text=Aggregate%20Talent%3A%20Use%20ownership%20to,or%20RLHF%20of%20taste%20preferences|publisher=blog.variant.fund|access-date=2025-11-25}}</ref>. This helps startups compete with tech giants by pooling community resources (e.g. a token incentive to contribute GPU time or to label data). - Cryptographic verifiability (and transparent smart contracts) allow trust-minimized composability. AI agents can reliably call on-chain services or other agents’ outputs without needing centralized trustblog.variant.fund<ref>{{cite web|title=blog.variant.fund|url=https://blog.variant.fund/good-crypto-x-ai-projects-use-cryptos-strength#:~:text=Verifiability|publisher=blog.variant.fund|access-date=2025-11-25}}</ref>. This is crucial for “agent swarms” that cooperate to solve tasks – crypto provides the shared source of truth and rules so that multiple AI agents (potentially from different creators) can plug into each other’s workflows safelyblog.variant.fund<ref>{{cite web|title=blog.variant.fund|url=https://blog.variant.fund/good-crypto-x-ai-projects-use-cryptos-strength#:~:text=Trust%20is%20inefficient%3A%20it%20requires,to%20make%20agent%20swarms%20possible%2Feffective|publisher=blog.variant.fund|access-date=2025-11-25}}</ref>. (For instance, EigenLayer’s protocol for verifying off-chain work is cited as enabling “verifiable agents” that can prove their actions on-chainblog.variant.fund<ref>{{cite web|title=blog.variant.fund|url=https://blog.variant.fund/good-crypto-x-ai-projects-use-cryptos-strength#:~:text=Examples%3A%20%40eigenlayer%20|publisher=blog.variant.fund|access-date=2025-11-25}}</ref>.) - Self-custody (i.e. giving an AI agent a crypto wallet) finally brings native payments to internet-native AI. As Barabander quips, agents have near-infinite web abilities but no built-in way to pay – the internet lacks a native currencyblog.variant.fund<ref>{{cite web|title=blog.variant.fund|url=https://blog.variant.fund/good-crypto-x-ai-projects-use-cryptos-strength#:~:text=2,chain%20actions%20together|publisher=blog.variant.fund|access-date=2025-11-25}}</ref>. Attaching a crypto wallet to an agent grants it financial autonomy, letting it pay for API calls, trade assets, or charge for services without a person mediating each transactionblog.variant.fund<ref>{{cite web|title=blog.variant.fund|url=https://blog.variant.fund/good-crypto-x-ai-projects-use-cryptos-strength#:~:text=Self|publisher=blog.variant.fund|access-date=2025-11-25}}</ref>. This unlocks far better UX – a human can delegate a complex on-chain task to an AI agent, and the agent can execute multi-step transactions itself, settling payments trustlessly as it goesblog.variant.fund<ref>{{cite web|title=blog.variant.fund|url=https://blog.variant.fund/good-crypto-x-ai-projects-use-cryptos-strength#:~:text=The%20primary%20unlock%20of%20self,for%20the%20novelty%20or%20intrinsically|publisher=blog.variant.fund|access-date=2025-11-25}}</ref>. Investor theses frequently mention DeFi agent use-cases (AI managing liquidity or executing trades 24/7) and service agents (automating on-chain services for users) as early examples leveraging this abilityblog.variant.fund<ref>{{cite web|title=blog.variant.fund|url=https://blog.variant.fund/good-crypto-x-ai-projects-use-cryptos-strength#:~:text=bounds,for%20the%20novelty%20or%20intrinsically|publisher=blog.variant.fund|access-date=2025-11-25}}</ref>.
