DePIN model empowers AI, understand DeepAI's ambition in one article

GPT Store Trends

In early January 2024, the GPT Store launched, with at least 3 million GPTs already available, indicating that the trend of Agent creators has already formed. Various AI chatbots have exploded, covering entertainment, work, learning, and more, leaving people overwhelmed.

Currently, GPT creators have no earnings. According to OpenAI's official policy announcements, future earnings for creators will be calculated based on the interaction volume of their GPTs with users, which is not yet a commercial model like the App Store; it is somewhat similar to the creator economy in the short video industry, only shifting from human creation to AI operation.

With the stunning debut of Sora, it is foreseeable that this will significantly reduce the time until AGI arrives. It is believed that the upcoming GPT-5 will possess even more powerful intelligence, and with the development of multimodal technology, AI Agents will be more attractive than the current chatbots, bringing AI into the homes of ordinary people.

AI Explosion Logic

The explosive popularity of ChatGPT has masked the commercialization risks of the AI industry. Currently, most are in a state of burning cash to subsidize users, with the monthly $20 ChatGPT Plus subscription rate still below 5%. Technological advancement is one aspect; innovative business models are also crucial. If the AI industry wants to create a wave similar to the internet, it should innovate while standing on the shoulders of giants, rather than devolving into the current capital game.

After exploring numerous cutting-edge AI projects, the author believes that two points can drive a massive explosion in the AI industry:

AI products should leverage existing social networks for development to achieve faster explosive growth. The success of ChatGPT gathered all the elements of timing, location, human resources, and funding, making it difficult for most teams to have such a good opportunity; one should not expect to launch a website or app and achieve an explosion.
The AI creator economy needs new business models to better incentivize long-tail creators. Traditional centralized profit-sharing methods are unfair, with unclear property rights and creators lacking bargaining power, all of which will affect overall efficiency. A decentralized economic model may be a better choice, and AI projects combined with Web3 economic mechanisms are worth exploring.

If these two points can be grasped, on one hand, customer acquisition costs can be reduced, providing the premise for lightning-fast expansion; on the other hand, allowing AI creators to continue earning profits can build a brand new AI economic ecosystem.

DeepAI Introduction

As the name suggests, DeepAI is committed to deepening the future prospects of AI, innovating by empowering AI with the DePIN model. DeepAI is a distributed Agent network that addresses the inefficiency of large AI models by sharing Agent services within communities, initiating from both the demand and supply sides to create a dual-flywheel effect.

Demand Side:

DeepAI incentivizes communities to deploy shared AI Agents, allowing more people to discover AI applications and increasing interaction participation with AI. On the other hand, it also empowers communities through AI, creating more value. Currently, DeepAI's group chatbots support mainstream community networks such as Telegram and Discord.

As more community leaders deploy AI chatbots, activating community atmospheres and attracting more ordinary people to join online communities, more AI application scenarios will be uncovered, thereby encouraging more community leaders to embrace AI.

Supply Side:

How to inspire more people to create more personalized Agents? DeepAI's strategy is to produce based on sales, somewhat similar to the Pinduoduo e-commerce model. Market demand gives meaning to supply, which is also a better solution to the commercialization dilemma of Agents.

As more AI application scenarios emerge, the creator rewards of the DeepAI protocol will be more valuable, attracting more AI creators to join and create more AI Agents. This means that AI creators can share their Bot works from platforms like GPT Store through the DeepAI interface within communities.

In summary, DeepAI, through a distributed Agent sharing model, empowers more application scenarios while lowering the usage threshold for ordinary people, and enhances AI efficiency through online communities, guiding AI creators to explore high-value Agents. By reshaping the Agent industrial chain through the DePIN model, it builds a distributed economy, allowing more people to understand Web3 through AI applications. The DeepAI solution will be a better path for the large-scale adoption of Web3.

Industry Pain Points

After experiencing the highlights of AI in 2023, large model vendors finally have to face reality as user growth enters a bottleneck phase, highlighting commercialization dilemmas. From the current DAU/MAU of top AI products, it can be seen that most users have not yet tapped into the potential value of AI.

