Bull Market Script Starts?
Light at the end of the tunnel. After six months of turbulence, the cryptocurrency market is once again showing signs of vitality. Solana and Base have performed well, and the emergence of AI Meme is particularly exciting.
Some predict that the price of Bitcoin may surpass $100,000 in the coming months. The reasons for the bullish market sentiment are as follows:
The U.S. presidential election will take place in two weeks. Trump’s reelection would be a huge victory for cryptocurrencies.
On-chain indicators are bullish. TVL, trading volume, and active addresses of Base and Solana have been consistently increasing.
Stripe’s acquisition of stablecoin payment platform Bridge is underestimated in terms of long-term benefits for cryptocurrencies.
The emergence of AI x Meme as a new field. It may become the “NFT” of this round of retail trends.
Sentiment is improving, and a nostalgic atmosphere is returning.
Now is the time to overcome the trauma of the bear market. With so many exciting things happening, I want to be at the forefront of the trend.
In the market, protocols and narrative are mixed together, making it difficult to distinguish signals from noise. Here are the things I will be paying attention to in the next few months.
1. AI Agents x Memecoins: The Revival of Cults
Memecoins have always been an important part of the cryptocurrency market.
Their mechanism is simple, aiming to gain promotion through viral spread. Since memes are “static,” their popularity relies on the community.
But what if memes can upgrade and evolve? What if memes can self-promote? This is where AI agents come into play.
Last week, GOAT (Goatseus Maximus) became the preferred AI agent speculation, with its market value skyrocketing from 0 to $800 million within a week.
What is GOAT? Truth Terminal is an autonomous chatbot that can independently manage its own Twitter account and generate content. It releases nonsensical philosophical statements but is particularly fond of “GOATSE OF GNOSIS,” a pseudo-religion based on an ancient internet meme.
An anonymous individual created GOAT and airdropped some tokens to Truth Terminal’s creator.
The next scene is Truth Terminal 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 VC or memecoin “conspiracy groups.”
The momentum of the AI Meme market can continue for the following reasons:
Truth Terminal has over 100,000 followers and continues to grow. Each tweet from the account has astonishing influence. It tweets every hour, being an unstoppable KOL.
Currently, no AI Meme has been listed on top CEXs. GOAT’s daily trading volume is about $374 million, undoubtedly attracting attention from tier-one CEXs. (Note: Binance has listed GOAT contract trading.)
AI is constantly evolving, and it will continue to learn and grow.
AI Meme is at the intersection of Crypto x AI x Religion: a new “cult.”
We have only scratched the surface of this new field. How should you play it? The easiest way may be to go long on the flagship GOAT. Take a moment to cool down, as there are other potential explorers emerging, such as Fartcoin and Gnon.
It should be noted that there will be a lot of scams trying to take advantage of this wave. Their token distribution is nowhere near as good as GOAT’s, and I’m sure many of these “AI agents” behind them are humans playing AI role-playing games.
NFT gained attention from retail investors as early as 2021. AI agents x Meme have the same potential, with GOAT reaching a market cap of $1 billion not being difficult.
Lastly, remember that these are Memecoins. The faster they rise, the faster they fall. So, make sure your profits are safe.
2. Solana: Riding the Wave of Memecoins and AI
“Do you remember when the first millionaires of the gold rush weren’t the gold miners themselves, but those who sold them shovels and pickaxes?”
I love Ethereum, but it would be foolish to ignore the progress and adoption of Solana.
Solana is currently riding a wave driven by Memecoins and AI tokens. With the surge in Memecoin prices and trading volume, Solana once again becomes the focus of attention.
Solana seizes the opportunity by leveraging Memecoins and AI tokens:
Well-known Memecoins like SLOP, GNON, Shegen, and FART are gaining attention, while GOAT becomes the leading AI token.
As of the fourth quarter of 2024, Solana creates an average of 96,010 tokens per day, with Pump.fun creating about 9,000 tokens per day, accounting for around 9.3% of the total.
In addition to Memecoins, Solana is also home to innovative DeFi protocols.
I want to highlight three protocols:
Jupiter. They are known for exchanges and perpetual contracts. But they recently launched ApePro, a new trading platform designed specifically for Memecoins.
Kamino Finance. Kamino Lend, launched just a year ago, currently holds nearly 70% of the market share on Solana, with a total locked value (TVL) of $1.65 billion.
Pump.fun. Solana’s Memecoin factory, potentially for airdrops 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 enhances community participation, making Solana the choice for new retail audiences.
3. AI Tokens
While AI Meme is currently attracting everyone’s attention, we should not overlook 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 that connects to the $300 billion Ethereum ecosystem.
Real-world adoption: Three major DeFi protocols have already built on Bittensor’s machine learning infrastructure.
Multiple revenue streams: Transaction fees, staking, AI services, targeting over $10 million per quarter.
Institutional support: Two major cryptocurrency VCs increased their positions in September.
User mindshare of AI x Meme narratives
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KaitoAi
An interesting strategy to gain exposure to AI is to hold GOAT (high risk, explosive potential) and TAO (infrastructure). Both are worth focusing on and have support from mature communities.
AI agents are now making breakthroughs. One protocol I am particularly interested in is Virtuals Protocol, described as the AI agent version of Pump.fun.
