New narrative - DeFAI
AI is taking over!
Happy New Year my esteemed subscribers and welcome to 2025. It’s the 74th edition of the Gems Corner and today, we will be looking at a hot new narrative - DeFAI.
The year 2024 was an interesting year for the Crypto industry as we saw new narratives take center stage and many other surprises. DeSci, AI Agents, Prediction Market, and Stablecoins were among the top narratives on the list, gaining the most mindshares.
BTC pulled off an interesting YoY increase but wasn’t among the top 10 gainers of 2024. $VIRTUAL, the native token of Virtuals Protocol, topped the list as the highest gainer with a 23,079% increase in YoY price. Who would have thought?
As the year kicks off, we are seeing the rise of a new narrative, an offspring of the AI wave known as DeFAI (DeFi + AI). DeFAI is the fusion of decentralized finance and artificial intelligence. It’s birthing an era of DeFi dApps powered by AI Agents and abstraction layers.
What is DeFAI?
DeFAI marries the dynamism of decentralized finance with the power of artificial intelligence. It promises to optimize financial strategies, enhance user experiences, and enable smarter decision-making, all within the decentralized ethos of Web3. By leveraging AI-driven models, DeFAI projects aim to:
Automate Complex Financial Processes: Imagine real-time portfolio adjustments based on market sentiment or algorithmic strategies that outperform traditional yield farming.
Enhance Risk Management: AI can analyze market conditions, flag potential risks, and recommend mitigation strategies.
Personalize Financial Tools: Tailored investment strategies based on user preferences and risk appetites.
As of writing, the market capitalization of DeFAI stands at $800M+, while AI Agents is at $15.75B - showing that it’s still very early. The market is catching up, and soon venture firms will be investing heavily in DeFAI projects to drive growth and mindshare. Strategic positioning is key.
DeFAI projects currently have the second-largest mindshare and are hitting good volumes and gains. Either you bet on the winners or the emerging players to maximize gains. 2025 is gonna be a movie - lock in.
Image of the Day
Alpha Bites and Tweets
Pre-register for Sentient - link
Sign up for Wayfinder for a chance to get $PROMPT tokens - link
Swap or deposit on Perana to get Petals (Possible drop) - link
That’s a wrap.
Thanks for reading!
Till next Friday,
Viktor DeFi.
PS: I’d love to hear your feedback and comments.