Written by: Web3 Farmer Frank
Is the AI Agent currently in the "2020-2021" prosperity cycle of the DeFi Summer?
"Clinging to the sword in the boat" is often the most effortless way of forecasting - looking at the data alone, the total locked value (TVL) of DeFi grew from $600 million in January 2020 to $26 billion in December 2020, an increase of over 40 times in just one year, and the market cap of the AI track is currently $44 billion, which also means that if it can truly replicate the prosperity cycle of DeFi, its potential market value may exceed $1 trillion.
So the question is, is the AI Agent really experiencing a similar "2020-2021" prosperity cycle as the DeFi Summer? In addition to AI Memecoin, what other projects will become the driving force behind this track's prosperity cycle?
The Prosperous Cycle of the Fiery AI Agent
Cookie.fun statistics show that as of January 1, 2025, the overall market value of the AI Agent sector has exceeded $16.6 billion, with a 53.79% increase in the past 7 days, against the backdrop of the overall crypto market being in a volatile period, the AI Agent ecosystem is expanding at an unprecedented pace, from Virtual to AI16Z, and then to platforms like Arc.
Especially the AI Agent projects driven by Meme culture, relying on their low-threshold token issuance and trading process, have quickly become the new center of traffic and attention. They have greatly reduced the participation threshold for ordinary users through humorous expression, highly interactive community culture, and user-friendly dissemination strategies, successfully attracting a large number of non-professional users to join.
In plain terms, this is actually another kind of cultural rebellion against "VC coins", and a continuation of the Meme narrative, but by combining it with AI Agent, it not only reduces the participation threshold, but also expands the potential scale of the market, and injects more inclusiveness and sustainability into the AI × Crypto narrative.
Including the recently eye-catching "TAO CAT", as the crystallization of Masa team's collision of the Virtuals and Bittensor two ecosystems, it uniquely demonstrates the superior self-evolution of AI Agent compared to traditional AI Bots, with a core of fair issuance and community-driven economic narrative.
Interestingly, during the writing process, TAOCAT was just selected for the new Binance Alpha project, followed by a significant price increase, and MASA also showed a follow-up upward trend.
This easily reminds people of the prosperous scene of the DeFi Summer: from the basic applications of Compound and Uniswap in the beginning to the subsequent massive user influx and the derivation of more complex on-chain trading strategies, the interweaving and resonance of technological narratives and capital drivers eventually formed a cyclical prosperity, so at least the current popularity and market value growth of AI Memecoin-based AI Agent has indeed brought a new round of narratives and imagination space to the crypto industry.
However, how far this prosperity cycle can go remains to be seen, as AI Memecoin is just the beginning, and the subsequent development depends more on whether AI Agent can become a long-term cornerstone of the crypto industry, rather than just a short-term fad.
For example, in the current AI Agent landscape, the total market value of the top 5 projects exceeds $7 billion, accounting for nearly 45%, among which the Virtual ecosystem and the AI16Z ecosystem have reached $4.65 billion and $2.37 billion respectively, indeed becoming industry benchmark cases in the entire crypto field.
However, essentially, the current prosperity of the "AI Agent" track is still mainly based on AI Memecoin or issuance platforms, and is still in the initial stage of the "equity" economic narrative limited to fair asset issuance. It needs to further deepen its reach, and if we look back at the previous crypto cycle, we will find that although DeFi has driven a large amount of capital to flow into the blockchain field, the user threshold of DeFi is still relatively high, requiring financial knowledge and operational skills, which to some extent limits its large-scale popularization.
The emergence of AI Agent, on the other hand, is nothing less than opening up a new narrative in the crypto field with a lower threshold and higher potential - unlike DeFi, which requires users to actively learn complex financial tools, AI Agent can directly provide users with personalized and intelligent services, reducing the participation threshold.
This is where some interesting variables lie, that is, by meeting the needs of more ordinary users through intelligent solutions, AI Agent becomes not only a technical product, but also a new "equity" economic narrative.
