Is the future of cryptocurrency investment guided by AI still far away?

Author: VeDAO

With ChatGPT entering the Web3 space, the combination of cryptocurrency investment and artificial intelligence (AI) technology is becoming increasingly frequent, leading to the emergence of various intelligent investment assistants and trading tools. The capital market is also favoring this field; according to veDAO's investment data, over 40% of the financing projects exceeding ten million dollars in the past few months have been AI projects or large language model (LLM) projects. Today, let’s follow the footsteps of smart VC money and share several practical and promising tool projects, introducing how to leverage AI technology to assist our cryptocurrency investments.

How Does AI Achieve Intelligent Investment?

In simple terms, AI technology software can automatically execute trades through market analysis tools, technical indicators, and data analysis, buying and selling cryptocurrencies when market conditions are favorable. To utilize AI technology, a large amount of real data and excellent algorithm models are essential. In the world of Web3, the publicly available and transparent massive data is indeed an inherent advantage, and the recent focus on large language models and intent-based trading concepts has further propelled the development of AI.

Currently, AI large language models possess capabilities such as generation, interpretation and analysis, logical reasoning, instruction and integration, and tool usage, making them suitable for creative and innovative work in the investment field, and helping to conduct trading investments accurately, swiftly, and with high quality.

The concept of intent-based trading is particularly innovative, aiming to optimize protocols and infrastructure to simplify cumbersome on-chain operations into a "one-stop" process. More precisely, it aims to obscure the previously complex operational processes, allowing users to achieve their goals seamlessly and directly. AI will leverage its advantages in natural language input, goal decomposition, optimal path calculation, and operation execution through ultra-efficient retrieval and execution rates. Efficient and accurate insights will clarify user intentions, thus achieving the "one-stop" goal.

Image from ACCapital

Market Status and Challenges

A good intelligent investment assistant can greatly benefit every investor. Currently, AI applications in the market are emerging one after another, but the quality of projects varies significantly. In fact, major DEXs and CEXs are laying out AI tools, yet no single or couple of tools have captured a large user base. The following reasons are worth exploring:

1. A sufficient volume of data is needed; it may not be enough to support AI learning or guarantee the quality of LLMs, and the project team's data resources may not ensure future iterative optimization, making it difficult for the project to take shape.

2. The importance of model factor dimensions; since Web3 differs from traditional finance, unique factors such as the Twitter ecosystem, Telegram group dynamics, and the inability to fully access off-chain data will complicate the model's considerations. Ultimately, it still requires a large volume of data to formulate and optimize strategies, which tests the project team's expertise and technical capabilities in the investment algorithm field.

3. Professional tasks should be handled by professionals. Although many leading DEXs and CEXs are developing AI investment tools, the pursuit of such tools is more about simplicity and precision. Many users find it frustrating to navigate through a vast array of page branches to find the modules or tools they want to use. Tools like Debank, DuneAnalytics, and veDAO are simple, professional, and precise, excelling in their respective fields, which leads to higher user reliance.

4. Simplifying complex processes is key; tools that make users feel that the operational process is clear, the interface is straightforward, and the operations are easy to master are considered excellent. Especially for investment management tools, how to buy and sell, how to customize, how to use automated trading bots, and how to manage changing positions are critical. AI aims to provide users with a simple, efficient, and precise experience, and excellent product tools must deliver this result, allowing users to truly feel the benefits brought by AI.

5. Innovative and advanced ideas still need time for technology to be implemented and popularized. The timeline from the global explosion of ChatGPT to the rise of large language models and the attention drawn to AI + intent concepts has been very short. We also need to give technology time to mature and be widely applied, continuously iterating and optimizing to present the best experience to users.

Highlighted Project Sharing

1. VeDAO

VeDAO will deeply integrate its unique trend tracking and intelligent trading modules, aiming to create a Web3 AI exchange that is more suitable for Web2/Web3 users to buy and sell investments. VeDAO's AI intelligent investment advisory has inherent platform advantages.

It has a TB-level massive database covering nearly 70 mainnet ecosystems and 40 Web3 tracks. This includes an 8000+ Web3 project library, 22000+ Twitter KOLs, 3700+ investment institutions, 20000+ smart money addresses, and 6000+ related news. It not only has a comprehensive project evaluation system and an expert committee composed of well-known Web3 institutions but also features two professional tracking modules—Twitter sentiment tracking and smart money signal tracking.

The AI trading section that VeDAO is diligently building can amplify the platform's existing data resource advantages, providing users with smarter and more efficient investment services, with the following highlights:

VeDAO-AI trading will provide users with comprehensive intelligent assistance throughout the investment process, including:

• Before users buy, veDAO-AI trading can analyze various data sources (such as market trends) through data-driven decision-making, offering more accurate and comprehensive investment advice.

• When users buy, the personalized recommendation feature of veDAO-AI trading can provide personalized position management and investment advice based on the user's capital and risk tolerance.

• While users hold positions, veDAO-AI trading's automated real-time response mechanism can monitor market changes and user holdings, automatically executing preset trading conditions, significantly improving trading efficiency.

• After users sell, veDAO-AI trading will analyze the current profit and loss situation and timing for buying and selling, helping users summarize their investments, and will also learn and optimize based on historical trading data, continuously improving the accuracy of trading strategies.

