It’s time to redesign developers’ incentives

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Opinion by: Dr. Richard Blythman, co-Founder at Naptha.AI.

Ever since the groundbreaking emergence of generative AI technology in 2022, discussions have centered around the harmonious duo of AI and cryptocurrency, each addressing the vital challenges faced by 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.

In the last couple of years, many AI-crypto firms have emerged and then disappeared, leaving very few still standing. This isn’t because the ideas behind these companies were bad or their products unvaluable. Instead, it’s due to two main challenges faced by these companies and their leadership teams:

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To prevent similar failures with AI projects, it’s crucial for those involved to reconsider their motivations driving AI development. Instead of focusing solely on monetary gains, they should shift their thoughts towards the potential impact their technology could have on shaping the world.

Misguided incentives in decentralized AI 

Encouraging users to act in a manner that supports the objectives of a product is known as incentivization. Financial incentives are effective in conventional cryptocurrency industries and consumer-focused Web3 products, but they may not be suitable for AI.

Cryptocurrency was designed as a substitute for traditional finance (TradFi). Artificial Intelligence, on the other hand, didn’t originate under the same financial perspective. Financial incentives aren’t effective within AI development, as they don’t align with the primary motivations of AI creators.

AI developers view themselves as pioneers at the forefront of a massive societal transformation, shaping the future more than seeking monetary compensation. For them, the potential impact on global economics, similar to that of Web2, may be far more significant than any marginal financial gains offered through tokenomics.

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As an analyst, I find that AI developers share a degree of wariness towards the hype surrounding cryptocurrencies. Unfortunately, the crypto world has earned a reputation for being a breeding ground for scammers, with nearly 40% of Americans expressing no confidence in its reliability. Despite this, only 7% of people have ever traded any form of cryptocurrency.

From this perspective, financially focused motivators might not only be inefficient, but could potentially discourage AI creators if they are the main attraction or primary focus.

From compensation to contribution

AI developers see their work as a mission that shapes society. They aspire to be recognized by playing a role in monumental technological breakthroughs. Innovation flourishes in environments that foster open communication and teamwork. While financial compensation is essential, it should not overshadow the importance of collaboration, as is often the case with crypto projects.

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Instead of focusing solely on immediate monetary rewards, emphasizing the broader impact and significance of their work in decentralized projects could entice developers to apply their skills. To assemble an effective team of developers based on genuine motivations, steer clear of token-based economics and financial incentives that may deter talent. Instead, foster a cooperative environment with a distinct vision, values, and opportunities for meaningful involvement that resonate with potential team members.

In a market that’s overflowing with similar offerings and clamoring for transformation, I find that distinctive factor sets us apart significantly.

Token-based incentives have shown success in conventional blockchain applications, as financial rewards fuel both developer and user participation. In such settings, tokens serve as appropriate compensation for contributors who aim for the economic prosperity of the system. Nevertheless, this approach might not be applicable when dealing with AI development, given that developers’ motivations differ fundamentally from those in traditional blockchain projects.

For decentralized AI to succeed, it’s time to create more effective incentive structures. 

A more traditional approach to token-based rewards may fail to grasp what truly inspires AI developers, potentially disrupting fruitful AI-blockchain collaborations before they fully develop. Instead, incentives should focus on collaboration, acknowledgement, and long-term societal influence – factors vital in addressing the distinctive motivators within the emerging AI development community.

A decentralized AI could establish itself as a revolutionary force by highlighting motivations rooted in purpose, like teamwork, acknowledgment, and a united goal for community improvement.

Decentralized AI harnesses two of the most significant technological innovations of modern times. The global blockchain AI market is expected to reach $3.718 billion by 2033.

This decade is up for the taking.

Dr. Richard Blythman has experience as an ML engineer at major tech companies and as a postdoctoral researcher in AI at a university. He is one of the early pioneers in AI/cryptocurrency, launching Algovera in 2021. Currently, he serves as both a co-founder and the chief scientific officer at Naptha.AI, a platform that coordinates several AI agents to enhance performance and foster innovation.

This piece is meant to provide a broad understanding and isn’t designed nor suitable to serve as legal or financial guidance. The perspectives, ideas, and viewpoints shared within this text belong solely to the writer and may not align with or be endorsed by CryptoMoon.

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2024-11-25 22:11