According to research by Sequoia Capital, top internet products can achieve an average of 51% daily active users/monthly active users, while top AI products average only 14%. If user engagement cannot be improved, the road to AI commercialization will be long.

The GPT Store is a better choice for OpenAI's commercialization breakthrough. Under the UGC model, it greatly unleashes the imagination of AI creators while also directing the private traffic of creators to the platform, enhancing retention rates through revenue sharing. However, the GPT Store currently faces the following serious issues:

There is a significant head effect for GPTs, with the top 20 bots accounting for over 90% of traffic, and most of the top bots are built by the official team, leaving long-tail GPTs with little usage, resulting in bleak earnings for creators.
Users still lack payment motivation, at most trying it out at the beginning. OpenAI merely splits a ChatGPT into various functional GPTs, attracting users to chat in different ways but without unique value, making it difficult to enhance overall efficiency.
The proliferation of homogeneous bots leads to a waste of resources, with many GPTs created through copy-pasting, and creators' property rights lacking protection.

Copycat large model vendors will also encounter similar problems. Without disruptive user experiences, the GPT Store may see a downturn after its peak, and the AI industry in 2024 is likely to enter a stagnation period, making it difficult for ordinary people to continue casual chats with homogeneous AI robots. Despite AI's unparalleled potential, it also faces commercialization challenges, as inefficiency hinders further popularization of AI, making it hard to form a positive commercial cycle.

DePIN Wave

In the 2024 outlook, many top crypto VCs repeatedly mention DePIN. In a narrow sense, DePIN focuses on device mining, where users contribute physical devices to earn rewards, building a distributed commercial economy. Broadly speaking, DePIN emphasizes resource sharing, not limited to physical devices, but also including computing data, social networks, and other intangible resources.

DePIN is becoming a core link connecting people with technology and consumers with industries, possessing cost-reduction and efficiency-enhancing advantages. How to find new integration models has become a core focus of the crypto industry. Web3 economic innovation is one aspect, while the value of practical services is also crucial. If the DePIN model empowers the AI industry, it could have a tremendous impact on traditional models.

Looking at the current star projects in this model, Bittensor, with an FDV valuation of $13 billion, and Render, with an FDV valuation of $4 billion, both show great promise. The former verifies distributed machine learning models, offering efficient evaluation advantages for AI models, while the latter enhances computing power efficiency through shared distributed GPU devices.

DeepAI is positioned as a distributed AI sharing network, combining the characteristics of both. The team has comprehensive technical expertise, engaging in quantitative trading in the crypto market with AI technology for many years, and has embraced GenAI since the end of 2022, continuously iterating products and gradually unveiling its mysteries.

Innovative Solutions

AI Creator Economy

Creators in the GPT Store are similar to YouTubers, except that the content is updated and produced by AI. Creator earnings come from the redistribution of ChatGPT's revenue, making creators merely workers on a centralized platform, with low and unfair earnings. In contrast, AI creators in the DeepAI market are akin to miners, independent entrepreneurs in free competition, providing Agents and earning blockchain Token rewards, all in a fully transparent manner.

DeepAI is not only aimed at GPT creators but can also create personalized Agents based on other large models, such as Claude or open-source large models. In the DeepAI distributed economy, creators will have more freedom and higher returns.

With the booming trend of AI open source, more low-cost small models will emerge in 2024, allowing ordinary people to even deploy large models through their mobile phones. DeepAI is a brand new infrastructure that enables ordinary people to become creators in the AI era by providing a Web3 mechanism for monetizing large AI models.

Community-Driven

To be precise, DeepAI is not a competitor to OpenAI but a downstream partner that helps OpenAI discover more valuable Agent scenarios. OpenAI has ushered in the Agent era, with millions of AI creators in its ecosystem, who can also be integrated into DeepAI to gain additional earnings.

