AI on the Rise: Investing in AI Tokens and Markets
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The convergence of artificial intelligence (AI) and blockchain technology has unlocked unprecedented investment prospects, offering a realm of possibilities for daring investors. Amidst a landscape where numerous ventures are destined for failure, a select few established entities stand as pillars within the AI/blockchain domain. The allure of AI blockchains is undeniably compelling, promising substantial potential, albeit accompanied by significant risk. For those contemplating entry into this dynamic arena, exercising caution and maintaining realistic expectations are paramount.
The Opportunities for AI Tokens
The collaboration of AI and blockchain heralds a revolution in online operations and global economic structures. By decentralizing the blockchain and empowering AI models with autonomy, a paradigm shift emerges, poised to enhance productivity, slash expenses, and optimize various sectors. Strategic early investments in the symbiotic blend of blockchain and AI technologies, along with their corresponding tokens, could yield substantial returns in the forthcoming era.
Challenges Encountered in AI Token Development
In the wave of recent technological strides, AI has taken center stage as the coveted buzzword. Despite the promises of synergy between AI and blockchain yielding positive outcomes in select scenarios, their successful integration remains scarcer than the prevailing hype would lead one to believe. Many AI token ventures flaunt objectives that teeter between impracticality and grandiosity, accompanied by considerable risk. In certain instances, projects merely append the allure of AI to stir intrigue, lacking substantive AI functionalities. Such tactics risk fueling transient market fervor, founded predominantly on hype rather than genuine substance.
Some of the AI token projects are discussed below:
Bittensor (TAO)
In 2019, Bittensor launched with a mission to create a decentralized marketplace for computing resources, aiming to alleviate the resource constraints faced by AI ventures. Traditionally, large organizations like OpenAI and Google invest heavily in hardware, while smaller players lease computing power from cloud providers like Amazon, which can be costly and challenging to scale. Bittensor offers a decentralized alternative where nodes contribute GPU resources to support AI workflows.
TAO, available for trading on major exchanges like Binance, KuCoin, and MEXC, was designed with finite limits similar to bitcoin, ensuring scarcity with a cap of 21 million tokens. Bittensor currently rewards miners and validators with approximately 7,200 TAOs daily.
Render Network (RNDR)
Founded by Otoy in 2016 and launched in 2020, the Render Network, akin to Bittensor, harnesses idle GPU computing power to serve users requiring rendering capabilities for images and videos.
Originally on Polygon, the Render Network shifted to Solana in late 2023 to enhance tokenomics and network features.
RNDR/RENDER, the native token, operates as RNDR on Ethereum/Polygon and as RENDER on Solana. Post-upgrades, RNDR’s maximum supply decreased to 536 million tokens from the initial 2.147 billion.
Similar to TAO, RNDR functions as a staking token for validators and rewards node operators providing GPU services. With 381 million tokens already in circulation, over 55% of the total supply is available for purchase to access GPU services.
RNDR’s price surged recently, hitting $13 from a low of $1.3 in September 2023, marking a 1000% increase. Though currently around $8, it reflects a 350% year-on-year gain, prompting potential buying opportunities.
The Graph (GRT)
The Graph, launched on Ethereum in 2018, isn’t your typical AI token project. Instead, it’s a decentralized data analysis platform designed to organize and retrieve blockchain data efficiently.
Similar to how indexes help navigate the vast internet, The Graph’s role in blockchain is crucial for decentralized applications (dApps). By facilitating data retrieval through queries and APIs, The Graph empowers developers to create serverless dApps, fostering true decentralization.
As blockchain-integrated AI models gain traction, The Graph’s role in organizing blockchain data becomes increasingly relevant for future AI training endeavors.
GRT serves as The Graph protocol’s native token, incentivizing participation from Indexers, Curators, and Delegators. While primarily utilized by Web3 developers, GRT is available for purchase on exchanges like Kraken, KuCoin, and Binance, also functioning as the protocol’s governance token.
With 9.4 billion of its 10.7 billion coins already in circulation, GRT holders can stake their tokens in delegator nodes, contributing to blockchain security and earning network query fees as rewards.
Fetch.ai (FET)
Fetch.ai, similar to Bittensor, aims to establish a decentralized AI services network, allowing users to engage “AI Agents” for autonomous online tasks. Envisioning a future where AI agents manage shopping and travel bookings, Fetch.ai also plans to automate DeFi and business services.
Established in 2019 in Cambridge, UK, Fetch.ai has partnered with industry giants like Deutsche Telekom and Bosch to deliver AI Agent solutions. FET serves as the native token on the Ethereum blockchain, primarily facilitating AI Agent payments and rewarding participants.
FET holders can stake their tokens for rewards, with the current APY at 8.99%, subject to network conditions. With a capped supply of 1.152 billion tokens and a circulating supply of 845 million, FET is tradable on major exchanges such as Binance, Coinbase, KuCoin, Kraken, and Bybit.
In 2024, FET surged by nearly 914%, skyrocketing from $0.35 (November 2023) to $3.2 (March 2024), with its market cap soaring from $437 million to $2.7 billion in under two months.
The Collaboration of AI and Blockchain in the Face of Regional Regulations
Blockchain and AI, though distinct, hold promise when combined, yet practical applications remain distant.
Even projects spearheaded by skilled AI experts carry high failure risks. Recent 900x and 1000x AI token spikes hinge on speculative optimism, with uncertain prospects for future value creation.
Regulatory hurdles loom large for entities like OpenAI, grappling with privacy and intellectual property disputes. Both the AI and blockchain sectors face evolving regulatory landscapes, exacerbating the substantial risk profile associated with AI tokens.
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