The market value of AI Agent far exceeds that of the DeFi Summer period, or will it replicate the DeFi-style market trend?

Author: Nancy, PANews

Dominant narratives emerge in every crypto cycle, and AI+ is undoubtedly one of the biggest threads in this bull market. In particular, the AI ​​Agent craze is seizing most of the liquidity on the chain, and the market is discussing crypto AI in a cycle similar to DeFi Summer. increasing day by day. In this article, PANews will compare the market development scale of encrypted AI and DeFi, and explore the similarities and differences in the development of these two fields.

The market value of 48 billion exceeds **the DeFi Summer period, and

whether it can replicate the success of DeFi** has caused controversy

According to CoinGecko data, as of January 2, the market value of the crypto AI field has reached US$48.8 billion, a figure that far exceeds the market value of DeFi during the "DeFi Summer" period. According to data from The Block, after the explosive growth phase in 2020, the market value of DeFi reached a maximum of US$6.04 billion. It was not until mid-April 2021 that it exceeded the US$50 billion mark. By then, the market had gradually matured and diversified. This comparison shows that the explosive power of encrypted AI has surpassed the early development stage of DeFi, showing stronger advantages in market appeal and growth potential.

The special AI Agent subdivides the track and continues to explode during this period. CoinGecko data shows that as of January 2, the market value of AI Agent has reached US$16.93 billion, accounting for 34.7% of the entire crypto AI track. This number is equivalent to the total market value of DeFi protocols in January 2021. If we take the leading projects Virtuals Protocol (US$5.02 billion) and ai16z (US$2.7 billion) as examples, the combined market value of the two has exceeded the market value of all DeFi protocols at the end of 2020, further highlighting the rapid development of the AI ​​track. The leading DeFi projects Uniswap and Aave had a maximum circulating market value of US$22.05 billion and US$6.58 billion respectively in the last bull market.

From the perspective of capital investment, DeFi has attracted a large amount of venture capital injection after its rapid development. Encrypted AI is also at a similar stage. More and more funds are beginning to flow into the AI ​​field, and investment around encrypted AI has surged. According to the 2024 financing report compiled by PANews, the DeFi field will receive US$1.69 billion from 296 investments and financings in 2024. As an emerging category, AI projects have grown rapidly this year, with nearly over 100 disclosed financing events, including 15.2% have received tens of millions of dollars in funding, with the capital size being around US$600 million.

Although the data performance of the encrypted AI track is impressive, the market still has different views on whether its development cycle can be similar to DeFi. For example, Messari noted in its latest report that AI agents will peak in the first quarter of 2025 and will not recover. The reasons are as follows: (1) AI Agent has not yet proven that its product adaptability is sufficient to support market speculation; (2) Alt-L1’s success was built on the clear demand for block space during the DeFi boom, but AI Agent There is neither demand nor a clear user base; (3) The launch of AI Agents relies on market speculation, but this speculation cycle will collapse when the market realizes that they will remain just playthings in the foreseeable future.

There are also views that AI has development potential similar to DeFi. For example, crypto KOL @ 0xWizard said that 2020 can be called the "Cambrian Explosion of DeFi" and 2025 is likely to be the "Cambrian Explosion of AI Agents." Various Ai+Crypto gameplays will take shape next year. Researcher Haotian believes that the arrival of AI Agent is just like the blockchain ushering in a DeFi Summer in 2020, which will create a huge new "bubble" narrative cycle of Build + Speculation. Although the AI ​​Agent ecosystem does not even have exclusive infra conditions yet, from the perspective of ecological plasticity, the industry narrative opportunities brought by AI Agent are much greater than those of DeFi.

Former Spartan Group member @0xJeff predicted that 2025 will be called the Agentic era, and Agentic L1 will reach a market value of US$100 billion, similar to the 2020-21 L1 valuation cycle; DeFi will be in the era of AI Agent With the help, it will reach the TVL high of more than 200 billion US dollars in the previous cycle, etc.

Regarding the valuation of AI MEME coin projects, crypto KOL @Rui said that in the early MEME market, the valuation of the project was closely related to whether it could be listed on exchanges, especially top exchanges. However, with the rise of AI Agents and market changes, the original valuation system based on exchange logic for large market capitalization MEME has failed. Everyone’s valuation expectations for the project are not which exchanges it will be listed on, but what kind of ecology it will create. For projects that already have an ecosystem, the valuation can be determined based on the proportion of the ecosystem; for individual projects or "wild system" projects, the key to valuation is whether it can exceed the market value of US$100 million. This market value is below Rely more on communication, community and early funding support.

Four commonalities from cultural influence to capital efficiency

The combination of technology and capital is the core driving force for the development of the encryption industry. In the last bull market, DeFi reshaped the crypto financial world through decentralized platforms and smart contracts. Nowadays, crypto AI is changing the way the crypto market operates in a more intelligent and automated way. From the current point of view, the two have similarities in cultural impact, technological foundation, entry barriers and financial efficiency.

Meme culture

As one of the core narratives of the last crypto bull market, DeFi itself has a spirit of rebellion against traditional finance. Many DeFi projects attract attention through humor and parody naming (such as various food series) while providing real financial functions. Initially, the market even classified DeFi more as a liquidity game rather than a pure financial instrument. However, this culture that broke the "seriousness" of traditional finance unexpectedly inspired reflection and discussion on the traditional financial system, and quickly A large number of developers and users have participated.

