Opinion by Dr. Richard Blythman, Co-Founder at Naptha.AI
Since the breakout moment of generative artificial intelligence (AI) in 2022, there has been talk about AI and crypto technologies as the perfect pair, with one solving the critical issues of the other. It has been proposed that AI’s proliferation of fake images can be solved through blockchain verification and that protocol threats can be detected with AI. Despite heightened interest and experimentation in both fields, the ‘AI-blockchain killer use case’ remains elusive.
Many ambitious AI blockchain projects have faltered over the past two or so years. That is not because the products weren’t valuable or good ideas. The critical issue these companies and their senior teams face is in two parts:
- Convincing AI developers to spend their time developing on a specific network: This is essential for creating value within the ecosystem.
- Incentivizing them to stay and keep working, once they’re on board: The incentives must be strong enough to motivate developers to contribute to the project.
Misguided Incentives in Decentralized AI
Incentivization aligns user behavior with product goals
A financially driven rewards structure works well in traditional crypto sectors and consumer Web3 products but not so much for AI. Crypto was built as an alternative to Traditional Finance (TradFi), while AI wasn’t envisioned through the same financial lens.
Financial Rewards Don’t Resonate with AI Developers’ Core Motivations
AI developers are pure technologists who believe they’re on the bleeding edge of a seismic societal shift. What they’re building will inform the future, so they do what they do not to get paid. If they think they’re creating infrastructure that’ll influence the world economy, much like we saw with Web2, the marginal financial gain through tokenomics is likely not an enormous appeal.
Recent Example: ai16z Token Rockets 50% After Nod from Top Venture Firm
AI Developers are Skeptical of Crypto’s Shill Side
AI developers are notably skeptical of crypto’s shill side. It has an unfortunate reputation for being a center of scammers, with almost 40% of Americans not at all confident in the trustworthiness of cryptocurrencies, despite only 7% ever having traded any. The reputation of crypto as volatile, with the potential for scams, makes it unappealing to many AI developers, who generally view their work as too essential to be subject to infrastructure failures or security breaches.
From Compensation to Contribution
AI Developers View Their Work as a Calling
AI developers view their work as a calling that influences society. They seek to be part of history, gaining recognition by contributing to significant technological advancements. Innovation thrives in settings that promote idea-sharing and collaboration. Financial remuneration can and should exist, but not at the forefront as per crypto projects.
Shifting the Narrative from Immediate Financial Gains
Shifting the narrative from immediate financial gains to the broader implications of their work can attract developers to invest their talents in decentralized projects. To build a robust team of developers for the right reasons, move away from tokenomics and financial incentives that often alienate talent and create a culture of collaboration with a clear vision and values and meaningful engagement opportunities.
A Unique Differentiator
That is a unique differentiator in itself in an industry that’s both saturated and calling for change. Token-based incentives have proven effective in traditional blockchain projects, where financial motivation drives both developer and user engagement. In these environments, token rewards align well with the goals of contributors who are invested in the economic growth of the ecosystem.
Decentralized AI Can Position Itself as a Transformative Movement
Collaboration, Recognition, and Long-term Societal Impact
To succeed, decentralized AI must create more effective incentive structures. Traditional token-based rewards misunderstand what drives AI developers and risk derailing promising AI-blockchain partnerships before they can mature. These incentive structures can include those that emphasize collaboration, recognition, and long-term societal impact.
Conclusion
The elusive AI-blockchain killer use case remains a challenge due to misguided incentives in decentralized AI. A shift in perspective is needed, focusing on collaboration, recognition, and long-term societal impact rather than just financial gains. By doing so, decentralized AI can position itself as a transformative movement, creating value within the ecosystem.
About the Author
Dr. Richard Blythman is a Co-Founder and Chief Scientific Officer of Naptha.AI. He has extensive experience in ML engineering and postdoctoral AI research at universities. As an early innovator in AI/crypto, he co-founded Algovera in 2021.
This article is for general information purposes only and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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