Title: What's next for AI agents: The Third Wave
Author: Kyle
Compiled by: TechFlow
Those who follow me know that I often post some obscure tweets, such as "the place to go for the hockey puck" or "buy when attention is low, sell when attention is high", and these expressions all have their deep meanings. The reason I keep mentioning these is that I believe, even after all these years, the cryptocurrency market is still very inefficient. People are always chasing price increases, trying to catch the "fear of missing out" (FOMO) trend, enjoying the immediate gratification of price increases, but often sell at the top 20 minutes later, ultimately resulting in losses.
Therefore, the secret to profitable investment is to buy low and sell high. Buy when no one is talking about it, and sell when everyone is talking about it. Buy when everything feels like it's over, and sell when you want to take a screenshot. Buy when it's cheap, and sell when it's expensive.
This is why I'm writing this article. AI agents on Solana are currently in a significant downtrend, while Altcoins on centralized exchanges are rising, and Base has absorbed all the liquidity. There are discussions about SOLETH and SOLBTC having already peaked, and a general pessimistic sentiment. Therefore, I'm betting on two things:
Solana will rebound, and we will see the second wave on-chain
AI agents will rebound
Now that the background is set, let me talk about how I think things will unfold if AI agents on Solana make a comeback. Here's the framework:
Macro Trends:
From hype to fundamentals, to utility;
Micro Trends:
From simple interactions to fundamental applications, to actual applications and virtual avatars.
The macro trend represents the overall narrative of each cycle. In the first wave, projects like Render, Akash, and Tao emerged, and many of them were almost useless. Render and Akash were almost unusable, and I'm not sure about the purpose of FET and OCEAN (or their evolutions, like AGI or something). As for NEAR, the first meme coin launched on it was a disastrous failure, and I witnessed it all.
The second wave was more about fundamental applications, with projects like Goat, Zerebro, and AI16Z. The subsequent micro cycles were the birth of new applications. Goat spawned a lot of random projects like memes AI, Shoggoth, and Project89. The wave after Goat was even deeper - Zerebro is now releasing music tracks; Lola can be traded on-chain, and AVB has community features.
Now, the macro and micro trends are colliding in the third wave - I believe we will see utility in the form of applications and virtual avatars. You've already seen some early signs; Alch now allows users to build their own applications using AI. Griffain lets you use AI agents to manage your wallet. AIXBT is the beloved analyst that can boost researchers' analytical capabilities tenfold.
Simple reply functionality will be a thing of the past. If your AI agent can only reply on Twitter, it's not worth paying attention to. We're already used to that; people always want more. So, the next wave will go beyond simple replies and into actual interactions. Virtual avatars are great because they allow you to communicate and interact with them. Applications let you build things and truly leverage AI, not just some bots replying in the comments.
So, there are a few ways to participate in this. Over the past few weeks, the Solana AI space has seen some significant declines, and many are struggling to cope. If you've been following my tweets, you might know that I've been bullish on the AI16Z project since its market cap reached $180 million and faced FUD. I believe AI16Z is the simplest way to access the entire AI ecosystem, as Eliza has been widely forked. Just like in the previous cycle, people were unwilling to pick individual games to invest in, and instead chose to bet on the entire gaming chain - I believe AI16Z is the "L1" of AI agents.
Strategy 1: Buy the AI projects that have performed well in major companies, such as AI16Z, and maybe TAO.
Strategy 2: Buy the smaller AI projects that are building the things I mentioned.
Strategy 2 is how I'm choosing asymmetric returns in this space. Due to the reasons I mentioned earlier - low attention, rotation effects, etc., many AI agents are currently overlooked by the market.
These AI projects are actually building the applications, interactions, and virtual avatars that I mentioned. These are what I'm choosing for the upcoming wave.
That's all I wanted to say. I hope this helps you. Good luck and have fun.
