How the Web3 and AI worlds collide Premium

VCs were quick to divert their attention from web3 to AI, but how can the two sectors benefit each other?

Generative AI has grabbed the limelight from Web3 in recent months. A little less than a year ago, several venture capital firms funded Web3 startups and crypto projects. Now, Generative AI is the apple of their eye. As the dust settles and a new winner emerges, some see a meaningful overlap between the two nascent industries. For starters, AI is capable of sifting through data, organising it, and presenting it in a useful way. This aspect of AI makes it industry agnostic in some sense.

“Intersections of AI and Web3 reveal instances where large language models (LLM) render on-chain data” that are humanly readable, Deep Gandhi, Investment Analyst with Hashed Emergent said. “Users can now simply input queries to understand on-chain data that previously seemed cryptic to most.”

While on-chain data is visible to everyone and contains all the details about the transactions recorded, like amount, time, wallet address and the fees, it isn’t necessarily interpretable by all. But LLMs are able to translate this complex blockchain data into simple natural language, making the technology far more accessible.

Belgium-based SettleMint, a low-code blockchain programming firm, added an AI assistant to its platform earlier this month to help Web3 developers write better smart contracts. Singapore-based Web3 startup Bunzz released an AI tool to help develop smart contracts with a click of button.

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Gandhi sees Generative AI streamlining processes in Web3 that “could attract numerous Web2 developers to the Web3 industry as they can now easily code customised smart contracts.”

AI coding assistants like GitHub Copilot have made it clear that AI inevitably makes life easy for coders. “It simply frees resources to focus their time and energy on better things. A team that may have needed three developers, may now only need two, and the additional resources can be deployed in UI/UX improvements. The productivity and cost improvements are key, especially to early-stage startups, as they can increase their runway and their chances to survive and succeed,” Ian Wittkopp, Head of Investments at Sino Global Capital said.