Editor’s note: The text emphasizes that Aave’s $GHO extension and Uniswap’s Unichain plan may reactivate DeFi 1.0, although there are not many other promising DeFi tokens, hoping to seize the opportunity of market recovery and overcome the negative sentiment of the bear market.
The following is the original content (for easier reading and understanding, the original content has been reorganized):
After six months of volatility, the market is now full of vitality again. Solana and Base performed well, and AI meme coins also brought new topics. Some people predict that Bitcoin may break the $100,000 mark in the coming months.
Here are some positive factors:
The U.S. presidential election will be held in two weeks. If Trump wins, it will be a major positive for cryptocurrencies.
On-chain indicators continue to be bullish, with Base and Solana’s TVL (total locked value), transaction volume, and number of active addresses all rising.
Stripe just acquired Bridge, a stablecoin payment platform. Many people underestimate the positive impact this will have on cryptocurrencies in the long run.
AI x Meme is an emerging field that may become the “NFT” in this cycle, attracting more retail users.
Market sentiment is picking up and an optimistic atmosphere is returning.
Now is the perfect time to shake off the trauma of the bear market and start anew. I can’t imagine being sidelined at this time of opportunity. With so many different protocols and narratives in the market, it’s hard to tell which are real signals and which are just noise. Here are a few key ones I’ll be watching in the coming months.
Transparency note: These are my honest opinions and I have not been paid to promote any of the protocols in this article. I apologize for not being able to cover all interesting narratives and protocols, please do your own research as this article is limited in length.
1. AI Agents x Meme Coins: Cultural Cults Are Back
Meme coins have been an important part of the cryptocurrency space since its inception.
The way it works is actually very simple: Meme coins usually gain attention in a relaxed way by being associated with viral hot topics or characters. However, traditional Meme coins are "static" and their popularity mainly depends on the spread of the community.
But what if Memecoins could evolve? What if Memecoins could advertise themselves? That’s where AI agents come in. (AI agents are intelligent systems that can perform specific tasks autonomously, without human intervention.)
Last week, $GOAT (Goatseus Maximus) became a hot spot for AI agent speculation, soaring from zero to a market value of $500 million in a week. So, what is $GOAT? Truth Terminal is an autonomous chatbot that independently manages its Twitter account and generates content.
It posted some techno-philosophical content, but later focused on the "GOATSE OF GNOSIS," a pseudo-religion based on an old (and explicit) internet meme. An anonymous person created the Goatseus Maximus ($GOAT) token and airdropped a portion of it to the founder of Truth Terminal.
Next, Truth Terminal spontaneously began to promote $GOAT on the X platform. An AI promoting its "own" Meme coin? People are flocking to it. It has the "basic elements of Meme coins": high liquidity and fair distribution, without too much venture capital or insider control of the Meme coin "secret alliance".
There are several reasons why AI Meme Coin continues to attract market attention:
1.Truth Terminal has over 100,000 followers and the number is still growing. The reach of each tweet is amazing. It tweets every hour and is a KOL who never rests.
2. Currently, no AI Meme coin is listed on centralized exchanges (CEX), but $GOAT has a daily trading volume of $374 million, and has clearly entered the attention list of top CEXs. (Update: Binance has just announced the launch of Goat's perpetual contract).
3. It continues to evolve. AI understands itself better than any human, and it will continue to learn and grow.
4. This is the intersection of cryptocurrency, artificial intelligence and religion - a combination of multiple cultural worships.
5. We have just scratched the surface of this emerging field, how to participate? The easiest way may be to hold the leader $GOAT and wait and see, some potential followers such as Fartcoin and Gnon are also rising.
Warning: A ton of scams will try to ride this wave, but their token distribution will be nowhere near as good as $GOAT. I'm pretty sure many of the so-called "AI agents" are actually just late-night programmers pretending to be one.
Looking back at 2021, NFTs have successfully attracted the attention of retail investors, and AI agent xMeme coins have similar potential. $GOAT's market value is likely to easily exceed the $1 billion mark. But don't forget, Meme coins rise fast and fall fast. So, make sure to lock in profits in time.
2. Solana: Riding the wave of meme coins and AI
Solana not only performs well on a technical level, it also occupies a place in the current meme coin and AI craze.
The first millionaires of the gold rush weren’t the diggers, but those who sold them the shovels and picks. Look, I love Ethereum, but it would be unwise to ignore the progress and popularity of Solana, the data doesn’t lie.
Solana is currently riding the wave of excitement from the explosive growth of meme coins and the development of AI-driven bots. With the rise of meme coins and the increase in trading volume, Solana is back in the spotlight.
Solana Seizes the Opportunity of Meme Coins and AI Tokens
Well-known meme coins such as SLOP, GNON, Shegen, and FART have attracted widespread attention, while $GOAT has become the leader among AI tokens. As of the fourth quarter of 2024, Solana created an average of 96,010 tokens per day, of which Pump.Fun contributed about 9,000, accounting for 9.3% of the total.
