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

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.

Market Cap of $48 Billion Surpassing DeFi Summer: Can It Replicate DeFi’s Success?

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 crypto AI has surpassed the early development stage of DeFi, showing stronger advantages in market appeal and growth potential.

The special AI Agent sub-sector the track and continues to explode during this period. CoinGecko data shows that as of January 2, the market cap 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 cap of the two has exceeded the market cap 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 cap 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. Crypto AI is also at a similar stage. More and more funds are beginning to flow into the AI ​​field, and investment around crypto AI has surged. According to PANews Statistics, “The 2024 Financing Report” shows that the DeFi field will receive US$1.69 billion from 296 investments and financings in 2024. Meanwhile, emerging AI projects have nearly reached 100 disclosed funding events this year, with 15.2% raising over $10 million each, amounting to approximately $600 million.

Although the data performance of the crypto 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. Key reasons include: (1) AI Agents have yet to demonstrate product-market fit sufficient to sustain market speculation; (2) Alt-L1 success during DeFi’s rise was based on clear demand for block space, which AI Agents lack; and (3) AI Agent-driven speculation could collapse as the market realizes their limited utility in the foreseeable future.

On the other hand, some believe AI holds potential similar to DeFi. Crypto KOL @0xWizard likens 2020’s “Cambrian explosion of DeFi” to a potential “Cambrian explosion of AI Agents” in 2025, envisioning early-stage AI+Crypto applications emerging next year. Researcher Haotian notes that the arrival of AI Agents resembles DeFi Summer in 2020, likely creating a new “bubble” narrative cycle of build and speculation. Although the AI Agent ecosystem lacks dedicated infrastructure, its narrative opportunities appear far grander than DeFi’s.

Former Spartan Group member @0xJeff predicts 2025 will be the “Agentic Era,” with Agentic Layer 1 blockchains reaching a $100 billion market cap, similar to the L1 valuation cycle of 2020–2021. DeFi, aided by AI Agents, could achieve TVL exceeding $200 billion, surpassing its last cycle peak.

Regarding the valuation of AI-themed MEME coin projects, crypto KOL @Rui stated that in the early MEME market, a project’s valuation was closely tied to whether it could be listed on exchanges, especially top-tier exchanges. However, with the rise of AI Agents and shifts in the market, the previous valuation system based on exchange listings for high-market-cap MEME coins has become obsolete. Now, valuation expectations are no longer about which exchanges a project will be listed on but rather what kind of ecosystem it can develop. For projects that already have an established ecosystem, their valuation can be determined based on the contribution of their ecosystem. For standalone or “wild” projects without an established system, the key factor for valuation is whether they can surpass the $100 million market cap. Below this threshold, their success relies more on marketing, community support, and early-stage funding.

Four Commonalities: From Cultural Impact 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 carried an inherent spirit of rebellion against traditional finance. Many DeFi projects provided genuine financial functionality while simultaneously using humorous and playful naming conventions (such as various food-themed projects) to capture attention. Initially, the market often viewed DeFi more as a liquidity game than a purely financial tool. However, this cultural break from the “seriousness” of traditional finance unexpectedly inspired reflection and discussion about the conventional financial system, quickly amassing significant participation from developers and users.

Similarly, the adoption of crypto AI has leveraged the cultural power of memes, much like the early DeFi narrative. The rise of AI Agents is not only driven by technological innovation and practical applications but also by the use of humorous and playful memes to quickly rally sentiment. This approach has sparked interest and engagement from on-chain users and drawn new groups, such as external developers and researchers, into the ecosystem in a more relaxed and interactive manner.

Technical Foundation

Ethereum’s flexibility, supported by smart contracts, token standards, and its developer ecosystem, has provided a robust technical foundation for the rise of DeFi. This flexibility not only allows developers to innovate financial products based on specific needs but also offers users a fair and transparent financial platform through its decentralized and open-source mechanisms.

The emergence and popularity of crypto AI narratives in this cycle have similarly stemmed from explosive advancements in AI technology, particularly the advent of large language models such as ChatGPT. These developments have highlighted the immense potential of combining artificial intelligence with blockchain technology. Moreover, the rapid improvement in the capabilities of AI models has empowered more intelligent on-chain applications, including trading strategies, market predictions, smart contract automation, and data analysis. This fusion offers a fresh perspective and drive for innovation in crypto technology.

Barriers to Entry

Compared to traditional financial systems, which require complex procedures, bank accounts, and credit checks, DeFi offers an intermediary-free, open, and transparent financial service system via blockchain and smart contracts. With just a crypto wallet and a small amount of crypto assets, users can freely engage in lending, trading, liquidity provision, and other activities, regardless of their location or economic background.

