Are AI Agents currently in the '2020-2021' prosperous cycle of DeFi Summer?
'Seizing the sword from the boat' is often the most worry-free forecasting method—looking solely from the data dimension, the total locked value (TVL) of DeFi grew from $600 million in January 2020 to $26 billion in December 2020, increasing by over 40 times in just one year. Meanwhile, the current market capitalization of the AI sector is $44 billion, which also means that if it can indeed replicate the prosperous cycle of DeFi, its potential market cap could exceed $1 trillion.
So the question arises: Are AI Agents really experiencing a '2020-2021' prosperous cycle similar to DeFi Summer? Beyond AI Memecoins, which projects will become the driving forces of this cycle?
The prosperous cycle of AI Agents is like adding fuel to the fire.
According to Cookie.fun statistics, as of January 1, 2025, the overall market capitalization of the AI Agent sector has surpassed $16.6 billion, with a staggering increase of 53.79% over the past seven days. Against the backdrop of the entire crypto market being in a volatile period, the ecosystems of AI Agents are expanding at an unprecedented speed, from Virtual to AI16Z, and then to platforms like Arc.
Especially for AI Agent projects driven by Meme culture, with their low barrier to entry for issuing tokens and trading processes, they have rapidly become new centers of traffic and attention. Most of them have significantly lowered the participation threshold for ordinary users through humorous expressions, highly interactive community cultures, and user-friendly communication strategies, successfully attracting a substantial number of non-professional users to join.
In simple terms, this is actually another cultural rebellion against 'VC coins' and a continuation of the Meme narrative. However, in combination with AI Agents, it has both lowered the participation threshold and expanded the potential market scale, injecting more inclusivity and sustainability into the AI × Crypto narrative.
Including the recently high-performing 'TAO CAT,' which is a product of the Masa team's collision of the two ecosystems of Virtuals and Bittensor, creatively demonstrating the superiority of AI Agents over traditional AI Bots in self-evolution, while still being driven by fair issuance and community-driven economic narratives.
Interestingly, during the writing process, TAOCAT was just selected for the latest Binance Alpha project, followed by a significant price increase, and MASA also showed a rising trend as a result.
This easily brings to mind the prosperous scene of DeFi Summer: from the initial foundational applications of Compound and Uniswap to the subsequent massive influx of users and the derivation of more complex on-chain trading strategies, the interplay of technological narratives and capital-driven resonance ultimately forms a periodic prosperity. Therefore, at least currently, the popularity and market capitalization growth of AI Agents based on AI Memecoins indeed bring a new round of narratives and imaginative space to the crypto industry.
However, how far this prosperous cycle can go is still uncertain. AI Memecoins are just the beginning, and the future depends more on whether AI Agents can become the long-term cornerstone of the crypto industry, rather than just a short-term fad.
For instance, in the current landscape of AI Agents, the total market capitalization of the top 5 exceeds $7 billion, accounting for nearly 45%. The market capitalization of the Virtual ecosystem and AI16Z ecosystem reaches $4.65 billion and $2.37 billion, respectively, becoming benchmark cases in the entire crypto field.
However, fundamentally, the current prosperity of the 'AI Agent' track is still dominated by AI Memecoins or issuance platforms, remaining in the early stage of the 'equal rights' economic narrative centered on fair asset issuance. It needs to further deepen its reach. Looking back at the previous crypto cycle, we find that although DeFi drove a large influx of capital into the blockchain field, the user threshold for DeFi remained relatively high, requiring financial knowledge and operational skills, which somewhat limited its large-scale popularization.
The emergence of AI Agents has opened a new narrative in the crypto field with lower barriers and higher potential. Unlike DeFi, which requires users to actively learn complex financial tools, AI Agents can directly provide personalized and intelligent services to users, lowering the participation threshold.
This is one of the interesting variables: using intelligent solutions to meet the needs of more ordinary users, making AI Agents not only a technical product but also a new kind of 'equal rights' economic narrative.