Solana is not only the home of Meme Coin, but also a number of other innovative DeFi protocols. Here are three projects worth paying attention to:
Jupiter: They focus on exchanges and perpetual contracts, and recently launched a new trading platform specifically designed for Meme coins - ApePro.
Kamino Finance: Since its launch last year, Kamino Lend has captured nearly 70% of the Solana market, with a total locked value (TVL) of $1.65 billion.
Pump.fun: Solana's Meme coin factory, with possible airdrops in the future. They launched a new internal trading tool, Pump Advanced, and introduced a video tokenization feature that allows users to convert videos into tradable assets, adding a unique dimension to Meme culture.
As Solana continues to innovate and attract diverse projects, it is becoming a potential competitor to Ethereum. The combination of Meme Coin and AI Token not only enriches its ecosystem, but also enhances community participation, making Solana attractive to emerging retail users or "dumb money" investors.
But also pay attention to transaction fees and network congestion during periods of high activity. Although Solana’s technology can handle high throughput, the meme coin craze sometimes challenges its limits.
4. AI: Don’t Ignore Crypto AI Tokens
The combination of Meme Coin and AI is currently attracting all the attention, but we should not ignore AI tokens in the crypto space.
One of the leaders is TAO. Bittensor (TAO) is an infrastructure project in this space, focusing on AI practicality:
The Opentensor Foundation recently launched an Ethereum compatibility layer, connecting the over $300 billion Ethereum ecosystem.
Real adoption: 3 major DeFi protocols are already being developed on Bittensor’s machine learning infrastructure.
Multiple revenue streams: transaction fees, staking, and AI services.
Target quarterly revenue of more than $10 million.
Institutional Support: Two large crypto VCs increased their holdings in September.
Solana is expected to become the leader of a new round of market boom with its innovation and rapid growth in the fields of Meme Coin and AI.
An interesting strategy to capture opportunities in the AI space is to attack with two fists:
$GOAT (High Risk, High Viral Potential)
$TAO (Infrastructure Layout)
Both are worth watching in Q4 and have mature community support, attracting both meme coin traders and AI enthusiasts.
AI agents are now experiencing their breakthrough, and one protocol I am particularly interested in is the Virtuals Protocol. Some people describe it as the Pump.fun of AI agents, which is well worth further study.
This dual strategy combines high-risk, high-reward Meme coins with robust AI infrastructure investments, profiting from short-term viral effects while laying the foundation for long-term technological development.
Virtuals Protocol allows users to co-own AI agents in the gaming and entertainment fields. Imagine that you can co-own these entertainment robots deployed on platforms such as TikTok and Roblox. This innovation not only changes the way users interact with the virtual world, but also brings new business models to AI agents.
Farewell Fantom, hello Sonic Chain!
Fantom was all the rage in 2021, with the TVL reaching $8 billion. I still remember the frenzy surrounding the SOLIDLY airdrop for the Fantom protocol.
Now, Fantom is undergoing a transformation, renaming itself Sonic Chain to focus on speed and scalability, and with the return of Andre Cronje, market expectations are high.
So what’s new with Sonic Chain? It promises faster transaction speeds, up to 10,000 TPS (transactions per second). While this speed is not the fastest in the industry, it is enough to put Sonic Chain in the race for high-speed public chains. Coupled with an improved token economic model, Sonic Chain has become one of the most anticipated projects in the fourth quarter of 2024.
This transformation may bring new life to Fantom, especially as competition from fast chains intensifies, Sonic Chain’s performance will be worth paying close attention to.
Some of the key catalysts for Sonic Chain’s upcoming launch include:
Liquid Staking: With the launch of Pendle, liquid staking will be available on Sonic.
DeFi Integration: Sonic will integrate mainstream DeFi protocols such as Curve, KyberSwap, Snapshot, etc. at an early stage to bring richer functions to its ecosystem.
New fee monetization model: Sonic's fee sharing mechanism allows developers to receive up to 90% of fee revenue, incentivizing developers to actively participate.
Developer Incentive Programs: Sonic is attracting developers through multiple programs, including educational and onboarding programs such as Sonic & Sodas, Sonic Boom, and Sonic University.
Sonic Arcade: This platform drove 20% growth in TVL last quarter, demonstrating its potential in incentivizing capital inflows.
The last sentence - money is always the most powerful driving force.
Sonic has confirmed approximately $132 million in airdrops, which has led to a significant increase in on-chain activity as users bridge operations to qualify for airdrops. Andre Cronje's involvement, large airdrops, upcoming DeFi tools, and changes in token economics are likely to drive growth for Sonic in Q4.
New Ethereum Layer 2 or application chains are released every day, but Solana’s dominance and the rise of Aptos and Sui show that Alt Layer 1 (alternative public chains) still has broad room for development.
In the Alt Layer 1 competition, Solana can be considered an Alpha investment, while Sonic is a Beta investment.
My few concerns:
Andre Cronje's key person risk: Although he is very innovative, he has a history of "disappearing" in the past. His contribution to Sonic cannot be ignored, but it also means that he is highly dependent on the project.
Lack of innovative Dapps: In the past few years, there have not been many innovative Dapps launched on Fantom, and the top applications are still Beethoven X and SpookySwap.