In comparison to traditional crypto tools and platforms, AI Agents provide a more intelligent and automated operational approach, allowing users to easily get started without needing to deeply understand complex technical details or possess specialized trading knowledge and experience. High-quality AI Agent projects also lower participation barriers and simplify operational pathways, breaking down the high thresholds traditionally imposed by venture capital (VC) and centralized exchanges (CEX). This not only opens up more opportunities for individual investors to participate but also provides developers and project teams with a more cost-effective and decentralized channel for innovation.

Moreover, by integrating MEME culture, AI Agents further reduce the cognitive barrier to understanding crypto AI technology, particularly for users without technical backgrounds. This breaks away from the perception of technical projects as being overly complex, making participation in this field more diverse, accessible, and entertaining.

Capital Efficiency

In the DeFi narrative, capital efficiency has always been a core driving force. DeFi leverages decentralized platforms, smart contracts, and automated mechanisms to significantly enhance the efficiency of capital utilization. These platforms attract substantial institutional and retail investments by offering high APY and capital returns. Without intermediaries or traditional banking processes, funds can flow faster and achieve higher returns, greatly improving overall market efficiency.

AI Agents, through automated and intelligent processing enabled by artificial intelligence technology, help users achieve even more efficient capital operations in the crypto market. Unlike traditional manual intervention, AI Agents can automatically execute tasks such as trading, asset management, and risk control based on real-time market data. This allows users to seize market opportunities, avoid emotional decisions, and minimize human errors, thereby significantly enhancing capital efficiency. Moreover, AI Agent projects utilize on-chain execution mechanisms to create opportunities for broader redistribution of benefits among users. This enables participants to enjoy the growth dividends of these projects with low barriers to entry.

Four Major Differences: From Technical Drivers to User Participation

While DeFi and crypto AI share similar motivations and potential for driving innovation in the crypto market, they exhibit significant differences across several key dimensions. These differences are not only reflected in the complexity of their technologies and the breadth of their applications but also in their market drivers and modes of user participation.

Scope of Application

DeFi primarily focuses on on-chain finance, with innovations concentrated on creating financial tools such as decentralized exchanges (DEXs), automated market makers (AMMs), and lending protocols. These innovations, while disruptive to traditional financial systems, have relatively focused and clear application scenarios. In contrast, the scope of crypto AI is much broader, encompassing on-chain finance, AI-generated content (AIGC), NFTs, smart contract automation, data analysis, and more. While the complexity of integrating technologies is higher for crypto AI, this allows it to address a wider range of markets and user needs. As large AI models continue to advance, they are expected to drive more cross-disciplinary innovations and applications.

Technical Drivers

DeFi’s technological innovations are primarily based on blockchain and smart contracts, driving the evolution of the decentralized financial ecosystem. Its core drivers include decentralized trading, permissionless financial innovation, and the automated execution of smart contracts. In contrast, the crypto AI narrative is driven by more complex and diverse technological forces, spanning financial areas like trading strategies and risk management, as well as broader applications such as content generation, personalized recommendations, and data analysis.

User Base

DeFi’s primary user base consists of on-chain native users, who typically have strong experience with financial operations. Crypto AI, on the other hand, not only attracts crypto natives but also engages a wide range of non-technical users, including content creators, developers, and technical researchers. This broader accessibility gives crypto AI a significant advantage in terms of adoption and market reach.

Market Value Drivers

The market value of DeFi projects is primarily determined by factors such as total value locked (TVL), exchange listings, and liquidity. It heavily relies on the frequency of platform tool usage and user participation, with market operations being relatively straightforward and transparent. In comparison, the valuation logic for crypto AI projects is more complex and carries higher uncertainty. It depends not only on the depth and breadth of technological innovation but also on the ecosystem’s influence and the potential development of practical application scenarios. This means the sustainability of the crypto AI narrative hinges on the combination of technological advancements and user demand, presenting both greater risks and higher potential rewards.

Disclaimer:

1. This article is reproduced from [PANews)]. Forward the Original title: The market value of AI Agent far exceeds that of the DeFi Summer period, or will it replicate the DeFi-style market trend? The copyright belongs to the original author [Nancy]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
2. Disclaimer: The views and opinions expressed in this article represent only the author’s personal views and do not constitute any investment advice.
3. The Gate Learn team translated the article into other languages. Copying, distributing, or plagiarizing the translated articles is prohibited unless mentioned.