FOMO Kills Innovation: A Deep Dive into the Solana AI Hackathon Debacle

When we launched this hackathon, we had a simple vision: make Solana the AI chain and grow it 10x. Hackathons are the best opportunity to achieve this goal

Solana announced the first Solana AI Hackathon on December 11, aiming to build AI agents and tools on Solana, powered by SEND AI. The prizes range from $5,000 to $30,000, and are intended to encourage serious Crypto x AI projects that can attract venture capital or launch their own tokens. Submissions will be open on December 15, where project teams can provide all project details, including GitHub code base, a 2-minute demo/pitch video, a 10-page pitch document, etc.

The Solana AI hackathon has been incredibly popular, even leading to the FOMO phenomenon. SendAI founder Yash Agarwal has criticized this phenomenon in an article, the full text of which is below.

When we launched this hackathon, we had a simple vision: make Solana the AI chain and grow it 10x.

Hackathons are the best opportunity to achieve this goal - to bring everyone together to participate in Crypto x AI Agents in person, which I am very optimistic about.

Over the past month, it’s safe to say that the Solana AI Hackathon has not only become a signature event, but has completely changed the Solana Agent landscape. Completing 400+ projects in 15 days is no small feat, and my team and I are proud to have contributed to adding $500-100 million in market value to Solana AI.

Of course, at the beginning, due to this strange Crypto x AI Agent, it was anticipated that there would be related tokens released. And it is completely fine if builders use tokens as a means of capital accumulation to build excellent products. For this purpose, all 8 tracks are carefully designed to encourage truly useful agents.

But at that time, I didn't know that this place would become a speculation place for degens. According to the data, this hackathon had only more than 40,000 visitors in 1 week. Now, there are 2-3 hackathon projects every day with a market value of 50 million US dollars, and the cumulative value exceeds 500 million US dollars. Solana AI hackathon accidentally became an AI token discovery platform.

Status Quo

Nothing unusual here - typical power-law distribution driving speculation.

While it’s great to see some builders launching tokens and using them as a means of capital accumulation, as with any previous narrative that’s going viral, there’s too much froth right now.

While this is closer to a fair launch (similar to an ICO) — it is not the best direction forward.

Builders are Approaching Blindness

Over-tokenization makes builders short-sighted and blind.

Currently, 90% of Crypto x AI projects are like cat/dog meme coins, which is totally fine if you are fully aware of this, but many projects are touting their tokens as "utility tokens", which is a complete scam.

This phenomenon could cause long-term damage to real builders (especially weaker ones) - who are now forced to be short-sighted.

Most proxy/infrastructure projects have figured out that tokens are the best way to get attention: issue tokens → proxy/framework goes “viral” (but has no users) → tokens go up → everyone is happy.

Many projects just make random announcements or demos (even with a market cap of over $200M) to please the audience, and then whales/cabals preach to retail investors that this is "great technology".

Many developers know their products are not scalable or viable in practice and so just keep doing demos or making random “XXY” announcements. Name some live, scalable, real on-chain and agent products.

Cabal / Whales /KOLs are bad VCs without reputation baggage

Cabal and whale players make this game very dirty: they make up stories ("backed by XX" - just a simple retweet or a casual remark of "the technology is great") to grab market supply or convince builders to give token allocations and pump, promote in their degen groups, and then continue to sell (or will eventually sell), hurting retail investors and builders.

Keep in mind that most tokens have no lock-up restrictions due to being launched via pump.

Advice for Builders

Don’t issue tokens for the sake of issuing — especially if you don’t own a significant portion of them. If you own less than 5% of the tokens — you won’t have any incentive to keep building once the price starts to fall.

Even if the token goes up in the short term and you get a quick benefit from issuing $50-100 million worth of tokens, once the price adjusts you have no incentive to build — and a bunch of crappy holders want you to keep building because they’ve been brainwashed by some cabal into thinking this is “awesome technology.”

A token is technically an asset, but it is also