DeepAI's positioning is as a connector, with downstream networks needing AI services. DeepAI essentially equips large models with hands and feet, making it easier for more ordinary people to use AI services through social platforms like Telegram and Discord, which have over a hundred million monthly active users.

Community networks have scene-based and tribal characteristics, making it easier for users to continuously interact with AI within groups, enhancing stickiness. Each community is a massive traffic pool, and through AI empowerment, it will create more results. Users can accumulate personal influence and build brand value.

Composability

DeepAI itself does not produce large models; it is merely a mover of large models, discovering quality large models through Web3 mechanisms. When large model services are tokenized, creators will be incentivized to provide more quality Agents. As a large number of Agents are deployed in network communities, human-machine collaboration communities will naturally form.

Similar to the DeFi market, monetized Agents also possess composability, allowing for the construction of Multi-Agents like Lego, which represents the next generation of social network models. One can envision a scenario where a startup community has humans as board members, hiring Agents as CEOs to direct various Agents in division of labor and collaboration to achieve common goals, which would be incredibly exciting.

On one hand, DeepAI serves as a blockchain oracle, completing price discovery for numerous Agents and filtering quality model services, thereby enhancing composability efficiency. On the other hand, through decentralized on-chain protocols, it builds a new AI governance model to achieve safe supervision of AI risks.

Distributed AI Economics

The economic model is the most important aspect of the DePIN model. After thoroughly reviewing DeepAI's white paper, we can understand that the rise in the value of DeepAI creator reward Tokens relies on a staking mechanism, closely related to the scale and stickiness of the AI community network served.

Incentive Roles

DeepAI's economic model primarily incentivizes both the supply side and the demand side, thereby accelerating the dual-flywheel effect.

Supply Side: AI creators provide AI model services to earn Token rewards.
Demand Side: Network community leaders wanting to integrate AI are referred to as "curators" in the model.

DeepAI adopts a more prudent approach in its Go-to-Market strategy, using a B2B strategy targeting community administrators as the user base, resulting in low customer acquisition costs and rapid growth.

Earnings Analysis

AI Creators:

Their main cost is the cost of AI models, which can be provided through API keys from commercial platforms like OpenAI or by deploying open-source large models to offer services. If they have vertical data or excel in prompt engineering, they can create more differentiated Agents. If adopted and deployed by more community curators, they will receive more mining rewards.

Currently, in each round of rewards from DeepAI, 80% is shared among creators, who earn corresponding mining rewards based on the interaction volume of their Agents. The more popular the Agent, the more rewards they receive. Additionally, the reward Tokens halve every four years, meaning that the earlier one participates in providing model services, the more rewards they can earn.

The total amount of Token rewards is 6 billion, requiring 16 years to complete mining, with relatively low circulation in the early stages. After mining, AI creators will monetize to cover AI model costs, but the remaining profit will still be considerable. As more AI demand parties stake Tokens, the circulation will decrease, leading to supply shortages and likely appreciation of Token prices.

Community Curators:

Using their own community networks as AI deployment nodes, their main cost is staking Tokens to obtain AI services, with AI usage quotas allocated based on the amount staked. The more they stake, the more AI services they can access. If they do not require many AI services, they do not need to stake a large amount of Tokens, so there is not much hard investment, and they gain the following two major benefits.

Empowering the community: Compared to manual operations, it saves costs, with 24-hour active Agent services providing a better user experience, making it easier to achieve creative viral growth and enhance community retention and growth speed.
Membership income: Community leaders can use AI services as a selling point, allowing AI experts to provide professional services similar to knowledge-sharing platforms, which can be monetized through branding, such as membership fees or tickets. A typical example is Midjourney, which generated $100 million in annual revenue with an 11-person team without needing financing, indicating that there will be more one-person companies in the AI era.

Additionally, as early participants, community curators can also receive limited edition NFTs from DeepAI. Holding these NFTs allows them to earn mining rewards like creators, receiving 10% of each round, signifying their irreplaceable role in the early advocacy of AI.