Fierce competition: The rapid development of other Layer 2 and Layer 1 public chains may put pressure on Sonic.
Whether the momentum can be maintained after the airdrop: After the airdrop is over, whether Sonic can continue to grow is an important question.
Still, Sonic's innovative moves are noteworthy, and it's doing enough well to warrant investors' attention, especially in the current competitive ecosystem.
6. Aerodrome - Base's Secret Weapon
It’s no secret that Base is currently dominant. It has officially become the largest Layer 2 on Ethereum, with the highest TVL.
Aerodrome’s TVL has exceeded $1.36 billion, firmly establishing itself as a top player in the Base chain DeFi ecosystem.
Among them, the main credit goes to the promotion of the following two funding pools:
Aerodrome’s market dominance
Current locked value (TVL): $1.36 billion (56% of Base’s total TVL)
30-day growth: 56% growth, while the market average growth is only 15%
Market share: 80% of Base decentralized exchange (DEX) trading volume
Average daily trading volume: more than $150 million
As Base matures, Aerodrome will continue to gain importance as its default DEX, and is expected to become a core player in the Base ecosystem.
Comparison of Base to other Layer 2 (last 30 days):
Average daily trading volume
Base: Average daily transaction volume reaches 5.6 million
Arbitrum: Average daily transaction volume is 2.1 million
Optimism: Average daily trading volume is 850,000
Active Addresses
Base: 1.5 million monthly active addresses
Arbitrum: 780,000 monthly active addresses
Optimism: 690,000 monthly active addresses
TVL growth
Base: $2.5 billion
Arbitrum: $2.4 billion
Optimism: $681 million
Base's Potential and Future Catalysts
Real-world asset (RWA) integration: Platforms like Centrifuge may introduce real-world assets into Base, thereby attracting more liquidity and traditional financial participants to its ecosystem.
GameFi and NFTs: Base’s scalability makes it an ideal candidate for a new gaming platform or NFT marketplace to tap into these growing crypto narratives.
Developer Incentives: Base, which is backed by Coinbase, may promote growth through developer incentives such as hackathons and grant programs to attract more talent to join the ecosystem.
Aerodrome's dominance has established a strong DeFi ecosystem on Base, attracting retail and institutional participants. Together with top protocols such as Uniswap, Aave, Balancer, Sushiswap, Curve, Stargate, etc., Base has the potential to attract the entire user ecosystem and occupy an important position in the Layer 2 competition.
DeFi 1.0 - Don’t underestimate the old projects
Remember when Aave and Uniswap ruled the DeFi space? It was a time of innovation and endless possibilities (and Sam Bankman Fried was still scamming).
Now they are back on the market with plans for aggressive expansion:
Aave Protocol plans to introduce its native stablecoin $GHO to new ecosystems such as Base and Avalanche. $GHO is Aave's native stablecoin and currently ranks 18th with a market cap of $160.1 million. At the beginning of 2024, $GHO had a market cap of $35 million, an increase of 350% in the past ten months. These trends show that old DeFi projects are regaining vitality and should not be underestimated.
Aave’s growth metrics:
Revenue: As of now, Aave’s annual revenue has reached US$50 million, far ahead of all lending protocols.
$GHO stablecoin: Circulating supply reaches 160 million US dollars.
ETH TVL: Current TVL stands at 5.1M ETH (over $11B) as deposits approach previous all-time highs.
Grayscale announced the launch of its Aave Trust.
Market Competition: $GHO is now competing with the top 15 stablecoins, showing demand from institutional investors.
Uniswap is preparing to launch its own chain, Unichain. In last week’s newsletter, we took a deep dive into the Uniswap v4 ecosystem updates and the launch of Unichain. If you missed it, here is a strategic update from Uniswap:
With the launch of Unichain, a significant liquidity migration is expected to occur.
One of Unichain’s main goals is to reduce gas fees for users by up to 95%.
The launch of Unichain may introduce new staking mechanisms.
The introduction of a revenue sharing model may incentivize the accumulation of $UNI.
Currently, there are over 400,000 on-chain wallets holding $UNI tokens.
Aave’s $GHO expansion and Uniswap’s ambitious Unichain plans are expected to revitalize DeFi 1.0 and bring these giants back into the spotlight. These initiatives may redefine the dynamics of stablecoins and reshape the decentralized exchange (DEX) landscape.
I tried looking for some other DeFi 1.0 tokens that could potentially recover, but there weren’t many promising examples. MakerDao rebranded as Sky a few months ago and has begun considering canceling its recent $500,000 revamp.
It's time to lock down
The past few years have been tough, with numerous Ponzi schemes, the collapse of Terra Luna, and the bankruptcy of FTX leading us into a long bear market. And it seems like the entire industry is focused on building more Ethereum Layer 2. I can feel the tide turning now.
Here are some important tips: Lock in opportunities. Stop doing nothing and get rid of the trauma of the bear market. Green candles are everywhere and the market has a strong tailwind. We can't all succeed. No one "deserves" the opportunity to make money. But you know what? The opportunity is here, waiting for you to grab it.
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