AI Agent Track Analysis: Potential and Opportunities Coexist

Before discussing the AI Agent track, let's take a macro view of the changes in the cryptocurrency industry during this cycle:

The Divergence of Bitcoin and the Crypto Market

In this cycle, there has been a significant divergence between Bitcoin and other crypto assets. After the approval of the Bitcoin spot ETF, recognition of Bitcoin's value has become a mainstream view, ranging from politicians to publicly listed companies. However, other crypto assets like Ethereum have not received the same level of recognition.

The main reason for this differentiation is the different asset positioning:

• Bitcoin is regarded as an alternative asset similar to gold, with properties to hedge against inflation and preserve value.
• Ethereum and other cryptocurrencies are still seen as high-risk tech stocks in the eyes of traditional finance, lacking mature business models.

Compared to technology giants like Nvidia and Microsoft, these crypto assets have a high valuation but lack return elasticity, resulting in a low risk-reward ratio. Data shows that Ethereum's Sharpe ratio is lower than that of tech companies like Meta and Google, while Bitcoin is only surpassed by Nvidia, which has performed remarkably in this round.

In addition, the current macro environment has tighter liquidity compared to the last bull market, coupled with the booming AI industry, leading to insufficient attraction of the crypto market for off-market funds.

Imbalance in the Internal Ecosystem of the Cryptocurrency Market

Due to limited ability to attract off-exchange funds, on-exchange funds have become key. A rough estimate shows that the current on-exchange funds ( total amount of stablecoins + contract positions ) has exceeded the last bull market, but most tokens have not reached new highs, reflecting a severe imbalance between supply and demand.

A large number of highly valued new projects have emerged on the supply side, but most have not found product-market fit and real users. This is due to excessive financing by crypto VCs during the bull market in 2022, which led to neglecting project quality in order to fulfill investment tasks.

The demand side is affected by regulatory influences. After the FTX incident, centralized exchanges became the target of criticism, having to shift from expanding their user base to pursuing profits, which compressed the space for new projects to list and for user incentives, weakening the momentum for market demand growth.

Advantages of AI Agents Compared to Meme Coins

The core application scenarios of the cryptocurrency market are asset trading and issuance. Against the backdrop of the current imbalance in supply and demand for highly valued projects, Meme coins have broken through first with characteristics such as no VC financing and fair issuance, driving new asset issuance and trading models.

However, the characteristic of Meme coins lacking practical use makes it difficult to gain mainstream recognition. In contrast, AI Agents are able to consolidate a broader consensus:

• Tell the AI infrastructure investment story to fund LPs.
• Explain on-chain meme logic to speculators
• Explain the investment logic of AI Agent projects to industry practitioners and VCs.

The AI Agent is expected to become the greatest common divisor of this round of the cryptocurrency industry.

AI Agent Project Analysis Framework

AI Agent has reshaped the cryptocurrency industry chain and valuation logic. After incorporating AI into the underlying blockchain technology stack, the AI layer runs in parallel with smart contracts, forming a full-chain Agent layer.

Based on this, a valuation logic can be established:

• The AI Agent framework can benchmark against DeFi middleware, with the potential to reach 5% of Ethereum's market value.
• The framed launch platform can be compared to Chainlink + Uniswap
• High-quality projects like Freysai can benchmark against AAVE, with a ceiling of 1.25%-3% of Ethereum's market cap.
• Other leading projects can refer to the valuations of similar projects in the previous cycle.

AI Agents will also change the ecosystem of the cryptocurrency market:

• Simplify asset trading process, support natural language interaction
• Change the project financing model, directly targeting the community
• Improve the transparency of token issuance and reduce centralization risks

The AgentApp, which can win users' trading entry, is expected to benchmark the valuation of exchange platform tokens.

From a more macro perspective, AI Agents may form a new AI society, creating a trillion-dollar economic scale, with crypto assets playing an important role in it.

Development Stages and Prospects of AI Agents

The current market capitalization of AI Agents is approximately $18.6 billion, accounting for 64% of the total market capitalization of DeFi, 75% of GameFi, and 62% of Layer 2. Overall, it is in a developing stage, and there is still considerable room for growth in the future.

Possible future hot topics include:

• Agent-driven cryptocurrency exchange: enabling decentralized listing, asset custody, and more.
• Agent-driven stablecoin: AI automatically adjusts to maintain the peg
• Application Agentization: Integration of various applications with Agent services

Overall, the era of AgentFi has just begun, and there is huge potential for future development.