Forward the original title: Analysis of ai16z and Virtuals’ Development Status: Holding Over Half of the AI Agent Market Share, Both Facing Challenges of Ecosystem Centralization

With the continuous improvement of infrastructure and the gradual implementation of application scenarios, the crypto AI Agent ecosystem is thriving, presenting a new market development trajectory. Liquidity and user participation are steadily increasing. In this AI Agent boom, ai16z and Virtuals Protocol are undoubtedly the two most dominant and representative projects, with their ecosystems attracting significant capital eager to capitalize on the opportunity.

ai16z and Virtuals Lead the AI Agent Market, Contributing Over Half of the Market Share

Although the AI Agent ecosystem has rapidly emerged in the crypto market, attracting significant attention and capital, its market structure remains relatively simple, heavily reliant on a few leading projects.

According to the latest data from Cookie.fun, as of December 30, the overall market capitalization of AI Agents has reached $11.68 billion, with a 39.1% increase over the past 7 days. This growth trend indicates the rapid expansion of the AI Agent ecosystem in the crypto market.

From an ecosystem scale perspective, the crypto AI Agent space clearly exhibits a head-effect, primarily dominated by Virtuals and ai16z. Specifically, Virtuals’ ecosystem market capitalization has reached $5.01 billion, while ai16z stands at $1.63 billion, together accounting for 56.8% of the AI Agent market share. This indicates that the growth and development of AI Agents currently depend heavily on the efforts of these two leading projects.

Additionally, in terms of types, Virtuals’ market value surpasses that of customized AI Agents, which stands at $4.67 billion, with the combined market value of other categories reaching $1.8 billion.

In terms of on-chain distribution, Base and Solana are the two primary battlegrounds for AI Agents. The market capitalization of AI Agents on Base is approximately $5.76 billion, while that on Solana is $5.47 billion. Together, they account for 96.1% of the overall market, with projects on other chains totaling only $920 million in market value, further indicating that the AI Agent ecosystem is still in its infancy.

Although Base and Solana are comparable in terms of AI Agent market scale, their ecosystem compositions differ significantly. Virtuals dominates the Base ecosystem, with 86.9% of its projects originating from this ecosystem. In contrast, ai16z captures only about one-third of Solana’s market share, suggesting that Solana’s AI Agent ecosystem is more diverse and varied compared to Base.

Different Ecosystem Development Paths with Clear Market Concentration

As Virtuals and ai16z gain popularity, their ecosystem projects have become the focal point for market investors’ attention and bets.

According to data from daos.fun, as of December 30, ai16z’s net asset value (NAV) is approximately $23.355 million, spanning over 1,400 tokens. Among these, only three tokens have a market capitalization exceeding $1 million—ELIZA, fxn, and degenai—which collectively account for 84.3% of the total NAV. Tokens with market values between $100,000 and $1 million number six, while the remaining tokens all have market capitalizations below $100,000. This distribution indicates that ai16z’s token portfolio is highly concentrated, with a few high-value tokens dominating the overall asset scale, while most tokens exhibit dispersed market values, reflecting a state of significant fragmentation within the ecosystem.

Compared to ai16z, Virtuals’ ecosystem projects are of relatively higher quality. Recently, Virtuals has garnered attention for surpassing the market capitalization of the prominent AI project Bittensor (TAO). However, the Virtuals ecosystem also demonstrates a degree of structural imbalance.

According to Virtuals’ official website, as of December 30, the ecosystem comprises approximately 510 projects. Of these, four projects—AIXBT, G.A.M.E, Luna, and VaderAI—have market capitalizations exceeding $100 million, accounting for 19.2% of the entire ecosystem. Projects with market capitalizations between $1 million and $100 million total 99, while around 60% of projects have market values below $100,000. Although Virtuals’ ecosystem enjoys greater market recognition overall, it also faces issues with market concentration.