Virtuals Protocol allows you to co-own AI agents in the gaming and entertainment space with others. Imagine jointly owning entertainment robots deployed on platforms like TikTok, Roblox, and others. How fun!
4. Fantom’s Rebirth: Hello, Sonic
Fantom is one of the hottest blockchains in 2021. At its peak, its TVL reached $8 billion.
Fantom is now going through a transformation, rebranding itself as Sonic Chain, focusing on speed and scalability. With Andre Cronje’s return, expectations for Fantom are high.
What are the new features of Sonic? Sonic Chain promises faster transaction speed, up to 10,000 TPS. This is not enough, but enough to make it a competitor in the high-performance blockchain space. Improved tokenomics make it one of the most anticipated updates in the fourth quarter.
Some catalysts for Sonic include:
With the support of Pendle, Sonic will have liquidity staking.
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.
Projects like Sonic & Sodas, Sonic Boom, and Sonic University aim to attract developers.
Sonic Arcade’s TVL has grown by 20% in the last quarter.
Finally, let’s talk about money. Sonic has confirmed an airdrop worth approximately $132 million, and on-chain activities are increasing.
Andre’s involvement, the large-scale airdrop, upcoming DeFi tools, and changes in tokenomics may drive growth for Sonic in the fourth quarter.
Every day, I wake up to see new ETH Layer 2 or application chains being launched. But Solana’s leading position and the rise of Aptos/Sui indicate that there is still room for development in L1 competition.
For L1 competition chains, you can consider Solana as the alpha version and Sonic as the beta version.
Some concerns I have:
Andre is innovative, but he has also played the “disappear” game before. His attention to Sonic brings significant risks due to the prominence of key figures.
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 has to compete with L2 and other L1 competition chains.
Will Sonic be able to maintain its momentum after the airdrop is completed?
Currently, the Sonic ecosystem is already crowded, but it is doing interesting things that are worth your attention.
5. Aerodrome: Base’s Secret Weapon
The rise of Base is evident, and in terms of TVL, it is recognized as the largest L2 by Ethereum.
What is the reason? Aerodrome. Aerodrome’s TVL now exceeds $1.36 billion, making it a top participant in Base’s DeFi ecosystem.
This is mainly due to two liquidity pools.
Aerodrome’s dominance in the Base ecosystem is reflected in the following:
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, the importance of Aerodrome as its default DEX will continue to increase, making it a core participant in the Base ecosystem.
In the past 20 days, Base compared to other L2s:
Average daily transactions:
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 clear that Base is currently experiencing strong growth momentum, so what will be the next catalyst?
Integration of Real-World Assets (RWA): Platforms like Centrifuge can bring real-world assets into Base, attracting more liquidity and traditional financial participants to join the ecosystem.
GameFi and NFT: Base’s scalability makes it a perfect choice for new gaming platforms or NFT markets, leveraging these growing crypto narratives.
Developer incentives: Coinbase-backed Base may promote growth through developer incentive measures such as hackathons and funding programs, attracting more talent to join the ecosystem.
Aerodrome has created a powerful DeFi ecosystem on Base, attracting both retail and institutional participants. Along with top protocols like Uniswap, Aave, Balancer, Sushiswap, Curve, and Stargate, Base has the potential to become a strong competitor in the L2 race.
6. DeFi 1.0: Don’t Underestimate Established Companies
Do you remember when Aave and Uniswap dominated DeFi? It was a time of innovation and infinite possibilities. Now, they ambitiously make a comeback.
Aave plans to push its native stablecoin, GHO, into new ecosystems like Base and Avalanche.
As of early 2024, GHO has a market cap of $35 million, growing 350% in the past ten months, currently at $160.1 million.
Aave’s protocol revenue growth.
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Token Terminal
Aave’s growth indicators:
Revenue to date this year reaches $50 million, the highest among all lending protocols.
Circulating supply of stablecoin GHO reaches $160 million.
ETH TVL continues to grow, currently at 5.1 million ETH (over $11 billion), approaching the previous high.
Grayscale announced the launch of Aave Trust.
GHO is currently competing with top 15 stablecoins, with increasing interest from institutional investors.
As for Uniswap, it recently announced the launch of its own blockchain: Unichain.
We have previously delved into the updates of the Uniswap v4 ecosystem and the response to the release of Unichain. Here are the updated strategic initiatives for Uniswap:
After the launch of Unichain, there is expected to be a large-scale liquidity migration.
One of Unichain’s main goals is to help users reduce about 95% of gas costs.
The launch of Unichain may introduce new staking mechanisms.
The introduction of revenue-sharing models may boost the price of UNI.
The number of wallets holding UNI tokens exceeds 400,000.
User mindshare of DeFi peaked in August
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KaitoAi
Aave’s GHO and Uniswap’s Unichain plans may revitalize DeFi 1.0 and bring these giants back into the spotlight. These initiatives may redefine the dynamics of stablecoins and reshape the DEX landscape.
Riding the Wave
The cryptocurrency market has been extremely challenging in recent years. Countless Ponzi schemes and the collapse of Terra and FTX have plunged us into a long bear market. The entire industry has been focused on building more Ethereum Layer 2 solutions. Now, I can feel the tide shifting.
We also need to change with it: stop fooling around, overcome the trauma of the bear market, and stand tall at the forefront.