What are AI Tokens: Explained

Like traditional altcoins, AI tokens are also built atop existing blockchain networks like Ethereum and Cardano among others.

Written by Radhika Parashar, Edited by Siddharth Suvarna | Updated: 9 September 2024 18:18 IST

Photo Credit: Reuters

AI coins can make for essential elements for projects like AI marketplaces and trading algorithms

Highlights

AI token holders can add to the decision-making of linked project
AI tokens act as native payment currency of related protocols
AI tokens can become incentives for developers and users of AI projects

A point of intersection between Artificial Intelligence (AI) and Web3 – AI tokens are cryptocurrencies that are linked to AI projects and protocols. In the last few days, the AI tokens category has emerged as a topic of buzz among members of the global tech community. This happened after tech giants like Apple and Nvidia reportedly initiated discussions around investing in OpenAI. Venture firm Thrive Capital also infused $1 billion (roughly Rs. 78.70 crore) in OpenAI, that helped in nudging the topic of AI tokens under the limelight.

Deep Dive into Use Cases of AI Tokens

AI tokens, which are tied to artificial intelligence projects, serve a range of functions. Similar to traditional altcoins, these tokens are often built on blockchain platforms such as Ethereum and Cardano.

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Developers in the AI space are increasingly combining AI with cryptocurrency technology to enhance transaction speed, transparency, and cost-efficiency—key elements needed to support the growth and operation of their protocols.

AI tokens give their holders the power to participate in the decision-making of the AI projects that the tokens are linked to. In addition, these cryptocurrencies act as the native payment currency for the AI projects they are accosted with, allowing holders to access the suit of services offered by the AI ecosystems, Dubai-based blockchain development firm Rock'n'Block explained through a recent post on LinkedIn.

AI tokens can become essential components for initiatives such as AI-driven marketplaces, AI-powered trading algorithms, and decentralized autonomous organizations (DAOs) that leverage artificial intelligence. Injective (INJ), Render (RENDER), Theta Token (THETA), Oasis Network (ROSE), SingularityNET (AGIX) have been named among popular AI tokens by Crypto.com.

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What Does the Future of AI Tokens Look Like

VanEck, an investment manager that received approval to launch Ether ETFs in the U.S. earlier this year, has offered an optimistic outlook on AI-driven cryptocurrencies. In a detailed report published in February, Matthew Sigel, VanEck's Head of Digital Assets Research, and Patrick Bush, Senior Investment Analyst for Digital Assets, explored the potential future of AI and cryptocurrency integration.

“There is a significant chance that public blockchains are the key to unlocking the widespread adoption of AI and that AI applications will be crypto's raison d'être (reason for being). This is because crypto provides important foundational elements AI needs, such as transparency, immutability, clearly defined ownership properties, and an adversarial testing environment,” the report noted. “We assert the base case for AI-focused crypto projects to collect $10.2 billion (roughly Rs. 85,635 crore) in annual revenues by 2030.”

AI tokens, which serve as incentives for developers and users of AI projects, are emerging as key drivers that could attract more people to explore new solutions and protocols in the future.

As per ZebPay, the potential for AI in the crypto world is immense because AI-powered crypto tokens can be programmed with the capabilities to detect illicit activities, analyse market trends, and identify investment opportunities.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

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Further reading: Cryptocurrency, AI Tokens, Artificial Intelligence, AI, OpenAI, Apple, Nvidia

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More