February 4th, 2025

The next wave of AI agents: A step towards true decentralisation and Web4

Artificial intelligence (AI) is advancing at a breakneck pace, and with it comes the potential to reshape industries and redefine how we interact with technology. Among the most exciting developments in this space is the rise of AI agents—autonomous systems capable of making decisions, learning from their environment, and executing tasks without constant human oversight. For those of us who believe in the ideals of Web4 and true decentralisation, AI agents represent a critical step forward. They offer the possibility of creating systems that are not only efficient but also equitable and self-sustaining.

However, the concept of AI agents is often misunderstood. Many people equate them with tools like ChatGPT or automated bots, which, while useful, fall far short of the true potential of AI agents. Others see AI as little more than a tool for generating content, such as images or articles. These misconceptions limit our understanding of what AI agents can achieve and obscure their transformative potential. To fully appreciate the next wave of AI agents, we need to move beyond these narrow definitions and explore their practical applications, particularly in the world of cryptocurrency, where they could serve as the backbone of decentralised systems.

Misunderstanding AI agents: More than just tools or bots

When you mention AI agents to the average person, their first thought is often of tools like ChatGPT. While ChatGPT is undeniably powerful—it can draft essays, summarise complex documents, and even assist with coding—it is not an AI agent in the truest sense. ChatGPT is a productivity tool, designed to respond to prompts and assist with specific tasks. It lacks the autonomy and decision-making capabilities that define a true AI agent.

Another common misconception is the idea that automated bots are AI agents. These bots, which are often used for tasks like customer service or social media management, are pre-programmed to perform specific functions. For example, a bot that automatically replies to customer inquiries or schedules meetings based on calendar availability is not an AI agent. It is simply a well-designed automation tool. True AI agents, by contrast, are capable of adapting to new situations, learning from their experiences, and making decisions without human input.

Finally, there is the belief that AI agents are primarily tools for generating content, such as images or articles. While AI can certainly create stunning visuals and compelling text, this is only a small part of what true AI agents can do. To illustrate this, let’s look at three examples of AI applications that go beyond these narrow definitions:

Scientific Discovery: AI systems like DeepMind’s AlphaFold have revolutionised biology by predicting protein structures with remarkable accuracy. This isn’t just a productivity boost—it’s a fundamental shift in how scientific research is conducted. AlphaFold operates autonomously, solving problems that were previously thought to be insurmountable.
Personalised Medicine: In healthcare, AI agents are being used to develop personalised treatment plans. IBM’s Watson Health, for example, has analysed patient data to recommend tailored cancer treatments. This goes beyond simple automation; it’s about making life-saving decisions based on complex data.
Urban Planning: AI agents are also being used to design smarter cities. Sidewalk Labs, a subsidiary of Alphabet, has developed systems that analyse traffic patterns, energy usage, and public transportation needs to create more efficient and sustainable urban environments.

These examples show that AI agents are not just tools—they are autonomous systems capable of transforming entire industries. But their potential becomes even more exciting when we consider their role in the world of cryptocurrency.

AI Agents in cryptocurrency: A new era of decentralisation

The cryptocurrency space has always been a breeding ground for innovation, and the integration of AI agents is the next logical step in its evolution. Unfortunately, when you bring up AI agents in crypto circles, the conversation often focuses on trading bots. These bots, which execute trades based on market conditions, are useful but far from revolutionary. They are not true AI agents; they are simply tools for automating repetitive tasks adapted to live data. The real potential of AI agents in crypto lies in their ability to serve as the backbone of decentralised projects, driving everything from governance to community engagement.

Example 1: DAO Governance

One of the most promising applications of AI agents in crypto is governance. Imagine a project like GOAT (Governance Optimised Autonomous Tokenisation), where an AI agent oversees the entire governance process. This agent could analyse community feedback, monitor on-chain activity, and propose changes to the tokenomics model based on real-time data. By doing so, it ensures that the project remains aligned with the community’s needs and adapts to changing market conditions without requiring constant human intervention.

