The Crypto AI Agent Craze: A 2025 Fixation Destined to Fade, Says a Leading VC

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As an analyst with over two decades of experience in the technology and venture capital space, I find Haseeb Qureshi’s predictions for the cryptocurrency industry in 2025 both insightful and intriguing. His life experiences in navigating diverse ecosystems, including blockchain and AI, lend credibility to his perspective on the convergence of these two worlds.

His prediction about the distinction between Layer 1 and Layer 2 networks fading is particularly compelling, as it mirrors the evolution I’ve witnessed in other technology sectors where the focus shifts from technical intricacies to user experience and niche differentiation. The emphasis on low latency and ultra-low-latency solutions resonates with my understanding of the importance of performance optimization in driving user adoption.

The forecasted shift in token launch strategies aligns with the broader trend towards rewarding genuine contributions rather than relying on vanity metrics. This change, if realized, could lead to more sustainable and resilient projects.

Regarding AI agents, I concur with Qureshi that they will continue to dominate the crypto landscape in 2025. However, I’m curious about how these agents will evolve beyond their current “Wizard of Oz” state, as he puts it. Will we see a rise of fully autonomous, self-aware AI agents? Only time will tell!

Lastly, the potential explosion of autonomous scambots is a concern that I share. As someone who has witnessed the rise and fall of various cyber threats, I can’t help but think that these scambots might be the next ransomware. But remember, as in any good superhero movie, with great power comes great responsibility – and hopefully, our industry will rise to meet this challenge!

Joke: In the world of blockchain, it seems we’re moving from “trustless” to “scam-bot.” I guess that’s progress, right? At least it’s not another “ICO”… yet.

On January 1st, Haseeb Qureshi, the leading partner at Dragonfly Capital, voiced his insights about the future of the cryptocurrency market through a post he published on social networking site X.

Layer 1 and Layer 2 Networks

Qureshi foresees that by 2025, the division between Layer 1 (L1) and Layer 2 (L2) blockchains may become less noticeable, as users tend to disregard the technical distinctions. He posits that due to intense competition, the blockchain landscape will experience substantial consolidation. This process, however, is likely to be influenced less by technological breakthroughs and more by networks’ capacity to establish unique positions and provide engaging user experiences that keep people coming back.

The Ethereum Virtual Machine (EVM) networks are poised to increase their dominance in the market, even as other systems such as Solana’s Virtual Machine (SVM) and Move gain traction. Qureshi predicts that improvements in large language models (LLMs) will advantage EVM-compatible networks because of their rich collections of existing contracts and training data. He anticipates that tools like LLMs will significantly contribute to automating application development, with a focus on ecosystems built on solid foundations.

As a researcher delving into the realm of blockchain technology, I foresee Solana’s focus on low latency setting a competitive benchmark for other platforms. This might prompt a transformation within the industry, where we move from the ongoing “transactions per second” (TPS) rivalries to what I call the “latency wars.” In this new landscape, innovative infrastructures like lightning-fast Layer 2 solutions and advanced security models will be at the forefront, pushing the limits of blockchain performance to deliver an optimal user experience.

Additionally, he emphasized the achievement of Hyperliquid, a dedicated chain tailored for one particular purpose. He contends that this strategy underscores the feasibility of specialized blockchains, which are designed to address specific scenarios, as an alternative to the outdated notion of a single blockchain ruling them all.

Token Launch Strategies

As a crypto investor, I’ve noticed Qureshi predicting a change in the distribution methodology of projects, suggesting a decrease in large-scale airdrops that are primarily based on superficial metrics. Instead, he anticipates the rise of two main trends:

1. A focus on more targeted and strategic airdrops, where tokens are distributed to specific groups that demonstrate genuine interest or engagement with the project.
2. An increased emphasis on fair launch mechanisms, such as decentralized sales or lotteries, which aim to ensure a more equitable distribution of tokens among all participants.

  1. Projects with measurable success metrics, such as exchanges or lending protocols, will reward tokens based on user activity. For these protocols, farmers are legitimate users contributing to core performance indicators.
  2. Projects without clear metrics, such as L1s and L2s, will lean toward crowdsales as their primary distribution method, reserving small airdrops for community contributions.