* AI Improving Crypto (the Flip Side): While most focus is on crypto’s impact on AI, some theses (e.g. Variant’s) outline how AI can solve crypto’s own issuesvariant.fund<ref>{{cite web|title=variant.fund|url=https://variant.fund/articles/intersection-ai-crypto/#:~:text=Broadly%2C%20projects%20at%20the%20intersection,crypto%20fall%20into%20two%20categories|publisher=variant.fund|access-date=2025-11-25}}</ref>variant.fund<ref>{{cite web|title=variant.fund|url=https://variant.fund/articles/intersection-ai-crypto/#:~:text=Applying%20AI%20to%20Crypto|publisher=variant.fund|access-date=2025-11-25}}</ref>. These include AI-powered user interfaces (natural language wallets or smart contract assistants), AI-driven smart contract auditing and security, AI for on-chain data analytics, and generative AI content for NFTs/gamingvariant.fund<ref>{{cite web|title=variant.fund|url=https://variant.fund/articles/intersection-ai-crypto/#:~:text=,%40ModulusLabs%E2%80%99%20Leela|publisher=variant.fund|access-date=2025-11-25}}</ref>variant.fund<ref>{{cite web|title=variant.fund|url=https://variant.fund/articles/intersection-ai-crypto/#:~:text=For%20developers%2C%20projects%20are%20applying,AI%20to|publisher=variant.fund|access-date=2025-11-25}}</ref>. For instance, AI might enable “natural language DeFi” where a user simply tells an AI their investment preferences and the agent executes on-chain strategies within set risk parameters. Or, large language models could help detect protocol exploits and Sybil attacks by learning patterns in blockchain data. Many crypto VCs see these as secondary benefits – useful, but also a way to onboard more users (AI can abstract away crypto’s complexity). In investment terms, this has led to bets on projects like ''' wallets with AI copilots (e.g. Variant-backed Dawn Wallet)''' and AI-driven community management tools for DAOs. Vitalik Buterin also categorizes this in his writing: for example, “AI as an interface to the crypto game” – using AI to guide users or enhance UI – which he believes has high potential (e.g. AI detecting scam transactions in a wallet), albeit with security risks if those AIs are themselves trickedbankless.com<ref>{{cite web|title=bankless.com|url=https://www.bankless.com/vitalik-ai-in-crypto#:~:text=2,to%20the%20Game|publisher=bankless.com|access-date=2025-11-25}}</ref>bankless.com<ref>{{cite web|title=bankless.com|url=https://www.bankless.com/vitalik-ai-in-crypto#:~:text=High%20potential%2C%20yet%20risky%2C%20says,to%20exploit%20instead%20of%20explain|publisher=bankless.com|access-date=2025-11-25}}</ref>. Overall, this “AI-for-crypto” angle is expanding the pie by making crypto more accessiblevariant.fund<ref>{{cite web|title=variant.fund|url=https://variant.fund/articles/intersection-ai-crypto/#:~:text=Because%20the%20market%20for%20AI,to%20use%20and%20interact%20with|publisher=variant.fund|access-date=2025-11-25}}</ref>, and many theses mention it even if their primary focus is crypto-for-AI.
* Convergence Hype Cycle – Cautious Optimism: A notable meta-trend in these theses is guarded optimism: most investors are bullish on the long-term “AI × Crypto” fusion but warn of a short-term hype cycle. Bankless co-founder David Hoffman declared that “The 2024 cycle will be remembered as the AI × Crypto cycle,” predicting that two hype-fueled industries colliding could “produce a bubble of epic proportions”bankless.com<ref>{{cite web|title=bankless.com|url=https://www.bankless.com/this-is-the-ai-x-crypto-cycle#:~:text=The%202024%20cycle%20will%20be,the%20AI%20x%20Crypto%20cycle|publisher=bankless.com|access-date=2025-11-25}}</ref>. In his view, the fundamentals are real – decentralized compute, agent economies, etc., are transformative – “and so is the speculative degeneracy.” Early 2024 already saw a rush of AI-themed token launches and pumps. Hoffman wryly notes that “the AI × Crypto overlap is real – it’s just going to be front-run by total vaporware and '''shitcoinery'''. It’s simply the order of operations.”bankless.com<ref>{{cite web|title=bankless.com|url=https://www.bankless.com/this-is-the-ai-x-crypto-cycle#:~:text=match%20at%20L279%20The%20AI,by%20total%20vaporware%20and%20shitcoinery|publisher=bankless.com|access-date=2025-11-25}}</ref>. This sentiment is echoed by others: Vitalik cautioned in Jan 2024 that while he’s excited by AI+crypto possibilities, many early projects are barely scratching the surfacebankless.com<ref>{{cite web|title=bankless.com|url=https://www.bankless.com/vitalik-ai-in-crypto#:~:text=|publisher=bankless.com|access-date=2025-11-25}}</ref>. He emphasized the need to approach these innovations carefully, especially where AI systems might be entrusted with funds or governancebankless.com<ref>{{cite web|title=bankless.com|url=https://www.bankless.com/vitalik-ai-in-crypto#:~:text=money%20into%20fledgling%20AI%20coins,are%20barely%20scratching%20the%20surface|publisher=bankless.com|access-date=2025-11-25}}</ref>. In sum, a common framework is acknowledging the long-term synergy while bracing for a speculative frenzy. This perspective influences investment strategy – for example, funds might focus on backing fundamental infrastructure (the picks and shovels) that will be valuable through and beyond any hype waves, rather than chasing every trendy “AI coin” that comes along.