As the founder of SlowMist, Yu Xian, tweeted: 'Another special sense of disconnection: the ultimate (perhaps) most important role of AI Agents in the crypto industry is to issue a token to stimulate incentives. In the non-crypto industry, major players have already taken the lead, including some interoperability protocols defined, making increasingly user-friendly AI applications, while most attention in the crypto industry is still on tokens.'
Therefore, AI Agents have indeed entered a prosperous cycle through AI Memecoins, gaining high recognition and funding attention from the market in this field, marking their formal entry into a golden age. In the future, from meme-driven traffic centers to diversified application scenarios, from the improvement of infrastructure to the long-term value excavation, AI Agents are expected to reshape the landscape of the crypto industry and become the most innovative and influential field in the crypto sector.
The 'Alpha' and 'Beta' of AI Agents.
If we trace back to the roots, we find that although the current AI Agents are merely about token issuance and the value capture of imagination, their real landing is still closely related to on-chain trading attributes.
After all, the practical uses of AI Agents are far from as simple as issuing tokens—long before the task-driven AgentGPT handling processes, AI Agents have already demonstrated their potential in on-chain trading strategies and other areas:
Users can customize their overall target tasks, and then the AI Agent allocates tasks based on its own resources, breaking down the overall target tasks into smaller tasks through the flow and distribution of proxy layer tasks, continuously executing and correcting according to the goals without human assistance, ultimately achieving the overall goal.
In simple terms, it is a vision centered on 'intent.' Users only need to know what they want to achieve (intent) and do not need to worry about the intermediate processes and steps. In many cases, users' intents are complex and may not be expressed accurately. However, AI trained on specific models can more accurately recognize user intent, inferring users' potential purposes and needs based on their keyword information.
In this process, with the combination of highly intelligent AI, whether it is natural language input of intent, judgment of needs, decomposition of goals, calculation of optimal process matching, or execution of operations, AI can exert tremendous advantages. Currently, a large number of smart trading projects involving complex cross-chain transactions have emerged in the market, capable of efficiently discovering the optimal exchange paths, allowing users to complete optimal transactions in real-time at the best prices.
This is the truly imaginative direction for the development of AI Agents—its real value lies in becoming the interactive application layer of Web3. Users do not need to understand complex systems; they only need to converse with AI Agents to complete all on-chain operations. This may lead to the integration of AI Agents into the underlying infrastructure of Web3, deeply merging with blockchain, smart contracts, etc., and giving rise to new application forms and business models, thus providing a broader imaginative space for Web3.
Therefore, from a macro perspective, the rapidly developing AI × Crypto narrative is undergoing self-iteration at an astonishing speed—from the initial AI Meme craze to the gradual shift towards practical and interactive AI Agents, the entire market's attention is refocusing, indicating a transformation from random token speculation to a narrative logic of actual technological landing.
AI Agents are no longer just a marketing gimmick but have genuinely integrated into industrial logic through value capture mechanisms, such as AI-driven KOLs, revenue generation tools, trading, and Alpha strategy optimization, as well as the construction of underlying infrastructure. AI technology is gradually shifting from entertainment narratives to tools for solving practical problems.
Its value extends far beyond the currently popular AI Memecoins. Through technological innovation and ecological integration, it truly drives the evolution and popularization of Web3. From this perspective, AI Agents are not merely tools; they may reshape the ecological rules of the crypto market, making AI Agents more easily accepted and adopted by mainstream users.
In any track with a 'long slope and thick snow,' infrastructure never misses the opportunity.
In the crypto industry, Alpha is points, while Beta is areas. Alpha is usually difficult to capture, but Beta projects, which have a high degree of certainty, are comparatively easier to ambush.
The AI Agent field is no exception. Although opportunities like AI Memecoins are difficult to grasp, infrastructure (Infra) is the core of Beta and is almost a clear value capture opportunity. The narrative transmission path is extremely clear—despite the explosive growth of AI Memecoins stirring up a frenzy of funding and market attention, the eventual project landscape is far from being determined, while Infra, as the 'water seller,' can almost secure a steady position due to its prior ecological advantages.
