What is DeFAI?

This hot new sector is up 139% this week.

View or listen in browser January 14, 2025 What is DeFAI? Dear Subscriber, By Bruce Ng The whole crypto market is in the red. But one hot new sector is in the green. While Bitcoin (BTC, “A”) lost 0.7% over the past seven days, something called DeFAI ran up 139%: Top 100-150 sectors by market cap. Source: Coingecko. Click here to see full-sized image.   DeFAI is a combination of DeFi and AI.  But don’t be too quick to dismiss this as a buzzword created by a bunch of crypto nerds to fabricate a new narrative. There could be some promising projects behind the hype.  Let’s take a look at the top coins in the DeFAI sector, according to market cap, for more insight:  Top seven DeFAI coins by market cap. Source: Coingecko. Click here to see full-sized image.   At a glance, we can see that some coins are new. But others are projects that have been around for a few years with notable track records.  From the list above, three projects stand out to me.  Griffain (GRIFFAIN): This project allows users to create and manage AI agents. These agents can perform various tasks such as token trading, creating new tokens, publishing on social media and searching for on-chain information based on user instructions. There are two types of agents: Personal Agents, which users can customize, and Special Agents, which are pre-built by Griffain for specific tasks. Hey Anon (Anon): Hey Anon aims to simplify DeFi operations and make them accessible and efficient. To do this, it uses AI agents to navigate the complexities of blockchain and DeFi protocols. These agents can perform actions like selling dust tokens across multiple wallets, consolidating assets and managing liquidity without user intervention. Hive Intelligence (HIVE): Hive Intelligence aims to be the foundational layer for AI agents in crypto. It offers scalable infrastructure that allows agents to access and process blockchain data more efficiently. It’s considered the “Chainlink of AI agents.” So, what do I think about DeFAI?  Is it the next big thing? Or is it only riding the broader AI trend’s coattails? The reality lies in between.  Crypto AI and DeFAI are new sectors, which explains all the hype around them. When it comes to DeFAI in particular, it has its fair share of experimental projects. And when fuelled by hype alone, the risk factor increases further.   At the same time, there are some undiscovered gems if you dig deep enough.  These projects address a necessary need in crypto and have strong fundamentals backing them like talented teams, AI research and a product that offers true value.  And that could prove worth the risk.  Especially when you take into account the sector market cap of DeFAI is only $1.2 billion presently. That’s tiny, especially when compared to the other new sector, AI agents, valued at $11.3 billion.  That means there is tremendous room for growth for projects that have staying power.  The trick for traders will be to separate those from the flash-in-the-pan projects. It’s a tricky task. But not impossible. For my own investing, I start by looking at the four fundamental factors:  Tokenomics: This is the breakdown of who owns what and how fast coins will be distributed to public supply. Team: A project can’t succeed without a strong team driving growth. So, do your research into who is driving the project you’re interested in. Do the team members make themselves known, or are they anonymous? If known, what are the members’ individual experience and success — or failures — with previous projects? Product specialty and use case: What service does this project offer? Does it have a product? If no product then when does it launch? Does the product provide a unique solution to a problem in crypto? Hype: As I’ve said before, a lot of crypto success comes from the hype around a project. So use tools like the ones  I showed you last week to see how popular a sector or project is online based on mindshare. You can also look on X (formerly Twitter) to see whether a project has key opinion leaders (KOLs) or other influencers pushing it on social media. There are, of course, various other factors to consider.  But these four will give you a solid grasp of whether a project deserves a deep dive across narratives. Hopefully, you can use these to help you find your next crypto investment. Best, Dr. Bruce Ng P.S. If you want to hear how a DeFi expert picks her opportunities, I suggest you watch Marija Matić’s Superyield Income Summit. It in, she reveals how she was able to target yields of 101% … 912% … even 1,168%! Even better, she’ll show you how you can do the same. Just click here to watch it now. Follow us:   11780 US Highway 1, Palm Beach Gardens, FL 33408-3080, USA Would you like to edit your e-mail notification preferences or unsubscribe from our mailing list? Copyright © 2025 Weiss Ratings. All rights reserved.