Real AI use cases in crypto, No. 1: The best money for AI is crypto
For every genuine blockchain project harnessing artificial intelligence in an attempt to create a better world — like Dr Ben Goertzel’s Singularity.net — there are 100 coins like AI Doge that have simply wedged the hyped-up terms “AI” and “Crypto” together to flog tokens.
“Those are just fundamental buzzwords,” explains Near blockchain founder Illia Polosukhin, who worked on the groundbreaking “Attention Is All You Need” research that led to large language models like ChatGPT and Claude.
As one of the few people in the world who are as well versed in AI as they are in crypto, Polosukhin says that if you ignore the hype, the technologies really are a good fit.
“There’s a lot of specific things both in AI and Web3 that can use each other or benefit each other,” he says.
Magazine spoke with Polosukhin, Framework Ventures founder Vance Spencer, MakerDAO founder Rune Christensen, Richard Ma from Quantstamp, Ralf Kubli from Casper and others to examine some of the key hype-free, genuine use cases for AI in crypto and blockchain.
Over the next week, we’re rolling out one genuine use case for AI in crypto each day — including reasons why you shouldn’t necessarily believe the hype.
The best money for AI is crypto
Everyone from Circle boss Jeremy Allaire to former BitMEX CEO Arthur Hayes to Animoca Brand’s Yat Siu is convinced that crypto will be the currency of choice for AI agents.
After all, LLMs are unable to get access to bank accounts but can easily make payments using a funded crypto wallet, and they’re well suited to interacting with the logic of smart contracts and DeFi protocols.
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The humans delegating the funds in the wallet can set the overarching strategies and rules, and then observe how the AI agent has performed using the transparent record on the blockchain.
Allaire says that AI “and blockchains are made for each other,” with the tech suited to “machine-generated and enforced contracts” and “machine-to-machine value exchange.”
Completely agree. AI and Blockchains are made for each other. Provenance of data, machine generated and enforced contracts, and machine to machine value exchange. We are already hearing about AI Bots spinning up on-chain wallets and using USDC. https://t.co/BwmdGdVufJ
— Jeremy Allaire (@jerallaire) May 25, 2023
Hayes believes that Bitcoin is the most logical payment system for AI as it is “available at all times, digital and completely automated” and enables the AI to pay for “data and compute power—in order to ‘stay alive.’”
That said, Hayes also seems to think AIs will live for trillions of years “until the heat death of the universe,” and the LLMs will, therefore, choose Bitcoin as it can be mined by robots. So sometimes Hayes’ ideas tend to get away from him.
Animoca Brands Executive Chairman and founder Yat Siu is another high-profile industry figure who believes that crypto is the only logical way for AIs to transact “with each other as autonomous beings in future.”
“In the future, 70-80% of transactions will happen through autonomous AI agents and the decentralised nature of crypto makes it a perfect match.”
But don’t take the word of puny humans: ChatGPT also chooses crypto as its preferred currency without any nudges in that direction.
Trading bots that are able to buy and sell crypto already account for up to 80% of spot volumes, and it’s likely these existing automated bots will progressively be replaced by more intelligent AI agents. (Be warned, however, that LLM-based trading experiments like Autopilot’s GPT Portfolio have seen mixed results so far, so putting your funds under the control of an AI is going to be a risky proposition for a while.)
Members of Near DAO have begun experimenting with allowing an AI to decide whether a particular new project satisfies the relevant grant criteria to fund it autonomously from the treasury.
How to add Bitcoin and crypto payments to an AI agent
It’s certainly easy enough to integrate crypto payments with AI. Lightning Labs has released a set of developer tools that enable GPT-4 to buy, sell and hold Bitcoin using the layer 2 network. And AI startup Fewsats has already created an agent that is able to pay Lightning Network invoices.
I don’t want you to freak out, but my @OpenAI agent just paid a LN invoice for me ?
First time #ChatGPT paid in #Bitcoin ? pic.twitter.com/811JdtJ3iB
— fewsats (@fewsats) November 14, 2023
Fetch.Ai also offers a service where you can create an AI agent that is able to make payments on your behalf.
Syndicate.io founder Ian Dao Lee recently wrote a blog detailing how he was able to knock up a GPT in just a few hours, using OpenAi’s APIs and Syndicate’s Transaction Cloud, which is able to autonomously make USDC payments from a Safe wallet on the Base network.
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He’s excited about the possibilities this holds. “The ability for AI to pay for things, hold things of value, exchange value, or create things of value — on behalf of itself or others — is how AI gets true agency,” he says.
“Some of the most interesting ideas open up not only when AI agents can transact on behalf of and with people, businesses, or other AI agents — but also when AI agents can manage things of value and transact on behalf of themselves.”
Lee believes that in the future, AI agents will be able to shop for things autonomously, manage the finances of people and organizations, determine and hand out funding approvals or try and grow wealth to help others.
