Why AI Agents Need Web3 Names to Reach Their Full Potential

In Iron Man, billionaire superhero Tony Stark has a digital butler named JARVIS that runs his household, assists with decision-making, and even helps pilot his high-tech exoskeleton.

But if we want to fully harness the power of AI agents in Web3, we must ensure they operate securely, transparently, and with accountability. That’s where decentralized identity systems come in.

Just as domain names made the internet navigable for humans, Web3 domains can unlock the full potential of AI agents by providing verifiable identities in human-readable form. Instead of relying on long, complex blockchain addresses, we can assign AI agents unique, simple names that make interacting with them easier and safer — preventing issues like scams, fraudulent replicas, and market manipulation.

AI Agents: The Next Big Leap

Large language models (LLMs) like ChatGPT have turned the AI industry on its head. AI agents are the next major step forward. These AIs don’t just generate text, they will take action.

For decentralized finance investors specifically, AI agents could automate liquidity provisioning, manage portfolios, and execute sophisticated trading strategies in real time. And since the agents can be accompanied by LLM copilots, users will be able to interact with them through simple text commands. Imagine how much simpler that makes interacting with your finances.

The Need for Verification and Security

The rise of AI agents comes with risks, however. These bots will be making financial decisions, launching tokens, and performing other high-stakes operations. As their capabilities grow, so must our ability to oversee and verify them. Decentralized identity systems can help – and memecoin trading illustrates this..

Meme tokens are notoriously easy to copy and difficult to verify. If you want to trade a memecoin — let’s say, $TRUMP — you might head on over to a trading platform like four.meme or pump.fun, and what do you see? Hundreds of same-name tokens, many of them attempted scams or rug pulls, riding $TRUMP’s success.

Sure, you could manually verify each token using a blockchain explorer like Etherscan. But this is time-consuming and error-prone. Every trade would require multiple steps to check the contract address, verify the number of holders, and confirm legitimacy before executing a transaction. Wouldn’t it be simpler and more secure if the contract address were linked to a trusted Web3 domain?

For instance, instead of a long string of characters, $TRUMP’s contract address could be something readable like trump.pump.fun or floki.four.meme. This would eliminate ambiguity and make verification instant. Plus, it’s more trustworthy, as domain issuers would require verification before assigning them, analogous to how X (formerly Twitter) assigns blue and gold checkmarks. With this extra layer of trust, investors could trade confidently, knowing that the coin’s contract address is officially recognized.

The same principle applies to AI agents. Soon, there will be millions of them operating in Web3. Without clear identities, it will be difficult to determine which ones are legitimate and which are malicious. By assigning AI agents verified Web3 domains, we create a system where users can easily distinguish trustworthy bots from bad actors.

Human Verification in the Web3 Era

Decentralized identity isn’t just useful for AI agents — it can help verify human identities as well. In the digital world, people can be easily impersonated. Deepfakes, bot accounts, and online scams have already eroded trust in social media, financial transactions, and even decentralized communities. More mundanely, people can simply misrepresent themselves online, exaggerating credentials or experience.

Web3 domains offer a solution. For example, suppose you complete a DeFi development course, and the course provider issues a blockchain-based certificate. By linking this credential to your Web3 domain, anyone could near-instantly verify your achievement.

Beyond credentials, Web3 domains can be linked to social media profiles, decentralized websites, and on-chain activity, creating a unique, immutable digital identity that belongs solely to the individual. Unlike traditional usernames, which can be stolen or censored, Web3 domains cannot be revoked.

In much the same way, AI agents’ identities could be tied to reputation scores based on user feedback, their execution success rates, or many other performance metrics.

A Landrush for Digital Identities

Here’s a reason to get in early on a Web3 domain: as adoption grows, the demand for desirable names will surge. Just as early internet domains became valuable digital real estate, Web3 domains will follow suit.

Premium Web3 domains could be worth thousands of dollars in the future. Right now, I can buy the name “alice.bnb” for just $6. As Web3 expands, however, it’ll get harder to snag the best names, whether for people or AI agents.

AI agents are set to reshape the digital economy. But for them to function safely and effectively, we need robust verification systems in place. Web3 domains offer an elegant solution, providing clear, decentralized identities for AI agents, tokens, and humans.