Author: Teng Yan, Researcher (focusing on Crypto x AI)

Compiled by: Astrea, PANews

Did you attend the Hong Kong Consensus Conference? I hope you had a great time! Although we didn't go, we carefully studied the conference timeline, and here are the key takeaways:

• Decentralized AI infrastructure has become a hot topic. Everyone is discussing issues of data ownership, verifiable computing, and confidentiality.
• AI agents are developing rapidly. Think about models like Allora, 3D avatars, and voice interaction agents. Agile teams will be in a favorable position when the market recovers.

Meanwhile, the open-source movement is in full swing. Major Web2 players are releasing their models:

• Perplexity R1 1776 - a DeepSeek R1 variant without company restrictions, providing only raw knowledge.
• NVIDIA (Evo 2) - a large language model (LLM) focused on DNA, used for decoding "junk" DNA, predicting mutations, and completely open-source.
• xAI (Grok 3) - Grok 2 is about to be open-sourced.
• Microsoft (Omniparser V2) - transforms any large language model (LLM) into a screen-reading, UI-controlling agent.

Why is this crucial for the crypto industry? Open-source AI reduces costs, enhances security, and drives decentralized innovation. The market may be sluggish, but AI is accelerating.

In this issue of the Weekly AI Edge, we will explore:

• AI stirring up a storm on the BNB Chain
• Kaito AI launching the long-awaited KAITO token
• Virtuals launching key features and Anand's optimistic forecast

I. Market Conditions

ENQAI stood out this week with a 50% surge, likely driven by the expansion of its new team (new Chief Marketing Officer and new initiatives). NMT followed with a 23% increase after launching Net Mind XYZ on the BNB Chain (more on this later). Meanwhile, TAO rose 18%, likely boosted by the Coinbase listing news.

However, not all AI tokens performed well. ELIZA, GRIFFAIN, and ARC were severely hit, with declines around 40%. Is the Solana AI agent losing its luster? We'll find out soon.

Now, let's see where the big money has been flowing this week.

Source: nansen.ai

Virtuals led the market with $3.5 million in capital inflows, driven by the strong performance of the sports agent platform HeyTracyAI and AskBillyBets, while its real-time betting (spots betting) business continues to expand its market share.

The team has recently launched the Agent Commerce Protocol (ACP) - the first blockchain protocol that enables autonomous collaboration of AI agents. The demo case shows that five AI agents have successfully operated a simulated business scenario of Lemonade on-chain, without the need for pre-set triggers.

Freysa attracted $600,000 in net inflows by releasing the Sovereign Agent Framework, which allows users to create tamper-proof AI agents based on crypto attestation and decentralized governance. They also launched Freysa Act IV - a virtual game where players will control AI digital avatars competing in a simulated city. If the digital avatar wins the 18-day race, the player will receive a six-figure prize (up to over $100,000).

II. Weekly Chart Highlights

Is an AI Frenzy Brewing on the BNB Chain?

Source: cookie.fun

The BNB Chain may be witnessing a recovery wave, with AI agents leading the charge. CZ (Changpeng Zhao) continues to drive real-world AI applications on the chain, and this time it's not just talk - this week, BNB Chain AI agents have claimed three out of the top five spots in market cap growth.

Does this mean... the return of the DeFi summer era? The BNB Chain was once our main battlefield.

First, the AI agent BNBXBT, inspired by the popular AI influencer AIXBT, was launched this week. Built on the ElizaOS framework, it focuses on in-depth research of the Binance Smart Chain (BSC). According to Cookie Fun data, it has already captured 2% of the AI market share in just one week and attracted over 6,000 holders - a pretty impressive performance for a newly launched project.

This week, NetMind (NMT) partnered with the BNB Chain to launch NetMind XYZ - a brand-new AI agent platform. It can be seen as an agent Launchpad, where users can quickly deploy, automate, and coordinate AI agents, powered by NetMind's decentralized computing and model APIs.

The first agent launched on the Netmind platform is Zoey, an AI application in the health domain that provides personalized health guidance, longevity supplements, and mental health support, all closely connected to a major longevity center in London. Zoey's token NML was issued this week, with its market cap soaring 270% to around $8 million.

The AI highlights on the BNB Chain this week also include:

• My Shell AI, an AI consumer layer on the BNB Chain, has launched its global token generation event (TGE). The project was oversubscribed by 11425%, locking up over $97 million worth of BNB, and reached its fundraising target in 21 seconds.
• BNB Chain is hosting an AI agent competition to attract developer talent.
• BNB Chain is injecting $4.4 million in liquidity for top meme coins, including those built on Holoworld and My Shell AI.
• The important AI model Deepseek R1 has now been permanently preserved on the BNB Chain through Eternal AI.
• With the recent AI hype, will the BNB Chain soon see a major comeback? We'll have to wait and see.

III. Project Highlights

The Launch of KAITO

The Kaito AI airdrop event went live as scheduled, and as expected, it caused chaos on the chain.

The project aims to restructure the attention economy by returning the power of value distribution to users, creators, and brands - rather than being monopolized by centralized platforms - through an AI-driven InfoFi Model and the $KAITO token. Its mechanism ensures that all content contributors can receive fair rewards, truly realizing the decentralized circulation of attention value.

In the GenAI era, attention is value (or "Yaps" as Kaito calls it). The $KAITO token, as the economic layer infrastructure, realizes this value conversion mechanism.

