AI Crypto Fund: A new trend in Web3 investment and compliance exploration.
As early as the end of 2023, major investment research institutions predicted that 'AI+' would become one of the mainstream tracks in Web3. Today, a year later, the development of AI in the Web3 field is particularly noteworthy, especially in the 2025 Web3 predictions released by a16z and VanEck, where AI agents, as the latest development direction of AI+, have attracted significant attention. Among them, Ai16z and its backing DAOS.FUN achieved remarkable results in AI agent investment in the second half of 2024, with market capitalization rapidly climbing to 80 million USD, triggering a new trend for AI crypto funds.
AI Crypto Fund: Definition and Advantages
AI crypto funds, which utilize artificial intelligence (AI) to replace traditional manual management, achieving full automation of the investment decision-making process. They rely on algorithmic models and on-chain data, executing real-time calculations to implement efficient and accurate investment strategies. Compared to traditional crypto funds, AI crypto funds have the following advantages:
Data Processing Capability: AI can rapidly analyze vast amounts of on-chain and off-chain data, accurately identifying trends and making decisions.
Market Sentiment Capture: By analyzing social media, news, etc., AI can sense market changes in advance, helping funds make more accurate choices.
Autonomy and Transparency: Based on DAO and smart contracts, all operational records are on-chain, increasing trustworthiness.
Risk Management Capability: AI can monitor market changes in real-time, quickly adjust asset allocation, and reduce risks.
Representative AI Crypto Fund Projects
Currently, several representative projects have emerged in the field of AI crypto funds:
Ai16z and DAOS.FUN: As a phenomenal AI crypto fund, Ai16z achieves full process automation from strategy formulation to execution, relying on advanced AI algorithms and on-chain data analysis capabilities.
Yahctzee Fund: Supported by crypto figure Arthur Hayes, it demonstrates excellent flexibility and adaptability through on-chain governance structures and high-performance AI algorithms.
Sekoia Virtuals: Initiated by Anand Iyer, managing partner of Canonical Ventures, focused on supporting the Virtuals ecosystem, emphasizing investment management for small Web3 communities.
Cod3x and BigTonyXBT: Cod3x focuses on building next-generation AI agent infrastructure, while BigTonyXBT is its autonomous trader based on the Base chain, concentrating on the DeFi sector.
Compliance Challenges of AI Crypto Funds
Although AI crypto funds show great potential, their compliance issues remain unresolved. Major challenges include:
Legal Entity Issues: DAOs have not been explicitly recognized as legal entities in most countries, leading to potential legal framework challenges for AI crypto funds in matters involving asset custody, contract signing, or legal disputes.
Licensing and Regulatory Issues: AI crypto funds lack a clear manager, with investment strategies and execution completed by AI algorithms, making the definition of 'fund manager' a compliance challenge. Additionally, the 'unlicensed operation' model may be viewed as regulatory avoidance.
Governance Transparency and Algorithm Compliance Issues: Although DAO architecture provides technical support for on-chain transparent governance, the algorithms are complex and not easily interpretable, raising doubts about whether regulators can accept a 'black box' operational model.
Diversity of Global Regulatory Environment: Countries have inconsistent regulatory attitudes towards crypto assets and AI technology, leading to more compliance challenges for AI crypto funds when expanding their business.
Summary
AI crypto funds bring a new imaginative space to the crypto investment field, challenging traditional financial logic through technological innovation. However, compliance remains the key factor determining whether AI crypto funds can become mainstream. Developers and investors should proactively adapt to existing legal frameworks and prepare for future regulatory rules. Only by seeking innovation within compliance and creating value within regulations can AI crypto funds inject sustainable development momentum into the entire industry.