• Additionally, veDAO-AI trading tools are inherently user-friendly, allowing users to complete complex on-chain transactions using simple natural language through natural language processing (NLP) technology.

With a comprehensive and user-friendly design for the AI trading process, it efficiently and accurately covers every aspect of the process, providing professional analysis for users' investment analysis, continuously iterating and optimizing investment advice strategies, offering meticulous intelligent position management, and personalized settings. In the future, it will also introduce mature intent trading technology, aiming to utilize safe and scientific AI technology.

VeDAO aims to use trend tracking to find good projects/catch good opportunities + AI intelligent trading to maximize users' investment benefits, creating a content-professional, easy-to-use Web3 AI exchange that is more suitable for Web2/Web3 users to buy and sell investments.

Related link: https://app.vedao.com/ai-trade

2. ParaX

ParaX's intent-driven AI assistant, ParaX AI, is a cross-domain intent-driven large language model (CDI-LLM) trained on a vast amount of DeFi-related data models, capable of understanding users' trading intentions in different scenarios. These data models include contract codes, mainstream protocol documents, etc., aiming to understand users' intentions through natural language, transforming them into desired goals and constraints, and then generating corresponding trading sequences. These trades are subsequently executed on ParaX's multi-chain contract accounts, achieving trading modes across different application scenarios. Its core features include:

• Multi-chain Account Abstraction (MAA): MAA unifies the attributes of multiple accounts across various chains, similar to centralized exchanges (CEX). This simplified approach brings several benefits: unified identity allows for authentication and authorization across a wide range of DeFi, streamlining processes and giving users more control over their data. Simplified management: ParaX deploys smart contracts to collect on-chain trading and asset data from various target chains.

• Meta User Interface (MUI): This is a one-stop dashboard where users can interact with all their favorite applications without getting bogged down in the details of chains or applications. The platform offers a "simplified" version that strips away any intermediate processes, providing only the necessary content. Users who prefer a more customized experience can choose dapps in the "professional" interface.

• Cross-domain Intent-based LLM: This can transform intentions into executable requests, encapsulating and hiding blockchain technology details, thereby lowering the barrier for users to enter Web3. The goal is to understand users' intentions through natural language, transforming them into desired goals and constraints, and subsequently generating corresponding trading sequences. These trades are then executed on multi-chain contract accounts, achieving various application scenario trading modes.

• ParaVM: ParaX will create an environment that encourages developers to create "mini-applications" that add unique value to the ParaX ecosystem.

Related link: https://app.vedao.com/projects/c2ab33d4aefdf9e6e26c0562cadc0893d9bd08b4813e472081c555f6cf6ff472

3. BubbleAI

BubbleAI is a signal and AI-driven trading aggregator. It utilizes cutting-edge Web3 technology to build a powerful off-chain data intelligence system. Whether it's market trends, trading data, or trend analysis, users can easily access the information. More importantly, BubbleAI has introduced its self-developed AI large model analysis engine, making complex data simple and understandable. This enables users to obtain and utilize previously difficult and complex data in the fastest and simplest way, providing solid support for their trading decisions.

Notably, BubbleAI recently successfully completed a multi-million dollar Pre-Seed financing round, led by Luxtech Capital and a leading publicly listed WEB3 company in Hong Kong. This funding will further drive BubbleAI's product development, deep data mining, and the development of its AI large model analysis engine, providing more powerful tools and support for global users.

Related link: https://app.vedao.com/projects/1405de11634f5f6c9ddf6ffa6e5abc2a1bdb1aeb2bd5f1d246efbe8358e97809

4. Assister

Assister is a natural language-driven Web3 analysis tool. It aims to empower individual retail investors with the knowledge needed to achieve financial freedom.

The Assister team discovered through extensive data research and analysis that 73% to 81% of retail investors fail in cryptocurrency investments due to a lack of information and expertise. In contrast, AI has revolutionized the Wall Street stock market, with algorithmic trading accounts accounting for 60% to 73% of the U.S. market. AI tools provide numerous benefits to hedge funds, investment firms, and stock investors, including reduced research time, increased accuracy, pattern prediction, and lower management fees. Professional traders use these tools to gather intelligence and consult clients or represent them in investments.

The Assister team sees the opportunity for ChatGPT in Web3, combining fine-tuned ChatGPT and dynamic dashboards with the latest on-chain and off-chain data, becoming a Web3 data warehouse. The Assister tool offers several benefits in Web3 investment analysis:

• Personalized Recommendations: ChatGPT maintains context and can provide personalized recommendations based on the investor's level, risk tolerance, and interests;

• Virtual Assistance: ChatGPT can act as a virtual assistant, explaining unknown metrics, correlations, and anomalies;

• Insight Tracking: ChatGPT can alert users to risks and opportunities it identifies as relevant to their portfolios and interests;

• Social Elements: Community members can share their tips and receive rewards from other community members;

The Assister Web3 analysis tool is currently in beta testing, and its core founder, Nick Havryliak, frequently updates the project's development results on Twitter. Notably, Assister made quite an impact at the Web 3 Investor Day held in Chicago on July 20, and we look forward to the official launch of this AI analysis tool.

Related link: https://app.vedao.com/projects/0a5ebb04f99d0460f3a0336cc0d63d671fb53781862d70de33fc3b88d6ba9a70