AI Agents Should Prioritize Utility over Tokens, Says Binance Founder
Artificial intelligence agents operating in the crypto space should concentrate on providing value through their core services rather than launching their own native tokens to raise capital, according to Changpeng Zhao, the founder and former CEO of Binance, the world’s largest cryptocurrency exchange.
Zhao’s comments come as the market capitalization of AI agent-related tokens has slumped. Data from CoinMarketCap shows that these tokens have lost over 21% of their combined market value in the past month, bringing the total down to about $27 billion.
While this downturn could be partly attributed to a larger market correction happening in the crypto world, Zhao suggests that a lack of focus on intrinsic utility is also contributing to the decline. He stated in a March 17 post on X:
“While crypto is the currency for AI, not every agent needs its own token. Agents can take fees in an existing crypto for providing a service.” “Launch a coin only if you have scale. Focus on utility, not tokens.”
Zhao’s perspective underscores a concerning trend in the AI crypto sector. AI agent tokens have been in a significant downtrend, losing around 61% of their peak market capitalization of $70.4 billion during the three months since they began declining on Dec. 7.
The focus on utility is essential for the long-term success of AI agents. Some venture capital firms, like Pantera Capital and Dragonfly, are showing enthusiasm for the future of AI agents, but have yet to invest in the market according to a discussion at Consensus 2025 in Hong Kong.
AI agents are gaining prominence in the blockchain space by performing autonomous transactions and contributing to exchange services. The appeal of these agents is amplified by their capacity to enhance online productivity, streamline decision-making processes, and create financial opportunities.
One example is the AI agent Luna, operating on Virtuals Protocol. On Dec. 16, Luna sought image generation services. STIX Protocol, another autonomous AI agent, generated the requested images in response. Luna then paid STIX Protocol $1.77 worth of VIRTUAL tokens for the service.
However, some of the demand for AI agents has decreased. Virtuals Protocol’s revenue fell by 97%, according to a report on February 28. This suggests that the sustainability of these projects is heavily dependent on their capacity to provide real-world value and utility.
Industry analysts predict a year of significant growth for the emerging field of AI cryptocurrencies.
Alvin Kan, chief operating officer of Bitget Wallet, anticipates that AI agents like ai16z and decentralized trading protocol Hyperliquid, “are poised for growth in 2025.”
Kan added, “Emerging narratives like AI-driven investments, decentralized AI agents and tokenized assets hint at a tech-driven shift, though with added risk.”
