Market Metrics

Total Crypto Market Cap: up .2% to $2.78T
Total AI Sector Market Cap: up 1% to $40B

Top Movers (7 days):

📈 TARS Protocol (TAI): up 112.2% to $0.263
📈 Dynex (DNX): up 62.5% to $0.6796
📈 Cere Network (OPTI): up 29.2% to $0.006124

Mindshare Check:

The AI sector currently accounts for 23.80% of the total crypto market’s narrative mindshare. This is down 10.01% during the past 7 days due to Memecoins capturing the second place spot. If you didn’t see, Iggy Azalea’s MOTHER token (yes Iggy mf Azalea) has been ripping…

Daily News

🟠 PRIME staking to earn the Wayfinder PROMPT token has launched, leading to many PRIME holders speculating on the game theory behind the staking mechanism. In a nutshell, the caching mechanism of PRIME token creates a game theory scenario where staking duration (from 21 days to 3 years) and multiplier rewards (1.05x to >85x) incentivize strategic behavior among token holders. However the uncertain distribution of stakers across durations and the potential impact of whales' actions make it challenging for smaller investors to predict and maximize their returns.

🟠 Multiple AI chatbots, including ChatGPT, Gemini, Claude, and Perplexity, experienced widespread outages this week, with ChatGPT facing two separate downtimes before being fully restored. The case for decentralized AI is becoming much stronger as their centralized counterparts demonstrate easily avoidable outages like this.

🟠 Bankless dropped a long form X post arguing that the AI industry should adopt core crypto values such as decentralization, open-source development, privacy, and user ownership to create a more inclusive, transparent, and privacy-preserving AI ecosystem.

🟠 The number of Uniswap Liquidity Pools deployed on L2s has now surpassed those deployed on Ethereum. This has largely been driven by the explosion of activity on Base as Coinbase onboards users onchain directly from the exchange. We are keeping our eye out for AI projects launching on Base, as it is Onchain Summer baby.

🟠 Robinhood has acquired Bitstamp in a $200 million deal, indicating strong conviction in the digital asset market. This is significant for Robinhood as it helps the company gain a significant share of the European market, gaining traction against competitors like Kraken that already have a strong foothold. Yano from Blockworks shared his thoughts on the acquisition.

Highlights of the Week

📉 The Value of Human Capital is Trending Towards Zero

This week, prompted by the rapid growth of Nvidia, Nic Carter, an early investor in AI infrastructure provider CoreWeave, shared his thoughts on the AI explosion and its potential consequences.

One of the key takeaways from Carter's tweet is the notion that AI is dramatically empowering capital relative to labor. As companies increasingly leverage AI tools to maintain productivity with fewer employees, the balance of power is shifting towards firms and shareholders. This trend is likely to accelerate as AI becomes ubiquitous, embedded into virtually every application in a manner reminiscent of the internet's integration into modern business.

AI is already displacing human labor in fields such as content creation, translation, transcription, and transportation. The rapid enhancement of productivity, skills and knowledge has enabled us to enter an age where startups can develop into fully functioning businesses with very few employees, drastically cutting operational costs. Gone are the days of bloated companies with tens of thousands of employees operating with slim margins. This new age will favor lean startups that are quick to show product market fit and reach profitability.

This rapid obsolescence of human labor raises profound questions about the future of work. The “laptop class” is likely to see some sort of white collar recession over the coming years as companies continue to cut bloat and maintain only the most productive employees; those who leverage AI better than their colleagues. The market's recognition of this AI-driven future is evident in the massive growth of AI-focused companies like Nvidia.

In light of these concerns, Carter believes that the transformative effects of AI on the workforce will inevitably lead to reprisals against capital. These could manifest in various forms, such as stricter AI regulations, higher taxes on capital gains, increased social welfare spending, and a resurgence of socialist political movements. This will inevitably lead to the movement of individuals with capital to countries with more favorable taxes, likely leading to stricter exit taxes and greater difficulty in obtaining residence in capital friendly jurisdictions.

When considering Carter’s perspective, the intersection of AI and blockchain technology presents a particularly exciting frontier. The ability to create decentralized, transparent, and secure systems that leverage the power of AI could help address some of the concerns by democratizing ownership of AI, allowing those with smaller amounts of capital to benefit from this new paradigm.

🤡 Influencers Back to Shilling AI Tokens

In 2024, 9-figure whale Alex Becker, founder of NeoTokyo NFTs and a crypto gaming YouTuber, has slightly shifted his focus from gaming to AI tokens. After a brief silence, he's back promoting Daestra Network (DSYNC), PAAl AI (PAAL), 0x0.ai (0X0), AIOZ Network (AIOZ), and AirTor Protocol (ATOR).

The initial pivot began on March 9th with a video outlining his basic investment thesis: “disregard tech, chart = good, number go up,” where he mentioned Kondux (KNDX), a $21 million market cap token. Post-video, KNDX surged ~260% but quickly fell below its March 9th opening price.

While early traders might have profited, many latecomers likely became exit liquidity, buying high and holding losses. This pattern is common in hyped tokens.

We're highlighting this because while some AI projects have solid fundamentals and growing user bases, many are just hype. Influencers often promote these, leading followers into risky investments and ultimately dumping on them. By the time a shillfluencer has shared their latest “top picks”, it is already too late. The only way to profit from these manipulated pumps is to own the token prior to it being shared, and the only way to do this is via insider info or just sheer luck.

As we stressed last week, avoid becoming exit liquidity. Focus on projects with real value, not just popular endorsements. In the AI space, discernment is key.