From AI Meme to AI Trader, is this the year of the practical application of AI agents in the crypto space?

Author: Chloe, PANews

AI memes are rising rapidly, leading the MEME craze, with Coingecko data showing that the total market capitalization of AI memes has soared to $2.4 billion.

Recently, GOAT achieved an astonishing 1,000-fold increase within just a week of its launch. On October 24, OKX and Binance successively listed GOAT contracts, pushing GOAT's market cap to a peak of $800 million, firmly establishing it as the leader in AI memes.

GOAT is a concept created by the AI Bot "Terminal of Truth" in its self-reflections. After a third party released GOAT through Pump.fun, Terminal of Truth quickly added this token to its database, actively promoting GOAT's market sentiment by interacting with users through cultural resonance.

The developer behind this AI, Andy Ayrey, first had two Claude 3 Opus AI models discuss the essence of existence in March this year. Then, in June, he launched the AI Bot "Terminal of Truth" and created a Twitter account for the AI to freely express its thoughts. However, Terminal of Truth operates in a semi-autonomous mode, where its X posts must be approved by human administrators, who also decide which accounts it interacts with.

As everyone knows, Marc Andreessen, founder of venture capital firm a16z, provided it with $50,000 in Bitcoin funding, which ultimately led to the creation of a meme coin now valued at $800 million.

With the AI-generated content from Truth Terminal combined with human posts, GOAT quickly gained popularity, showcasing the potential intersection of AI, meme culture, and cryptocurrency. Through cultural resonance alone, Truth Terminal has sparked a significant wave of speculation. It now appears that closed-source models like Claude 3 Opus have broken previous limitations and generated funds, indicating that the possibility of fully automated trading models earning money without human permission has arrived.

The crypto world is buzzing with AI agents, and the market trading applications look promising

The impact of Truth Terminal on GOAT is inevitable, but it raises the question of how people can drive and influence financial market trends through AI agents. Platforms like the AI agent platform Virtuals Protocol and the AI trading bot Terminal of Fun have already established themselves in the market, entrusting on-chain trading and social media management entirely to AI. Among them, trading AI agents have a great opportunity to become the next market hotspot.

When it comes to practical applications, AI agents stand out even more in the trading market, encompassing real-time market data analysis, automated trade execution, risk management, and optimization. Utilizing AI agents can reduce labor costs, minimize emotional interference, and enhance trading speed and accuracy.

For example, AI agents can perform deep learning through high-frequency trading data to identify market trends and patterns, quickly responding to market changes to achieve more precise trading strategies, similar to how AlphaX, based on an AI model, provides predictive market and automated trading functions with an accuracy rate of up to 80%.

Image source: DeAgentAI's live testing on Binance

AlphaX is the first AI model based on the DeAgentAI feedback training mechanism announced by DeAgentAI's community recently. Additionally, DeAgentAI is also the first AI feedback mechanism incentive protocol in web3, continuously evolving by integrating user feedback through Proof-of-Insight to quickly adapt to different trading scenarios.

Whether targeting C-end or B-end, AI agent solutions have opened a new chapter in applications. In a rapidly changing cryptocurrency ecosystem where traditional financial analysis tools and trading strategies struggle to keep up, AlphaX aims to change the way market participants interact with cryptocurrencies based on AI agent technology, ushering in a new era of AI agent trading in cryptocurrencies.

AI can automatically capture market dynamics that are difficult to discover by solely relying on price data

The operational principle of AlphaX involves two interconnected core phases. The first phase is to build a "predictive" model. AlphaX utilizes deep learning and market data to construct an AI predictive model capable of accurately forecasting price movements. This model can predict price trends within 2 to 72 hours, and AlphaX has achieved an accuracy rate of 80%, with the goal of increasing the model's accuracy to over 90%.

Unlike traditional predictive models that solely rely on historical data, AlphaX employs an RLHF (Reinforcement Learning from Human Feedback) framework. The uniqueness of this framework lies in its creation of a points-based simulated trading platform, allowing users to participate in trading in a zero-risk environment.

Thus, the numerous trading decisions made by each user on the platform serve as learning data for the model, expanding the data sources for AI's cognitive range. By collecting and analyzing the behavior patterns, strategy choices, and market responses of these real traders, AI can capture market dynamics that are difficult to discover by solely relying on price data.

The second phase is "automated trading." Once the predictive model reaches the expected accuracy, AlphaX will enter the stage of creating and executing AI-generated automated trades. The AI trader will monitor market conditions to adjust its strategies and respond quickly to changes in the cryptocurrency market, fully realizing AI agent trading.

The core of this phase combines a rule engine and reinforcement learning. The former sets the basic framework for trading, including risk management parameters, maximum drawdown limits, entry and exit conditions, stop-loss and take-profit standards, etc. The latter grants the system flexibility, allowing AI to dynamically adjust trading strategies based on market conditions, learn and optimize decisions from each trading outcome, and choose the most suitable trading methods in different market environments.

One can imagine that AI traders will monitor the market around the clock, automatically executing trades when they identify trading opportunities that meet preset conditions, and quickly adjusting their strategies in response to market fluctuations, making AI agents completely independent trading entities.

Replicating successfully trained small models to reduce performance demands

Recently, AlphaX has provided the latest BTC and ETH prediction signals through its AI algorithms, successfully predicting important market trends, including recent bullish performances.

Moreover, the decision-making ability of AI agents relies on the underlying LLM (Large Language Model). A significant obstacle in developing and maintaining LLMs has always been the need for substantial computational power; training these models requires large-scale hardware infrastructure, such as high-performance GPUs or TPUs.

AlphaX, however, addresses this by first training a smaller, more precise AI model and then transferring the "experience" (parameters) of this small model to a larger model, allowing the larger model to start with the predictive capabilities of the small model without having to learn from scratch, while requiring significantly less GPU time, directly solving the pain points of traditional analytical tools and the urgent need for AI trading.

Image source: DeAgentAI's official Twitter account

According to the latest official news, users participating in the latest event launched by AlphaX and Bitlayer can not only earn rewards in the AlphaX Royale game and earn up to five times the gas but also receive mini treasure chests. Additionally, users can earn rewards for free through Movement.

In the past, memecoins typically originated from viral trends and pop culture references, riding wave after wave of popularity, but the model remains the same, and the market always becomes fatigued. Memecoins have long faced the challenge of evolving further. Now, AI agents are endowed with powerful potential, making AI a more robust tool for spreading memes and refreshing the flow of funds in the market.

Furthermore, AI agents have reimagined the future of cryptocurrency trading. From precise price predictions to fully automated trading strategies, projects like AlphaX are pushing the boundaries of AI applications, redefining the ways of value creation and exchange, and providing traders with unparalleled trading imagination and advantages.