AI Agent: Is It Now in the "2020-2021" Boom Cycle of DeFi Summer?

farmer Frank

The cryptocurrency market has experienced several booms and busts over the years, with each cycle being driven by different narratives and technologies. In 2020 and 2021, the DeFi (decentralized finance) sector enjoyed a period of rapid growth, attracting a large amount of capital and attention. Now, as we enter 2025, the question arises: Is the AI Agent field currently experiencing a boom cycle similar to DeFi Summer in 2020-2021?

To answer this question, we need to examine the key characteristics of DeFi Summer and compare them to the current state of the AI Agent landscape.

DeFi Summer was sparked by the emergence of protocols like Compound and Uniswap, which offered users new and innovative ways to interact with cryptocurrencies. These protocols allowed users to borrow, lend, trade, and earn yield on their digital assets, opening up possibilities that were previously unavailable in the traditional financial system.

The narrative around DeFi quickly gained traction, attracting both retail and institutional investors. This led to a surge in the total locked value (TVL) in DeFi protocols, which increased from around $600 million in January 2020 to over $26 billion by December 2020.

As the capital flowed into the DeFi sector, it also fueled the growth of related projects, such as decentralized exchanges (DEXs) and NFT marketplaces. This created a virtuous cycle, where the increasing activity on DEXs and NFT platforms further attracted users and capital to the DeFi ecosystem.

Eventually, the DeFi boom reached its peak in early 2021, before a market downturn led to a decline in TVL and prices. However, the DeFi narrative had already left an indelible mark on the cryptocurrency landscape, paving the way for new innovations and applications.

Now, let's turn our attention to the AI Agent field and see how it compares to DeFi Summer.

Over the past year, AI Agent projects have emerged as one of the hottest trends in the crypto market. These projects, which typically operate on Bittensor or other data networks, combine elements of artificial intelligence (AI), decentralized autonomous organizations (DAOs), and non-fungible tokens (NFTs).

One of the defining characteristics of AI Agent projects is their ability to generate and sell tokens, often using innovative mechanisms. This has attracted a large number of users and speculators, who are hoping to participate in the token sales and potentially reap the rewards.

The market value of the AI Agent sector has experienced a significant increase in recent months. According to statistics from Cookie.fun, the total market value of the sector exceeded $16.6 billion as of January 1, 2025, representing an increase of 53.79% over the past 7 days.

This growth has been driven in part by the popularity of AI Memecoins, which have quickly become new centers of traffic and attention. By lowering the participation threshold through humorous expressions, interactive community culture, and user-centric communication strategies, these projects have managed to attract a large following among non-professional users.

To put it simply, this phenomenon can be seen as a cultural rebellion against "VC coins" and a continuation of the Meme narrative. However, when combined with AI Agents, it not only lowers the barrier to participation and expands the potential size of the market, but also injects more inclusiveness and sustainability into the AI × Crypto narrative.

Among the AI Agent projects that have enjoyed strong growth recently is TAO CAT. Created by the Masa team through the integration of Virtuals and Bittensor technologies, TAO CAT showcases the advantages of self-evolution in AI Agents compared to traditional AI Bots. At its core, the project still adheres to the economic narrative of fair issuance and community-driven development.

Interestingly, during the writing of this analysis, TAOCAT was selected as one of Binance Alpha's new projects, which was followed by a substantial increase in its price. MASA also benefited from this news and experienced an upward trend.

This development easily brings to mind the prosperous scene of DeFi Summer, where early projects like Compound, Uniswap, and Aave enjoyed strong price performance and attracted a large amount of attention. As more users flocked to these protocols, their tokens also appreciated in value, creating a positive feedback loop that ultimately fueled the entire DeFi narrative.

From the initial basic applications of Compound and Uniswap to the subsequent large-scale influx of users and the derivation of more complex on-chain trading strategies, the technical narrative and capital-driven interweaving and resonance eventually formed a cyclical prosperity.

Therefore, at least for now, the popularity and market value growth of AI Agent based on AI Memecoin have indeed brought a new round of narrative and imagination space to the crypto industry.

However, it's important to note that AI Memecoins are just the beginning. For the AI Agent field to achieve sustained growth and impact, it needs to go beyond token issuance and simple narratives