Author: 0xJeff
Compiled by: Block unicorn
Do you remember the L2 hype cycle between 2022-2023?
The best strategy at the time was to accumulate leading Decentralized Exchanges (DEXs), top money markets, Solidly forks, LST, yield optimizers, and so on. Everyone was chasing token launches, mining airdrops, or deploying Total Value Locked (TVL) into L2 projects like Blast to earn points.
It was chaotic but effective (at least for a few months). Now, a similar energy is back - but this time, the rules have completely changed.
The proxy ecosystem is reshaping everything we thought we knew about the market, with a structure entirely different from what we've seen before.
1. No VC Dominance
In the L2 era, token distribution always had the same formula:
15-30% allocated to the team.
10-30% allocated to VCs and KOLs.
The rest for token issuance or incentives.
That's not the case here. In the proxy ecosystem, the tokens are 100% community-owned. The team launches the proxy token, maybe retaining 5% for incentives, and the rest is left to the market.
What does this mean?
Everyone has an equal opportunity to participate in the purchase. There are no concerns about VC unlocks or insider dumping. If you want exposure, you take the same market risk as everyone else.
What about OTC deals for KOLs?
Some projects do offer discounted OTC deals, but they are typically:
Strictly limited in size.
Only available to partners aligned with the ecosystem, such as DAOs or influential voices actively supporting the ecosystem.
This is not the "VCs pump and dump, retail gets left behind" model. It's a fairer, more streamlined system that keeps power in the hands of the community.
2. No Forks
At least not in DeFi, where everything from Uniswap to Liquity has dozens of forks, with little to no innovation.
Here, everything revolves around brand new innovations. Developers are not cloning existing projects but launching entirely new proxies and use cases at a pace that's hard to keep up with.
Why? Because the pace of AI application development is faster:
No months-long audits required.
Most proxies can be launched in weeks, not months.
The space is vibrant, experimental, and creative.
There's something exciting new every week. As AI technology advances, the Web3 AI proxy narrative is constantly evolving.
3. Brand New User Acquisition Channels
In traditional DeFi, users had to:
Find the project's website.
Spend time understanding the product.
Potentially interact with it.
Proxies have flipped this script. They directly present the product to the user.
Take @aixbt_agent as an example:
It provides real-time alpha directly on CT.
Users immediately see the value, get curious, and dive in.
Eventually, they acquire tokens to fully unlock the product.
This "participate first, trade later" channel is more efficient. As on-chain trading proxies and DeFi proxies gain attention, this model will become mainstream by 2025.
4. Carefully Curated Ecosystems
Unlike the thousands of scattered L2s and dApps, we now have tightly-knit ecosystems, such as:
@virtuals_io (Base)
@ai16zdao (Solana)
@daosdotworld (Base)
@daosdotfun (Solana)
The difference from the past is that developers are not attracted by grants or token launches, but naturally join because of:
Fair token economics.
Passionate communities.
Opportunities to experiment and innovate in exciting domains.
This is what happens when you combine fair launches with constant innovation. Developers, investors, and the community work together to drive growth.
How to Position Yourself in this Proxy Cycle
It feels like the early stages of L1s - just moving much faster. Back in 2020-2021, many L1s reached valuations over $100 billion. The same potential exists here.
If you want to find your place in this, keep an eye on these proxy L1s:
$VIRTUAL
$AI16Z
$ZEREBRO
$GRIFFAIN
$BULLY
$ARC
And don't just chase the current hot projects. Look for:
Undervalued projects that go beyond the current narratives.
Teams that can deliver quickly, tell a compelling story, and build user mindshare.
Welcome to the New Era
The proxy ecosystem is not just a new L1, it's an entirely different market structure - faster, more streamlined, and community-driven than anything we've seen before.
We're entering a cycle that could reshape how Web3 innovation operates, and the journey to $100 billion+ valuations has just begun.
Join us, my friend, and let's enjoy an exciting ride!