Example 2: AI-Driven Tokenomics

Another exciting application is the use of AI agents to design tokenisation models. Tokenomics is a complex field that requires balancing incentives for developers, investors, and users. An AI agent could analyse historical data, simulate different scenarios, and propose a tokenisation model that maximises long-term value for all participants. For instance, it could recommend a dynamic staking mechanism that adjusts rewards based on network activity, ensuring the system remains sustainable over time. You can look at ai16z as an example for the above.

Example 3: Community engagement and content creation

AI agents can also play a central role in content creation and community engagement. Picture an AI agent that autonomously generates educational content, such as tutorials and explainer videos, tailored to the needs of the community. It could also moderate forums, answer questions, and even identify and address potential sources of conflict within the community. By fostering a more inclusive and engaged user base, the AI agent would contribute to the long-term success of the project. The closest for this example would be Virtuals Protocol.

These examples demonstrate that AI agents can do far more than automate trading or generate content. They can serve as the central nervous system of a crypto project, driving innovation and ensuring its sustainability.

Challenges and Opportunities

While the potential of AI agents is enormous, there are significant challenges that must be addressed. One of the biggest concerns is transparency. As AI agents become more autonomous, it’s crucial to ensure that their decision-making processes are transparent and aligned with human values. This is especially important in decentralised systems, where trust is a cornerstone.

Another challenge is the risk of centralisation. Ironically, the very technology that promises to enable decentralisation could become a source of centralisation if a few entities control the development and deployment of AI agents. To prevent this, we need to prioritise open-source development and community-driven governance models.

Ethics is another critical issue. As AI agents take on more responsibilities, we must grapple with questions about fairness, bias, and privacy. These challenges are not unique to AI agents, but their autonomous nature makes them particularly difficult to address.

Despite these challenges, the opportunities far outweigh the risks. By integrating AI agents into decentralised systems, we can create a world where technology serves as a true enabler of human potential. Imagine a future where AI agents manage entire ecosystems, from designing tokenomics to fostering community engagement, all while operating transparently and ethically. This is not a distant dream—it’s a vision that is rapidly becoming a reality.

A call to action

The rise of AI agents represents a fundamental shift in how we think about technology and its role in society. These systems are not just tools or bots; they are autonomous, intelligent entities capable of transforming industries and enabling true decentralisation. In the world of cryptocurrency, they have the potential to serve as the backbone of decentralised projects, driving innovation and ensuring long-term sustainability.

But realising this vision will require a collective effort. Developers must prioritise transparency and ethics, while communities must embrace the potential of AI agents to drive meaningful change. Most importantly, we need to move beyond the narrow definitions and misconceptions that currently dominate the conversation and recognise the true potential of AI agents as enablers of a decentralised future.

As someone who has long believed in the ideals of Web4 and true decentralisation, I am optimistic about the future of AI agents. They represent not just the next wave of technology, but a fundamental shift in how we interact with the digital world. The journey will not be without its challenges, but the destination—a world where technology empowers individuals and communities—is well worth the effort. Let’s embrace this new wave with open minds and a commitment to building a better, more decentralised future.

Source: https://ciosea.economictimes.indiatimes.com/amp/blog/the-next-wave-of-ai-agents-a-step-towards-true-decentralisation-and-web4/117190829

Anndy Lian

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com

j j j

June 9th, 2023

Will Singapore, Hong Kong step up crypto scrutiny as US cracks down on Binance, Coinbase?

The moves by the US SEC against Binance, Coinbase spooked investment sentiment just as Hong Kong seeks to establish itself as a trading hub along with Singapore
Unlike Singapore and Hong Kong, the US does not have comprehensive regulations for crypto and blockchain firms to operate without fear of regulatory action

US regulatory action against two major cryptocurrency exchanges, Coinbase and Binance, is likely to serve as a reference point for Hong Kong and Singapore as they seek to balance growth with investors’ safety, analysts have said.

The crackdown is the latest in a series of measures by the US Securities and Exchange Commission (SEC), which has levied fines and other penalties against crypto-lending firms, following the collapse of one of the most-reliable crypto exchanges FTX last November that sparked public outrage.