However, it turns out that AIs are just as stingy with their money as humans are, donating an underwhelming $3 to charity.
Don’t believe the hype
While AI can more easily use crypto at present, banks appear eager to adopt AI for a variety of uses and already use it extensively for the detection of financial fraud.
Payment companies like Brex are working on integrating AI with corporate bank accounts to allow AI agents to automatically make payments in defined circumstances, such as travel expenses.
And a team of researchers recently put out a preprint describing how they successfully trained an AI agent called MM-Navigator to work out how to search through Amazon for a given product within a certain budget and to buy it.
Until crypto payments are more widely accepted, fiat still has a lot of advantages when dealing with businesses in the real world.
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SEC Commissioner and head of the crypto task force, Hester Peirce, says US financial firms are navigating crypto in a way that’s similar to playing the children’s game “the floor is lava,” but in the dark.
“It is time that we find a way to end this game. We need to turn on the lights and build some walkways over the lava pit,” Peirce said at the SEC “Know Your Custodian” roundtable event on April 25.
The lava is crypto, says Peirce
Peirce explained that SEC registrants are forced to approach crypto-related activities like “the floor is lava,” where the aim is to jump from one piece of furniture to the next without touching the ground, except here, touching crypto directly is the lava.
“A D.C. version of this game is our regulatory approach to crypto assets, and crypto asset custody in particular,” she said.
Peirce said that, much like in the game, firms wanting to engage with crypto must avoid directly holding it due to unclear regulatory rules. “To engage in crypto-related activities, SEC-registrants have had to hop from one poorly illuminated regulatory space to the next, all while ensuring that they never touch any crypto asset,” Peirce said.
Peirce said that investment advisers are often unsure which crypto assets qualify as securities, what entities count as qualified custodians, and whether “exercising staking or voting rights” could trigger custody violations.
“The twist in the regulatory version is that it is largely played in the dark: burning legal lava and no lamps to illuminate the way.”
Peirce also said that a broker or ATS that cannot custody or manage crypto assets will struggle to facilitate trading, making it unlikely for a “robust market” to develop.
Echoing a similar sentiment, SEC Commissioner Mark Uyeda said at the event that as more SEC registrants work with crypto assets, it’s essential that they have access to custodial options that meet legal and regulatory requirements.
Uyeda said the agency should consider letting advisers use “state-chartered limited-purpose trust companies” with the authority to hold crypto assets as qualified custodians.
Related: Blockchain needs regulation, scalability to close AI hiring gap
Meanwhile, the recently sworn-in chair of the SEC, Paul Atkins, said that he expected “huge benefits” from blockchain technology through efficiency, risk mitigation, transparency, and cutting costs.
He reiterated that among his goals at the SEC would be to facilitate “clear regulatory rules of the road” for digital assets, hinting that the agency under former chair Gary Gensler had contributed to market and regulatory uncertainty.
“I look forward to engaging with market participants and working with colleagues in President Trump’s administration and Congress to establish a rational fit-for-purpose framework for crypto assets,” said Atkins.
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Politics
Labour and Reform in battle for Runcorn by-election seat – but disillusionment could be eventual winner
On the banks of the Mersey, Runcorn and Helsby is a more complicated political picture than the apparent Labour heartland that first presents itself.
Yes, there are industrial and manufacturing areas – an old town that’s fallen victim to out-of-town shopping, and an out-of-town shopping centre that’s fallen victim to Amazon.
But there are also more middle-class new town developments, as well as Tory-facing rural swathes.
Space Cafe director Marie Moss says a sense of community has faded
One thing this area does mirror with many across the country, though, is a fed-up electorate with little confidence that politics can work for them.
In the Space Cafe in Runcorn Old Town, its director Marie Moss says many in the region remember a time when a sense of community was more acute.
“People were very proud of their town… and that’s why people get upset and emotional as they remember that,” she says.
It’s this feeling of disenfranchisement and nostalgia-tinged yearning for the past that Reform UK is trading off in its targeting of traditional Labour voters here.
Party leader Nigel Farage features heavily on leaflets in these parts, alongside spikey messaging around migration, law and order, and Labour’s record in government so far.
Runcorn 2024 result
Taxi driver Mike Holland hears frequent worries about that record from those riding in the back of his cab.
A Labour voter for decades, he says locals were “made up” at last year’s election result but have been “astonished” since then, with benefit changes a common topic of concern.
“Getting a taxi is two things, it’s either a luxury or a necessity… the necessity people are the disabled people… and a lot of the old dears are so stressed and worried about their disability allowance and whether they are going to get it or not get it,” he says.
But will that mean straight switchers to Reform UK?
Taxi driver Mike Holland has voted for Labour for decades, but is now looking at the Lib Dems and Greens – or may not vote at all
Mike says he agrees with some of what the party is offering but thinks a lot of people are put off by Mr Farage.
