Key points of this article:
- Review the development dynamics of Agents and AI in the past few months;
- Review some obvious investment opportunities in the market;
- Take a break during the New Year period, observe many things from the perspective of a bystander, and deeply reflect on past successes and failures;
- Next, I will try to share all my thoughts as clearly as possible;
Review the development dynamics of Agents and AI in the past few months
Review of AI Agents
I am very satisfied with the performance at the end of last year. From September to early October, we entered the narratives around AI, Agents, and Infra very early.
Without over-complicating the analysis of these trends, I clearly saw that these are the next stage of the AI super-cycle (there will be more important catalysts in the future).
This mature judgment comes from the long-term experience of capturing narratives in the market. When you can identify these trends, you can quickly deploy capital without too much hesitation.
Even now, I still see some people arguing about irrelevant issues such as the packaged applications of ChatGPT, the specific functions of a certain Agent, or a protocol's untimely response.
But are these really important? We are here to make money, not to prove ourselves right.
The key is to be clear about the stage of the market cycle you are in. Each cycle has its unique rules and strategies.
This is also why many people hold on to old projects for too long, missing out on some "simple mode" hot trends. When I say "old", I don't mean truly old, but relatively outdated compared to the industry's rapid development pace.
Remember, new hot spots emerge every day, and the speed of capital flow is getting faster and faster - if the team cannot clearly convey their ideas or show a clear roadmap, capital will flow to protocols with stronger communication skills and the ability to execute quickly.
When I first encountered Goat, I recognized its potential and focused on it very early - what surprised me was that it took others so long to migrate to Base via cross-chain bridges or start exploring Agents on Sol.
This phenomenon is largely due to the "Mid Curve Effect" and market panic sentiment. If you only realized these issues until now, you need to seriously reflect on the reasons.
I am very grateful for the past few months, as I did not experience too much severe loss.
I seized the opportunity when ai16z was at a $30 million market cap, and also entered when aixbt was at a $30 million market cap, in addition to some layout opportunities for gaming and chat projects under $10 million market cap.
Of course, there were also missed opportunities, such as Zerebro, Fartcoin, Snai, and Swarm Node. But that's okay, it's impossible to catch all the opportunities, the important thing is to reflect on why they were missed and why they succeeded.
Quality
- As always, quality is the key to success:
- High-level developers;
- Excellent brand building;
- Innovative ideas or unique technologies with competitive advantages;
- A cohesive, high-quality community;
- Clear and valuable information and communication;
These are the core elements we have always been focusing on. If two or more of the above are missing, there is risk. Why? Because there will always be other teams that can do better.
For example, in the current Virtuals environment, as long as there is a high-quality team launching AI Agents or related infrastructure, I will quickly invest in the early stage (i.e. "All In"). As long as the developers are doxxed and have been in this field for more than 5 years, participating in multiple protocols - as soon as I find such a team early on, I will decisively enter.
In fact, you don't even need to invest a lot of capital to get considerable returns. For example, I discovered the GEKKO project when it just started, with a market cap of only $4 million. Because it was developed by the Axal team and received investment from a16z, that was enough for me, so I decisively invested. As a result, it went from a $4 million market cap to $40 million, with very impressive returns. I believe it will continue to grow further. Turning $4,000 into $40,000 is a year's salary for some people. Sometimes, you don't need to invest a huge amount of capital, $2,000 or $4,000 can bring quite considerable returns. Don't underestimate the potential of these funds.
Another thing I've been working on is Acolyt, a team with very strong capabilities, with a narrative similar to GEKKO. As I mentioned before, if there are 100 different AI intelligences that can all provide high-quality market intelligence (alpha), the only thing that can differentiate them is identity, user interface (UI), brand, developer level, etc. - no different from other areas of life.
This is what I've been looking for: those teams that have been focused on building for a long time - those passionate, constantly tweeting, and continuously launching new products top developers. They are the only destination for my capital, I won't consider anywhere else.