Regarding the differing development paths of AI Agents for ai16z and Virtuals, Web3 independent researcher Haotian noted in a previous article that ai16z takes a more open-source approach, resembling an “Android-style” developer ecosystem alliance. However, due to the lack of tokenomics for ai16z’s tokens, their ecosystem lacks a robust evaluation model, preventing short-term synergy. This issue, however, is expected to be resolved with a systematic tokenomics framework. Each member of ai16z’s ecosystem demonstrates unique capabilities, with its future momentum relying on the strength of its developer community. Founder Shaw’s primary goal is to lead the scattered ecosystem towards a technology-driven, open-source community growth flywheel.In a recent interview with PANews, Shaw revealed that ai16z plans to release a new tokenomics proposal around January 1, 2025, which will include an LP pairing mechanism and DeFi functionality integration.

Comparison Between Virtuals and ai16z, Source: @0xgangWhat

In comparison, Virtuals adopts a more closed approach. Haotian pointed out that Virtuals follows an “Apple-style” ecosystem expansion strategy, resembling an “AI Agent star-making factory.” Virtuals established a comprehensive tokenomics framework early on, requiring users to stake VIRTUAL tokens to create AI Agents and to consume VIRTUAL tokens to purchase new AI Agent tokens. As more AI Agents are issued on Virtuals, the demand for VIRTUAL tokens increases, naturally generating a positive growth flywheel effect.

However, Virtuals’ focus on being an asset issuance platform and providing a standardized AI Agent framework leads to significant homogenization among AI Agents on the platform. This emphasis on asset issuance over technological ecosystem breakthroughs highlights the inherent limitations of a closed ecosystem like Virtuals.

From Pure MEME to On-Chain Applications: AI Agents Revolutionize Market Operations

The hype around Virtuals, ai16z, and similar projects reflects growing attention to AI Agents and represents an important evolution in the development of MEMEs.

“AI will be the main theme driving technological and productivity advancements over the next 20 years. It can integrate into all categories of Crypto, including DeFi, GameFi, NFT, and DeSci. During its rapid growth phase, it will bring numerous new applications and technologies, all of which can be applied in Crypto,” said crypto KOL 0xWizard. He believes that new AI-integrated assets could recreate on-chain asset market capitalization or even redefine the total crypto market value.

“Starting from pure MEMEs like GOAT, to chat-enabled AI Agents, to on-chain funds like ai16z, and then to new asset issuance platforms like Virtuals and Spore, each step brings us closer to practical applications. The essence of this on-chain trend lies in how these ‘application-driven projects’ bypass exchanges and VCs, directly issuing new assets on-chain to redistribute interests. Project teams no longer need to court VCs, compete for resources, or pay listing fees to exchanges—they can simply launch on-chain to test the market’s response,” noted crypto KOL @Michael_Liu93.

Haotian also observed that the environment has changed, as has the logic for market value capture, mainly reflected in the following points: (1) moving from stacking infrastructure unrelated to market demands to validating market needs through AI Agent applications; (2) transitioning from VC funding rounds, which squeezed secondary market profit margins, to building open-source Public Goods projects that directly engage the secondary market, while allowing AI Agents to autonomously manage assets, offering greater potential for projects; (3) reducing operational pressures caused by airdrops aimed at acquiring early users and traffic, by adopting MEME-driven secondary launches better suited for sustainable tokenomics (e.g., LP fees, transaction taxes, and reserve releases); (4) breaking the dependency on centralized exchange (CEX) listings, leading to a decentralized exchange (DEX)-dominated landscape where grassroots projects have higher chances of succeeding; (5) establishing new market operation rules, as projects that fail to deeply engage with their communities and remain at the forefront of product development will find it difficult to thrive in the market and ecosystem.

Disclaimer:

1. This article is reprinted from [PANews)]. Forward the original title: Analysis of ai16z and Virtuals’ Development Status: Holding Over Half of the AI Agent Market Share, Both Facing Challenges of Ecosystem Centralization. All copyrights belong 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. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute investment advice.
3. The Gate Learn team translated the article into other languages. Copying, distributing, or plagiarizing the translated articles is prohibited unless mentioned.