Regarding this airdrop: The initial community airdrop allocation was only 10%, rewarding early contributors (yappers) and Genesis NFT holders. With Kaito launching at a fully diluted valuation (FDV) of over $1 billion, the value of each yap (or airdrop credit) was around $15 during the token generation event (TGE) - meaning some participants instantly received rewards worth thousands or even hundreds of thousands of dollars.

So far, 27 million KAITO tokens have been claimed (equivalent to $27 million), with the largest single claim reaching 460,000 tokens (about $460,000). The average user received 455 tokens, which at the first-day trading price of around $1, is equivalent to a profit of $455 per person.

Source: flipsidecrypto.xyz

KOLs quickly cashed out, sparking controversy. The main point of contention is that most of the airdropped tokens ultimately ended up in the hands of top influencers, rather than regular users.

Some believe this is an inevitable result - Kaito's over $1 billion fully diluted valuation (FDV) means that some influencers need to sell tokens to address their tax burden. If a model similar to Eigen or HyperLiquid (where tokens are not tradable during the TGE stage) had been used, it might have alleviated the selling pressure and encouraged long-term holding.

Nevertheless, the Kaito Connect mechanism still provides strong holding incentives for token holders: token holders can stake to gain voting rights, directly influencing content ranking, attention allocation, and network reward rules.

For example, voters can choose which projects qualify for the "Yapper Leaderboard" - a real-time ranking of creator influence and contribution. Stakers can also earn more KAITO tokens as rewards, with the current annual percentage rate (APR) as high as 70%, though this rate is expected to gradually decrease in the coming days.

Source: docs.kaito.ai

The controversy did not end with the airdrop distribution. As a long-term core contributor and top KOL/influencer of Kaito AI, AIXBT did not receive any token allocation - even though they had previously posted about the Kaito pre-release, which received over 100,000 views.

Many critics accuse Kaito of retroactively changing the rules to exclude KOLs like AIXBT, while also using this as an opportunity to boost their own user engagement. If Kaito truly believes in an AI-driven crypto future, why would they exclude the most influential voices in the field?

Kaito's vision is certainly grand, but the core issues remain unresolved: can they truly build a fair system for distributing attention? The market still needs to validate whether this model is sustainable.

We believe it is too early to compare it to mature platforms like HyperLiquid.

IV. Hotspot Focus

Project Updates

• TAO has officially launched on Coinbase. Once liquidity is sufficient, the TAO-USD trading pair will be rolled out in phases.
• The development of Allora's mainnet has been launched. This invitation-only phase aims to stress-test the network, scale it, and attract top participants before a full public release. The goal is to build a decentralized, self-optimizing AI network.
• Mira Network has established a partnership with OpenLedgerHQ. This collaboration will bring a higher level of evaluation methodology to decentralized models, ensuring the reliability of AI is proven. Additionally, Mira has released Klok, a decentralized chat application where users can earn Mira credits.
• Recall's testnet has been launched. This decentralized platform focuses on testing, verifying, and evolving AI agents, taking trustless, machine-verifiable decision-making to a new level.
• Io.net is collaborating with Gaianet AI to leverage scalable GPU computing power to accelerate the inference of decentralized AI agents. By accessing Io.net's GPU cluster, Gaia's AI agents will see significant performance improvements, enabling faster model processing and higher efficiency.
• Io.net has also introduced "joint staking" functionality, allowing IO token holders to earn block rewards without owning hardware.
• Delphi Labs and cyber Fund have announced the launch of the dAGI accelerator, an 8-week fast-track program aimed at helping founders who want to build the next generation of decentralized AI. The program provides hands-on guidance, up to $500,000 in funding, and support from the Solana, Ethereum, and Base ecosystems.
• Sentient has partnered with KGeN to launch a brand-new large language model (LLM) for the gaming domain, combining Sentient's AI intelligence with KGeN's vast dataset of over 13 million gamers, bringing richer gaming experiences to developers and players.

AI Agents

• ElizaOS has released a product roadmap, including major features such as an upgraded Degen Spartan AI, Autonomous Investor, and an AI Agent Marketplace.
• CreatorBid has integrated Allora Network's collective intelligence into its AI Agent Launchpad platform SDK, enabling AI Agents to learn, self-adapt, and make smart on-chain decisions in real-time.
• Jupiter DEX has upgraded its routing algorithm by integrating the Virtuals protocol, allowing users to swap any input token for AI Agents at the best price.
• NEAR Protocol has launched Shade Agents - multi-chain AI-driven smart contracts that are fully on-chain verified and have self-correcting capabilities, serving as autonomous contracts without single points of failure.
• FLock and Animoca Brands have jointly launched HeyAni, the first decentralized AI venture agent, leveraging FLock's AI infrastructure to provide business evaluation and investment rating services for Web3 entrepreneurs.

Web2 AI

• Grok 3 beta version has been released, with Elon Musk heavily promoting its performance in mathematics, science, and coding, surpassing competitors like OpenAI. New features include DeepSearch (information synthesis and contradiction analysis) and Think (next-generation reasoning engine).
• Perplexity has launched Deep Research, enabling users to generate in-depth research reports on any topic.
• OpenAI has unveiled SWE-Lancer - the first real-world programming test platform, featuring 1,400 high-difficulty engineering tasks from Upwork, with a total prize pool of $1 million, testing full-stack complexity and high-risk scenarios.
• Google has just launched an AI-driven experimental lab collaboration partner - AI Joint Scientist, to generate new hypotheses and accelerate discoveries. This is a multi-agent system that has been validated in real-world experiments and is available for testing.