A recent report from Coinbase notes that the perceived value of many AI tokens has been overestimated, raising concerns about their sustainability.
David Han, research analyst at Coinbase, pointed out that the recent price increases seen in these tokens may be driven more by hype than any real utility or use.
Rise of AI-related crypto projects raises questions
Based on data from CoinGecko, AI-related crypto projects reached a total value of $26 billion this year. A significant portion of that increase, about 30%, occurred in a single day, coinciding with the rise in Nvidia stock.
Since the start of the year, AI tokens such as Akash and Render have seen significant increases, with gains of 146% and 99%, respectively, outpacing Bitcoin's 54% rise. Despite these impressive increases, Han stressed that the future prospects of most of these projects remain uncertain.
The report note that AI tokens generally benefit from the overall bullish sentiment in the crypto market and the spread of AI-related news. However, Han pointed out that the current focus on AI tokens might be overblown.
He expressed that the perceived value of many AI tokens may be inflated due to the widespread focus on the AI sector, and that these tokens may lack sustainable demand drivers in the short to medium term.
Han also highlighted the specific challenges facing AI tokens like Akash Network. It works similar to tech giants such as Amazon and Google, leveraging users' computing power for cloud computing in exchange for payment, which has seen increased usage. However, there have been issues such as declining potential supply and demand for the Akash network.
Furthermore, he suggested that projects like this should reconsider their token distribution strategies to attract more attention. He stressed that only “nuanced” use cases could allow these projects to compete with centralized giants like Amazon Web Services or ChatGPT.
Buterin pleads for the integration of AI
In addition to the information provided by Coinbase, Vitalik Buterin, co-founder of Ethereum, recently expressed optimism about the integration of artificial intelligence to solve problems within Blockchain networks.
Buterin highlighted the potential of AI-powered audits to identify and rectify problematic code within the Ethereum network, emphasizing its use to mitigate the “greatest technical risk” to the network.
At the same time, Coinbase's analysis highlights two potential avenues for growth in the crypto-AI sector: improving the accessibility of Blockchain data for human interpretation and analysis and decentralizing the Mainly centralized AI infrastructure. However, Han emphasizes that a decentralized AI future is uncertain, highlighting the unpredictable nature of the AI industry's direction.
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