Below is a guest post from Shane Neagle, Editor-in-Chief of Tokenist.
If you can learn something from the Crypto market, then if there is a shortcut, it will be taken. When digital collectors in the form of NFTs appeared, the market quickly saturated. In turn, speculative NFTs purchased their potential for resale Market defeat.
Similarly, like memokine, the appeal of quick gold on board, whether the rug is pulled, pumped or thrown away, showed a catastrophic combination of entry and hype and high hype possibilities.
But what about the Altcoin market itself, other than MemeCoin and NFTS? Now that AI has become an inexplicable part of life, are there any broader lessons or even threats? First, let’s look at what happens in the NFTS as an enlightening parallel.
Supersaturation and speculation fatigue
Just before Terra (Luna) collapsed in May 2022, global NFT sales reached nearly $24 billion. Optimism was so high that JP Morgan projected Metaverse revenue of $1 trillion per year Within 10 years. That prediction now seems completely out of place.
The cascade of bankruptcies from Celsius to Blockfi and FTX served as a trigger for the collapse of the NFT market, but the text was already on the wall. AI-driven image generators such as stable diffusion and Dall-E significantly lower the barrier to penetration and open the lock for derivative low-effort NFT collections.
This AI-driven saturation significantly eroded the rarity of collectibles and ultimately drove speculative PFP (profile photo) projects in favor of utility-driven NFTs and tokenized real-world assets (RWAs).
Overall, AI availability has significantly exacerbated the underlying weakness of the NFT market, which is an oversupply. This problem is easy to understand now Ghibli Mania It wipes out the social media space generated by both ChatGpt and Grok.
Second, the creation of the collapse profit from the NFTS induced speculative fatigue. MemeCoins reflects this dynamic very closely with the help of an additional AI-powered layer.
AI bots such as Truth deviceflocking social media posts with AI-generated memes and stories to promote tokens. Banana gunfurther abuses the memokine market by performing millisecond trading and sending false demand signals.
The ultimate result of AI amplification is the creation of a market that is highly prone to bubble bursts. As a result, repeated bursts cause fatigue and constantly reducing retail engagement, especially when participants are tempted by hype rather than being led to healthy risk management. However, the problem is that this type of crypto fatigue can infect Altcoin markets other than NFT and Memecoin at a deeper level.
AI in Blockchain Coding: A New Distortion Frontier
For years, it has been common to measure the underlying value of blockchain projects due to developer involvement. This developer activity will act as a signal to future token holders. After all, if your project has few core developers, the risk of your project suffering is much greater when it leaves.
Second, there is less effort to hunt bugs, new features, implement roadmap, and optimize. This is why there are many dedicated websites to publish this metric, and developers commit over various periods.
In short, developer activity measures the health of the blockchain. As developers are seeking incentives, they may even reveal the potential for blockchain adoption as the leading long-term value driver.
But as AI plays, we are looking at the potential for important distortions. Last year, it has been widely accepted that AI models, along with image generation, are at their best in coding. Specifically, Anthropic’s Claude 3.7 was Popular Junior software engineers can be replaced as coding multipliers.
This opens up a whole new landscape. This landscape offers few advanced developers, making it possible to leverage AI underling.
Generate smart contracts from ERC-20 to BEP-20. CraftTokenomics, Whitepapers, and even a roadmap.
And, just like it happened with NFTs and Memecoin, the lower the barrier to intrusion, the higher the potential for oversupply. AI continues to lower that barrier to entry with the capabilities of a complete blockchain project pipeline, from smart contract codes to social media boosts.
It may be that AI can manufacture Smart Contract Audit By creating false trust. When it comes to developer activity metrics, AI tools easily distort with auto-generated commits and pull requests, or fake GitHub accounts that generate minor and frequent updates.
As a result, it is more difficult to assess its true value and health as new tokens get into the spotlight.
The bright side of the AI-driven token generation
Even in the early stages, AI models are now being replaced with coding. This opens the door to stirring tokens with minimal effort, and once again repeats a NFT-like cycle that is flooded with low-effective tokens.
This inevitably causes fatigue and disillusionment with the crypto space, as it becomes more difficult to filter AI noise. Similarly, there are advantages.
Bitcoin is further strengthened as a unique cryptocurrency that relies on real-world assets (energy, hardware) via work proof algorithms. As such, Bitcoin acts as an anchor for the wider Altcoin market. Projects that rely on AI code generation lead to more forks and zombie chains, but this rapid decay of activity increases projects with pre-world use cases.
Ultimately, AI cannot sustainably forge adoptions. Rather, AI acts as a filtering mechanism for purgeing weak projects.
Unfortunately, Memocoin’s activities over the past few years clearly show that people are seeking early opportunities in the hopes of getting a lock-in with a much-needed 10x profit. This is not an investor’s mindset, but a quick backmindset. Therefore, this driver maintains the incentive to use AI to generate cryptographic projects for purposes other than extracting wealth.
But in the opposite direction, blockchain projects also provide solutions. Where appropriate, the OriginTrail (TRAC) project utilizes distributed knowledge graphs (DKGs) to ensure the verifiability of the information used by AI.
“Even abuse of social networks for political manipulation may seem tiny compared to the lack of trust in the solutions we are ‘outsourced’ cognition. Systems that trust us to process a large amount of knowledge, provide input for our actions, and to automatically carry out certain actions, have the highest possible requirements for transparency and neurologicality. ”
Trace Lab White Paper Verifiable Internet for Artificial Intelligence: Convergence of Crypto, Internet, AI
In the long run, it would be wise to expect further erosion of trust in the Altcoin market. Ultimately, mass-produced, unaudited contracts can lead to costly hacks, not just lagpur. Onchain’s reputation efforts from karma3labs It may help, but it is unclear whether such innovative solutions can move beyond niche adoption.
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