I took some profits today. I'm buying some Bitcoin and stablecoins with it. The thing is...I'm not re-deploying them for the rest of the cycle. I'm still bullish and think there's a lot of juice left in the cycle! It's really hard to take profits when you're still bullish. Here's why I did it: 1. I've guaranteed that I'm not gonna roundtrip this cycle. 2. The Bitcoin goes into my long-term stash that I won't touch for at least a decade. So if BTC is $1m one day, I have exposure. 3. A slightly smaller portfolio means I'm going to be more disciplined with how I trade. 4. I'm training my "selling" muscle. Everyone think they'll magically be able to sell when the top is here. Selling is a skill. How can you execute a skill if you don't have much practice? Every cycle I see that people regret not taking enough profits. And they regret round tripping their portfolio. Well..what are you going to do that's different, or are you going to repeat the cycle?
Here's what we got today:
Introduction to Rei Network. Smarter agents?
A dramatic week. A dip in the market followed by a ton of fighting on the timeline.
Around the web. Ai16z is getting a humanoid robot, Virtual is buying ~$40M worth of agent tokens, and more.
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The market roared back to life yesterday. The people who thought a.i. agents are dead spoke too soon (because they're salty that they're sidelined). I want to write about an interesting agent infrastructure on Base called Rei Network.
What makes it special? Short answer: their tech.
Longer (but still simplistic) answer: Other agent frameworks don't properly integrate Agent and the blockchain. They're only nominally connected via tokens. REI agents actually use the blockchain to learn and think. So, their model has several benefits.
Verifiability. With other Agents, we can't be really sure if it's some minimum-wage worker who's answering our queries.
Smarter framework. REI's special architecture allows them to create Agents that are much smarter than competitors. Read the following articles for more details.
You don't have to trust them blindly. You can see it in action via their live agent, Rei_00.
Below are some of the features of the agent that I'm impressed with:
Custom charts. Sheshares market insights backed by custom-generated charts.
Multiple data sources. Rei_00 takes data from on-chain metrics to price movements according to social sentiment. In contrast, AIXBT, the leading alpha agent, merely scrapes X for data.
Compounding knowledge. She stores her experience and insights directly on the blockchain. This growing knowledge database will allow her to make increasingly sophisticated decisions.
REI terminal. This will allow humans to watch the Agent's thought process. Whilst some agents like Luna do have this, most agents don't. You can watch REI's thought process here.
Soon, it'll be possible for Rei_00 to perform trades based on her analysis. And if she ends up profitable, it'll surely attract a ton of attention. Right now there's a lot of attention on AIXBT (the top agent KOL at the moment). So, some people are viewing it as a potential beta play. The market cap of the leading alpha agent, AIXBT, is at ~$800M. And AIXBT only scrapes X content to learn and make more content. It's also quite vulnerable to hallucinating. The thesis is essentially she's better and smarter than other "alpha bots." But of course, AIXBT's value isn't just its Alpha. The tweets get insane reach. And the problem with REI is her posts are barely getting any reach. The average tweet gets less than 1k views.
There are some other capabilities that she has.
Similar to AIXBT, REI will probably create a different token-gated terminal that'll give high-quality answers. This is likely to happen, but not confirmed yet.
Soon, they will release their framework that'll allow devs to create agents as well. This is definitely a competitive battleground.
They're also tapping into the DeFAI narrative. They're building an REI DeFi Assistant. Users will be able to perform onchain actions by just typing "supply 0.1 USDC on Aave".
I'm completely obsessed with agents right now. Will be interesting to see who the winners are a year from now.
Note:Edgy doesn't hold any REI tokens at the moment and this isn't sponsored. Just sharing some interesting research.
Why the low percentage? User experience. DeFi borrowing does not naturally form part of a user's journey; users have to specifically search for and log into dApps and then sign several different approvals, making it tougher to discover and harder to adopt credit.
I remember how much drama there was on Crypto Twitter during the bear market. It makes sense because people aren't making money. Well, there's STILL fighting even in a bull market. A lot happened so I wanted to catch you guys up. Last week was filled with drama on crypto Twitter. Let me catch you up:
#1. Usual USD0++ devaluation
Usual protocol is a decentralized stablecoin issuer. And it was heavily promoted by almost all crypto KOLs (except me lol).
USD0 was their stablecoin. USD0++ is its staked version, which received the yield collected by the Usual Protocol. It was promoted as the equivalent of a savings account. $USD0++ was supposed to be redeemable for $USD0 at a 1:1 ratio.
Last week, they announced that $USD0++ could now only be redeemed for 0.87 $USD0. So, people started selling it. This had several negative consequences:
From its ~$780M peak market cap, $USUAL crashed to only ~$280M (representing a ~65% decrease).
Staked $USUAL holders couldn't unstake. There was a 10% fee for unstaking. So, many had to witness heavy losses.
Principal token holders of $USD0++ on Pendle also saw its value crash.
This generated outrage with many believing that this was a rug from the Usual team. Holders found it suspicious when the team changed the documentation from 1:1 to 1:0.87 for $USDO0++. (According to the team, they were being transparent.)