He’s now looking at the Liberal Democrats and Greens, both of whom have put up local politicians as candidates.
Or, Mike says, he may just not vote at all.
It’s in places like Runcorn town that some of the political contradictions within Reform UK reveal themselves more clearly.
Many here say they were brought up being told to never vote Tory.
And yet, Reform, chasing their support, has chosen a former Conservative councillor as its candidate.
It’s no surprise Labour has been trialling attack lines in this campaign, painting Mr Farage’s party as “failed Tories”.
As a response to this, look no further than Reform’s recent nod to the left on industrialisation and public ownership.
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Read more:
Tough test for Labour after MP quits
MP jailed for late-night brawl
Local elections could re-shape politics
But head 15 minutes south from Runcorn docks, and this by-election campaign changes.
Rural areas like Frodsham and Helsby have, in the past, tended towards the Tories.
The Conservatives, of course, have a candidate in this vote, one who stood in a neighbouring constituency last year.
But Reform is now making a hard play for their supporters in these parts, with a softer message compared to the one being put out in urban areas – an attempt to reassure those anxious about too much political revolution coming to their privet-lined streets.
Labour, meanwhile, is actively trying to mobilise the anti-Farage vote by presenting their candidate – another local councillor – as the only person who can stop Reform.
Makeup artist Nadine Tan is concerned about division and anger in the community
The pitch here is aimed at voters like Frodsham makeup artist Nadine Tan, who are worried about division and anger in the community.
“I think they need to kind of come together and stop trying to divide everyone,” she says.
But like Mike the taxi driver five miles north, disillusionment could be the eventual winner as Nadine says, despite the “thousands of leaflets” through her door, she still thinks “they all say the same thing”.
One factor that doesn’t seem to be swinging too many votes, though, is the insalubrious circumstances in which the area’s former Labour MP left office.
Labour MP Mike Amesbury was convicted of punching a man in the street. Pic: Reuters
Mike Amesbury stepped down after being convicted of repeatedly punching a constituent in a late-night brawl outside a pub.
But across the patch, many praise their ex-MP’s local efforts, while also saying he was “very silly” to have acted in the way he did.
That may be putting it mildly.
But it’s hard to find much more agreement ahead of Thursday’s vote.
A constituency still hungry for change, but unsure as to who can deliver it.
Full list of candidates, Runcorn and Helsby by-election:
Catherine Anne Blaiklock – English Democrats
Dan Clarke – Liberal Party
Chris Copeman – Green Party
Paul Duffy – Liberal Democrats
Peter Ford – Workers Party
Howling Laud Hope – Monster Raving Loony Party
Sean Houlston – Conservatives
Jason Philip Hughes – Volt UK
Alan McKie – Independent
Graham Harry Moore – English Constitution Party
Paul Andrew Murphy – Social Democratic Party
Sarah Pochin – Reform UK
Karen Shore – Labour
John Stevens – Rejoin EU
Michael Williams – Independent
Solana decentralized finance (DeFi) protocol Loopscale has temporarily halted its lending markets after suffering an approximately $5.8 million exploit.
On April 26, a hacker siphoned approximately 5.7 million USDC (USDC) and 1200 Solana (SOL) from the lending protocol after taking out a “series of undercollateralized loans”, Loopscale co-founder Mary Gooneratne said in an X post.
The exploit only impacted Loopscale’s USDC and SOL vaults and the losses represent around 12% of Loopscale’s total value locked (TVL), Gooneratne added.
Loopscale is “working to resume repayment functionality as soon as possible to mitigate unforeseen liquidations,” its said in an X post.
“Our team is fully mobilized to investigate, recover funds, and ensure users are protected,” Gooneratne said.
In the first quarter of 2025, hackers stole more than $1.6 billion worth of crypto from exchanges and on-chain smart contracts, blockchain security firm PeckShield said in an April report.
More than 90% of those losses are attributable to a $1.5 billion attack on ByBit, a centralized cryptocurrency exchange, by North Korean hacking outfit Lazarus Group.
Related: Crypto hacks top $1.6B in Q1 2025 — PeckShield
Unique DeFi lending model
Launched on April 10 after a six-month closed beta, Loopscale is a DeFi lending protocol designed to enhance capital efficiency by directly matching lenders and borrowers.
It also supports specialized lending markets, such as “structured credit, receivables financing, and undercollateralized lending,” Loopscale said in an April announcement shared with Cointelegraph.
Loopscale’s order book model distinguishes it from DeFi lending peers such as Aave that aggregate cryptocurrency deposits into liquidity pools.
Loopscale’s main USDC and SOL vaults yield APRs exceeding 5% and 10%, respectively. It also supports lending markets for tokens such as JitoSOL and BONK (BONK) and looping strategies for upwards of 40 different token pairs.
The DeFi protocol has approximately $40 million in TVL and has attracted upwards of 7,000 lenders, according to researcher OurNetwork.
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