It’s time to redesign developers’ incentives

Opinion by: Dr. Richard Blythman, co-Founder at Naptha.AI.

Since the breakout moment of generative artificial intelligence in 2022, there has been talk about AI and crypto technologies as the perfect pair, with one solving the critical issues of the other.

It has been proposed that AI’s proliferation of fake images can be solved through blockchain verification and that protocol threats can be detected with AI. Despite heightened interest and experimentation in both fields, the “AI-blockchain killer use case” remains elusive. Many ambitious AI blockchain projects have faltered.

Despite the countless AI-crypto companies that have come and gone in the past two or so years, hardly any have stuck. That is not because the products weren’t valuable or good ideas. The critical issue these companies and their senior teams face is in two parts. Firstly, convincing AI developers to spend their time developing on a specific network is essential. Secondly, they should be incentivized to stay, and keep working, once they’re on board. 

To solve these problems, people who seek to avoid the fate of these failed ventures need to reassess their perspective on what incentivizes AI developers. It’s time to stop thinking about the financial rewards and start thinking about how their technology might change the world. 

Misguided incentives in decentralized AI 

Incentivization aligns user behavior with product goals. A financially driven rewards structure works well in traditional crypto sectors and consumer Web3 products, but not so much for AI.

Crypto was built as an alternative to TradFi. AI wasn’t envisioned through the same financial lens. Financial rewards don’t work in AI because they do not resonate with AI developers’ core motivations. 

AI developers are pure technologists who believe they’re on the bleeding edge of a seismic societal shift. What they’re building will inform the future, so they do what they do, not to get paid. If they think they’re creating infrastructure that’ll influence the world economy, much like we saw with Web2, the marginal financial gain through tokenomics is likely not an enormous appeal.

Recent: ai16z token rockets 50% after nod from top venture firm

AI developers are also notably skeptical of crypto’s shill side. It has an unfortunate reputation for being a center of scammers, with almost 40% of Americans not at all confident in the trustworthiness of cryptocurrencies, despite only 7% ever having traded any. The reputation of crypto as volatile, with the potential for scams, makes it unappealing to many AI developers, who generally view their work as too essential to be subject to infrastructure failures or security breaches.

In this sense, financially centered incentives are not just ineffective — they may even deter AI developers if they are the central selling point.

From compensation to contribution

AI developers view their work as a calling that influences society. They seek to be part of history, gaining recognition by contributing to significant technological advancements. Innovation thrives in settings that promote idea-sharing and collaboration. Financial remuneration can and should exist, but not at the forefront as per crypto projects.

Shifting the narrative from immediate financial gains to the broader implications of their work can attract developers to invest their talents in decentralized projects. To build a robust team of developers for the right reasons, move away from tokenomics and financial incentives that often alienate talent and create a culture of collaboration with a clear vision and values and meaningful engagement opportunities.

That is a unique differentiator in itself in an industry that’s both saturated and calling for change.

Token-based incentives have proven effective in traditional blockchain projects, where financial motivation drives both developer and user engagement. In these environments, token rewards align well with the goals of contributors who are invested in the economic growth of the ecosystem. This assumption, however, falls short when applied to the field of AI development, where developer motivations are fundamentally different. 

For decentralized AI to succeed, it’s time to create more effective incentive structures. 

Traditional token-based rewards misunderstand what drives AI developers and risk derailing promising AI-blockchain partnerships before they can mature. These incentive structures can include those that emphasize collaboration, recognition, and long-term societal impact, all essential to meeting the unique motivations of the not-yet-tapped AI development community. 

Decentralized AI can position itself as a transformative movement by emphasizing purpose-driven incentives, such as collaboration, recognition and a shared vision for societal change.

Decentralized AI harnesses two of the most significant technological innovations of modern times. The global blockchain AI market is expected to reach $3.718 billion by 2033.

This decade is up for the taking.

Dr. Richard Blythman worked as an ML engineer in Big Tech and as a postdoctoral AI researcher at university. He is an early innovator in AI/crypto, co-founding Algovera in 2021. He is a co-founder and the chief scientific officer of Naptha.AI, a platform that orchestrates multiple AI agents to optimize performance and drive innovation.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.