Author: Alana Source: substack Translation: Shan Ouba, Golden Finance

Since the last update, There are three major turning points that have impacted (or could impact) the current state of the crypto industry:

1. President Trump wins the election, and it looks like we We’re about to have the most pro-cryptocurrency Congress ever.

2. An AI agent named Truth Terminal started discussing a token called $GOAT.

3.Hyperliquid airdropped its tokens, which attracted widespread attention in the industry.

Here is an analysis of the possible impact of these events:

New

Hard to know What will the new and new Congress actually do. My hope is a combination of: more ETFs, more clarity on how traditional financial institutions accept digital assets (either through legislation, agency-level rulemaking, or a combination of both), stablecoin legislation, and maybe some de- A way to centralize revenue generation protocols to redistribute revenue.

This manifests itself in many ways in the startup market:

1. Risk reduction, Increased competition

Certain business models may be less risky, such as institutional-grade staking. If staking is included in ETFs, market risk will shift to product and team orientation.

2. Growth and quality improvement of customer groups

As traditional financial institutions become more By embracing cryptocurrencies easily, the market will welcome more quality customers. For example: More than 2,000 large commercial banks and 3,000 brokerage firms may require digital asset custody and security services, which will open up a whole new market for encryption protocols and service-based software companies.

3. Developers benefit

The current lack of regulatory framework will consume developers’ resources, hourtime and funding, and may even prevent some projects from getting off the ground. Clearer supervision will enhance developer confidence, increase productivity, and attract more entrepreneurs.

Overall, we are about to enter the most developer-friendly environment in the 15-year history of the crypto industry. The excitement among developers and other investors I spoke with was palpable. I can't wait.

Truth Terminal

Truth Terminal has sparked a wave of interest and development in cryptographic-enabled AI agents and frameworks.

To be honest, right now, there don’t seem to be a lot of agents that are actually doing unique and interesting things with crypto. The most notable “action” is capital accumulation – in the form of trades and, more commonly, airdrops from those trying to get agents to post about their coins.

As far as I know, many agents currently have little to no economic relationship with their tokens. (The only exception I can think of is Botto). It’s not entirely clear how consumers can use these proxies beyond purchasing tokens. Compared to DeFi Summer, participants are actively using these protocols. The challenge is that it's unclear what "using" a proxy actually looks like. My colleague Jesse wrote a great article introducing at least one compelling model:

As AI automates everyday tasks Goal, the role of humans can be minimized and focused on providing capital, driving guidance, long-term planning and other resources beyond the grasp of the model.

The obvious next step for these agents is to start deploying this capital. This can be through trading, venture capital, providing liquidity to the protocol, staking tokens to run validators, creating additional assets… and more. Humans can help set parameters or investment goals.

Broadly speaking, there are a number of factors that are likely to continue to drive growth in the crypto AI agent category. First, today’s agents are in their infancy. As they begin to perform more productive tasks and/or collaborate with each other, both excitement and fundamentals should grow. Second, some agent innovation is driven by forces outside of crypto. The broader AI industry is filled with talented people working on improving agents and underlying models. As these researchers continue to expand the agent's functional scope, cryptographic developers can use this work as a foundation and then integrate cryptography in unique and interesting formats.

Agent is just one part of the Crypto-x AI stack. Under the hood, these agents need to access computation, run inference, integrate new training data, make payments, and more. Over the past year, many teams have been hard at work building high-performance infrastructure. Variant has invested in several projects: Hyperbolic provides verifiable inference and computation, Sapien is expanding access to cost-effective training data, and an unannounced project is working on decentralized training. We are actively investing in more projects.

Why is crypto-native infrastructure essential for agency innovation? Agents should be able to sell their own shares, self-fund their operations and infrastructure needs, interact with other agents (and have a verification mechanism, a "proxy oracle", if they get information from other agents) - all of which There is a risk that its operations will be reviewed or shut down. Decentralized infrastructure plays a key role in removing platform risk and allowing these agents access to capital.

Hyperliquid Airdrop

The third turning point is the Hyperliquid Airdrop. It caused a stir in the industry. The project is completely self-funded, so there are no non-team “insiders.” Nearly one-third of the supply was airdropped to the project’s historical users, creating a massive wealth creation event. Best of all, the product itself is widely used and loved; it's something users want to own.

Hyperliquid’s airdrop thus serves as a lightning rod for other funding dynamics that have emerged over the past six months. The market is increasingly leaning toward two themes: 1) giving retail investors more equal access to institutional allocators, 2) avoiding the adverse effects of unlocking (where it is known that partially vested internal tokens will flow and be diluted at a certain date existing circulating supply). Hyperliquid achieves both goals.

There has been a lot of discussion in the industry about alternative financing and startup strategies. Hyperliquid brings a megaphone to this category. None of the following are alike, but I think they fit in nicely with the discussion of why Hyperliquid's launch was so impactful. So, with that in mind, some of the ways we've seen teams working toward a similar end goal include:

"Community Rounds" on platforms like Echo, Individual qualified investors have the opportunity to invest in private placement financing. Such a platform enables the project community to participate while expanding the range of capital options available to founders.around. These are becoming more and more popular. Again, this is not a direct comparison to airdrops: private placement rounds typically have a vesting schedule, whereas Hyperliquid airdrops are immediately liquid. But in general, community rounds strive to achieve a similar end goal of providing community members with valuation/access typically reserved for institutional allocators.

Issue tokens first and then build products. Tokens provide a source of funding for developing products and attracting third-party contributors. It’s worth noting that this is the opposite of Hyperliquid’s approach: build the product first, then issue tokens. So, it's not the same thing - but it's trying to give early project users a chance to contribute, participate in development, and be adventurous.

Refuse to unlock entirely and give investors the option to sell when tokens are generated. If early investors do choose to realize returns, the effect could be a temporary drop in price – in turn giving community members the chance to get in at an attractive valuation. We've seen one or two of these; I think they'll become more and more common.

Why is this important? The dominant theme seems to be that projects now have more options than ever to help users become owners. As an admittedly biased VC, I believe there is no substitute for getting early stage funding from VCs - legal help, strategic advice and portfolio resources are all invaluable in going from zero to one. Fortunately, raising venture capital funding and relying on some of these alternative financing/startup strategies are not mutually exclusive. Thoughtfully embracing a path that brings real benefits to the community can and should be rewarded. But again, the foundation of all of this - and the real lesson/reminder of Hyperliquid - is to build great products that users love and want to own :)

Conclusion

Above The content reviews the major turning points that will occur in the second half of 2024. This is slightly different from my reflections on the first half of 2024, when the focus was more on data-based examples of what works in the crypto space. Fortunately, repeating that kind of analysis here would probably take many, many pages because there are so many success stories worth documenting!

So I would like to share with anyone who has read this far two of the most amazing charts I have ever seen:

Cryptocurrencyis becoming increasingly difficult to ignore.