AI Agents in Crypto
These autonomous onchain agents utilize artificial intelligence (AI) to interact with blockchain protocols. This enables a range of functionalities like token swapping, trading, portfolio management, and engagement with DeFi platforms.
AI agents automate intricate processes, enabling users to optimize their strategies, minimize manual errors, and carry out transactions efficiently and quickly. The rise in AI agents in crypto emerges as the technology goes mainstream in different sectors, boosting smart contracts’ and DApps’ capabilities.
AI agents can evaluate vast amounts of data, recognize patterns, and make informed decisions concerning constant human oversight.
How AI Agents Drive Automation in Crypto
- Efficient transaction handling: AI agents can handle numerous transactions concurrently. This ensures faster trades and more sophisticated strategies.
- Automated financial management: AI agents can take charge of finances, manage portfolios, and make trades. It is similar to having a personal financial advisor on autopilot.
- Personalized financial assistants: One can think of an AI that recommends services and handles bookings and payments, easing financial life.
- Improved security: Advanced technologies such as multiparty computation (MPC) boost the security of transactions, safeguarding assets from unapproved access.
- Natural language transactions: People can use simple text commands to interact with their finances.
Brian Armstrong, Coinbase’s chief, has been a vocal advocate for using AI agents in crypto. He has even suggested that blockchain transactions’ future might increasingly feature automation. .
The Based Agent
This AI-enhanced autonomous agent uses the Swarm by OpenAI linked with the Base L2. It permits the execution of onchain tasks such as creating tokens and transferring assets.
Lincoln Murr, a developer at Coinbase, claims its template allows users to execute trades and integrate smart contract functions easily. The following are needed to get started with Based Agent:
- A key from OpenAI
- An API key from Coinbase’s developer program
- A template offered by Replit.
The streamlined approach democratizes access to AI capabilities in the crypto realm. This empowers users to automate their trading strategies and develop AI-powered bots that can execute onchain tasks.
AI agents can have their crypto wallets, allowing them to execute transactions on the blockchain. For example, the Based Agent template is a straightforward application for developing autonomous AI agents integrated with wallets and onchain access.
How to Create an AI Agent Using the Swarm and CDP
Step 1: The Development Environment
- Start by forking the template from the Based Agent Replit
- Sign up for a Replit account if it does not exist
- After forking, one will have a version of the project to customize.
Step 2: Acquire Needed API Keys
- For the Coinbase CDP API key, one should go to the CDP Portal to create a new project and generate an API key.
- For the OpenAI API key, a person should visit the OpenAI platform to create a new key. Besides, they must fund the account with 1$ or $2 for testing.
Step 3: Configure the Environment
In the Replit project, one should access ‘Tools’ and select ‘Secrets’ to store API keys safely. Coinbase and OpenAI keys should be added as secrets.
Step 4: Understand the Code Structure
- One should be acquainted with the main functions that enable blockchain operations.
- One must review how to interact with their agent via various modes, for instance, independent operation (autonomous mode) and direct command line interaction (chat mode).
Step 5: Extend Agent Capabilities
- One can think about new functionalities they intend to add to the agent to improve its capabilities.
- The new features can be incorporated by updating the agent’s function list.
Risks of AI Agents in Crypto Trading
Algorithm bias is a potential risk that involves AI favoring specific projects or narratives, creating echo chambers that misguide investors concerning a token’s value. This can result in irrational excitement and unsustainable price hikes.
It is vulnerable to market manipulation, which entails using AI tools to execute illicit activities such as the pump-and-dump. This may result in distorted market values.
The absence of regulatory oversight for AI-enhanced promotions means dishonest actors can exploit the technologies without accountability. Finally, a compromised AI agent can negatively manipulate trading strategies or market perceptions.
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