In a world where AI products and services are increasingly common, AgentLayer — an autonomous and collaborative AI agent network — looks to make a lasting impression with its native AGENT token. From catering to users seeking services specific to AI agents to having utility across governance setup and developer incentivization, AGENT tokens are laden with relevant use cases.
This guide will help you maximize the potential of AgentLayer’s AI services, offering readers a deeper understanding of the multifaceted role of its native token — AGENT.
- Understanding the AGENT token: In brief
- Unpacking the AgentLayer ecosystem and the role of AGENT
- Features of AGENT token
- Benefits of the AGENT token
- The importance of understanding AgentLayer tokenomics
- AgentLayer tokenomics: In detail
- AgentLayer economy: Why AgentChain is relevant
- How AGENT staking works
- Is there more to AgentLayer governance than staking?
- AGENT tokens and liquidity mining
- Can AGENT tokens change the AI narrative?
- Frequently asked questions
Understanding the AGENT token: In brief
AGENT is the native token of the AgentLayer network. The crypto powers services across the ecosystem, all while remunerating developers — who are of critical importance to the network’s trading bot marketplace.
The token has a set tokenomics model involving all 1 billion tokens, including a decent allocation for core contributors.
Unpacking the AgentLayer ecosystem and the role of AGENT
The AGENT token enables seamless interactions between AI agents, developers, and the community. The core team behind the AGENT token is the same as that of the AgentLayer ecosystem. Some notable names include:
- Prof. Yang Liu: Co-founder & CEO at MetaTrust Labs
- Mr. TY Shao: Co-founder & Community Lead
- Mr. Xue Yue: Blockchain Developer Engineer
- Mr. Andy Deng: Product Lead and VP at MetaTrust Labs
There is an advisory board assisting the core team with aspects related to ecosystem and token development.
Token standard and the development lifecycle
As previously explained, the AGENT token powers the AgentLayer ecosystem, which comprises:
AgentOS: Developers often use AgentLayer’s operating system to create and deploy AI agents. The AGENT tokens play a key role at this juncture, helping incentivize developers and encouraging continuous innovation.
AgentNetwork: The entire decentralized AI agent hosting ecosystem operates without a single point of failure. In this space, the role of AGENT tokens is to ensure transactions and interactions between agents.
AgentLink: This is AgentLayer’s communication protocol, where multiple agents work together for seamless data exchange. At this point, tokens can be utilized to pay for communication services and data exchange.
AgentFi: Per the name, this is the financial layer of the ecosystem, with AGENT central to all the relevant operations, including liquidity mining, staking, and revenue sharing.
Besides the ecosystem-specific role outlined above, the AGENT token also has a clear usage across AgentChain. This dedicated layer-2 chain ensures the execution of smart contracts and incentivizes network validators. The AgentStore, which operates an expansive marketplace, also utilizes AGENT tokens as its primary currency.
And finally, there is AgentKey, which secures access and control over AI agents. AGENT tokens authorize and authenticate transactions at this level.
Features of AGENT token
As per our earlier discussion, here are some of the key traits of AGENT:
- Interoperability
- Advanced built-in security features, thanks to the ERC-6358 standard
- Clear-cut role in the AgentLayer DAO as a governance-handling tool
- Support for transaction utility within the ecosystem
- Tie-ups with intra-ecosystem economic incentives
Benefits of the AGENT token
The listed features translate into numerous clear user-specific benefits and utilities:
- The token opens access to services, even for less experienced users.
- This opens up governance and staking participation, all thanks to the existence of veAGENT tokens — which act as AgentLayer’s LP tokens. Plus, staking attracts yields.
- A host of economic benefits across multiple ecosystem layers.
- Helps users deploy AI agent services via subscriptions or the sale mode.
- It can be used as the transaction and service fee within the ecosystem.
- Gives access to various token sales and launches within the AgentLayer ecosystem via Initial Agent Offerings (IAOs), integrated within the AgentEx — another element of AgentLayer.
The importance of understanding AgentLayer tokenomics
Ecosystem users and token holders should understand AGENT tokenomics for a number of reasons. Firstly, AgentLayer isn’t a regular protocol. Instead, it markets itself as a decentralized AI ecosystem where AI models and their creators can work harmoniously. The in-house models aren’t ChatGPT-inspired; they instead use the proprietary TrustLLM. Having a token makes this credible ecosystem more accessible to regular users looking for a taste of non-ChatGPT AI.
For those people, understanding the tokenomics can help validate the project and contribute to the token’s credibility. For AgentLayer, understanding the AGENT tokenomics can offer a better picture of the following:
- Economic incentives related to the project
- The governance angle and the transparency
- Plans for growth and sustainability
- The composability and interoperability angle, as the AGENT token also adheres to the ERC-6358 standard and integrates EigenLayer AVS.
- The role and extent of incentivization
AgentLayer tokenomics: In detail
As mentioned previously, AGENT comes with a maximum supply of 1 billion tokens. Here’s how the distribution pans out:
- Investors: 10%
- Vesting schedule: 1% at Token Generation Event (TGE), with a six-month cliff and nine-month vesting period.
- Advisors: 3%
- Vesting schedule: 0.18% at TGE, with a 12-month cliff and 12-month vesting period.
- Core contributors: 20%
- Vesting schedule: 0.6% at TGE, with a 6-month cliff and 12-month vesting period.
- Long-term treasury: 8%
- Vesting schedule: No cliff, 48 months vesting.
- Community building & node release: 20%
- Vesting schedule: 1.2% at TGE, with no cliff and 48 months vesting.
- Ecosystem building: 39%
- Vesting schedule: 1.95% at TGE, with no cliff and 48 months vesting.
