Original author: The DeFi Edge
Original translation: Luffy, Foresight News
There is light at the end of the tunnel. After six months of turmoil, the crypto market is regaining vitality. Both Solana and Base are performing well; more excitingly, we finally have something 'new' like AI Meme.
Some predict that Bitcoin prices may break $100,000 in the coming months. The bullish reasons for the market are:
The US presidential election will be held in two weeks. Trump's election would be a huge victory for cryptocurrency.
On-chain metrics are bullish. The TVL, trading volume, and active addresses of Base and Solana have been on the rise.
Stripe's massive acquisition of the stablecoin payment platform Bridge. Everyone underestimated the long-term benefits of this for cryptocurrency.
A new realm of AI x Meme is emerging. It could be the 'NFT' of this round of retail enthusiasm.
The sentiment is improving, and the nostalgic atmosphere has returned.
It's time to recover from the trauma of the bear market. So many exciting things are happening, and I want to be at the forefront of the trend.
The protocols and narratives in the market are a mix of quality; it’s not easy to distinguish signals from noise. Here’s what I’ll be focusing on in the coming months.
1. AI agents x Memecoins: Cult revival
Memecoins have always been an important part of cryptocurrency.
Their operation is very simple, designed to leverage viral marketing for promotion. Since Memes are 'static', their popularity relies on the community.
But what if Memes could upgrade and evolve? What if Memes could promote themselves? That's where AI agents come into play.
Last week, GOAT (Goatseus Maximus) became the preferred choice for AI agent speculation, skyrocketing its market value 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 nonsensical musings on technical philosophy, but it has a particular fondness for 'GOATSE OF GNOSIS', a pseudo-religion based on an ancient internet Meme.
An anonymous person created GOAT and airdropped some tokens to the creators of Truth Terminal.
The next scene is that Truth Terminal starts heavily promoting GOAT on Twitter. Will AI launch its 'own' Memecoin? It has good 'Memecoin fundamentals': high liquidity and fair distribution, with no team risks like those of VC or Memecoin 'conspiracy groups'.
The market momentum for AI Meme can continue for the following reasons:
Truth Terminal has over 100,000 followers and is continuously growing. Every tweet from this account has a remarkable impact. It tweets every hour; it is a KOL that never rests.
Currently, no AI Meme has been listed on major CEXs. GOAT's daily trading volume is about $374 million, and it has undoubtedly entered the watchlist of Tier 1 CEXs. (Translator's note: Binance has already launched GOAT contract trading)
AI is continuously evolving, and it will keep learning and growing.
AI Meme sits at the intersection of Crypto x AI x Religion: it is a new 'cult'.
We have only scratched the surface of this new domain. How should you play it? The simplest way might be to go long on the leading GOAT. Hold on, there are also some potential explorers emerging, such as Fartcoin and Gnon.
It's important to note that there will be a lot of scams trying to capitalize on this wave. Their token distribution is far from as good as GOAT, and I’m sure many of these 'AI agents' are just humans playing AI role-playing games.
Back in 2021, NFTs drew attention from scattered retail investors. AI agents x Meme have the same potential, and a $1 billion market cap for GOAT is not out of reach.
Finally, remember that these are Memecoins. The faster they rise, the faster they fall. So make sure your profits are secure.
2. Solana: Riding the wave of Memecoins and AI
'The first millionaires of the gold rush were not the miners but those who sold them shovels and picks.'
I love Ethereum, but ignoring Solana's progress and adoption is foolish.
Solana is currently riding a wave driven by Memecoins and AI. With the surge in Memecoin prices and trading volume, Solana has once again become the center of attention.
Solana seizes the opportunity with Memecoins and AI tokens:
Well-known Memecoins like SLOP, GNON, Shegen, and FART are attracting attention, while GOAT emerges as the leading AI token.
As of Q4 2024, Solana creates an average of 96,010 tokens daily, with Pump.fun creating about 9,000 tokens a day, accounting for approximately 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 primarily known for exchanges and perpetual contracts. But they recently launched ApePro, a new trading platform specifically designed for Memecoins.
Kamino Finance. Kamino Lend was launched just a year ago and currently occupies nearly 70% of the Solana market share, with a total locked value (TVL) of $1.65 billion.
Pump.fun. Solana's Memecoin factory, which may airdrop in the future. Their new internal trading tool is called Pump Advanced. They also launched a video tokenization platform that allows users to tokenize videos, making them tradable assets on the platform.
As Solana continues to innovate and attract different projects, it has become a strong 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
Memecoin + AI is currently attracting everyone's attention, but we should not ignore Crypto AI tokens.
Bittensor (TAO) is the leader in this field.
Bittensor is the infrastructure of the Crypto AI field, focusing on AI utilities:
Opentensor FDN recently launched an Ethereum-compatible layer, connecting the $300 billion Ethereum ecosystem.
Real adoption: Three major DeFi protocols have been built on Bittensor's machine learning infrastructure.
Multiple sources of income: trading fees, staking, AI services, targeting over $10 million per quarter.
Institutional support: Two major cryptocurrency VCs increased their positions in September.
User mind share of AI x Meme narratives, source: KaitoAi
An interesting strategy for gaining exposure to AI might be to hold: GOAT (high risk, potential for explosion) and TAO (infrastructure). Both are worth focusing on and are supported by mature communities.
AI agents are now making breakthroughs. One protocol I’m focusing on is Virtuals Protocol, which some describe as the AI agent version of Pump.fun.
