Artificial intelligence (AI) is transforming many industries, and crypto assets (virtual currencies) are no exception. With the fusion of blockchain and AI, a unique crypto asset called AI token has been created.
Here, we will explain what AI tokens are, how they work, and introduce some well-known AI tokens.
Understanding AI tokens
AI Token is a crypto asset that supports AI-based projects, applications, and services within the blockchain ecosystem.
AI tokens play three crucial roles.
The first is the promotion of trade. AI tokens will serve as a medium of value exchange within AI-powered platforms. Tokens allow users to pay for services, access data, and participate in platform activities.
Second, tokens play a vital role in enabling protocol governance. Some AI tokens give holders governance rights and the ability to participate in the decision-making process that determines the development and direction of AI projects and platforms.
Third, AI tokens incentivize users to contribute towards the growth of AI protocols/projects. You can receive rewards in AI tokens by providing data, providing computing resources, and developing AI applications.
How AI tokens work
AI tokens typically work in the following way.
- Creating a token: Projects often create tokens on blockchain platforms using standards like Ethereum’s ERC-20 or BNB Smart Chain’s BEP-20.
- Creating a smart contract: Create a smart contract that defines how tokens are used in AI-related services.
- Issuance of token: Projects working on AI tokens typically issue tokens in a token sale or genesis block.
- Use of tokens: Users can acquire tokens through exchanges, staking, or ecosystem participation. The tokens are then used to access services, pay fees, and participate in governance.
- Integration with AI platforms: The project will link AI tokens with platforms that provide AI services. Holders can use their tokens to access machine learning (ML) models, data analytics, and other AI capabilities.
- decentralization: Many AI token projects aim to be decentralized. Decentralized governance allows token holders to have a say in key decision-making processes.
- incentive: Some projects use tokens to incentivize those who contribute resources such as computing power or data to the network.
Details vary depending on the project. Each AI token system is designed with its own rules and objectives.
AI Token Top 5 Market Capitalization Capitalization Top 5
The landscape of crypto assets and AI is rapidly evolving, with numerous projects emerging that address various aspects of the field. Here, we will introduce the top 5 AI tokens by market capitalization.
Injective Chain is a layer 2 decentralized exchange and derivatives trading platform powered by the INJ cryptocurrency.
Uses AI for optimized order execution, strategy testing, predictive analytics, and enables the use of advanced trading tools like margin/leverage. As of this writing, INJ is the largest AI token with a market capitalization of $1.418 billion.
Graph (GRT) is an indexing protocol for organizing blockchain data and provides functionality to facilitate AI analysis. GRT is the second largest AI token by market capitalization ($1.379 billion at the time of writing) and has a decentralized network of nodes called “Indexer”.
Nodes create indexes and serve application data by staking GRT.
Render enables a distributed GPU cloud computing network for high-demand AI/ML training and rendering tasks.
Users stake their renders to access GPUs. The project gives you a render as a reward for lending your graphics ability. The market capitalization is $1.22 billion at the time of writing this article.
Theta Token (THETA)
Theta Token (THETA) is the crypto asset of the decentralized video distribution network Theta. The market capitalization at the time of writing this article is $960 million.
The company aims to leverage innovations in AI and ML to improve the quality and reduce costs of video streaming. Users and relay nodes gain theta by sharing bandwidth resources.
Oasis Network (ROSE)
Oasis Network enables privacy-preserving AI calculations on blockchain.
At the time of writing this article, the market capitalization is $567 million. ROSE coordinates a network of nodes to provide secure computing through technologies such as Intel SGX, differential privacy, and federated learning.
Possibilities and risks of AI tokens
As blockchain platforms strive for mass adoption, AI-driven innovation is essential to unlocking new capabilities and efficiencies.
AI-specific tokens support the incentives and collaboration needed to advance AI in a decentralized context. There is great potential as tokenization of machine learning (ML) processes moves on-chain.
However, like many crypto assets, it remains technically complex and volatile. It is important to conduct sufficient due diligence.
｜Translation and editing: Akiko Yamaguchi, Takayuki Masuda
｜Original text: A Beginner’s Guide to AI Tokens