This article is from: 0xJeff
Compiled | Odaily ([@OdailyChina](https://x.com/OdailyChina))
Translator | Azuma ([@azuma_eth](https://x.com/azuma_eth))
Do you remember the Layer 1/Layer 2 hype cycle of 2022-2023?
The best investments at the time were buying tokens of top decentralized exchanges (DEXs), lending protocols, EVM-compatible networks, LSTs, and yield optimization protocols. Everyone was chasing mining, airdrops, or pouring TVL into projects like Blast to accumulate points.
It was chaotic, but it worked (at least for a few months). Now, the market has an equally vibrant energy - but this time, the rules have completely changed.
The AI Agent ecosystem is reshaping our entire understanding of the market, with a structure completely different from what we've seen before.
I. No VC Dominance
In the Layer 1/Layer 2 era, token distribution always followed the same formula:
15-30% for the team;
10-30% for investors and KOLs;
the rest for airdrops or incentives.
The new cycle is different. In the AI Agent ecosystem, tokens are often 100% community-owned. After launching the token, the team may grab 5% for future rewards, but the rest is left to the market.
What does this mean?
Everyone has an equal buying opportunity. There are no concerns about VC unlocks or insider trading. All users who want to buy will bear the same market risks as everyone else.
You might ask, what about off-market trades for KOLs?
Some projects do offer discounted off-market trades, but they often:
Have strict size limits;
Only offer them to DAOs or KOLs actively supporting the ecosystem.
This is not a "VCs make the deal, retail bags it" model. It's a fairer, more streamlined system, with power retained in the community's hands.
II. No Endless Forking
At least not like DeFi, where there were dozens of fork products from Uniswap to Liquity, and the fork products had almost no innovation.
In the new cycle, everything is about innovation. Builders are no longer just cloning existing projects, but rapidly launching entirely new Agents and use cases.
Why? Because AI applications are evolving faster:
You don't need months of review time;
Most Agents can be launched in weeks, not months;
The space is full of energy, experimentation, and creativity.
Exciting new things emerge every week. As AI technology advances, Web3's AI Agents are also constantly evolving.
III. A New Acquisition Funnel
In the previous DeFi market, users had to first find the project website; then spend time understanding the product; and only then might they choose to interact with it.
AI Agents are completely different - they can directly present their products to users.
For example, aixbt (@aixbt_agent) can directly provide various alpha insights in real-time on X.
Users can immediately see its value and become interested; then dive deeper to understand it; ultimately, they may choose to acquire tokens to unlock full functionality.
This "participate first, trade later" new acquisition funnel is more efficient. As on-chain transactional AI Agents and DeFi AI Agents evolve, this model will dominate by 2025.
IV. Highly Integrated Ecosystems
In the new cycle, ecosystems will be more tightly integrated, without the thousands of scattered Layer 1/Layer 2 and DApps:
Virtuals (Base), ai16z (Solana), daos.world (Base), daos.fun (Solana)... Their uniqueness lies in the fact that builders are attracted not by subsidies or incentives, but naturally.
A fair token economic model, a passionate community, the opportunity to experiment and innovate in an exciting field... This is the result of combining fair issuance and continuous innovation. Builders, investors, and the community will drive growth together.
How to Position Yourself in the New Cycle?
The current market is like the early stage of Layer 1, just developing much faster. Many Layer 1 projects reached $100 billion valuations as early as 2020-2021. The AI track now has the same potential.
If you want to position yourself effectively, keep an eye on these new "Agent Layer 1" projects:
VIRTUAL
AI16Z
ZEREBRO
GRIFFAIN
BULL
AR
Don't just chase the current hype, look for projects that are undervalued and immune to current events, teams that know how to build consensus, with fast interactions and compelling narratives.
You can refer to my previous article, "How to Position Yourself in This Agentic Cycle".
Welcome to the New World
The AI Agent ecosystem is not just a new Layer 1. It is a completely different market structure - faster, more streamlined, and more community-driven than anything we've seen before.
We are entering a cycle that could reshape the way Web3 innovation operates, with $10 billion valuations just the starting point.
