Translation: Plain Language Blockchain
Currently, there are 300,000 wallets holding at least one AI agent token. Will this trend continue? What is the best strategy for AI agents now? What are the future development prospects and challenges facing the industry? This article provides some analysis.
1. The Rise of AI Agents
In November, AI agents attracted widespread attention, as people's focus gradually shifted from memecoins to this new hotspot. In fact, early versions of AI agents can be traced back to 2020, but the real craze began this year, largely thanks to the success of VIRTUAL – which achieved an astonishing 3000% growth in just one year. Several key factors contributed to the success of Virtuals:
Despite facing challenges such as declining market share and increasing criticism, still adhering to the @pumpdotfun model.
Cleverly combining AI technology with the viral dissemination effect of memecoins.
Created the AI internet celebrity Luna, managed by Virtuals, which has over 500,000 followers on TikTok.
Launched 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 rapidly escalates, creating a snowball effect—or a bubble effect, if you prefer to describe it that way. Then, there will always be a large number of people flocking to chase the next similar success story. In the past, we have witnessed this phenomenon multiple times in memecoins and Telegram trading bots. Will this time be different?
2. AI is Unstoppable
In 2024, the AI agent industry is experiencing unprecedented growth. Venture capital in this field soared to $1 billion within a year, an 81.4% increase in trading volume compared to 2023. In the third quarter of 2024, total venture capital in the AI sector reached a peak of $18.9 billion, with AI agents contributing 28%.
Another example of investor confidence is that OpenAI completed a $6.6 billion funding round, setting the record for the largest venture capital deal in history.
3. AI Agents in Web3: Prospects and Reality
AI agents have numerous use cases in Web3, and with advancements in technology, they are expected to become more powerful. Although this narrative is timely, its full potential is still evolving. In the current market environment, when asset prices are highly volatile, and you need to keep 100% of your assets in stablecoins to maintain portfolio value, AI agents designed specifically for trading perform exceptionally well. We lack historical data to prove other possibilities.
Moreover, AI trading bots are not a new thing; they emerged many years ago but have yet to achieve mainstream adoption. If they were so profitable, why is that?
4. Will AI Agents Become the Core of Market Trends?
I have always been skeptical, so my answer is negative. The crypto market is full of speculation, 10% is technology, and narratives are fleeting. Remember the attention on the re-staking protocol using EigenLayer? That wasn't long ago, but its popularity has significantly diminished now.
AI agents do have technical support and bring innovative application scenarios, but the 'freshness' often quickly turns into 'normalcy'. As more and more teams rush in to develop AI agents, competition intensifies, and inevitably more failures will occur, leading to a gradual cooling of interest.
Every trend in Web3 brings huge opportunities and exciting journeys. The key is to profit in a timely manner and quickly turn to the next hotspot.
5. Technical Issues
Even on a technical level, there are still many urgent issues to resolve. Most current AI agents have little connection to Web3 beyond the economic aspect.
But... the market value of AI agents is expected to double from $7 billion to $14 billion within two years. As new protocols and application scenarios continuously attract user attention, this field will inevitably continue to grow.
In other words: the industry has huge potential, but the AI agents currently at the forefront of the craze may struggle to maintain their dominance in the coming months.
6. Short-term Outlook
Now let's talk about the current opportunity: AI agents on Solana are clearly in a low point. This perspective mainly references @0xkyle__'s article on X, which I generally agree with, but remember to always do your own research (DYOR).
Currently, liquidity is flowing into altcoins on centralized exchanges and Base, while market sentiment towards Solana is particularly pessimistic, especially concerning concerns about peak SOL/ETH and SOL/BTC. In this pessimistic atmosphere, two key bets are becoming popular in the crypto circle:
1) Solana will make a strong comeback, igniting a second wave of on-chain enthusiasm.
2) AI agents will rebound accordingly.
Therefore, there are two possible strategic investment approaches:
1) Large-cap AI: Invest in established players like AI16Z and potential TAO, which have proven their value.
2) Small-cap AI: Look for undervalued projects focused on interactivity, applications, and virtual personas, as this is the area that produces asymmetrical returns.