🌵 The Intersection of Crypto & AI 🌵

Big Brain Breakdown

Market Metrics

Total Crypto Market Cap: up 3.1% to $2.515T
Total AI Sector Market Cap: up 4% to $30.1B

Top Movers (24hrs):

📈PalmAI (PALM): up 44.1% to $0.518
📈Orbofi AI (OBI): up 41.2% to $0.01078
📈Arc (ARC): up 23.5% to $0.03461

Daily News

🟠 Arkahm Intel reported that $5.8B worth of MT. GOX Bitcoin was on the move yesterday. Some people are speculating that a lot of this BTC will get sold upon distribution, whereas others are speculating that the OG BTC holders will hang onto their coins.

🟠 Aethir announced $36 million in annual recurring revenue, making it one of the highest revenue-generating DePIN projects. At a marketcap of just over $300M, some investors are speculating ATH is undervalued relative to other DePIN projects such as Akash, io.net and Render Network.

🟠 RoboNet announced the launch of Pauly, an AI-powered trading agent designed to operate on US election markets via Polymarket. Pauly utilizes advanced data analysis to identify and capitalize on trading opportunities in political prediction markets, with an initial focus on the November 2024 US election outcomes.

🟠 Mira has emerged from stealth, raising $9 million in seed funding led by Bitkraft Ventures and Framework Ventures. The team is building a decentralized AI infrastructure platform to help developers quickly create AI-native apps, with plans to launch its own blockchain in the future.

🟠Sanctum.so has released the token checker for their airdrop. If you got got involved in Sanctum after we covered it, you likely have some free tokens to claim. Checker is here.

🧠Big Brain Breakdown

Today's Big Brain Breakdown is brought to you in partnership with Token Unlocks. For our long-time readers, you know we're not fans of high FDV, low float tokens. If you're invested in a token that doesn't have 100% of its supply circulating, you need to be aware of future unlocks. After all, you don't want to end up as exit liquidity.

When building a medium to long-term position in any asset, it's crucial to scrutinize all aspects of the project in order to build a strong thesis. This means gathering intelligence from a wide range of on-chain and off-chain sources.

Some components of your investment thesis might be more subjective or "vibes-based." These could include the founding team's track record of shipping products, overall market sentiment, or the project's ability to capture mindshare and narratives. However, other onchain metrics are more fundamentally driven and readily available. These include user adoption rates, fees and revenue generated, trading volumes, and of course, those looming token unlocks and circulating supply increases.

By combining all these elements, you can build a robust investment thesis that leaves no stone unturned, allowing you to be confident in what you are throwing your money at. (Doesn’t apply to memecoins!!!)

Linear unlocks are typically daily emissions and the “Unlock Date” indicates a change in the number of tokens emitted on the inputted date. For example, NEAR’s daily emissions are currently 414,750 tokens a day, but in 88 days that will change to 423,680 tokens a day.

With that in mind, we have partnered with Token Unlocks to gather insights on all of the AI token unlocks supported on their platform to help deliver a synopsis on what token unlocks to expect in the AI sector over the next 12 months.

Let’s take a look at some key findings.

PRIME Cliff Unlock

Echelon is anticipating a large cliff unlock within the next few weeks (1.75% of supply), which is primarily driven by the vesting of tokens allocated to Parallel Studio Investors becoming liquid. While the Parallel Studio’s Reserve tokens were expected to begin unlocking on this similar cliff period, the team recently paused the vesting period of these tokens in June of 2024 until June of 2025, and extended the vesting period into December of 2027, significantly decreasing the amount of liquid tokens hitting the public markets (good news for PRIME holders).

It is important to note that the vesting schedule does not include staking/emissions rewards, which is dependent on the amount of Parallel NFTs users hold. Additionally, it is to be determined how the vested Echelon Foundation tokens will be used given that it is not well documented. Something to consider.

ARKM Linear Unlock

Arkham is set to experience a large uptick in their linear unlocks across the board of currently illiquid tokens, most notably for Ecosystem Incentives & Grants. These ARKM tokens will also begin to vest linearly for Investors & Advisors, a new cohort of holders that have yet to receive any liquid tokens. On this current emissions schedule, approximately 498,140 ARKM ($816,950) tokens will begin unlocking a day.

As these tokens become liquid, they will play multiple roles within the ecosystem:

1. Used for staking bounties and participating in intelligence auctions on the exchange.

2. Enables the reward system for community-beneficial actions and provides grants for ecosystem-enhancing projects.

3. Enables a unique discount system, offering up to 60% off platform fees for users who pay with ARKM (20% discount) or hold and lock tokens for 30-90+ days (up to 50% discount).

This multi-faceted utility aims to drive platform adoption and foster long-term ecosystem growth, potentially benefiting from the increased liquidity provided by the upcoming token unlocks.

ATH Cliff Unlock

While still far out, we wanted to point out just how low of a liquid supply of tokens Aethir has circulating, with a large looming 16.67% of supply unlock next February. Unlocks for project’s like this are very important to note, as they signify that the core team must rush to find product-market-fit to ensure token price equilibrium and establish healthy a supply:demand dynamic, among other pressures to meet early-stage investor expectations.

ATH was among the cohort of high FDV, low float tokens we saw launch in Q1 of 2024, but we hope that they are able to bootstrap growth and offset the price impact that this large unlock may impose. Their recent announcement indicating strong revenue growth could play a role in offsetting downside from the unlocks.

IO Cliff Unlock

There is a large sequence of io.net unlocks for the next 12 months, releasing 2.22% of the circulating supply ($5.64 million at the current price) every 30 days for the next 12 months. The tokens vesting during these next 12 months are allocated to the Binance Launchpad, Ecosystem R&D, Community, and Emissions, with the Investor and Early Contributor cohorts vesting their tokens in July of 2025.

Similar to ATH, it is a race to product-market-fit for io.net, and we hope that the demand for distributed computing resources heats up in 2025 before the unlocks become more aggressive.

Our Take

Historically speaking, it has been a well known meme that token unlocks are “bullish” because it indicates that there will be less tokens for investors sell post-unlock. However, we anticipate that this will change as investors become savvier and understanding of the risks associated with holding these long-tail assets. Additionally, we are slowly seeing a trend reversal from investors preferring speculation-driven assets towards preference for fundamentally-backed assets that are posting consistent cash-flows, user adoption, and smart contract growth.

While industry investors will never truly rid themselves from YOLOing the next great idea, slowly ending are the days of hype cycles, and a return to normalcy and investor maturation is inevitable.

Meme of the Day

IYKYK