Moreover, Qureshi anticipates that memecoins may wane in favor of “AI Agent Coins,” indicating a transition from financial speculation towards enthusiasm for AI-driven solutions.

Stablecoin Adoption and Institutional Entry

As a seasoned venture capitalist with years of experience navigating the dynamic world of digital finance, I firmly believe that stablecoin adoption will skyrocket among small and medium-sized businesses in 2025. These companies are constantly seeking efficient settlement options to streamline their operations, and stablecoins present an attractive solution.

I foresee major banks jumping on the bandwagon by issuing their own stablecoins before the end of this year as they strive to remain competitive in the digital finance arena. This is a natural evolution for these institutions, given the increasing demand for digital assets and the growing need for seamless financial transactions.

However, I am confident that Tether will continue to hold a dominant position in the market under the current U.S. administration. With its proven track record, robust infrastructure, and strong backing, it is well-positioned to maintain its leadership role in this rapidly evolving landscape. That said, new entrants may emerge as competitors, but I predict that Tether will remain a force to be reckoned with.

According to Qureshi’s prediction, Ethena Labs, a major influencer in the stablecoin sector, stands poised to seize substantial financial resources. As treasury yields are projected to drop, he anticipates that yields based on blockchain technology will grow more alluring.

Regulation and a Shifting Landscape

Qureshi predicts that the United States may enact stablecoin legislation in 2025, which could boost the use of these digital currencies even more. However, he believes significant changes in the broader market infrastructure, such as the Financial Innovation and Technology for the 21st Century Act (FIT21), might experience delays. This could potentially slow down the merging of conventional financial institutions with blockchain technologies.

During the Trump presidency, Qureshi anticipates a brief relaxation in regulatory measures, referring to it as a “cryptocurrency jubilee”. This leniency is expected to encourage vigorous growth, with major corporations from the Fortune 100 and startups alike likely to speed up their adoption of crypto services within their platforms.

The Evolution of AI Agents

According to Qureshi’s forecast, AI agents will be prevalent in the crypto sector by 2025. However, he provided a more complex perspective regarding their current and future roles. He likened many existing AI agents to the “Wizard of Oz” systems, where human involvement maintains their functionality, concealing their lack of true self-governance. While these bots may displace certain influencers and automate real-time data collection, Qureshi emphasizes that their dependence on human supervision restricts their full potential.

Qureshi posits that by 2025, the novelty of AI agents will keep people intrigued, but by 2026, as these tools become commonplace, interest might start to wane. He predicts that the market trend will eventually lean more towards valuing human influencers over bots due to a growing preference for authenticity. However, he warns that this shift could prompt AI agents to mimic human behavior, potentially leading to revelations of their artificial nature and stirring up discussions about ethics.

In a more somber tone, Qureshi expressed concerns about an impending surge of harmful autonomous programs, similar to the increase in ransomware observed in past years. He highlighted that these deceitful entities might abuse blockchain networks for illegitimate purposes, creating substantial security issues.

Even though there are concerns, Qureshi believes that software engineering agents are the real game-changers in this field. He argues that these tools hold immense potential to transform blockchain development significantly by cutting down the cost and intricacy involved in creating new applications. He envisions a time when projects can be initiated with little capital, paving the way for an era marked by unparalleled experimentation and innovation.

According to Qureshi, artificial intelligence (AI) can significantly boost the security of blockchain networks. He foresees a future where AI is extensively used for static analysis, continuous monitoring, and simulated attacks, thereby providing an advantage to defenders over potential attackers. In his view, these developments could lead to more secure and user-friendly blockchain environments for both developers and users.

The Convergence of Crypto and AI

Qureshi further delved into the potential interaction between AI and the crypto market. He is convinced that intelligent AI systems will increasingly use cryptocurrencies, particularly stablecoins, for transactions given their user-friendly nature and ease of access. He also highlighted decentralized AI learning and application as an emerging field of research, with several pioneering projects currently shaping a future where decentralized AI models could replace centralized ones.

As an analyst, I’m convinced that AI-driven wallets have the potential to significantly enhance user experiences by automating tasks such as bridging assets, optimizing transaction fees, and detecting potential scams. This transformation could reshape the impact of blockchain networks, as users might become less focused on the specific chains powering their applications, instead prioritizing the seamless functionality they offer.

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2025-01-03 11:04