A new subset of tokens comes from AI agents with DeFi capabilities. The category is still relatively small, but recently saw a spike in volumes and overall market capitalization.
AI agents try to differentiate themselves with specific capabilities. Most early agents focused on personality, content, or entertainment. A few provided utility, by aggregating data or performing analyzes along the chain. The most attractive feature of DeFAI is its potential for personalized portfolio management and automated income.
AI agents with trading capabilities are also shortened to DeFAI tokens. The collection is relatively small, with a total market cap still under $1 billion. However, in recent days we have seen the beginning of livelier trading and a potential breakout for the sector. The DeFAI sector could follow the scenario DeScia sector that grew its market capitalization by 500% within weeks.
Only about 1% of DeFAI tokens have made net gains, with most of them in various correction levels. For those tokens, a reversal could spur a new selection of AI assets. For now, the sector remains subdued as AI agent platforms are still the bigger and more liquid story.
The appearance of DeFAI follows the saturation of the market by answer bots and an influx of unwanted content. Trading or profit maximizing agents strive to bring utility and real use cases to what otherwise seems like another meme market.
The FAI trend taps Solana, basic chains
Despite Ethereum being the leading hub for DeFi, AI agents with trading capabilities have chosen Solana and Base. These two chains offer smaller costs in testing agent behavior.
Until now, there is no standard for how AI agents can communicate and take safe, verifiable actions without human supervision. AI agents have only owned tokens, usually donated by other projects.
Some DeFAI projects focus on building an abstraction layer to receive human instructions. The leaders in that area are also among the top tokens, including GRIFFAIN, Hey Anon (ANON), and ORBIT (GRIFT).
DeFAI tokens increased their volumes, signaling a possible breakthrough for a new category of assets. | Source: Coingecko
Autonomous trading agents are just emerging, with the ambitious goal of monitoring the market much faster than a human, and then implementing a trading strategy to achieve the prompt’s objectives. Projects like Almanac are trying to find the tools that will allow AI agents to access decentralized trading or other forms of DeFi.
Can DeFAI outperform the market?
In the initial stages, all DeFAI tokens can be extremely volatile. The entire category followed Thursday’s market dip, which wiped out some of the valuations. The small number of tokens in that category is one of the factors for the low valuation.
The category is expected to gain more influence and reach a higher valuation in the coming months. AI agents as a whole peaked above $17 billion in total capitalization, later dropping to $13.4 billion.
Tokens like GRIFFAIN and ANON have risen previously, boosted by whale activity. Tokens such as NEUR and QUAIN also invite early investments. The emergence of a new sector could bring more retailers out of FOMO, expanding the category as a whole.
The Griffain project has the most ambitious approach, starting with swaps based on natural language input. The agent may also be able to independently launch tokens on Pump.fun, with the potential to increase human-driven traffic. An AI trading agent may be able to perform actions such as identifying whale portfolios, monitoring social media, and noticing trends.
ANON expands the potential actions with DeFi, including lending and staking. DeFAI agents may also be able to act as liquidity providers and manage pools and returns. All DeFi actions are potential tools for the agents, including bridging, staking, looking for the best yield, and more. Some AI agent projects are also expanding into the NFT market, unleashing faster analytics capabilities. DeFAI projects also include a social media module for following trends and posting answers, data or transactions.
AI agents can contribute to bot-driven traffic on multiple chains. Overall, automated trading is one of the most important elements of Solana, where speed is essential. The issue of agent trading raises both technical and regulatory concerns.