As mentioned above, from the perspective of AI's role transformation in the blockchain ecosystem, it is upgrading from a mere tool to a productive force driving industry change. This not only serves existing crypto users but may also attract traditional financial users into the on-chain ecosystem by lowering barriers, building a more inclusive and sustainable economic logic.
Transitioning from elite finance serving a few to inclusive finance serving the majority; from the unsustainability of short-term speculation to the sustainability of long-term growth.
This indicates that AI Agent Infra is likely to become a key entry point for the intelligentization of on-chain applications, and it also means that projects in the same track that have not yet been fully priced by the market may hide new value reassessment spaces, one important direction being data.
As we all know, a significant challenge faced by AI Agents is how to efficiently mine and utilize high-quality data, which not only determines the learning ability and decision-making level of AI Agents but also directly affects the effectiveness of their actual applications and user experience.
Especially for the blockchain ecosystem, Twitter data, Discord data, web crawler data, etc., may hide billions of signals, containing many use cases that can be derived and realized, allowing for personalized mining and utilization—such as tracking whale dynamics, analyzing 'Smart Money' transactions, monitoring on-chain address interactions, filtering layered differentiated on-chain users, and accurately reaching different player groups, etc.
Thus, data infrastructure is not only the support for the development of AI Agents but also the core of their value creation and market promotion. Interestingly, as the current leader in the AI data sector, Masa's recently constructed SN 42 data service subnet and SN 59 AI Agent arena on Bittensor deserve mention.
The AI Agent arena is a significant step for Masa as a data infra towards the AI Agent platform, making the data network no longer abstract, but capable of empowering AI Agents in real-time, allowing them to evolve in real-time, iterating on Bittensor's powerful reward mechanism, enabling AI Agents to compete in the arena. The arena went live just a few weeks ago and has already attracted top AI Agents from the Virtuals and creator.bid ecosystems, including TAO CAT incubated by Masa.
Therefore, at its core, Masa is centered on 'infrastructure (data) + application scenarios (arena) + token economy (AI Agent),' attracting more users and developers to operate the platform, continuously expanding AI Agent business scenarios, and stimulating platform activity.
From a broader logical perspective, the narrative path of Infra projects like Masa is very clear—focusing on the 'adaptability' issues of AI agents on-chain, addressing the efficiency, stability, and intelligence needs of on-chain operations. If this track continues to ferment, it may not only build the infrastructure of an on-chain AI ecosystem but also promote comprehensive upgrades in developer ecology and user experience.
According to market rotation rules, the success of Virtual will also drive investors to focus on functionally complementary projects with technological innovation or low valuations in the same track, especially those with strong ecological building capabilities and clear narrative directions. Therefore, Infra projects like Masa undoubtedly form a natural complementary logic with Virtual's token issuance functionality.
The improvement of infrastructure and the maturity of technology have allowed AI Agents to transition from an uncertain Alpha stage to a profitable and scalable Beta stage. From this perspective, Infra projects like Masa are indispensable drivers in this process.
The aforementioned TAOCAT has been selected for the latest Binance Alpha project, which adds real-world evidence to my analytical logic and further reinforces the idea that when market attention gradually shifts towards the AI Agent track, infrastructure projects (like MASA) may welcome unexpected value growth opportunities.
Overall, this round of AI Agent Infra's heat is just the beginning. The market's demand for intelligent infrastructure on-chain is still rapidly expanding. The performances of Virtual and Masa provide us with a good reference. In the future, more clearly positioned, functionally complementary, and undervalued projects may gradually be discovered by the market, and opportunities for value reassessment are often hidden in the dark lines of niche fields.
Conclusion
AI Agents are not the endpoint but the starting point: in the future crypto market, AI Agents will not only be a component of the ecosystem but will also become an important driving force for advancing the entire ecosystem.
Infrastructure is the foundation of the ecosystem. Behind any major trend, its support is indispensable. Whether it is pioneers like Virtual or potential players like Masa, their commonality lies in embedding their value into the core of the entire ecosystem through technology and logic, and the market's recognition of this value is merely a matter of time.