This tokenomics schedule caters to investors, advisors, ecosystem builders, and every other stakeholder.
As for the objectives, with the AGENT token and the upcoming TGE, AgentLayer aims to:
- Offer sustainable economic incentives to stakeholders
- Help with the governance model, making it transparent and sustainable
- Steady revenue generation
- Facilitate composability or interaction across AI models and APIs
However, several aspects of AGENT tokenomics should be clarified in order to support a further understanding of the project’s vision and mission.
Critiquing the developer remuneration structure
Developer remuneration can be a concern in both decentralized and centralized AI networks. While centralized networks have large organizations to appease, decentralized AI networks are plagued by high transaction costs, making monetization difficult.
Additionally, in decentralized AI, datasets often need to be completed, leading to inefficiencies and higher costs in developing performing AI systems.
Here’s how AgentLayer’s tokenomics aims to solve these issues:
- AgentStore sales and subscriptions
- Incentivizing contributions, where developers are rewarded with AGENT tokens
- Developers can stake tokens to earn rewards and access voting rights
Hence, the existence of a native token opens up monetization options for developers.
Promoting composibility
While we have briefly discussed the concept of composability — or rather integration — across agent APIs and AI models, here are some additional aspects to consider:
- Having a compatible token enables interoperability between agents and APIs. Simply put, thanks to the ERC-6358 standard, AGENT tokens can be the building blocks of complex, multi-component AI systems.
- The AGENT token also promotes standardization, ensuring models and agents adhere to specific protocols. This element reduces compatibility issues.
NFTs for advanced services
Flexible token standards ensure that AGENT tokens aren’t restricted to payments or covering transaction costs. Instead, its tokenomics also allows for the creation of non-fungible tokens that represent assets and unique AI services, opening another revenue stream for developers.
As mentioned previously, tokenizing AI services also ensures secure ownership and provenance of AI services. This makes it easier to track intellectual property rights.
Is a flywheel mechanism possible with AGENT?
Every AI network or product aims to be sustainable. For AgentLayer, the AGENT token can achieve this with the help of the flywheel mechanism.
A flywheel mechanism is a self-reinforcing cycle where each component’s output becomes the input for the next component. This creates a continuous loop of growth, sustainability, and value generation.
AgentLayer’s mechanism involves AI agents, the TAG DAO governance framework, and developers, all of which are connected with the help of AGENT tokens. Here is how the process flows:
- Tokenomics helps engage developers and creators.
- TAG DAO generates value and revenue for the ecosystem from transaction fees, staking rewards, and service charges, which are distributed among AGENT token holders.
- A self-sustaining cycle is formed when developers create valuable AI agents and services that attract users to the ecosystem. Users pay for these services using AGENT tokens, generating revenue.
This mechanism helps AgentLayer scale beyond the usual limitations associated with pedestrian AI services.
AgentLayer economy: Why AgentChain is relevant
The AgentChain is a specialized layer-2 (L2) solution built on Ethereum, designed to optimize AI operations within the AgentLayer ecosystem. The AGENT token plays a crucial role in this network by ensuring efficient and secure transactions.
Notably, AgentChain is more like a failsafe for addressing the efficiency and scalability challenges associated with running high-frequency AI operations on the Ethereum mainnet, which AgentLayer is built on.
AGENT tokens are used to pay transaction fees on the AgentChain, ensuring that operations remain efficient and cost-effective. The same token, used across layers, makes the AgentLayer economy and the associated tokenomics easy to make sense of.
How AGENT staking works
One of AGENT’s key features is that the token can be staked. Users who lock their AGENT tokens receive veAGENT tokens in return, which also come with voting rights within TAG DAO. Stakers also win additional AGENT tokens depending on the lock duration and the amount staked.
While rewards and incentives are enticing for users, staking also contributes to the security of the AgentLayer network and ensures all participants have skin in the game.
Is there more to AgentLayer governance than staking?
While staking comes with voting rights, the TAG DAO allows AGENT token holders to propose and vote on important changes. These include protocol upgrades, fund allocations, and new feature developments. Notably, holders of APGN — AgentLayer’s Premium Governance Nodes — get super-voting rights.
These nodes also offer daily AGENT token rewards and early access to ecosystem features, constituting another incentivization for AgentLayer users.
AGENT tokens and liquidity mining
AgentLayer boasts a decentralized exchange, AgentSwap, which features an AGENT-specific liquidity pool. Once the token officially launches, these pools will start facilitating liquidity provisioning and trading, making the AgentLayer ecosystem more accessible.
Participants in liquidity mining via pools can earn additional AGENT tokens as rewards for their contributions. The reward typically depends on the size of the user’s stake and the duration of liquidity provision, incentivizing long-term commitment and participation.
Liquidity mining can also help with any potential concerns related to the value maintenance of AGENT. By locking up tokens in liquidity pools, the circulating supply of AGENT tokens is reduced, which can positively impact the token’s value due to decreased supply and sustained demand. Note that this is theoretical, and the sustainability element requires further investigation.
Can AGENT tokens change the AI narrative?
AGENT tokens integrate governance, cryptocurrency, incentivization, and other elements into the AgentLayer ecosystem. What could be limited to a collection of autonomous agents inside a decentralized network is instead a comprehensive and interoperable ecosystem — thanks to the ambition and functionality of AGENT tokens.
Over time, AGENT tokens are expected to help AgentLayer expand its AI service repertoire, bring infrastructural improvements to the AgentOS and the AgentLink space, and foster strategic partnerships. And with the custom tokenomics taking care of vesting schedules and controlled emissions, holders may not need to worry about possible price dumps.
As always, never invest in crypto without a comprehensive risk management strategy in place, and never invest more than you can afford to lose.
Frequently asked questions
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