Written by: The DeFi Edge
Compiled by: Luffy, Foresight News
The light at the end of the tunnel is starting to appear. After 6 months of turbulence, the crypto market is regaining its vitality. Solana and Base have performed well; more encouragingly, we finally have something "new" like AI Meme.
Some predict that the price of Bitcoin may break through $100,000 in the coming months. The bullish reasons in the market are:
The US presidential election will be held in two weeks. Trump's election would be a huge victory for cryptocurrencies.
On-chain indicators are bullish. The TVL, trading volume and active addresses of Base and Solana have been growing.
Stripe's major acquisition of the stablecoin payment platform Bridge. Everyone has underestimated the long-term positive impact of this on cryptocurrencies.
The new field of AI x Meme is emerging. It may be the "Non-Fungible Token" of this round of retail frenzy.
The mood is improving, and the nostalgic atmosphere is back.
Now is the time to get rid of the post-traumatic stress of the bear market. So many interesting things are happening, and I want to be at the forefront of the trend.
The protocols and narratives in the market are a mixed bag, and it's not easy to distinguish signal from noise. Here are the things I'll be focusing on in the coming months.
1. AI Agent x Memecoin: The Cult is Back
Memecoins have always been an important part of cryptocurrencies.
Their mechanism is very simple, aiming to gain traction through viral spread. Since Memes are "static", their popularity depends on the community.
But what if Memes could be upgraded and evolved? What if Memes could self-promote? This is where AI agents come into play.
Last week, GOAT (Goatseus Maximus) became the first choice for AI agent speculation, with its market cap soaring from 0 to $800 million in a week.
What is GOAT? Truth Terminal is an autonomous chatbot that can independently manage its own Twitter account and generate content. It posts nonsense about technical philosophy, but it is obsessed with the "GOATSE OF GNOSIS", a pseudo-religion based on an ancient internet Meme.
An anonymous person created GOAT and airdropped some tokens to the creator of Truth Terminal.
The next act is that Truth Terminal began to heavily promote GOAT on Twitter. Will AI launch its own "Memecoin"? It has good "Memecoin fundamentals": high liquidity and fair distribution, and no team risk like VC or Memecoin "conspiracy groups".
The market momentum of AI Meme can continue for the following reasons:
Truth Terminal has over 100,000 followers and is still growing. Each of its tweets has an amazing impact. It tweets every hour, it's a KOL that never rests.
Currently, no major CEX has listed any AI Meme. GOAT's daily trading volume is around $374 million, and it has certainly caught the attention of tier-1 CEXs. (Note: Binance has listed GOAT futures trading)
AI is constantly evolving, and it will continue to learn and grow.
AI Meme is at the intersection of Crypto x AI x Religion: it's a new "cult".
We've only scratched the surface of this new field. How should you play it? The simplest way might be to long the leader GOAT. Calmly, there are also some potential explorers emerging, such as Fartcoin and Gnon.
Note that there will be a lot of scams trying to ride this wave. Their token distribution is far inferior to GOAT's, and I'm sure many of these "AI agents" are actually humans playing AI role-playing games.
Back in 2021, Non-Fungible Tokens caught the attention of retail investors. AI Agent x Meme has the same potential, and a $1 billion market cap for GOAT is not impossible.
Finally, remember that these are Memecoins. The faster they rise, the faster they fall. So make sure your profits are safe.
2. Solana: Riding the Wave of Memecoins and AI
"The first millionaires of the gold rush were not the gold diggers, but the ones who sold them the shovels and pickaxes."
I love Ethereum, but it's foolish to ignore Solana's progress and adoption.
Solana is currently riding a wave driven by Memecoins and AI.
As Memecoin prices soar and trading volumes rise, Solana is back in the spotlight.
Solana is capitalizing on Memecoins and AI tokens:
Well-known Memecoins like SLOP, GNON, Shegen and FART are gaining attention, while GOAT has become the leading AI token.