The SEC said Coinbase had acted as a broker, exchange and clearing agency for investments without proper registration. The complaint came a day after the regulator sued Binance, alleging it had tried to evade US regulation.

Binance said the enforcement action was unwarranted and alleged it was a regulatory “overreach” that damages the United States’ status as a global financial hub. Paul Grewal, Coinbase’s general counsel, said in a statement that the company would continue operating as usual and had “demonstrated commitment to compliance”, according to Reuters.

The development spooked investment sentiment just as Hong Kong is seeking to frame regulations to establish itself as a trading hub along with Singapore, which already has such a framework.

The two cities may look at the US action as a reference point, which could mean tighter scrutiny even in the Asian hubs, analysts say.

“There will be a fallout for sure. Hong Kong and Singapore are taking measures to regulate the cryptocurrency industry by proposing new licensing regimes for virtual asset trading platforms,” said Anndy Lian, Singapore-based author of the book “NFT: From Zero to Hero”.

Unlike Singapore and Hong Kong, the US has yet to come up with a comprehensive set of regulations that allows cryptocurrency and blockchain firms to operate transparently without fear of regulatory action.

“The war that the US is waging on cryptocurrencies shows no signs of abating, and it will only intensify as time wears on,” said Julian Hosp, the CEO and co-founder of Cake Group, a fast-growing Southeast Asia’s digital assets innovator.

The regulator’s action is part of a larger trend which is likely to continue into the 2024 presidential election, Hosp said.

Industry cautions on overkill

The Securities and Futures Commission (SFC) in Hong Kong has requested feedback on a proposal that would require virtual asset trading platform operators to obtain the same type of licences as securities traders, Lian said, adding that it had asked other firms who were not applying to prepare for an orderly closure.

Securities, as opposed to other financial assets, are strictly regulated and require detailed disclosures to inform investors of potential risks.

“These developments indicate that cryptocurrency exchanges seeking approval in Hong Kong and Singapore will have to adhere to new regulatory requirements and may be subject to increased scrutiny from regulators,” Lian said.

But new regulations could help establish the legitimacy of the cryptocurrency industry and potentially attract more investors and businesses at a time people are increasingly wary of the US market, analysts said.

“The SEC’s lawsuit primarily focuses on actions that have taken place in the United States and their impact on American citizens,” said Rajagopal Menon, vice-president of WazirX, India’s leading cryptocurrency exchange.

“As for regulators in Hong Kong, such as the Securities and Futures Commission, and Dubai’s Virtual Asset Regulatory Authority, the SEC’s lawsuit can serve as a point of reference or information. However, it does not automatically alter their regulatory stance or trigger immediate action,” he added.

At the two-day Crypto Expo Asia in Singapore, attendees were unbothered by news about Binance and Coinbase, with little to no mention about the developments.

Though the US action may not have a direct impact on other regions, Menon conceded that it could potentially have some indirect influence on their decision-making processes.

Nizam Ismail, founder of Singapore-based compliance consultancy Ethikom Consultancy, said crypto investors too were likely to be more cautious about risks and the need for due diligence on intermediaries.

“These products will be subject to prudential and consumer protection requirements. In the longer term, regulatory gaps will be addressed and consumer protection measures are likely to be introduced,” he added.

The development also exposed extreme price fluctuations in the digital assets which have made many traditional investors in assets like stocks and bonds cautious about investing in the digital asset.

After initially falling to a three-month low of US$25,750 following the Binance lawsuit, bitcoin has rebounded to around US$27,000 in afternoon trade in Asian hours.

Some investors – typically traditional investors, family offices and high net worth individuals – may have been deterred by the US regulator’s lawsuits, while “die-hards” long time investors “would not care”, said Hayden Hughes, the chief executive office and co-founder of Alpha Impact, a social trading platform.

A key takeaway from the incident for Asian hubs like Hong Kong is to have “regulatory clarity”, he said, adding that Hong Kong’s decision to open up to crypto and implement regulations had been a step in the right direction.

