According to Scott Stuart, co-founder of Kava Labs, Artificial Intelligence tokens possess lasting value and will not become another fleeting trend like NFTs, despite some setbacks already observed in the sector.
Stuart noted, “We experienced an initial surge of AI interest with projects like Fetch promising mergers that went nowhere, or platforms like Virtuals and AI16z that saw early success only to subsequently plummet by 80% or 90%. It was not a positive outcome.”
Market trends reveal that since January, the Virtuals Protocol’s native token, Virtuals, has dropped by almost 85%, while FET, the token associated with Fetch.ai, has decreased by 60%.
KAVA, however, is performing relatively well, showing only a 5% decline, outperforming the CoinDesk 20 index, which has seen a 29% drop.
Originally, Kava wasn’t focused on AI; it began as a decentralized finance (DeFi) platform based on Cosmos. However, it shifted toward decentralized AI to carve out a niche amidst a consolidating crypto market.
Since its shift, Kava has launched its AI platform and marketplace, which includes a blockchain-based chatbot akin to ChatGPT powered by DeepSeek’s large language model, the autonomous AI agent Oros, and GPU capacity on a decentralized infrastructure.
Stuart explained that this pivot was crucial as altcoins face growing obstacles without a strong narrative, making the straightforward utility of decentralized AI vital to its credibility.
“In contrast to speculative bubbles like NFTs, decentralized AI has fundamental utility that guarantees its resilience. Trends like NFTs are essentially memes built atop other memes. Anything that is secondary to meme coins will inevitably fluctuate with the hype cycles,” he remarked.
Kava is establishing a decentralized AI infrastructure aimed at being auditable, transparent, and open-source. Given its comparative performance in the market, it suggests that their endeavors are on the right track.
“Viewing AI as technology is merely a way for corporations to present information to you,” Stuart commented. “OpenAI has its proprietary components, and at any future point, they can adjust that model to deliver whatever they prefer.”
Stuart emphasizes the importance of demystifying AI as it becomes increasingly interwoven into daily life, stating, “Proprietary AI can manipulate models in unnoticed ways. It’s unclear whether it favors your interests, those of a corporation, or even aligns with a nation-state’s objectives.”
Stuart is not alone in his worries. Previously, the CEO of a leading web3 fund in South Korea expressed that opaque AI has rendered machines akin to ‘God.’ Their inner functions remain unknown and beyond comprehension, even though they have become entrenched in society.
On the other hand, Kava Labs advocates for an “open-weight” model, permitting scrutiny of AI model parameters, similar to the transparency of Ethereum’s smart contracts.
Recognizing that regulators increasingly view AI transparency as a strategic priority for the U.S., Stuart sees a significant opportunity to create an auditable decentralized AI infrastructure that is proudly ‘made in the U.S.A.’ and supported by open-source funding initiatives.
“Under the previous administration, the tendency was to offshore everything,” he noted. “Now, there is a serious intention to reverse that, and we are seizing this moment to fortify U.S.-based infrastructure.”
At the core of this architecture will be open-source technology.
“The future of AI won’t be dominated by corporations,” he concluded. “It will be open, transparent, and decentralized. Kava aims to spearhead this change.”