HOW MANY PROJECTS Highlights

8 Highlights From Coinbase Ventures’ Report “Demystifying the Crypto x AI Stack”

On October 24th, Coinbase published “Demystifying the Crypto x AI Stack”, highlighting more than 200 projects building at the intersection of AI And crypto. The Tl;dr at the start:

The future of AI can be built on blockchain technology, as crypto can help increase accessibility, transparency, and use cases within the emerging tech. The convergence of crypto’s efficiency, borderless nature, and programmability with AI has the potential to transform how humans and machines interact with the digital economy, including by enabling users to have sovereignty over their personal data. This includes the rise of the “Agentic Web,” where AI agents operating on crypto infrastructure can drive economic activity and growth.

The piece takes only 15 minutes to read , so I suggest reading it. But, if you want to save 10 minutes, here are my 8 highlights:

1. Coinbase Lays Out A Framework Composed Of Two Core Sub-Segment

The first sub-segment is Decentralized AI, where generic AI infrastructure can be infused with “..the properties of modern peer-to-peer blockchain networks”. This enables democratized access to AI resources (e.g., compute, storage, bandwidth, training data, etc), collaborative, open-source model development, verifiable inference, or immutable ledgers and cryptographic signatures for content provenance and authenticity.

The second sub-segment is Onchain AI, where crypto infrastructure and apps leverage AI to improve user and dev experiences via LLMs and natural-language interfaces or enhancing smart contract capabilities. Two pathways for onchain AI adoption include: (1) Devs integrating AI models or agents into their smart contracts and apps and (2) AI agents leveraging crypto rails (e.g., self-custody wallets, stablecoins, etc) for payments and incentivizing decentralized infra resources.

2. The Itnersection of Crypto x AI Is Driving the Emergence OF The “Agentic” Web

The “Agentic” web is a transformative paradigm in which AI agents, following the logic laid out via smart contracts, and acting autonomously, can drive significant economic activity. These agents will control their own crypto wallets and execute transactions that fulfill their owners intents. In addition, AI will write the majority of software code, including smart contracts, resulting in a “cambrian explosion” of onchain apps.

Coinbase sees a future where the lines between AI and crypto become increasingly blurred, creating a new paradigm of smart, autonomous, and decentralized systems.

3. Crypto Will Be The Payment Rails For The Agentic Web

It’s easy to imagine a world in which the agentic web will drive billions of micro agent-to-agent transactions a day. Coinbase Ventrues believes that crypto will be the preferred rails for those transactions given it’s advantage over tradfi rails including crypto’s efficiency, borderless nature, and programmability. In addition, the verifiability and immutability of decentralized networks will ensure the trust and auditability of AI agent transactions.

Interacting onchain through conversational interfaces will become the default user norm. Users will simply describe their desired transaction intent in natural language (e.g., “Swap X for Y”), and AI agents will execute those intents via verifiable smart contracts, providing increased efficiency and and lower cost execution.

4. Coinbase Segments The Crypto x AI Tech Stack Into Four Layers

Per the graphic below, the four layers are:

1) Compute — networks focused on supplying GPU’s to AI devs

2) Data — networks that enable decentralized storage, access, orchestration, and verifiability of the AI data pipeline

3) Middleware — networks/platforms that enable the development, deployment, and hosting of AI models / agents

4) Applications — user-facing products (B2B or B2C) that leverage onchain AI mechanisms

5. The Compute Layer Provides A Potential Solution To GPU Scarcity

By establishing permissionless marketplaces for buying, renting, and hosting physical GPUs, aggregators enable anyone (e.g., Bitcoin miners) to contribute their excess GPU compute capacity for AI job execution, in return for token incentives. It’s early days, with numerous challenges, so Coinbase believes that mainstream adoption is “unlikely” in the near-to-medium term. But the emerging segments identified include:

• General-purpose Compute: Marketplaces that provide GPU computing resources that can be used for a variety of apps
• AI / ML Compute: Networks that provide GPU computing resources for a specific service, like GPU aggregators, distributed training/inference, GPU tokenization, etc
• Edge Compute: Compute and storage networks that power on-device LLMs for personal, contextualized inference

6. The Data Layer Includes Access To Data Sets, Data Provenance, & Data Storage

Putting together landscapes is challenging. So I’m highlighting just one obvious omission, the original decentralized data storage solution built by Gavin Wood back in the day, and still going strong, Swarm.

The lack of training data is a major challenge for most companies other than Facebook, Apple, Microsoft, Google and Amazon (aka FAMGA). Coinbase sees massive opportunity in addressing that challenge, including:

• Incentivizing users to share their private data (e.g., “Data DAOs” ) where contributors can see economic upside from contributing their data
• Tooling for generating synthetic data assets from natural language prompts or incentivizing users to scrape data from public websites
• Incentivizing users to pre-process datasets for training models (e.g., data labeling / reinforcement learning from human feedback) and to build tools designed to query, analyze, visualize, and provide actionable insights on onchain data
• Establish multi-sided, permissionless data marketplaces, where anyone can be compensated for contributing
• Storage networks for long-term data storage enabling the management of structured data that is updated frequently (e.g., Swarm)
• Optimizing data ingestion pipelines and processing for AI and data-intensive apps enabling provenance the tracking & verification of AI-generated content
• Data labeling that improves reinforcement learning and fine-tunes mechanisms for AI models by incentivizing the creation of high-quality training datasets
• Oracles that use AI to provide verifiable offchain data for onchain smart contracts

7. Coinbase Ventures Biggest Focus Is On The Middleware Layer / Infrastructure Needed To Enable Crypto x AI Services To Thrive

Building open decentralized AI models or agent-based ecosystems requires new infrastructure, including open-weighted LLMs that power onchain AI use, and foundational models that quickly understand, process, and act on onchain data, to name just a few. Middleware is a core focus for the Coinbase Ventures crew given the massive long-term growth in demand for AI services. Emerging segments include:

• AI models whose weights are publicly accessible, allowing users to easily modify and distribute them
• Networks and platforms enabling the creation of foundational LLMs for onchain use cases
• Networks and platforms that enable incentivized and verifiable training or fine-tuning mechanisms onchain (e.g., Gensyn, Prime Intellect)
• Privacy: Networks and platforms that employ privacy-preserving mechanisms for the development, training, and inference of AI models
• Inference Networks that employ cryptographic techniques / proofs to verify the correctness of AI model outputs
• Resource Coordination Networks designed to facilitate the resource sharing, collaboration, and coordination of AI model development
• Agentic networks and platforms facilitatating the creation, deployment, and monetization of AI agents for both on/offchain environments

8. Applications/AI Agents Are Already Proliferating And Poised To Enable Increasingly Complex Tasks

AI agents are already proliferating in crypto (e.g. Dawn Wallet, Parallel Colony and Venice.ai (my fave!). Coinbase believes that advancements in AI agent infra and frameworks are poised to enable the crypto design space to build more complex, proactive apps, with emerging segments including:

• AI companions for creating & monetizing personalized AI models
• Apps in which natural language prompts are the primary interface for interacting with onchain transactions
• Dev-facing apps/tools that leverage AI models / agents to enhance onchain developer experiences and security mechanisms
• Decentralized identity apps that leverage cryptographic proofs and ML models to verify user’s proof of personhood

— —

If you appreciated this post please “Clap” below so others will see the post.

This article has been prepared for informational purposes only and does not constitute an offer or solicitation to buy tokens or other securities of CryptoOracle (the “Company”).