But it is unlikely that the event would deter crypto exchanges from seeking approval from Hong Kong and Singapore authorities, he said, highlighting that the two cities would gain from establishing clear rules and a licensing framework.

“Asian hubs can focus on their core mission of protecting the retail investors. There is absolutely no incentive for regulators to move fast and break things,” Hughes said.

Industry executives urged regulators to strike a balance with the fledgling industry.

Hong Kong and Singapore were unlikely to be impacted by the developments “if there is a will on both sides” and regulators are cautious “to not overkill the opportunity”, said Thomas Tallis, CEO of TVVIN, a firm that takes real-world assets and issues them on the blockchain.

Source: https://www.scmp.com/week-asia/economics/article/3223305/will-singapore-hong-kong-step-crypto-scrutiny-us-cracks-down-binance-coinbase

Anndy Lian

www.anndy.com

j j j

May 3rd, 2023

EU AI Act: A Significant Step Toward Global AI Governance

In recent years, Artificial Intelligence (AI) has emerged as a powerful tool that has transformed many aspects of modern life, including creating and consuming content. Using generative AI tools like ChatGPT has opened up new possibilities for content creation but has also raised new challenges and questions around copyright. The issue of copyright and AI-generated content is complex, involving various legal and ethical considerations.

As AI technologies become more prevalent in content creation, it is essential to address the questions of ownership, attribution, and compensation for AI-generated works. One of the primary challenges is that existing copyright laws are struggling to keep up with the rapid advancements in AI technology. The current legal framework, designed for traditional forms of content creation, may not be adequately equipped to address the unique aspects of AI-generated content.

Moreover, as AI-generated content becomes more prevalent, it is crucial to consider the ethical implications, particularly around issues such as bias, privacy, and accountability. AI algorithms can amplify existing biases, leading to unfair treatment of certain groups or individuals. Additionally, AI-generated content can raise privacy concerns as it may involve the use of personal data.

To address these challenges, policymakers, industry leaders, and other stakeholders are working to establish clear guidelines and regulations that balance the interests of creators, users, and AI technologies while considering the ethical implications of AI-generated content. For instance, the European Union (EU) is currently drafting the AI Act, a new law aimed at regulating the use of AI technologies in the EU. We will talk more about this in this article.

What is EU AI Act?

The European Union (EU) introduced the EU AI Act in April 2021, proposing a comprehensive legal and regulatory framework for AI. The proposed regulation covers all types of AI in various sectors, including entities that use AI systems professionally. The regulation aims to tackle challenges and risks linked to AI development and deployment, including discriminatory and rights-violating AI.

The EU AI Act primarily puts the responsibility on AI system providers to create a legal framework for developing, distributing, and using AI. The regulation includes broad and general articles to ensure its application across different industries and use cases. The EU AI Act is currently undergoing the legislative process and is subject to the ordinary legislative procedure for the EU. Members of the European Parliament agreed on the AI Act preliminarily in April 2023, and the text is scheduled to proceed to a plenary vote in June 2023. Upon approval, the EU AI Act will be among the first AI-specific regulations in the world.

It is essential to note that the EU AI Act is a significant development in regulating AI systems as it comprehensively and uniformly addresses the associated risks and challenges comprehensively and uniformly. The regulation’s general nature ensures adaptability and applicability across different industries and use cases, marking a significant step towards AI regulation in the EU.

How would EU AI Act help with generative works?

The EU AI Act, a proposed regulation for the use of AI technology, may also help regulate the use of generative works. The act includes provisions on transparency, data quality, and human oversight, which are relevant to developing and using generative AI models such as ChatGPT. In particular, the act would require companies that use AI tools to disclose any copyrighted materials employed in developing their systems. This could help prevent the unauthorized use of intellectual property in generative works. Additionally, the EU proposes requiring companies that provide generative AI services to explain the reasons and ethical standards for their decisions.

It’s worth noting that generative AI tools, like ChatGPT, have also come under scrutiny in other areas. For example, the US Consumer Financial Protection Bureau (CFPB) examines how generative AI tools could propagate bias or misinformation and create risks in the financial services sector. Some experts have pointed out that algorithms used by generative AI tools like ChatGPT could be subject to legal protections similar to those that govern the content on social media platforms like YouTube.

