Bull Market Scenario Initiated?
Light shines at the end of the tunnel. After six months of volatility, 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 bullish market sentiment is supported by the following reasons:
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. Base and Solana’s Total Value Locked (TVL), trading volume, and active addresses have been consistently increasing.
Stripe’s acquisition of stablecoin payment platform Bridge is underestimated in terms of its long-term benefits for cryptocurrencies.
The emergence of AI x Meme represents a new field for this round of retail market sentiment, similar to NFTs.
Sentiments are improving, and the nostalgic atmosphere is returning.
Now is the time to overcome the trauma of the bear market. With so many interesting things happening, I want to be at the forefront of the trend.
In the market, protocols and narratives are intertwined, making it difficult to distinguish signals from noise. Here are some areas I will be focusing on in the coming months:
1. AI Agent x Memecoin: The Revival of Cults
Memecoins have always been an important part of the cryptocurrency market.
Their working principle is simple, aiming to gain promotion through viral spread. As memes are “static,” their popularity relies on the community.
But what if memes could upgrade and evolve? What if memes could self-promote? This is where AI agents come in.
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 content related to technical philosophy, but it has a special affection for “GOATSE OF GNOSIS,” a pseudo-religion based on an ancient internet meme.
GOAT was created by an anonymous individual who airdropped some tokens to the creator of Truth Terminal.
The next scene is Truth Terminal vigorously promoting GOAT on Twitter. Will AI launch its “own” memecoin? It has good “memecoin fundamentals”: high liquidity and fair distribution, without the team risks associated with VCs or memecoin “conspiracy groups.”
The momentum of AI memecoin can continue for the following reasons:
Truth Terminal has over 100,000 followers, and it continues to grow. Each tweet from this account has tremendous influence. It tweets every hour, making it an unstoppable KOL.
Currently, no AI memecoin has been listed on top-tier CEXs. GOAT’s daily trading volume is approximately $374 million, indicating it has caught the attention of level one CEXs. (Note: GOAT contract trading has been listed on Binance)
AI is continuously developing, and it will continue to learn and grow.
AI memecoin resides 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 leading AI agent, GOAT. But stay calm, as there are other potential explorers emerging, such as Fartcoin and Gnon.
It is worth noting that there will be a plethora of scams trying to take advantage of this wave. Their token distribution is nowhere near as good as GOAT’s, and I am sure many of these “AI agents” behind them are humans playing an AI role-playing game.
NFTs garnered the attention of retail investors as early as 2021. AI agents x Memes have the same potential, and reaching a market value of $1 billion for GOAT is not difficult.
Lastly, please remember that these are Memecoins. The faster they rise, the faster they fall. So, make sure to secure your profits.
2. Solana: Riding the Wave of Memecoins and AI
“Do you remember when the first millionaires during the gold rush were not the gold diggers, but the ones selling shovels and pickaxes?”
I love Ethereum, but ignoring the progress and adoption of Solana would be foolish.
Solana is currently riding a wave driven by Memecoins and AI tokens. With the surge in Memecoin prices and trading volume, Solana has once again become the focus of attention.
Solana has seized the opportunity by leveraging Memecoins and AI tokens:
Prominent Memecoins like SLOP, GNON, Shegen, and FART are gaining attention, with GOAT leading the way as an AI token.
As of the fourth quarter of 2024, Solana creates an average of 96,010 tokens per day, with Pump.fun creating approximately 9,000 tokens per day, accounting for about 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. However, 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 Value Locked (TVL) of $1.65 billion.
Pump.fun. Solana’s Memecoin factory, which may have future airdrops. Their new internal trading tool is called Pump Advanced. They have also launched a video tokenization platform, allowing users to tokenize videos and make them tradable assets on the platform.
With Solana’s continuous innovation and attraction of different projects, it has become a strong competitor to Ethereum. The combination of Memecoins and AI tokens not only diversifies its product offerings but also enhances community engagement, making Solana a choice for new retail audiences.
3. AI Tokens
While AI Memes are currently capturing 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, connecting to the $3 trillion 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, aiming for over $10 million in quarterly revenue.
Institutional support: In September, two major cryptocurrency VCs increased their positions.
The user mental share of AI x Meme narratives.
