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AI-Based Crypto Tokens: The Illusion of Decentralized AI?

This provocative study critically evaluates the proliferation of crypto tokens marketed as ‘decentralized AI’ projects. The anonymous authors challenge the prev

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Abstract

This provocative study critically evaluates the proliferation of crypto tokens marketed as ‘decentralized AI’ projects. The anonymous authors challenge the prevailing narrative that the tokenization of AI compute or model access necessarily results in decentralized architecture. Through a systematic analysis of tokenomic structures and project whitepapers, the research identifies a recurring pattern of ‘centralized reliance’ disguised as decentralized infrastructure, where the core AI model execution remains on centralized cloud servers under the control of a single entity. The paper argues that current token models primarily serve as capital raising mechanisms rather than utility-driven decentralized governance systems. By examining the governance token distribution and node operator decentralization metrics of top-tier AI tokens, the study reveals significant centralization risks. The work warns investors and developers about the misalignment between marketing nomenclature and the technical reality of current ‘Decentralized Physical Infrastructure Networks’ (DePIN) in the AI sector, urging a more rigorous taxonomy for Web3 AI projects. Authors: Anonymous Publication: arXiv preprint Publication date: 2025-01-01

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Key findings

  • Many ‘decentralized AI’ projects maintain centralized control over core AI model inference.
  • Tokenomics often overshadow technical decentralization in current AI-crypto initiatives.
  • Marketing terms like ‘Decentralized AI’ are frequently used to obfuscate traditional cloud-based architectures.
  • True decentralization in AI requires verifiable compute protocols rather than simple governance tokens.

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Citation

Anonymous (2025). AI-Based Crypto Tokens: The Illusion of Decentralized AI?. arXiv preprint. https://arxiv.org/html/2505.07828v1
Canonical knowledge ID: research:ai-based-crypto-tokens-the-illusion-of-decentralized-ai