Recently, I listened to a crypto podcast(Unchained) where the guest mentioned "execution risk" on the rise of AI Agents in the crypto space.
From my understanding of the podcast, it seems certain AI agents like truth terminal/GOAT and Zerebro can be pictured as an evolution of traditional crypto memecoins like DOGE, PEPE etc.
Unlike the latter, AI Agents or rather the creator(s) of the AI Agent have this task of spreading their own memes through decentralized networks and self-perpetuating social media presence.
This is their "execution risk".
I mean, it's interesting to just observe how some of these AI agents yap on Twitter/X, create music or do livestream on TikTok. I don't yet understand how they're able to do these from a basic level, but watching it purely as a consumer is quite fascinating.
Some agents seem to have developed their own surface personalities and interaction styles, making them a little bit relatable.
A Potential Flawed Strategy
As per definition, execution risk refers to the possibility that a planned strategy, project, or transaction fails to achieve its intended outcomes due to problems with implementation.
Put in another way, it's basically the risk that something won't work out as planned due to operational challenges, rather than flaws in the strategy itself.
However, there's a bit of an oversimplification. I think with AI agents, the strategy itself could be flawed.
Traditional memecoins rely primarily on community-driven virality. If it fails to gain traction or maintain community interest, there's little to no underlying value proposition to fall back on.
The project primarily lives or dies by social momentum alone.
AI agents require ongoing technical development, maintenance, and also effective AI training and deployment.
This tells me that the execution risk here is multifaceted. Some of it may include:
Technical Implementation: The AI overall, has to perform consistently and convincingly across platforms.
Content Quality: The AI needs to generate engaging, relevant content that resonates with users.
Platform Integration: Successfully interfacing with various social media APIs and blockchain networks.
Training Data: Ensuring the AI has appropriate, high-quality training data while avoiding common biases.
The fundamental difference from traditional memecoins is that AI agents require active management and technological execution, rather than just community momentum.
This creates a more complex risk profile, through which the strategy (AI adoption and engagement) and execution (technical implementation) must succeed more or less simultaneously.
Given The Choice
Of course, this is coming from an insight gained from just listening to a podcast without any sufficient understanding of the field in general.
But given the choice, between engaging/investing in pure memecoins or AI memecoins, I'll definitely chose the latter, without hesitation. Because there's a possibility of building basic business fundamentals, even though the execution risk can be quite high.
Besides, which carries more risk, betting on pure social momentum or betting on technological innovation with social elements?
In a way, the higher execution risk can be justified by the potential for real utility development and/or an opportunity for actual product-market fit beyond just speculation.
Thanks for reading!! Share your thoughts below on the comments.