As Slowmist founder Yu Cheng tweeted: "Another special sense of alienation: the most important role of AI Agent in the Crypto industry will ultimately (perhaps) be to issue a token to stimulate and incentivize that. In non-Crypto industries, the big players have long been far ahead, including defining some interoperability protocols, and making increasingly user-friendly AI applications, while the Crypto industry is still mostly focused on tokens."
Therefore, AI Agent has indeed entered a prosperous cycle by virtue of AI Memecoin, winning high recognition and capital attention from the market for this field, and also marking its formal entry into a golden age: from the traffic center driven by Meme to diversified application scenarios, from the improvement of infrastructure to the exploration of long-term value, AI Agent is expected to reshape the landscape of the crypto industry and become the most innovative and influential field in the crypto industry.
The "Alpha" and "Beta" of AI Agent
If we trace back the origins, we will find that although the current AI Agent is just about token issuance and imagination value capture, the real landing is closely related to on-chain trading attributes.
After all, the actual use of AI Agent is far beyond just issuing tokens - even in the task-driven AgentGPT processing flow, AI Agent has already shown its potential in on-chain trading strategies:
Users can customize the overall task goal, and then the AI Agent will go to do task allocation based on its own resources, decomposing the overall task goal into a series of small tasks through the flow and allocation of agent-layer tasks, and continuously executing and correcting them without human assistance to achieve the overall goal.
In other words, it is the core vision of "intention-centric", where users only need to know what the desired result (intention) is, without having to care about the intermediate process and steps, and in many cases, the user's intention is complex, and the expression of intention may not be accurate, while the AI trained with specific models can more accurately identify the user's potential purpose and needs based on the user's keywords and other information.
In this process, combined with highly intelligent AI, whether it is natural language input of intention, judgment of needs, decomposition of goals, calculation of optimal process matching, or execution of operations, AI can play a huge advantage, and the market has also emerged a large number of smart trading projects involving cross-chain complex transactions, which can efficiently discover the optimal exchange path and allow users to complete the optimal transaction in real time at the best price.
This is the truly imaginative direction of AI Agent development - the real value lies in becoming the interaction application layer of Web3, where users do not need to understand the complex system, but only need to communicate with the AI Agent to complete all on-chain operations, thus becoming the underlying infrastructure of Web3, deeply integrated with blockchain, smart contracts and other technologies, and catalyzing new application forms and business models, bringing broader imagination space to Web3.
Here is the English translation of the text, with the specified terms preserved:So from a macro perspective, the rapidly evolving AI × Crypto narrative is completing its self-iteration at an astonishing pace - from the initial AI Meme craze to the gradual shift towards practical and interactive AI Agents, the market's attention is refocusing, which also means that the market's narrative logic is transforming from random token speculation to actual technology implementation.
AI Agents are no longer just hype, but are truly integrated into the industrial logic through value capture mechanisms, such as AI-driven KOLs, yield generation tools, trading and Alpha strategy optimization, as well as the construction of underlying infrastructure. AI technology is gradually transitioning from an entertainment narrative to a tool for solving real problems.
Its value goes far beyond the currently popular AI Memecoins, but through technological innovation and ecosystem integration, it is truly driving the evolution and popularization of Web3. From this perspective, AI Agents are not just tools, they may reshape the ecological rules of the crypto market, making AI Agents more accessible and adoptable to mainstream users.
Any "long slope and deep snow" track, infrastructure is never absent
In the crypto industry, Alpha is a point, and Beta is a surface. Alpha is usually difficult to capture, but Beta projects with high certainty are relatively easier to be ambushed.
The AI Agent field is no exception. Although opportunities like AI Memecoins are difficult to grasp, infrastructure (Infra) as the core of Beta is an almost clear value capture opportunity, and the narrative transmission path is extremely clear - although the outbreak of AI Memecoins has triggered a frenzy of capital and market attention, the eventual project landscape is far from determined, while Infra, as the "water seller", can almost sit on the fishing platform with the advantage of the early ecosystem.