But this change doesn't really mean that the entire protocol was a scam. Ultimately, its success will depend on its ability to gain adoption across USDC and USDT. And the high yield of Usual is a PvP game between people who got in early vs later.
If you want a proper detailed breakdown, read this.
The team has announced new updates that'll allow USD0++ holders to redeem at a 1:1 ratio by contributing USUAL. Read more here.
#2. Aiccelerate PnD drama.
Remember Daos.fun? It is the DAO launchpad that started Ai16z. I've already covered multiple times.
Another Investment DAO from them called Aiccelerate took the spotlight last week. It was a really, really hyped-up DAO because of the team and advisors involved, which included many top names in crypto.
When the token launched, everyone wanted to buy it. But 100% of the allocation was given to insiders without any opportunity for the public to buy.
And so, the token pumped like crazy. After launch, it traded at >270M for some time. Even now, it is trading at >$90M despite only having <$200k in assets under management.
Many of the early investors saw gains of ~10000%. So many of them dumped on retail who didn't have access to the earlier round. This was seen as a pump and dump by many people.
Imo, you cannot really blame the early investors who took profit when their investments created insane returns. It was the rational thing to do.
They didn't create a proper vesting schedule for early investors.
They should've given the opportunity for the retail to enter as well.
The KOLs who shilled the token and then sold the token on the same day were also wrong. I don't want to throw mud by naming names. If you want to know, you can see exactly who received allocation as well as their stats here.
Lesson: don't freaking ape in because some KOL said so, even if it is me! Make sure to always do your own research.
#3 Other Stuff.
There was a lot more happening this week.
The Ai16z DAO founder got into another drama. He promoted a memecoin that copied previous ai16z-related memecoin. He was involved in the Aiccelerate drama as well. Since his erratic behavior has become a bit of a pattern, I decided to exit my ai16z position.
A major VC investor was accused of larping as a lone trader on X. The problem was that this guy had a huge following and was promoting projects that he had seed allocations in but never disclosed. I'm not naming him because the information isn't 100% confirmed yet.
Sony launched their Soneum, their L2 that'll eventually be part of Optimism's Superchain. When degens created memecoins that violated traditional IP rights, Sony blocked their trading via their centralized sequencer.
The Soneium story is a bit nuanced. On one hand, it showed the censorship capacity of the centralized sequencers of the current L2s.
On the other hand, it was a live demonstration of Ethereum L1's control over L2s. When Sony censored txns, some people were able to force Soneum to include the txns using Ethereum L1. But when compared to normal L2 txn, it was a much slower and expensive process.
Anyways, this was a crazy week. Even if you aren't on CT to always catch everything, I'll try my best to share everything here.
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🤖 Agent Arena
Virtual Protocol has collected >$40M worth of $VIRTUAL trading fees from agents. They'll use this to buy agent tokens, effectively pumping agent prices.They've also updated the Value accrual mechanism to support agent builders on Virtual.
ELIZA, a project associated with ai16z, announced that they'll be building humanoid robots. The goal seems to create a "productivity partner" to help with complex tasks.
ElizaOS, the AI Agent framework from ai16z, has integrated with Arbitrum. Agent builders on Arbitrum can get funding from two programs: Trailblazer and Stylus sprint.
🚀 DeFi Catalysts
Sandglass, a yield trading protocol on Solana, launched its points market. kySOL by KyrosFi is the first asset used for yield-trading.
Dinero introduced BeraETH, a liquid staking token on Berachain. It'll provide staked ETH yield to the Berachain ecosystem.
Frax Finance launched frxETH v2. This update will decentralize validators of the LST and keep the current high yield.
Derive (formerly Lyra) shared its 2025 roadmap. They introduced three new products targeting three different user segments.
Raydium Protocol has launched its beta perpetual futures, powered by Orderly Network.
Polygon is partnering with Reliance Jio, India's leading Telecom company. They'll onboard 450M+ users to web3 via select apps and services.
🪂 Airdrop Alpha
Kern Protocol, which claims to be a privacy layer for Solana, announced $KERN airdrop. Users of top Solana DeFi apps and memecoin communities are eligible for the airdrop.
Bubblemaps announced $BMT, a token for their platform. You can add your Solana wallet to their application to join their airdrop campaign.
Resolv is an Ethena competitor that doesn't have a token. Since the Usual Protocol airdrop was very juicy, Resolv could be juicy for stable farmers as well.
Azuki, the popular NFT brand, announced that $ANIME will launch in January. 50.5% of the token will be given to the community.
Solv Protocol is launching $SOLV in two days. The airdrop claim will be live tomorrow.
🚀 New Launches
Superposition, an Arbitrum L3 tailored for DeFi, launched its mainnet alpha. They claim to be the first blockchain that pays users to use it.
Liquity Protocol will launch its V2 in January. There will be 15+ friendly forks of the v2 on various chains that will airdrop tokens to $LQTY holders.
DISCLAIMER: I'm NOT a financial advisor. This content is for education and information purposes only. Crypto and DeFi are risky and speculative. Please do your research before investing. Whenever you're ready, here are the ways we can help you:
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