How To Create An ALI Agent

The creation of an ALI Agent necessitates introducing the other major addition to the AI Protocol V3’s architecture: the “Hives.”

As shared previously, an ALI Agent may utilize one or more AI Models along with additional components of the AI Protocol to form a specialized functionality. This ability of an Agent to be able to pay for, access, and utilize AI Models, datasets, and other components is managed through Hives.

A Hive is a system that allows ALI Agents to have decentralized access to AI data, compute power, storage, and other resources by enabling trustless coordination between various on-chain and off-chain components of the AI Protocol.

Having clarified the concept and role of a Hive, it is now possible to list down the factors to keep in consideration when creating an ALI Agent:

  • An ALI Agent must be an ERC-721 Token (NFT),

  • The Token must be connected with its own Key Smart Contract,

  • The Token must be registered as an ALI Agent in the Hive Registry Contract.

The process of creating an ALI Agent is entirely on-chain and decentralized, and any entity or individual aiming to create a new Agent can leverage the comprehensive documentation, guidelines, and smart contracts provided by the AI Protocol.

ALI Agent Economies

ALI Agents introduce a novel approach to AI asset management by integrating embedded liquidity through a smart contract bonding curve, facilitating seamless transactions for Key buying and selling.

Bonding Curves represent a mathematical framework designed to dynamically adjust the price of an Agent's Keys based on the prevailing supply. This mechanism ensures a direct correlation between the quantity of Keys in circulation and their market price. As participants acquire additional Keys, the price per Key escalates in accordance with the bonding curve formula. Conversely, as Keys are relinquished back into the market, their prices diminishes, mirroring the increase in supply. This methodological approach facilitates a static and responsive pricing system, central to fostering an equitable and transparent economic environment within the AI Protocol ecosystem.

Anyone can engage an ALI Agent's bonding curve smart contract to trade the Keys of that Agent. Every ALI Agent trades Keys for the ALI Utility Token, and the amount of ALI associated with the purchasing or selling of Keys is a locked-in algorithm.

ALI Agent owners also have the autonomy to issue ALI Agent Tokens, enhancing community engagement and providing incentives. Such mechanisms not only reward creators and Key Holders but also strengthen the communal fabric of the ALI Agent ecosystem, fostering a collaborative and incentivized environment for all participants. The issuer of the Token can choose to use ALI Agent Tokens as Airdrops and/or create an ALI Agent Token Liquidity Pool, allowing anyone to participate in this economy through an ALI Agent Token exchange.

What is the difference between an ALI Agent and an iNFT?

As a side note, ALI Agents should not be confused with iNFTs within the AI Protocol. While an ALI Agent can be transformed into a Level 5 ALI Agent (The fusing of an ALI Agent with a Level 5 Intelligence Pod), generally they each have their own role within the AI Protocol’s ecosystem, and carry specific functions that make them distinct. An ALI Agent that becomes a Level 5 ALI Agent and transformed into a Hive can mint its own Hive-native Utility Token, can launch a Hive Liquidity Pool (LP), and can execute Hive Token airdrops.

iNFTs are not registered with the Hive Registry Contract, and they lack the ability to issue their own Keys on a bonding curve. While iNFTs are designed to provide more personal and private AI Services, they can also be used to provide compute services to a Hive by connecting them to that Hive. An iNFT owner can choose to transform their asset into an ALI Agent by registering it with the Hive Registry and issuing Keys. The iNFT's Intelligence Pod can also be upgraded to a Level 5 Pod and turned into a Level 5 ALI Agent by fusing it with any ALI Agent, using AI Protocol smart contracts.

With the new developments and features released as part of the AI Protocol V3, one way to understand the difference between ALI Agents and iNFTs is in their utility: while the ALI Agent primarily acts to provide decentralized access to a variety of AI services to its owner or community, the iNFT serves to enable provision of these resources - i.e. within the AI Protocol’s ecosystem the suppliers of AI and other resources will primarily be iNFT owners, while the consumers of those AI services and resources will primarily be ALI Agent owners.

To understand why an ALI Agent must be registered with the HIVE Registry Contract, a deep dive into the operations and architecture of HIVEs is required in the "Intelligence Layer" section.

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