Generative AI was not prominently featured in the original proposal for the AI Act, as it only had one mention of “chatbot” in the 108-page document. However, the act has been revised to include stricter rules for “foundation model” systems, which include generative AI systems like ChatGPT. The revised text also emphasizes the importance of developing European standards for AI, which could help ensure that generative AI models meet the act’s essential requirements for different levels of risk.

Risks and challenges associated with the development and deployment of AI

The development and deployment of AI come with various risks and challenges that must be addressed to ensure its ethical use. One of the main concerns is that AI systems, if not implemented correctly, can violate human rights and discriminate against marginalized communities. Discriminatory AI systems can lead to biased decision-making processes that disproportionately affect certain groups, such as migrants, refugees, and asylum seekers.

Moreover, AI systems that interact with physical objects, such as autonomous vehicles and robots, have the potential to cause harm, making safety and security a significant ethical concern in AI development. The development of AI-generated code can also lead to unintended consequences, and LLMs’ ability to generate functional code is limited, making them powerful tools for answering high-level but specific technical questions.

To address these challenges, the Asilomar AI Principles recommend that AI systems be developed and employed to reduce the risk of unintentional harm to humans. It is also important to ensure that AI systems are designed to be inclusive and transparent and to minimize the risk of unintentional harm to human users.

As the EU and the US are jointly pivotal to the future of global AI governance, it is crucial to ensure that EU and US approaches to AI risk management are generally aligned to facilitate bilateral trade. At the same time, AI developers need to establish safeguards that protect users from potential risks. OpenAI, for instance, has established AI safeguards and has a vision for AI’s ethical and responsible development.

How is the United States looking at AI copyright?

The topic of AI copyright rules in the United States is a complex and evolving issue. Several recent legal cases and proposed regulations shed light on the current state of the law.

One major concern is whether AI-generated works can be protected by copyright law. Currently, most countries, including the US, require a human author for copyright protection to arise. However, ongoing discussions and proposed legislation may change this requirement in the future.

Another issue is the use of copyrighted material in training AI models. Some AI tools are trained on massive datasets that contain copyrighted works without obtaining specific licensing for this use. This raises questions about whether this use constitutes copyright infringement.

Recent legal cases also shed light on the issue of AI copyright rules. For example, Getty Images filed a lawsuit against Stability AI in February 2023, alleging copyright, trademark infringement, and trademark dilution.

In April 2023, the US Supreme Court heard a case that could have implications for AI-generated works. The case concerns fair use law and whether AI tools can be protected under it.

Proposed regulations in the European Union may also have an impact on AI copyright rules in the US. The EU is drafting the AI Act to regulate emerging AI technology, including copyright and intellectual property issues.

In conclusion

In conclusion, EU lawmakers have agreed that companies using generative AI tools like ChatGPT will have to disclose any copyrighted material used in developing their systems as part of a larger draft law known as the AI Act. It is a big move in my opinion.

The complex issue of AI-generated content and copyright requires attention from both legal and ethical perspectives. While debates and lawsuits continue regarding the use of generative AI tools in content creation, it is apparent that current copyright laws are struggling to keep up with technological advancements.

As AI continues to revolutionize content production and consumption, policymakers and industry leaders must collaborate to establish guidelines that balance the interests of creators, users, and AI technologies. These guidelines should provide clarity on issues like ownership, attribution, and compensation for AI-generated content.

It is also essential to consider the ethical implications of AI-generated content, including issues like bias, privacy, and accountability. As AI-generated content becomes more prevalent, it is crucial to ensure responsible and transparent production and use.

To address this issue, policymakers, industry leaders, and other stakeholders must work together to establish clear guidelines and regulations. These regulations should balance the interests of all parties involved and take into account the ethical implications of AI-generated content. This effort is critical in ensuring that AI continues transforming content creation and consumption fairly, equitably, and responsibly.

Source: https://www.securities.io/eu-ai-act-a-significant-step-toward-global-ai-governance/