We are seeing things changing rather rapidly.
Over the past year, we discussed the idea of AI and cryptocurrency coming together. At the same time, we also pushed the notion of having to decentralize AI services away from Big Tech. The domination of Meta, xAI, and Google is becoming evident.
Venice.AI is one of the early innovations that seek to pull from these major behemoths. Having an option outside of Silicon Valley is crucial. Hopefully, we see dozens of other projects follow suit.
It was recently announced that Venice.AI was releasing a token. Here is where we are starting to see a major shift.
Could this be the model to follow? We will see how it unfolds. For now, let's dig into what is taking place.
VeniceAI: Tokenization Of AI With VVV
Before delving into the tokenization, we should answer what Venice.AI is.
According to this article:
Venice AI is a privacy-focused, decentralized generative AI platform created by Erik Voorhees, the founder of the cryptocurrency exchange ShapeShift. Launched in 2024, Venice AI was designed to address growing concerns about privacy, censorship, and the centralization of artificial intelligence technologies.
At its core, Venice AI offers users a unique alternative to mainstream AI models like OpenAI's ChatGPT. It emphasizes user privacy by not storing any data or conversations on centralized servers. Instead, the platform employs end-to-end encryption and decentralized computing, ensuring that user interactions are secure and anonymous. This approach starkly contrasts with other AI systems that often store and analyze user data, potentially leading to privacy breaches.
As it says, this is a stark difference compared to other platforms that are out there.
The service can be used via an account or as a guest. The latter is a bit limited in the number of prompts that can be done.
People can generate text, images, or build code. There is also web access which is helpful.
In other words, this is a fairly robust model, especially considering it is outside the halls of Big Tech.
Tokenization
We are looking at the tokenization for informational purposes. This is not a statement on the validity of the finanical opportunity or a recommendation of any sort.
The tokenization of Venice.AI starts with the VVV token. What is interesting is we are dealing with both a value capture token along with access.
Of course, as stated in the past, future value of all platforms will emerge from AI. Here is a screenshot from the website. Notice the market capitalization. Naturally, we could presume this is a pump based upon it being new to market. However, over the long term, if the team continues to build out a viable alternative to Big Tech, it could house enormous value.
One of the keys is the feed mechanism for the ecosystem. The fact they are setting up VVV to be an access token is crucial. It moves the success of the system simply to the amount of activity. If enough exists, then it is guaranteed the token will have value.
Why? People need to stake to access the service.
Here is what the website says:
Your daily inference capacity is determined by the percentage of staked VVV tokens you hold. VCUs (Venice Compute Units) represent a standardized unit of measurement for the computational power required to run different AI models. For example, if you have 1% of the staked VVV tokens and the total API capacity is 10,000 VCUs, you would be entitled to 100 VCUs (1% of total capacity) every day, without spending or losing your VVV.
This sounds a lot like the Hive blockchain. It set up a back-end token system for the inference bandwidth. The units are acquired via staking, with greater access provided in parallel with staking. This is where things shift from simply value capture to access.
Another factor in this, something we have covered a great deal, is the development of AI agents. It is crucial this is tied to these platforms, offering alternatives outside the centralized servers of Silicon Valley.
Venice has launched with 100 million VVV tokens, with 25 million allocated to over 100,000 registered users. Another 25 million tokens are designated for AI community protocol accounts on Base, including Virtuals and developers using Coinbase’s AgentKit.
While running to Coinbase might not be the best thing in the world, it does provide a shortcut to getting things produced. Developers to can take what is built there and apply it elsewhere.
The Future Unfolding
This is the direction things are going. It is also moving at a very fast pace. Venice.ai was only a dream a year ago. Now, we see how advanced it is compared to the rest of Web 3.0.
AI is disrupting everything. Blockchains and ecosystems that were designed even 5 years ago now can be obsolete. Naturally, the ability to store information along with send/receiving value is not outdated. However, the basis for an application or platform could have changed completely.
Flexibility is key. We are in the middle of a technological explosion, operating in the very early days. What Venice.ai is doing is just one example.
The mindset of a race is crucial. Time is of the essence.
Here is a conversation regarding the project with Erik Voorhees.