As of Q4 2024, Solana is creating an average of 96,010 tokens per day, with Pump.fun creating around 9,000 tokens per day, accounting for about 9.3% of the total.
In addition to Memecoins, Solana is also home to some innovative DeFi protocols.
I want to highlight three protocols:
Jupiter. They are mainly known for their exchange and perpetual contracts. But they recently launched ApePro, a new trading platform designed specifically for Memecoins.
Kamino Finance. Kamino Lend, launched just a year ago, now occupies nearly 70% of the Solana market, with a Total Value Locked (TVL) of $1.65 billion.
Pump.fun. Solana's Memecoin factory, with potential future airdrops. Their new internal trading tool is called Pump Advanced. They have also launched a video tokenization platform, allowing users to tokenize videos and make them tradable assets on the platform.
As Solana continues to innovate and attract diverse projects, it has become a formidable competitor to Ethereum. The combination of Memecoins and AI tokens not only diversifies its products, but also strengthens community engagement, making Solana a choice for the new retail audience.
3. AI Tokens
Memecoins + AI are currently attracting everyone's attention, but we shouldn't overlook Crypto AI tokens.
Bittensor (TAO) is the leader in this field.
Bittensor is the infrastructure in the Crypto AI space, focusing on AI utilities:
Opentensor FDN recently launched an Ethereum-compatible layer, connecting to the $300 billion Ethereum ecosystem.
Real adoption: 3 major DeFi protocols have been built on Bittensor's machine learning infrastructure
Multiple revenue streams: transaction fees, staking, AI services, targeting over $10 million per quarter
Institutional support: two major crypto VCs increased their positions in September
Mind share of the AI x Meme narrative, source: KaitoAi
An interesting strategy to gain exposure to AI might be to hold: GOAT (high risk, high potential) and TAO (infrastructure). Both are worth focusing on and have mature communities behind them.
AI agents are now making breakthroughs. One protocol I'm focusing on is Virtuals Protocol, which has been described as the AI agent version of Pump.fun.
Virtuals Protocol allows you to co-own entertainment AI agents deployed on platforms like TikTok, Roblox and others. Imagine co-owning entertainment bots - how exciting!
4. Fantom Reborn: Hello, Sonic
Fantom was one of the hottest blockchains in 2021. At its peak, its TVL reached $8 billion.
Fantom is now undergoing a transformation, rebranding itself as Sonic Chain, focusing on speed and scalability. With the return of Andre Cronje, expectations are high.
What's new about Sonic? Sonic Chain promises faster transaction speeds, up to 10,000 TPS. This is still not enough, but enough to put it in the competition of high-performance blockchains. Improved token economics make it one of the most anticipated updates for Q4.
Sonic's upcoming catalysts include:
With Pendle's support, Sonic will have a liquidity staking feature.
Curve, KyberSwap, Snapshot and other major DeFi protocols are launching on Sonic.
Sonic's new fee mechanism can allow developers to earn up to 90% of the fees.
Initiatives like Sonic & Sodas, Sonic Boom, and Sonic University aim to attract developers
Last quarter, Sonic Arcade's TVL grew by 20%.
Finally, actions speak louder than words. Sonic has confirmed a $132 million airdrop, and on-chain activity is growing.
Andre's involvement, large-scale airdrops, upcoming DeFi tools, and changes to the token economics could drive Sonic's growth in Q4.
I wake up every day to see new ETH Layer 2 or application chains being launched. But Solana's dominance and the rise of Aptos / Sui show that there is still room for L1 competitor chains.
For L1 competitor chains, you can think of Solana as the Alpha version and Sonic as the Beta version.
Some concerns I have:
Andre is highly innovative, but he has also "disappeared" before. He has brought a lot of attention to Sonic, so the key person risk is significant.
There haven't been many innovative DApps launched on Fantom in the past few years. Their most popular DApps are still Beethoven X and SpookySwap.
Sonic has to compete with L2s and other L1s.
Will Sonic maintain momentum after the airdrop is completed?
