A New Crypto Edge: Hallucination Yield
I recently listened to an interesting conversation with Good Alexander, founder of a crypto project Post Fiat. He talked about this wild concept he's been exploring at the crossroads of blockchain and AI, and it's called Hallucination Yield. It's really interesting, so let me break it down for you.
What's Hallucination Yield?
Imagine this: AI systems, like ChatGPT, have this funny way of guessing what a cryptocurrency's market cap should be. Sometimes, they think a coin should be worth way more than it actually is. It's like they're dreaming up these values, hence 'Hallucination Yield'. Alexander mentioned VIRTUALS as an example; these AI models were saying it had a market cap of $7 billion, even though in reality, it was trading below $100 million. Meanwhile, VIRTUALS reached a market cap of around $4 billion already.
How does it work?
So, these AI models, they're trained on tons of data. They start to form their own biases towards certain things, like AI projects or even memes like Pepe. They might predict a higher market cap for these because they see a lot of engagement or because they've seen similar patterns in the past. It's kind of like if we were trying to guess how popular a new song would be based on how much we liked the artist's old hits, but on a data-driven level.
Putting it into practice
Now, if you're into trading or just curious about investing, here's how you could play with this idea. First, you'd come up with questions you might ask an AI about a coin, like its potential or market cap. Then, you'd use these cool APIs to ask different AI models around the world what they think. It's like getting opinions from different friends from different places, but instead, these friends are supercomputers.
You'd gather all their answers, focus on what they predict for market cap, and then compare that with the real market cap. If the AI's guess is way higher, that's your Hallucination Yield.
What does it mean for the market?
It's not about just taking what the AI says as gospel, but understanding why they might think a coin is the next big thing. Alexander pointed out that these models have a soft spot for AI-related projects, which could nudge market trends as more people start using AI for investment advice. The tricky part is figuring out if the AI's high opinion is based on something real or just a cool story it's spun.
Looking forward
As AI gets more involved in how we analyze markets, this Hallucination Yield thing could become pretty important. It might mean that soon, understanding what AI thinks could be as crucial as knowing the market inside out. It's like we're entering this phase where what the AI 'dreams' about could lead investment trends.
Wrapping it up
So, Hallucination Yield is this mind-bending concept that mixes AI's predictive power with the wild west of crypto trading. As we move forward, it might change how we see value in digital money and how we use tech to make decisions. It's definitely something to keep an eye on, especially if you're into staying ahead in the game.
If you want to watch the full conversation, I’ll drop it here below.
Thanks for reading.
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Written by Timothy Assi, an Elite Popular Investor on eToro.
Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk. Past Performance is not an indication of future results’
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