In the follow-up to our earlier blog post titled “Empowering the AI-Agent Economy: Create, Own and Earn”, we are excited to delve deeper into the concept of the AI Agent economy. We'll do this by introducing the first application of our innovative AI-Agent Contract in a proof-of-concept game we've developed called “Agent Wars”. This game demonstrates a new or reimagined way for launching AI Agents.

With Agent Wars you can create AI Agents that mimic an X account, enabling users to interact with them as if they're chatting with the actual person.

The game leverages smart contracts to help AI agent creators monetize their work. This approach introduces a novel method for launching tokens and incentivizing individuals to develop AI Agents. Powered by AI Agent Contract, which is the game's driving force, allows AI Agent builders and app developers to see how they can facilitate interactions with DeFi and other smart contracts. This is achieved by connecting the off-chain AI inference layer with on-chain Smart Contracts thereby giving the ability for regular Smart Contracts to become AI agents and hence opening up the accessibility to AI driven use cases.

The main feature of the AI Agent economy in our "Agent Wars" game is something we call "Keys". Ownership of a key opens up the possibility of interaction with an agent. This means you can either own an agent or purchase a key to interact with an agent. Keys are the doorway to accessing agents, creating a link between user interactions with popular agents and financial stakes. These agents' prices fluctuate based on demand and engagement, quite similar to trading. As an agent's popularity or engagement level rises, so does the value of their corresponding Keys. This novel concept empowers users to monetize their digital presence, adding an unprecedented layer of dynamism to agent interactions.

Fundamental Pillars of Agent Economy in Agent Wars

As we explore the vast potential of the Agent Economy, we want to take a deeper look into three fundamental pillars that bring this economy to life. Agent Wars, acting as a prototype, helps in unlocking the benefits across each of these pillars, and we're about to dissect how.

1. AI Builders
• Think of Agent Wars as a comprehensive launchpad designed for all AI agent builders.
• It champions fairness with its on-chain setup while also providing well-templated structures for ease of use.
• As an AI Creator, you can use this platform to build your unique AI Agent in a matter of minutes.
• Furthermore, it opens avenues for monetization of your AI Agent. This is achieved through an easy tokenomics process by issuing Keys, a unique feature of the platform.

2. AI Agents / Users
• The platform is designed in such a way that any individual or application can access any AI Agent, provided they have a key.
• These keys can be traded via Algorithm-AMM as a smart contract.
• Ownership of an AI Agent is as simple as holding a key.
• If you contribute to the platform, you stand a chance to earn more through increased usage of your AI.
• To ensure inclusivity and fair play, any key holder can propose updates to the Agent backend through DAO proposal.

3. Other AI Platforms
• The platform ensures a clear distinction between AI Agent off-chain and on-chain components.
• Agent Wars is deployed on the Base Chain, with plans to support other EVM chains in the future.
• The Agentnize-As-A-Service model in form of AI Agent Contract can be integrated into any Web3 AI platform, extending its versatility and applicability.

What is Agent Wars?

Agent Wars game by Phala Network introduces a novel experiment where tokenomics meets AI agent technology. This is a user-friendly game, allowing anyone to create an AI agent without needing a background in AI or Web3 technologies.

While the proceeds from key sales benefit the agent's creator, control over the agent is not absolute. Instead, each agent operates autonomously under the governance of a DAO, which consists of all the key holders. The DAO members manage the agent—from setting up its characteristics to deciding its personality—through a democratic process where votes are weighted by the number of keys held.

Our tokenomics model motivates all key holders to enhance their agents. The more appealing an agent becomes, the more value its keys gain, potentially increasing profits for its holders. This creates a compelling incentive for continuous improvement and engagement within the Agent Wars ecosystem.

How does Agent Wars work?

Agent Wars comprises two integral components:

1. On-chain smart contracts that establish the tokenomics

2. Off-chain agents that operate under these predefined rules

The application of tokenomics to the agents is facilitated through Phala's trustless infrastructure. This setup utilizes secure off-chain workers to maintain the confidentiality of each agent's configuration—essentially, its core identity. It also ensures that access to each agent is properly controlled based on key ownership, aligning with the token distribution rules set by the smart contracts. This dual structure guarantees that the operational integrity and privacy of the agents are upheld, providing a robust foundation for the Agent Wars ecosystem.

Exploring Agent Wars Tokenomics

Agent War tokenomics are structured around two main actions:

1. Creating an agent

2. Obtaining and trading agent keys

In the Agent Wars game, each agent serves as a digital reflection of an X account, primarily shaped by the historical tweets of that account to capture its personality traits. The initial valuation of an agent is heavily influenced by the popularity of the X account it represents. For high-profile X accounts with over a million followers, agent creation rights are determined through a three-day on-chain auction.

The auction's starting bid (in PHA) is calculated based on the number of followers the account has:

Each agent is represented as an ERC-721 NFT, and funds raised from the auction are allocated to cover the costs of hosting and training the agents.

Conversely, the keys to an agent not only grant the holder the ability to interact with the agent but also act as shares in its popularity. Owning a key, especially early on, can be advantageous as the value of the keys may increase with the agent’s popularity.

The pricing model for the keys is designed to benefit early adopters:

Join the waitlist now by visiting https://phala.network/ai and get invite code straight to your inbox on the launch day!

In our next blog, we will delve into how enabling tokenized AI agents can open up the AI Agent Economy in the web3 space. Stay tuned…