As mentioned above, from the perspective of the role of AI in the blockchain ecosystem, it is upgrading from a simple tool to a productive force driving industry transformation. This not only serves the existing crypto users, but may also attract traditional financial users to the on-chain ecosystem by lowering the threshold, building a more inclusive and sustainable economic logic:
From elitist finance serving the few to inclusive finance serving the majority; from the unsustainability of short-term speculation to the sustainability of long-term growth.
This represents that AI Agent Infra is likely to become a key entry point for the intelligentization of on-chain applications, and also means that projects in the same track that have not been fully priced by the market may hide new value revaluation space, one of the important directions of which is data.
As is well known, one of the important challenges facing AI Agents is how to efficiently explore and utilize high-quality data, which not only determines the learning ability and decision-making level of AI Agents, but also directly affects the actual application effect and user experience.
Especially for the blockchain ecosystem, data from Twitter, Discord, web crawlers, etc. may hide billions of signals, containing many derivable use cases, which can be personalized for mining and utilization - such as tracking whale dynamics, analyzing "Smart Money" transactions, monitoring on-chain address interactions, screening and differentiating on-chain users, and precisely reaching different player groups, etc.
So data infrastructure is not only the support for the development of AI Agents, but also the core of their value creation and market promotion. Interestingly, as the leader in the AI data track, Masa recently built the SN42 data service subnet and the SN59 AI Agent arena on Bittensor, which is worth a mention.
The AI Agent arena is a big step taken by Masa as the data Infra towards the AI Agent platform, making the data network no longer abstract, but able to empower AI Agents in real-time, allowing them to evolve and iterate with Bittensor's powerful reward mechanism, letting AI Agents compete in the arena. Just a few weeks after its launch, the arena has already attracted the participation of top AI Agents from the Virtuals and creator.bid ecosystems, including TAO CAT incubated by Masa.
Therefore, essentially Masa is centered on "infrastructure (data) + application scenario (arena) + token economy (AI Agent)" to attract more users and developers to operate the platform and continuously expand the business scenarios of AI Agents, stimulating platform activity.
From a broader logic, the narrative path of Masa-like AI Agent Infra is very clear - focusing on the "adaptability" issue of AI agents on-chain, solving the efficiency, stability and intelligence needs of on-chain operations, if this track continues to ferment, it not only has the potential to build the infrastructure of the on-chain AI ecosystem, but may also drive the comprehensive upgrade of the developer ecosystem and user experience.
According to the market rotation rules, the success of Virtuals will also drive investors to focus on functionally complementary, technologically innovative or undervalued projects in the same track, especially those with strong ecosystem building capabilities and clear narrative directions, so Masa-like Infra projects naturally form a complementary logic with Virtuals' token issuance function.
And the improvement of infrastructure and the maturity of technology have enabled AI Agents to transition from the uncertain Alpha stage to the profitable and scalable Beta stage, so from this perspective, Infra projects like Masa are indispensable drivers in this process.
The fact that the aforementioned TAOCAT was selected for the Binance Alpha new round project also provides empirical evidence for my analysis, further reinforcing the potential for unexpected value growth opportunities for infrastructure-type projects (such as MASA) as market attention gradually shifts towards the AI Agent track.
In general, the current heat of AI Agent Infra is just the beginning, and the market's demand for on-chain intelligence infrastructure is still expanding rapidly. The performance of Virtuals and Masa provides a good reference for us, and there may be more projects with clear positioning, functional complementarity, and undervalued valuation to be gradually discovered by the market, and the opportunities for value revaluation are often hidden in the subtle lines of niche areas.
Epilogue
AI Agents are not the endpoint, but the starting point: in the future crypto market, AI Agents will not only be a component of the ecosystem, but will also become an important driving force for the entire ecosystem to move forward.
Infrastructure is the foundation of the ecosystem, and any major trend cannot do without its support. Whether it is pioneers like Virtuals or potential players like Masa, their common point is to embed their value into the core of the entire ecosystem through technology and logic, and the market's perception of this value is just a matter of time.