Things to Avoid
- Avoid single-person development teams with undisclosed identities, especially when building speculative AI projects, as the risk is high.
- Another thing to be wary of is AI projects initiated by individual "influencers". These projects are often abandoned shortly after announcement, as the developers realize the responsibility exceeds their expectations.
Struggling Narratives
I have to admit that there are some narratives that I was personally very optimistic about, but their development has indeed encountered some difficulties. This does not mean these projects are bad, but their progress has been relatively slow.
It is indeed frustrating to invest in a seemingly promising project, only to find that its performance is not as expected, while the surrounding projects have achieved 2-3 times growth in a short period of time.
These projects often belong to the "slow-burning" category, or ultimately become "auxiliary experiments" for other projects.
For example, $GRIFT+$REALIS+$OMEGA. I still hold some of them, but from a practical perspective, I should have cut losses earlier and reallocated the capital to stronger AI infrastructure projects like REI and ARC, whose potential is more evident and performance more stable.
At the time, I invested around $100,000 to $120,000 in these "experimental" projects, hoping they would capture a larger market share. But in retrospect, projects like Griffain with Solana support are clearly stronger, while projects like Realis need more time to mature, perhaps because their ideas are too ahead of their time or their team size is smaller.
Upon reflection, when you get 20-30x returns on projects like $GAME, you feel you have enough capital to "test the waters" or take risks, so you don't mind putting capital into a slowly progressing project. But as a trader or investor, we shouldn't treat our capital that way.
In the coming weeks, I will continue to share my observations on AI and market operations, while also keeping an eye on the next potential market rotation opportunity. We all know that no narrative can last forever. This doesn't necessarily mean the AI narrative is over, but it may be entering a new stage of development.
Remember, the market is changing very rapidly now, almost a comprehensive acceleration. If you slack off, you may be eliminated. Stay on top of market dynamics every day, because the "hot potatoes" are getting hotter and hotter.
Reviewing Some Obvious Investment Opportunities in the Market
Some market opportunities are very obvious to some, but not necessarily to others. I won't list all the examples, but I'll share some key cases and my thoughts on how I've captured these narratives.
VIRTUALS
When I first saw the GOAT project take off, I was deeply attracted to it. After realizing its potential, I immediately made an investment. But then, I completely missed $ZEREBRO and $BULLY, both of which have performed very well to this day. This made me start looking for the next potential opportunity more urgently.
That's when I discovered aixbt. When I understood its functionality and positioning, I immediately recognized it as the next project worth paying attention to, especially after seeing the discussions around $GOAT, $ZEREBRO, and $BULLY in the community. I noticed the market was gradually shifting from entertainment-focused projects to utility-focused projects. This shift is what led me to start focusing on projects like Base, Virtuals, $GAME, and $CONVO.
In fact, it was Jeff's article on how Virtuals could become a billion-dollar protocol that made me decide. The article's discussion of token economics, branding, and the ecosystem advantages of the Base chain further convinced me of Virtuals' immense potential.
Through researching $GAME, I was finally able to properly understand the concept of "frameworks". This knowledge allowed me to capture many great investment opportunities in the following weeks. Although I'm not a technical geek and can't fully understand all the details, I'm very interested in this field and willing to learn as much as possible.
Interestingly, I didn't invest in Virtuals when its market cap reached $500-600 million.
I believe that when you confirm the potential of an ecosystem, such as it potentially growing to a $50 billion, $100 billion, or even $200 billion scale, you need to focus on two key points: one is the "first movers", and the other is the persistent mind-share Agents.
For example, $LUNA is a typical first mover, while $VADER is the first DAO/ALPHA project.
Within this ecosystem, there are many projects worth paying attention to. For me, the team is the most critical factor, followed by the concept and utility, and finally the brand and identity. These three constitute the "holy trinity".
