Over the past year, AI agents have gained major traction in the crypto sector, driven by their ability to perform autonomous trading, predict market trends, and optimize financial operations. These digital systems execute trades, forecast market shifts, and perform other complex financial tasks with minimal human intervention. The market capitalization of AI agents has surged, with CoinMarketCap reporting a total valuation exceeding $13.5 billion. Source: Grand View Research The global AI agents market was valued at $5.40 billion last year, and projections suggest a compound annual growth rate of 45.8% from 2025 to 2030. What Are Level 3 AI Agents? As AI agents evolve, Level 3 agents have emerged with enhanced autonomy and advanced learning capabilities. Unlike basic AI agents, which follow predefined workflows, Level 3 AI Agents exhibit independent learning, long-term memory, and decision-making capabilities that mirror human cognitive functions. James Ross, founder of Ethereum layer-2 network Mode, explained to Cryptonews that while most artificial intelligence today relies on human guidance and predefined workflows, Level 3 agents operate with minimal intervention. “Level 3 agents can make independent decisions based on richer context and real-time data,” Ross said. “They possess long-term memory, allowing them to retain and apply past experiences, user preferences, and environmental factors to future decisions.” Ross noted that these agents continuously refine their behavior through experience, autonomously detecting patterns and adapting without explicit retraining. They can also process multiple data types simultaneously, including text, images, audio, video, and live environmental inputs, leading to more sophisticated decision-making. “These agents anticipate user needs, offer recommendations, and take actions based on behavioral patterns rather than simply responding to commands,” Ross said. Level 3 AI Agents for the Crypto Industry With their advanced capabilities, Level 3 AI Agents have the potential to impact the cryptocurrency sector . Jessica Salomon, advisor to Chirper.Fun Level 3 Agent Launchpad, told Cryptonews that Level 3 agents will enhance user interaction within the crypto space. “The key transformation will be the shift from transactional to relationship-based interactions, where AI agents function as true users rather than just tools,” Salomon said. Ross noted that earlier AI agents were confined to tasks such as trading, market monitoring, and executing smart contract functions. These agents followed static models, limiting their effectiveness in rapidly evolving crypto environments. Level 3 AI Agents address these constraints by refining their models in real-time, adapting to new market trends, and identifying anomalies. “They will analyze subtle patterns, predict market movements, and proactively adjust their strategies instead of merely reacting to changes,” Ross said. Level 3 AI Agents for DeFi Ross pointed out that decentralized finance (DeFi) is a great use case for Level 3 AI agents. This is because these agents can autonomously manage portfolios, lending strategies, and liquidity pools by adapting to market conditions. “For example, an AI agent could detect an impending market downturn and proactively reallocate assets, interact with DeFi protocols, or trigger hedging strategies – all without human intervention,” Ross said. “This level of real-time, adaptive decision-making is beyond the capabilities of today’s agents, which are typically confined to predefined rules.” Ross added that the AI agents being leveraged by Mode – which enables DeFi Agents to actively move assets on-chain – are performing better than human traders. Significant breakthrough on Synth data + BTC options pricing agent via @modenetwork AI Terminal Insanely powerful for pro options traders + retail Needs a bit more polish and then I will post videos this week Next level DeFAI incoming pic.twitter.com/hLYjMULabb — James Ross (@JRossTreacher) February 17, 2025 DeFi asset management protocol Velvet Capital is also using advanced AI agents to help investors trade digital assets and launch portfolios. The company recently announced its “AI Agent Portfolio Launchpad,” a tool for AI-driven portfolio creation that allows for automated strategies to manage investments. What’s Next For Level 3 AI Agents? Level 3 agents will also be likely used within decentralized autonomous organizations (DAOs) . Ilan Rakhmanov, founder of ChainGPT, told Cryptonews that DAOs still depend heavily on human decision-making, which can slow processes and create inefficiencies. Rakhmanov believes that an AI agent could eventually step in to analyze market conditions in real-time, or manage treasury funds based on on-chain and off-chain data. “These agents could also negotiate with smart contracts, and even propose governance improvements,” Rakhmanov said. “That’s the future we’re heading toward.” While the application of advanced AI agents is relatively new, it’s notable that NEAR Protocol recently began leveraging “Shade Agents.” Kendall Cole, co-founder of Proximity Lab, told Cryptonews that Shade Agents work by extending much of the trust minimization of smart contracts to off-chain AI agents. He explained that these AI-powered agents expand the design space for DeFi applications by entirely removing humans. “For example, there are teams building index token agents that trade major Layer-1 tokens cross-chain based on mindshare trends,” Cole said. “There are also prediction market agents that create and settle markets, or x.com game agents that send transactions on behalf of users based on tweets.” Cole noted that Shade Agents will enable completely new products, both in crypto and beyond. Challenges Holding Back Adoption Although Level 3 AI Agents offer potential, several challenges remain. Salomon pointed to ethical concerns, including privacy risks associated with long-term memory storage and the potential for AI-driven emotional manipulation. “Maintaining consistent behavior while allowing for natural evolution and learning presents a significant challenge, as does creating authentic real-time responses that reflect genuine emotional intelligence rather than scripted patterns,” she said. Building trust remains a key challenge for AI agents. Ido Ben Natan, CEO of security platform Blockaid, told Cryptonews that without trust, users will hesitate to deposit funds into systems for meaningful financial activity. Ben Natan noted that Blockaid is currently working on frameworks to improve AI decision-making security. “As part of our platform, we provide companies with solutions for securing all of their agents’ on-chain interactions,” he said. “This allows builders to create secure guardrails around their agents and prevent them from accidentally interacting with malicious assets or entities.” Salomon added that the overall success of advanced AI agents will depend on maintaining clear AI-human boundaries, strong privacy protections, and transparent development processes. “The immediate focus will be on building trust and demonstrating value in specific use cases before expanding to broader applications,” she noted. “This will allow time to address both technical and ethical challenges while building user confidence.” Investing in the Era of Smart Automation Smart systems are beginning to take on roles once reserved for human expertise, redefining how digital assets are managed. Level 3 AI agents demonstrate a blend of learning, memory, and proactive adjustments that challenges conventional market practices. This development prompts a closer look at the interplay between technology and investor decision-making. It may be the right time for market participants to explore a more dynamic engagement with their portfolios. Reflecting on these changes, investors might consider adopting strategies that embrace both technological insight and personal judgment. The post How Level 3 AI Agents Could Transform DeFi—And What’s Holding Them Back appeared first on Cryptonews .