Currently, the Sonic ecosystem is quite crowded, but it is doing interesting things and is worth keeping an eye on.
5. Aerodrome: Base's Secret Weapon
The rise of Base is undeniable, and it is the largest L2 officially recognized by Ethereum, based on TVL.
What's the reason? Aerodrome. Aerodrome's TVL now exceeds $1.36 billion, making it a top participant in Base's DeFi ecosystem.
This is largely due to these two liquidity pools.
Aerodrome's dominance in the Base ecosystem is reflected as follows:
Current TVL: $1.36 billion (56% of Base's total TVL)
30-day growth: 56%, outpacing the market average of 15%
Market share: 80% of all DEX trading volume on Base
Daily trading volume: over $150 million
As Base matures, the importance of Aerodrome as its default DEX will continue to grow, making it a core participant in the Base ecosystem.
Comparison of Base to other L2s over the past 20 days:
Daily transaction count:
Base: 5.6 million
Arbitrum: 2.1 million
Optimism: 850,000
Active addresses:
Base: 1.5 million monthly active users
Arbitrum: 780,000 monthly active users
Optimism: 690,000 monthly active users
TVL growth:
Base: $2.5 billion
Arbitrum: $2.4 billion
Optimism: $681 million
It's clear that Base is currently on a strong growth trajectory, so what could be the next catalyst?
Real-World Asset (RWA) integration: Platforms like Centrifuge can bring real-world assets onto Base, attracting more liquidity and traditional finance participants to its ecosystem.
GameFi and NFTs: Base's scalability makes it an ideal choice for new gaming platforms or NFT marketplaces, leveraging these growing crypto narratives.
Developer incentive programs: Coinbase-backed Base may drive growth through developer incentive initiatives like hackathons and grant programs to attract more talent to the ecosystem.
Aerodrome has created a powerful DeFi ecosystem on Base, attracting both retail and institutional participants. Together with top protocols like Uniswap, Aave, Balancer, SushiSwap, Curve, and Stargate, Base has the potential to become a formidable contender in the L2 race.
6. DeFi 1.0: Don't Underestimate the Old Guard
Remember when Aave and Uniswap dominated DeFi? That was a time of innovation and endless possibilities. Now, they're back with ambitious plans.
Aave plans to push its native stablecoin GHO into new ecosystems like Base and Avalanche.
As of early 2024, GHO's market cap has grown 350% in the past 10 months, from $35 million to $160.1 million.
Growth in Aave protocol's revenue. Source: Token Terminal
Aave's growth metrics:
Revenue reached $50 million year-to-date, the highest among all lending protocols;
Circulating supply of the stablecoin GHO reached $160 million;
ETH TVL continues to grow, currently at 5.1 million ETH (over $110 billion), nearing its previous peak;
Grayscale announced the launch of the Aave Trust;
GHO is now competing with top 15 stablecoins, with increasing institutional interest.
As for Uniswap, it recently announced the launch of its own blockchain: Unichain.
We previously delved into the updates to the Uniswap v4 ecosystem and the response to the Unichain launch. Here are the latest strategic moves by Uniswap:
Massive liquidity migration is expected after the launch of Unichain;
One of Unichain's main goals is to help users reduce gas costs by around 95%;
The launch of Unichain may introduce new staking mechanisms;
The introduction of a revenue-sharing model could boost the UNI token price;
The number of wallets holding UNI tokens has surpassed 400,000.
DeFi's user mindshare peaked in August. Source: KaitoAi
Aave's GHO and Uniswap's Unichain plans may revive DeFi 1.0, bringing these giants back into the spotlight. These initiatives could redefine the dynamics of stablecoins and reshape the DEX landscape.
Riding the Wave
The crypto markets have been very challenging in recent years. Countless Ponzi schemes, the collapse of Terra and FTX have plunged us into a prolonged bear market. The entire space has been focused on building more Ethereum Layer 2s. Now, I can feel the tide turning.
We need to change with it: stop the madness, shake off the bear market PTSD, and stand tall in the tide.