Virtuals Protocol allows you to co-own AI agents in the gaming and entertainment fields with others. Imagine co-owning entertainment bots deployed on TikTok, Roblox, and other platforms—how fun!
4. Fantom Rebirth: Hello, Sonic
Fantom was one of the hottest blockchains in 2021. At its peak, its TVL reached $8 billion.
Fantom is undergoing a transformation; it is rebranding itself as Sonic Chain, focusing on speed and scalability. With Andre Cronje's return, expectations are high.
What new features does Sonic have? Sonic Chain promises faster transaction speeds, up to 10,000 TPS. This is not enough but sufficient to join the competition among high-performance blockchains. Improved token economics makes it one of the most anticipated updates for Q4.
Next catalysts for Sonic include:
With Pendle's support, Sonic will have liquidity staking features.
Curve, KyberSwap, Snapshot, and other major DeFi protocols are launching on Sonic.
Sonic's new fee mechanism allows developers to earn up to 90% of the fees.
Plans like Sonic Sodas, Sonic Boom, and Sonic University aim to attract developers.
Last quarter, Sonic Arcade's TVL grew by 20%.
Finally, let’s let money do the talking. Sonic has confirmed an airdrop worth about $132 million, and on-chain activity is increasing.
Andre's involvement, massive airdrops, upcoming DeFi tools, and changes in token economics may drive growth for Sonic in Q4.
Every day I wake up to see new ETH Layer 2 or application chains being launched. However, Solana's leading position and the rise of Aptos/Sui indicate that there is still room for development in L1 competitive chains.
For L1 competitive chains, you can consider Solana as the Alpha version and Sonic as the Beta version.
Some things I'm concerned about:
Andre is very innovative, but he has also played 'disappearing' before. He has brought too much attention to Sonic, so the risks of key figures are high.
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 needs to compete with L2 and other L1s.
After the airdrop is completed, can Sonic maintain its momentum?
Currently, the Sonic ecosystem is quite crowded, but it is doing interesting things that are worth your attention.
5. Aerodrome: Base's secret weapon
The rise of Base is evident; based on TVL, it is the largest L2 officially recognized by Ethereum.
What’s the reason? Aerodrome. The TVL of Aerodrome now exceeds $1.36 billion, making it a top player in Base's DeFi ecosystem.
This is mainly 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%, higher than the market average of 15%
Market share: 80% of all DEX trading volume on Base
Daily trading volume: over $150 million
As Base matures, Aerodrome's importance as its default DEX will increase, becoming a core participant in the Base ecosystem.
In the past 20 days, comparisons of Base with other L2s:
Daily average 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 is evident that Base's current development momentum is strong, so what will the next catalyst be?
Integration of Real World Assets (RWA): Platforms like Centrifuge can bring real-world assets into Base, attracting more liquidity and traditional financial participants to its ecosystem.
GameFi and NFT: The scalability of Base makes it a perfect choice for new gaming platforms or NFT markets, capitalizing on these growing crypto narratives.
Developer incentives: Base, supported by Coinbase, could promote growth through developer incentives such as hackathons and funding programs, attracting more talent to the ecosystem.
Aerodrome has created a strong DeFi ecosystem on Base, attracting both retail and institutional participants. Along with top protocols like Uniswap, Aave, Balancer, Sushiswap, Curve, Stargate, etc., Base has the potential to become a strong contender in the L2 race.
6. DeFi 1.0: Don't underestimate the old companies.
Do you remember when Aave and Uniswap dominated DeFi? That was a time full of innovation and infinite possibilities. Now, they are ambitiously returning.
Aave plans to push its native stablecoin GHO into new ecosystems like Base and Avalanche.
At the beginning of 2024, GHO's market value was $35 million, growing 350% over the past ten months, now at $160.1 million.
Revenue growth of the Aave protocol. Source: Token Terminal
Growth metrics for Aave:
This year, revenue has reached $50 million, the highest among all lending protocols;
The circulating supply of the stablecoin GHO has reached $160 million;
ETH TVL is continuously growing, currently at 5.1 million ETH (over $11 billion), approaching previous highs;
Grayscale announced the launch of Aave Trust;
GHO is currently competing with the top 15 stablecoins, with increasing interest from institutional investors.
As for Uniswap, it recently announced the launch of its own blockchain: Unichain.
We previously explored the updates of the Uniswap v4 ecosystem and the responses to the Unichain launch; here are the updated strategic initiatives for Uniswap:
After the launch of Unichain, a massive liquidity migration is expected;
One of Unichain's main goals is to help users reduce Gas costs by about 95%;
The launch of Unichain may introduce new staking mechanisms;
Introducing a revenue-sharing model could boost UNI prices;
The number of wallets holding UNI tokens exceeds 400,000.
The mind share of DeFi users peaked in August. Source: KaitoAi
Aave's GHO and Uniswap's Unichain plans may revitalize DeFi 1.0, bringing these giants back into the spotlight. These initiatives could redefine the dynamics of stablecoins and reshape the DEX landscape.
Ride the wind
The crypto market has been very tough over the past few years. Countless Ponzi schemes, the collapse of Terra and FTX have plunged us into a long bear market. The entire field has focused on building more Ethereum Layer 2s. Now, I can feel the tide is turning.
We must change accordingly: stop fooling around, overcome the trauma of the bear market, and stand tall at the forefront of the trend.