Similar to the meme culture in the early DeFi narrative, the popularity of encrypted AI also relied on the cultural power of MEME. The rise of AI Agent not only relies on technological innovation and application value, but also quickly gathers emotions through humor and joking MEME methods, thus stimulating the interest and participation of users on the chain, including new groups such as outside developers and researchers. Join in a more relaxed and interactive way.

Technical basis

With support for smart contracts, token standards and developer ecology, Ethereum’s flexibility provides a strong technical foundation for the rise of DeFi. It not only allows developers to innovate financial products according to needs, but also its decentralization and open source The mechanism also provides users with a fair and transparent financial platform.

The rise and popularity of encrypted AI narratives in this cycle also began with the explosive progress of AI technology, especially the emergence of large-scale language models (such as ChatGPT), which allowed people to see the huge potential of combining artificial intelligence technology with blockchain. At the same time, the rapid improvement of AI large model capabilities has also empowered more intelligent on-chain applications, such as trading strategies, market predictions, smart contract automation and data analysis, etc., thus providing new perspectives and motivation for encryption technology innovation. .

Entry threshold

Compared with the traditional financial system that requires complex procedures, bank accounts and credit reviews, DeFi can provide an intermediary-free, open and transparent financial service method through blockchain and smart contracts, requiring only an encrypted wallet and a small amount of encryption. Assets can be freely used for lending, trading, liquidity provision and other activities without being restricted by regional and economic background.

Compared with traditional encryption tools and platforms, AI Agent provides a more intelligent and automated operation method, allowing users to easily get started without in-depth understanding of complex technical details and professional trading knowledge and experience. At the same time, high-quality AI Agent projects have also broken the previous high thresholds of platforms such as VC and centralized exchanges (CEX) through lower participation thresholds and convenient operation paths, not only providing more participation opportunities for individual investors, It also opens up lower-cost and more decentralized innovation channels for developers and project parties.

The combination of AI Agent and MEME culture also lowers people's cognitive threshold for encrypted AI technology, especially for users with non-technical backgrounds, and breaks the high-threshold image of technical projects, making participation in this field more diversified, easier and more accessible. Entertainment.

capital efficiency

In the DeFi narrative, capital efficiency has always been one of the core driving forces. DeFi can greatly improve the efficiency of fund use through decentralized platforms and the use of smart contracts and automation mechanisms. These platforms attract a large number of institutional funds and retail users to enter the market by providing high APY and capital returns. Without the need for intermediaries and traditional bank processing, funds can flow in a shorter period of time and obtain higher returns, which greatly improves the capital efficiency of the market.

AI Agent can help users achieve more efficient financial operations in the crypto market through automation and intelligent processing of artificial intelligence technology. Different from traditional manual intervention methods, AI Agent can automatically perform tasks such as transactions, asset management and risk control based on real-time market data, helping users seize market opportunities and avoid emotional decision-making and human errors, thus greatly improving the operational efficiency of funds. . Not only that, the AI ​​Agent project provides more users with the opportunity to redistribute interests through the on-chain execution mechanism, allowing participants to enjoy the project’s growth dividends with a low threshold.

Four major differences from technology-driven to user participation

Although DeFi and Crypto AI demonstrate similar dynamics and potential in driving innovation in the crypto market, they differ significantly on several key levels. These differences are reflected not only in the complexity of the technology and the breadth of application scenarios, but also in market drivers and different approaches to user engagement.

Application scope

The main focus of DeFi is on-chain finance, and the main innovations focus on the construction of financial instruments such as decentralized exchanges (DEX), automated market makers (AMM), and lending protocols. Although these innovations have subverted the traditional financial system, their application scenarios are relatively concentrated and clear. In contrast, the application scope of encrypted AI is much wider, involving on-chain finance, AI-generated content (AIGC), NFT, smart contract automation, data analysis and other fields. Although encrypted AI is more complex in terms of technology integration, it also allows it to reach more markets and user needs. In the future, with the technological development of large-scale AI models, more cross-field innovations and applications will be promoted.

Technology driving force

DeFi's technological innovation is mainly based on blockchain and smart contracts, and promotes the innovation of the decentralized financial ecosystem. Its core motivation comes from decentralized transactions, permissionless financial innovation, and automatic execution of smart contracts. Encrypted AI storytelling has complex and diverse technical drivers, ranging from financial fields such as trading strategies and risk management to wider application ranges such as content generation, personalized recommendations, and data analysis.

user groups

The main user group of DeFi is the native users on the chain, and this group usually has strong financial operation experience. In addition to attracting crypto natives, crypto AI can also attract the participation of a large number of users with non-technical backgrounds, including content creators, developers, and technical researchers. It has significant advantages in popularity and market coverage.

market capitalization driven

The market value of DeFi projects is mainly determined by factors such as the amount of locked positions, the listing and liquidity of the exchange, and more depends on the frequency of use of financial instruments on the platform and the degree of user participation. The market operation is relatively direct and transparent. Relatively speaking, the market value logic of encrypted AI projects is more complex and highly uncertain. It not only depends on the depth and breadth of technological innovation, but also the ecological influence of the project and the development potential of practical application scenarios. It also means that whether the encrypted AI narrative can be sustained depends on the combination of technological progress and user needs, and there are higher risks and potentials.