AI’s interesting exposure strategy may be to hold: GOAT (high risk, high potential) and TAO (infrastructure). Both are worth paying attention to and have the support of mature communities.
AI agents are now making breakthroughs. One protocol I am particularly interested in is Virtuals Protocol, which some describe 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 co-owning entertainment robots deployed on platforms like TikTok, Roblox, and others. How exciting!
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 undergoing a transformation, rebranding itself as Sonic Chain, focusing on speed and scalability. With Andre Cronje’s return, expectations are high.
What are the new features of Sonic? Sonic Chain promises faster transaction speeds, up to 10,000 TPS. This is not enough to compete with high-performance blockchains, but it is sufficient to position itself as a contender. The improved token economics make it one of the most anticipated updates for the fourth quarter.
Some catalysts for Sonic include:
With Pendle’s support, Sonic will have liquidity staking capabilities.
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.
In the last quarter, Sonic Arcade’s TVL grew by 20%.
Finally, money talks. Sonic has confirmed an airdrop worth approximately $132 million, and on-chain activities are growing.
Andre’s involvement, large-scale airdrops, upcoming DeFi tools, and changes in token economics could 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 chains.
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 “disappearance” game before. His significant attention to Sonic poses a key person risk.
There haven’t been many innovative DApps launched on Fantom in recent years. Their most popular DApps are still Beethoven X and SpookySwap.
Sonic will have 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 deserve your attention.
5. Aerodrome: Base’s Secret Weapon
The rise of Base is evident, and by TVL, it is recognized as the largest L2 by Ethereum.
Why is that? Aerodrome. Aerodrome’s TVL now exceeds $1.36 billion, making it a top participant in Base’s DeFi ecosystem.
This is mainly attributed to its 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%, exceeding 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:
Daily transaction count:
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 evident that Base’s current development momentum is strong. 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 participation from traditional finance.
GameFi and NFTs: Base’s scalability makes it a perfect choice for new gaming platforms or NFT markets, leveraging these growing crypto narratives.
Developer incentives: Base supported by Coinbase may promote growth through developer incentive programs such as hackathons and funding, attracting more talent to the ecosystem.
Aerodrome has created a powerful DeFi ecosystem on Base, attracting both retail and institutional participants. Alongside 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: Do Not Underestimate Established Companies
Do you remember when Aave and Uniswap dominated DeFi? It was an era full of innovation and endless possibilities. Now, they are ambitiously making a comeback.
Aave plans to bring its native stablecoin GHO to new ecosystems like Base and Avalanche.
As of early 2024, GHO’s market cap is $35 million, growing 350% in the past ten months and currently valued at $160.1 million.
Aave protocol’s revenue growth.
Data source: Token Terminal
Aave’s growth indicators:
Revenue of $50 million year-to-date, the highest among all lending protocols.
Circulating supply of stablecoin GHO reaching $160 million.
ETH TVL continuously growing, currently at 5.1 million ETH (over $11 billion), close to its previous all-time high.
Grayscale announced the launch of Aave Trust.
GHO is currently competing with top 15 stablecoins, attracting institutional investor interest.
As for Uniswap, it recently announced the launch of its own blockchain: Unichain.
We have previously discussed the updates to the Uniswap v4 ecosystem and the reaction to the release of Unichain. Here are the updated strategic moves for Uniswap:
With the launch of Unichain, a large-scale liquidity migration is expected.
One of Unichain’s main goals is to help users reduce gas costs by approximately 95%.
The launch of Unichain may introduce new staking mechanisms.
The introduction of revenue-sharing models may boost the UNI token price.
The number of wallets holding UNI tokens exceeds 400,000.
User mental share of DeFi peaked in August.
These moves by Aave with GHO and Uniswap with Unichain could revitalize DeFi 1.0, making these giants once again the focus of attention. These initiatives could redefine the dynamics of stablecoins and reshape the DEX landscape.
Riding the Tide
These past few years in the cryptocurrency market have been extremely challenging. Countless Ponzi schemes and the failures of Terra and FTX have left us in a prolonged bear market. The entire industry has been focused on building more Ethereum Layer 2 solutions. Now, I can sense the tide is turning.
We also need to change with it: stop fooling around, overcome the trauma of the bear market, and stand strong at the forefront.
