Interpreting the development status of ai16z and Virtuals: occupying more than half of the AI Agent market share, both facing challenges of ecological centralization

Written by: Nancy, PANews

With the increasingly perfect infrastructure and the gradual landing of application scenarios, the encrypted AI Agent ecosystem is booming, presenting a new market development trajectory, and liquidity and user participation are constantly rising. In this wave of AI Agent boom, ai16z and Virtuals Protocol are undoubtedly the two most powerful representative projects, and their ecosystems have attracted the active mining of various capital routes.

a16z and Virtuals dominate the AI Agent market, contributing more than half of the market share.

Although the AI Agent ecosystem is rapidly emerging in the cryptocurrency market, attracting a lot of attention and capital, its market structure still appears to be single, mainly relying on the promotion of a few leading projects.

According to the latest data from Cookie.fun, as of December 30th, the overall market value of AI Agent has reached 11.68 billion US dollars, with a growth rate of nearly 39.1% in the past 7 days. This growth trend indicates the rapid growth of the AI Agent ecosystem in the cryptocurrency market.

In terms of ecosystem size, the entire encrypted AI Agent exhibits a clear head effect, mainly dominated by Virtuals and ai16z. Specifically, the ecological market value of Virtuals has reached 50.1 billion U.S. dollars, ai16z is 16.3 billion U.S. dollars, and the two together account for 56.8% of the market share of the AI Agent. This also means that the current growth and development of AI Agent rely more on the construction of these two leading projects.

At the same time, in terms of category, the market value of Virtuals exceeds that of customized AI Agents, which is 46.7 billion U.S. dollars, with a total market value of 18 billion U.S. dollars for other categories.

From the perspective of on-chain distribution, Base and Solana are the two main battlefields for AI Agent. The market value of AI Agent on Base is about 5.76 billion US dollars, while the market value on Solana is 5.47 billion US dollars. The two together contribute 96.1% to the overall market, while the cumulative market value of other on-chain projects is only 920 million US dollars, further indicating that the AI Agent ecosystem is still in its infancy.

Although Base and Solana are equally matched in the market size of AI Agent, the ecological composition of the two is significantly different. The main project of Base's ecology is Virtuals, with 86.9% of the projects coming from this ecology. In contrast, ai16z only occupies nearly one-third of the market share on Solana, indicating that the AI Agent ecology on Solana is more diverse and rich than that on Base.

Presenting different ecological development paths, but with significantly different market concentration

With the popularity of Virtuals and ai16z, their ecosystem projects have also become the focus of market investors' attention and speculation.

According to data from daos.fun, as of December 30th, the net asset value (NAV) of ai16z is approximately $23.355 million, covering over 1400 tokens. Among these tokens, only 3 have a market value exceeding one million US dollars, namely ELIZA, fxn, and degenai, with the cumulative market value accounting for 84.3% of the total; there are 6 tokens with asset values between 10,000 and 100,000 US dollars, and the market value of the remaining tokens is below 100,000 US dollars. This distribution indicates that ai16z's token portfolio exhibits a relatively concentrated feature, with a few high-value tokens dominating the overall asset size, while the market value of most tokens is relatively dispersed, indicating that the ecosystem is still in a highly differentiated state.

Compared with ai16z, the quality of Virtuals' ecological projects is relatively high, and it has been hotly discussed recently because its market value exceeds that of the star AI project Bittensor (TAO). Nevertheless, there is also a certain degree of structural imbalance in the Virtuals ecosystem.

According to the Virtuals official website, as of December 30th, there are approximately 510 ecological projects in the Virtuals ecosystem. Among them, there are 4 projects with a market value of over 100 million, namely AIXBT, G.A.M.E, Luna, and VaderAI, accounting for 19.2% of the overall ecosystem; there are 99 projects with a market value between 1 million and 100 million US dollars, and the remaining about 60% of the projects have a market value below 100,000 US dollars. The Virtuals overall ecological projects have gained more market recognition, but there is a certain degree of concentration in their ecological development.

For the different AI Agent development routes of ai16z and Virtuals, independent researcher Haotian previously pointed out in a post that ai16z is more open source and more like an "Android-style" developer ecosystem alliance route. However, due to the extreme lack of token economics for ai16z tokens, the tokens in its ecosystem lack a reasonable evaluation model and cannot form a cohesive force in the short term. However, all of this will be resolved after a systematic Tokenomics. At the same time, every member of the ai16z ecosystem has its own strengths, and the potential lies in the developer community. The first thing that founder Shaw wants to do is to lead the scattered ecosystem into a super open source growth flywheel driven by the technical open source community.

In a recent interview with PANews, Shaw revealed that ai16z will unveil a new token economics proposal including LP pairing mechanism, DeFi integration, etc. around January 1, 2025.

Compared to Virtuals and ai16z, source: @0xgangWhat

In contrast, Virtuals is relatively closed. Haotian pointed out that Virtuals follows an "Apple-style" ecological expansion route, more like an AI Agent "Star-making Dream Factory". Since Virtuals had a complete token economy early on, users need to pledge the token VIRTUAL to create an AI Agent, and need to consume the VIRTUAL token to purchase the new AI Agent token. Therefore, the more AI Agents issued on Virtuals, the greater the demand for Virtuals tokens, naturally creating a positive growth flywheel effect. However, due to Virtuals' emphasis on asset issuance platforms and the provision of a standard AI Agent framework base, it will lead to relatively heavy homogenization of AI Agents on the platform. This asset issuance and light technological ecological breakthrough of Virtuals are essentially the inherent limitations of a closed ecological system.

From pure MEME to on-chain application, AI Agent innovates market operation mode

Behind the hype of Virtuals and ai16z is the increasing attention to AI Agents, as well as an important manifestation of the evolution of MEME development.

"AI is the main theme of the future 20 years for the improvement of human technology and productivity, and it can be integrated into all crypto categories, including DeFi, GameFi, NFT, and Desci. During the period of rapid improvement, it will bring a large number of new applications and new technologies, all of which can be applied to crypto." Cryptocurrency KOL0xWizard believes that combining AI with new targets could potentially create a new on-chain asset market value, or even recreate the total market value of cryptocurrencies.

"From the original pure MEME like GOAT, to chatable AI Agents, to on-chain funds like ai16z, and then to new asset issuance platforms like Virtual and Spore, each step is getting closer to applications. The essence of this round of on-chain market is that the new 'application projects' bypass exchanges and VCs, and directly redistribute benefits through the on-chain issuance of new assets. At the same time, the project party does not need to flatter VCs, compete for resources, and pay tolls to exchanges, and can directly go on the chain to see if the market is interested." Cryptocurrency KOL pointed out @Michael_Liu93 pointed out.

Haotian also believes that the environment has changed, and the logic of capturing value in the market is also changing, which is mainly reflected in the following points: (1) from the previous infrastructure stacking that is detached from the actual needs of the market to using AI Agent applications to verify market demand; (2) In the past, VC rounds of financing led to more and more narrow profit margins in the secondary market, but now projects built in the form of open-source Public Good can be directly financed in the secondary market, and allowing AI Agents to independently manage assets can bring greater imagination to the project; (3) In the past, airdrop methods such as acquiring early users and traffic have brought follow-up operational pressure, and opening in a MEME-level way can be suitable for continuously growing Tokenomics (LP fees, transaction taxes, reserved share release, etc.); (4) After breaking the endgame of CEX listing, it will gradually tend to be DEX-oriented, and high-quality projects have a greater probability of "grassroots counterattack"; (5) Realize new market operation rules, and it is basically difficult for the market and ecology of projects that do not mingle with the community and do not always pounce on the front line of products.