1. The Rise of AI Agents
In November, AI Agents attracted widespread attention, with people's focus shifting from memecoins to this new hotspot. The early versions of AI Agents can be traced back to 2020, but the real hype started this year, mainly due to the success of VIRTUAL - it achieved an amazing 3000% growth in just one year. The key factors behind Virtuals' success are: - Persisting with the @pumpdotfun model despite facing challenges of declining market share and increasing criticism - Cleverly combining AI technology with the viral spread effect of memecoins - Creating the AI influencer Luna, managed by Virtuals, who has over 500,000 followers on TikTok - Launching on the Base platform, which has gathered a large number of memecoin traders In the Web3 space, when a new category of protocol emerges and succeeds, investor interest quickly surges, forming a snowball effect - or a bubble effect (if you prefer to describe it that way). Afterwards, a large number of people will flock to chase the next similar success story. We have witnessed this phenomenon multiple times in the past with memecoins and Telegram trading bots. Will it be any different this time?2. AI is Unstoppable
In 2024, the AI Agents industry experienced unprecedented growth. Venture capital in this field soared to $1 billion in a year, an 81.4% increase in transaction volume compared to 2023. In the third quarter of 2024, the total venture capital in the AI field reached a peak of $18.9 billion, with AI Agents contributing 28%. Another example that demonstrates investor confidence is OpenAI's completion of a $6.6 billion financing round, the largest venture capital transaction in history.3. AI Agents in Web3: Prospects and Realities
AI Agents have numerous use cases in Web3, and with technological advancements, they are expected to become even more powerful. Although this narrative is timely, their full potential is still evolving. In the current market environment, where asset prices are highly volatile, and you need to keep 100% of your assets in stablecoins to maintain the value of your portfolio, AI Agents designed for trading perform particularly well. However, we lack historical data to prove other possibilities. Furthermore, AI trading bots are not a new phenomenon, as they have existed for many years, but they have yet to achieve mainstream adoption. If they are truly so profitable, why is this the case?4. Will AI Agents Become the Core of the Market Hype?
I have always been skeptical, so my answer is no. The cryptocurrency market is full of speculation, with 10% being technology and narratives quickly fading. Remember the attention-grabbing EigenLayer re-staking protocol? That was not so long ago, but its hype has now significantly diminished. AI Agents do have technical support and bring innovative use cases, but "novelty" often quickly becomes "normal." As more teams enter the development of AI Agents, competition will intensify, and inevitably, there will be more failure cases, leading to a gradual cooling of the hype. Every trend in Web3 brings great opportunities and an exciting journey. The key is to profit in a timely manner and quickly move on to the next hotspot.V. Technical Issues
Even at the technical level, there are still many pressing issues that need to be solved. Most of the current AI agents have almost no connection with Web3, apart from the economic aspect.
But... the total market value of AI agents is expected to double from $7 billion to $14 billion within two years. As new protocols and new application scenarios continue to attract users' attention, this field will inevitably continue to grow.
In other words: the industry has huge potential, but the AI agents at the forefront of the current boom may not be able to maintain their dominant position in the coming months.
VI. Short-term Outlook
Now let's talk about the opportunities at hand: AI agents on Solana are currently in an obvious trough. This view is mainly based on the article by @0xkyle__ on X, and I generally agree with it, but remember to always do your own research (DYOR).
Currently, liquidity is flowing into centralized exchange Altcoins and Base, and the market sentiment towards Solana is particularly pessimistic, especially the concerns about the peak of SOL/ETH and SOL/BTC. In this pessimistic atmosphere, two key bets are currently popular in the crypto circle:
- Solana will make a strong comeback and trigger a second wave of on-chain hype.
- AI agents will rebound accordingly.
Therefore, there are two possible strategic investment approaches:
- Large-cap AI: Invest in mature players like A16Z and the potential TAO, which have already proven their worth.
- Small-cap AI: Look for undervalued projects that focus on interactivity, applications, and virtual avatars, as this is the area where asymmetric returns can be generated.