At the start, to mitigate the impact of Token price declines on user growth, DeepAI has been very restrained in releasing Token circulation, with a circulation rate of only 24.25% one year after launch, requiring a total of 16 years for full circulation. With the booming development of the AI industry and adhering to a long-term perspective, as more community users adopt Agent services, the staking rate of Tokens will naturally rise.

Future Prospects

Currently, DeepAI has completed the beta version product testing, primarily serving various online communities, with priority targets including Web3 project parties, DAOs, KOLs, private traffic, events, and also communities transitioning from Web2 knowledge payment.

DeepAI's immense potential lies in its platform positioning; the more quality Agents are issued and deployed, the more traffic it can attract, strengthening the head effect. As the number of cooperative network communities increases, DeepAI will possess strong network effects, thereby building a broad moat.

Regarding DeepAI's valuation potential, we can compare it with some products in the same sector, with the following valuation data as of mid-February 2024.

Sleepless AI:

Focusing on AI virtual lover chats, it attracted billions of dollars in funding through Binance Launchpool, indicating the liquidity of the Web3 market's welcome for AI projects. It is now listed on Binance, with an FDV market cap of $1.6 billion. In comparison, DeepAI is positioned as a platform rather than an application, offering greater portability. More personalized AI characters can be created based on the DeepAI platform, compatible with virtual lovers as well as various roles in gaming, anime, and film.

Bittensor:

An established AI project that started in 2021, currently holding the highest valuation in the AI+Web3 sector, with an FDV market cap of $13 billion. It verifies machine learning models through blockchain protocols, similar to DeepAI's mining reward mechanism, with participation from top crypto VCs like PolyChain. In comparison, DeepAI primarily verifies and filters Agent large models, offering greater scalability and broader application scenarios than Bittensor's focus on machine learning models.

Character.AI:

In addition to comparing with AI projects in the Web3 field, DeepAI also has similar products in the Web2 AI industry chain. In the personalized AI chatbot sector, besides OpenAI, which is valued over $100 billion, Character.AI is the most influential, with its latest funding round valuing it at $5 billion.

As mentioned above, DeepAI is a downstream service provider for OpenAI, not constituting direct competition but rather expanding OpenAI's coverage scenarios. By integrating into various online communities, it significantly extends the service range of Agents. Due to DeepAI's distributed economy and network effects, it is also less likely to be undermined by OpenAI, and its valuation can reference OpenAI's future growth potential.

DeepAI is more community-driven than Character.AI, and its economic model has advantages. DeepAI not only increases earnings for creators but also possesses unique values such as Agent price discovery and computing power efficiency enhancement. Additionally, through fan economies like Tokens and NFTs, compared to Character.AI's traditional monthly charging model, DeepAI's economic model is more likely to enhance user loyalty.

Outlook

With AIGC growing at an annual rate of 40%, the global GenAI market is expected to reach trillions of dollars by 2030. By integrating with the internet, the scale of the AI derivative market will reach new heights. AI, as an advanced productive force, is being actively embraced across various industries, presenting a significant trend of "AI+" in all things.

In the AI wave, Web3 holds significant value in reshaping production relationships and can solve the dilemmas of centralized platforms, making its importance self-evident. Meanwhile, if the Web3 sector actively embraces AI, given that AIGC and others inherently bring massive traffic, connecting the real world through DePIN can greatly accelerate the large-scale adoption of Web3.

DeepAI was initiated by a crypto quantitative team, combining advantages in AI technology and Web3 economics, and has already built the foundational infrastructure for the Agent network. The early team not only provides comprehensive technical services to ensure the distributed economy operates in a positive cycle but also continuously reduces centralized weight, decentralizing power to ecological participants.

As AI technology develops, Agents, as containers of productivity, possess immense imaginative space for the future. DeepAI positions itself as an industry infrastructure, empowering AI with the DePIN model and upgrading the AIGC community, offering greater scalability than Bittensor. As a project yet to be launched, it is worth looking forward to.

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