> For the complete documentation index, see [llms.txt](https://xeleb.gitbook.io/xeleb-protocol/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://xeleb.gitbook.io/xeleb-protocol/about-xeleb-protocol/the-problem.md).

# The Problem

<figure><img src="https://1156842896-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2Fevy1MSKCZwQTkmZoUynP%2Fuploads%2F0E67CMWCbGX3lmlIH2AU%2FScreenshot%202025-07-15%20at%2011.01.26.png?alt=media&amp;token=93d7fbc4-2805-44f4-bf19-9a085885f0c5" alt=""><figcaption></figcaption></figure>

Blockchain and artificial intelligence (AI) are two transformative technologies that are increasingly converging in innovative ways. However, decentralized **AI systems face critical challenges in interoperability, incentive alignment, and scalability - issues** that are often overlooked in speculative AI-token projects \[1].&#x20;

* Up to **85% of AI projects fail** due to weak use cases, poor integration, or unsustainable business models \[2].
* Over **60% of AI-related crypto tokens** exhibit pump-and-dump behavior within 30 days of launch \[3].
* User retention across Web3 applications remains critically low, often **below 12%** after 30 days \[4].

These conditions have led to:

* Loss of user trust
* Drainage of ecosystem liquidity
* Minimal real-world adoption
* Poor user retention (<12%) \[4].

**The result?**&#x20;

A bloated, noisy landscape where the few truly valuable AI x Web3 projects struggle to stand out - choking innovation and investor confidence.

We call this the **99% Useless AI Crisis -** and it’s what Xeleb aim to solve.

Let's explore what we're cooking...!

***

**References**

\[1] Vid Kersic, Muhamed Turkanovic: *"A Review on Building Blocks of Decentralized Artificial Intelligence"*, ICT Express, 2025 (Elsevier)&#x20;

\[2] Gartner: *"Why 85% of AI Projects Fail and What to Do About It"*, Gartner Research, 2023&#x20;

\[3] Chainalysis: *"Crypto Crime Report 2025"*, Chainalysis Research, 2025

\[4] Dune Analytics: *"Web3 User Retention Dashboard"*, hildobby, 2024