The foundational thesis on the tokenomics of MagnetAI
Chapter I: AI Economy Lifecycle
Throughout the evolution of Artificial Intelligence, one of the central and most fiercely debated topics is finding the balance between nonprofit initiatives and rapid commercial expansion. This challenge is critical not only within the AI industry but also extends to the entire human world.
On one side, there is a growing concern about the monopolization of AI by a few dominant players, raising fears of a dystopian future where a handful of entities could dictate the fate of humanity. This scenario echoes the dramatic plots seen in popular AI-themed films. On the other side, the open-source AI community struggles to secure funding and achieve profitability, which hinders its development. This challenge results in community-driven projects being increasingly overshadowed by their commercially-oriented counterparts.
Let's illustrate this with a specific case study - OpenAI. Over a decade, OpenAI's evolution from a nonprofit organization to a leading AI commercial enterprise offers a typical and insightful trajectory:
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Foundation Phase (2015-2017): Initially established as a nonprofit, OpenAI focused primarily on fundamental research in machine learning and deep learning. During this period, the organization was dedicated to open research, publishing a series of foundational scientific findings.
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Expansion Phase (2018-2020): As OpenAI transitioned into a hybrid model of business and nonprofit operations, it formed a commercial company to attract capital and talent. This phase was marked by the launch of the commercialized model of GPT-3, aimed at scaling up research and development efforts.
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Profit Phase (2021-present): In recent years, OpenAI has continued to develop various commercial products and advance the capabilities of the GPT models, transitioning into a fully commercial profit-driven company.
We have observed that the developmental paradigm of OpenAI is almost universally applicable to all projects in the AI world. Whether it involves AI models, knowledge-based bots, or various types of AI agents, the journey from inception to commercialization can typically be encapsulated by this paradigm, which we refer to as the “AI Economy Lifecycle”.
Projects entering the AI economy typically start in the Foundation phase, where they develop initial products and attract early users. Once funding is secured, they move into the Expansion phase, focusing on promoting their offerings to attract a broader user base and expand their community. After successfully commercializing and finding a profitable business model, projects enter the Profit phase. Following this cycle, they return to the Foundation phase, where they either upgrade their existing products or diversify their portfolio, thus repeating this process in a spiraling pattern of continuous improvement and growth.
Chapter II: Rethinking AI Economy
Given that the AI economy is fundamentally driven by this lifecycle, are there alternative growth models beyond the example set by OpenAI? Can these alternatives balance openness and commercial viability, maintaining the spirit of a community-driven open-source approach while achieving rapid commercial growth?
Our answer is: Web3
Crypto decentralization can balance out AI centralization; AI is opaque, and crypto brings transparency. — Vitalik Buterin
As Vitalik Buterin has noted, there are significant synergies between Web3 and the AI economy, including tokenization, monetization, incentivization and full data ownership.
By leveraging the native features of Web3, we can better shape the future of the AI world. Addressing these opportunities is precisely what MagnetAI focuses on and aims to address.
If we can harness the unique features of Web3 to optimize the AI Economy Lifecycle, we can ensure that AI remains open while rapidly achieving consensus and growth.
Chapter III: How Does MagnetAI Solve This?
MagnetAI's ModelFi concept introduces a strategic approach covering the three key phases of the AI Economy Lifecycle. We believe that during the Foundation Phase, AI projects primarily require early users; in the Expansion Phase, they need funding; and in the Profit Phase, the focus is on achieving long-term profitability and conversion. Accordingly, we have tailored distinct strategies for each stage, integrated into our product matrix known as the MagnetAI Trinity:
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Model Store: This decentralized AI Marketplace standardizes AI projects, providing a unified bot service interface with features such as PricePerMessage, Revenue Sharing, Chat2Earn, and Follow2Earn, all while integrating model tokenization to enhance accessibility and monetization.
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Model Economy: Serving as a launchpad for tokenizing models, bots, or agents (hereafter referred to as Projects), this platform enables participants to share in the ownership of AI projects through tokenization, facilitating rapid funding and cashing in on future value.
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Model Network: This framework offers unified access to various computing infrastructures, including traditional Web2 clouds, Web3 GPU sharing platforms, and individual GPUs, optimizing resource utilization and maximizing revenue potential for projects.
Through the MagnetAI Trinity, we provide concrete solutions tailored to each phase of the AI Economy Lifecycle:
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Foundation Phase: Our Model Store connects globally with millions of AI users in a fully transparent, decentralized manner, driving early traffic and visibility for AI creators. The standardized interface simplifies project creation for AI creators and usage for end-users.
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Expansion Phase: Via the Model Economy, we assist AI creators in tokenizing their projects. This not only enables creators to rapidly raise funds and cash in on the future value of their AI projects but also allows the general public to deeply engage with and eventually share in the ownership rights of these projects.
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Profit Phase: We continue generating income through the Model Store's Chat2Earn and PricePerMessage features, sharing revenue with Model Token Holders. Simultaneously, the Model Network provides cost-effective inference solutions to ensure maximum revenue retention.
We believe that this approach not only maintains openness in AI but also leverages the synergies between Web3 and AI to enable rapid growth for projects, including models, bots, and agents.
In the long term, MagnetAI aims to create a platform that not only enables AI creators and mainstream users to benefit from the new AI Economy Lifecycle, but also to harness the openness, transparency, and trustlessness of Web3. By doing so, we ensure that AI remains open-source and develops under global oversight, fostering a continuously thriving and growing AI world.
We believe in AI, but we believe even more in AI + Web3.