This is an opinion post written for CryptoPotato by Ken Timsit, Head of Cronos Labs
2023 is the year of artificial intelligence, and there’s no better time than now to take a deeper dive into the different types and use cases of AI — especially for startups and projects working at the intersection of AI and blockchain.
To carry the momentum into 2024, Web3 startups should get a better sense of what to focus on when developing projects at the intersection of blockchain and AI. The Cronos Accelerator Program has evaluated over 600 Web3 startup applications, which allowed us to gain an accurate sense of the current blockchain and AI landscape.
Coming from all around the world, the teams reviewed were working on the development of projects related to GameFi, NFT, DeFi, data, and infrastructure. Derived from those 600 applications, here are four main focus areas for projects in blockchain and AI.
ChatGPT and Midjourney proved how generative AI can improve the productivity of creative designers, coders, customer support specialists, and other content creators. While this may not seem specific to the blockchain industry, reviewing the applications from newly-forming Web3 teams showed that it is the area where AI will create the most value for the blockchain industry.
Increasing the productivity of teams working on blockchain protocols is a critical imperative as these protocols increasingly have to contend with local regulations, labor-intensive compliance, and multi-language localization. The best path forward for blockchain protocols is to augment team productivity by using AI tools in every department – such as software development, marketing, risk management, product design, and customer service.
For example, we have seen SaaS projects like Notifly, which use AI to create digests of what is going on in the community of other start-ups across Discord servers and Twitter spaces, two platforms widely used by Web3 projects for user engagement. In software development,
Blockchain protocols might work wonders on the backend, but that would mean nothing if they fail to provide a smooth user experience with clean screens and simple interfaces since no one other than the crypto-savvy minority would use them.
An ideal Web3 user experience should utilize AI to guide users as they navigate through product functions, interfaces, and notifications. AI can shoulder the role of an interactive FAQ, conversing with users and presenting what they need with appealing visuals. Companies and startups like Crypto.com (Any chatbot) and Dune Analytics (natural language queries) have already started to deliver on this dimension.
2024 should bring the next wave of “Siri for Web3” into reality, where users are asking questions and entering inputs instead of getting puzzled by complicated interfaces.
For years, Web3 technology has promised to equip users with decentralized (or self-sovereign) identity. Decentralized identity protocols enable us to store claims, such as “I am human” and “I am over 18”, and selectively share these claims with apps that require some proof of identity.
It is possible that the rise of AI will finally create use cases for decentralized identity, for example, to ascertain which users are human and to track the provenance and copyright status of training data used by AI models.
However, decentralized identity protocols face the “chicken and egg” problem with respect to adoption: Too many standards are in competition, and none has any critical mass of users yet to be useful. The technology is ready, but the world needs entrepreneurs with sustainable answers to go to market and user adoption issues.
AI has created a vast ecosystem of user and developer tools, from model creators like OpenAI and Midjourney to providers of training data like Scale AI. This year, blockchain-based products have truly joined the fray.
Some of them promise cheaper access to compute resources by leveraging the peer-to-peer renting of unused hardware, considering that AI model training can cost anywhere from seven digits to well over $200 million.
Other start-ups, like Modulus Labs and Risk Zero, are focused on delivering improved access to AI models, either by offering censorship resistance or by developing ways to certify which particular model is being used by a decentralized application.
Finally, a few startups like Fetch.ai are betting on the fact that AI agents will need to transact with each other in order to source services from external APIs or more specialized agents, and they are building the blockchain-based financial rails to power this economy.
In the future, agent networks could operate as DAOs in the sense that they would be governed by a community of users and appointed guardians and would have to pay fines for rule transgressions and prediction mistakes, therefore creating a feedback loop that keeps AIs in check and aligned with their human overlords.
Blockchain and AI are both emerging technologies, meaning they have been around for a while but still have a long way to go. 2023 was a definitive year for where AI could stand in the business world, and 2024 would see how blockchain can benefit from AI to accelerate its own growth.
Author Bio
Ken Timsit is the Head of Cronos Labs, the 100 M$ web3 start-up accelerator and ecosystem development arm of the Cronos blockchain.
Prior to joining the Cronos project in 2021, Ken was chief revenue officer at ConsenSys, the Ethereum technology company behind market-leading products MetaMask and Infura, where he spent 5 years.
Ken started his career at The Boston Consulting Group (BCG), where he spent 15 years in Paris, New York, and Singapore, and was a partner and managing director focusing on financial services and fintech. He subsequently co-founded an e-commerce startup in Southeast Asia.
Ken is a frequent speaker at blockchain conferences and has co-authored several reports and publications on Web3 and fintech. Between 2018 and 2020, he served as a management committee member of the European Commission’s EU Blockchain Observatory and Forum.
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