Here are some excellent projects worth researching:
>$WAI;
>$ACOLYT;
>$SEKOIA;
>$GEKKO;
These projects are all worth paying attention to, especially those within the Agentstarter ecosystem.
a16z
It may sound a bit random, but when I first encountered and promoted daos.fun, I almost invested in a16z solely based on the name. After delving into projects like Marc's Truth Terminal, I became convinced that this is a project worth paying attention to.
Here is the English translation:When I realized that AI16z DAO is attracting top developers from around the world and is committed to accelerating the development of its ecosystem and framework, I became even more confident in its immense potential. The increasing activity on GitHub and the rapid accumulation of momentum across the entire project cannot be explained by "middle curve thinking".
Although there have been some FUD (fear, uncertainty and doubt) during this period, their test projects $ELIZA and $DEGENAI in the Agentic Outlook ecosystem have great potential. For example, Eliza's market cap has already reached $160 million, while @degenspartanai has reached $100 million. As AI16z continues to expand, these two projects are expected to grow further - these are very obvious investment opportunities.
Other Ecosystems
In Agentic Outlook One, I have analyzed in detail each major Launchpad/protocol and its Alpha Agents or Beta projects:
Creator.Bid|$BID (potential dark horse)
Algo| Grew from $2-3 million market cap to $25 million (obvious opportunity)
AVA| Grew from around $25 million to $150 million
@dasha| Grew from $15 million to $150 million
The following ecosystems are also worth watching:
We also covered Nebula|$MOE early on, which grew from $5 million to $25 million.
Other ecosystems worth watching:
- ALCHEMIST AI|$ALCH
- FXN|$FXN
- arc|$ARC
- griffain| $GRIFFAIN
- Top Hat
AI|$HAT - Empyreal|$EMP
- Spectral|$SPEC
- 3σ|$TRISIG
Many of these projects have already achieved multiple-fold growth.
The full analysis can be viewed here: Link
This list could go on, as the potential of these projects is even higher - they are all very obvious investment opportunities.
However, I still hold some other projects that I believe have potential, such as $GRIFT and $REALIS. I believe they just need more time and some adjustments to perform well.
Here are some projects I haven't had a chance to analyze in depth, but they are also worth watching:
Among these projects, $REI in particular is worth extra attention.
Outside of the on-chain ecosystem, I am very optimistic about the combination of DeFi and Agents:
- $MODE|Mode, which I believe is a project with great potential.
- Another one to look forward to is the further development of Uomi.
By consistently selecting projects with excellent teams, strong infrastructure (Infra), and high attention/hype/mindshare, you won't go wrong.
For me, the lifecycle of Agents is usually shorter, as most projects struggle to maintain market attention for an extended period. But in my view, AIXBT and GOAT are exemplars and benchmarks of success in the Agents domain.
Why reflect on these?
Because it helps you uncover the next investment opportunity.
Note
It's worth keeping an eye on some early projects like $GNON, $PROJECT89, $AVB, etc.
$OPUS has already dropped 85% in market cap, and many early AI projects may have already bottomed out.
We need to watch whether these projects are still actively developing, while also remembering that the potential of AI infrastructure (Infra) and Agents is immense.
New ideas and concepts emerge every week, and these new projects often have stronger teams and better branding, so we need to continuously scan the entire market.
I'm not saying these projects are bad, but rather emphasizing the rapid pace of market changes - many traders who have experienced 80-100x returns will quickly take profits and move on to the next more attractive opportunity, whether it's Swarms, DeSci, or DeFi Agents.
Great teams always find ways to stay relevant in the market long-term.
Finally, there are some trends worth noting:
There are currently many ongoing Hackathons, which are giving rise to some very interesting ideas and projects. Participating in these events not only helps expand your toolkit, but also allows you to better understand future technology trends.
Sources for AI Agents:
Decentralised.Co, in collaboration with Sentient Market;
In the coming days, we can discuss the future development of the Sentient domain together, so that we can seize the opportunity when the market narrative changes.
