Editor's Note: The article reviews the market volatility of AI projects, pointing out that emerging crypto projects often encounter pullbacks after experiencing rapid growth, a process that helps to screen out projects with long-term value. Although many AI projects have experienced a significant market cap decline, Venice AI, with its decentralized, uncensored features and innovative token mechanism, has shown long-term potential. However, the launch of Venice has also sparked controversy, particularly around issues of team operations and transparency.
The following is the original content (edited for easier reading):
Review of the AI Market
This road is long and bumpy. The market volatility of the past few months has made everyone forget that the regular market does not just go up. After experiencing a huge surge, the AI field is now experiencing a strong pullback. This is normal for emerging narratives in crypto: they first experience unprecedented growth by attracting industry attention.
This leads to crazy speculation - but a correction is inevitable. Once the correction occurs, we can discern which projects are truly worth investing in. Correction is actually the Darwinian evolutionary process that crypto projects go through.
In fact, 90% of AI projects may eventually go to zero. Once this happens, we'll know whether the narrative is sustainable (spoiler alert: we think it is), and this usually happens when everyone has already exited the market or been exposed too little. The pain may continue, but we're still far from the end.
The total market cap of AI agents has been completely destroyed. From $15 billion a few weeks ago, it has now experienced over 60% correction, with a market cap of less than $7 billion.
This is reflected in the prices of top launch platforms and agents:
· AI16Z: From over $2 to $0.35
· ZEREBRO Destruction: Dropped to 0.05
· FARTCOIN: Fell below 0.70 again
The only agent that saw an increase in market cap last week was $GOD. Well, that's not surprising; after all, he is omnipotent.
In this chaotic situation, Solana seems to be gaining a competitive edge over Base:
However, when there is blood in the water, it is usually the best time to buy. Although prices have fallen, innovation in the AI field is at an all-time high.
Venice AI & VVV: AI Reasoning Based on DeepSeek
Venice AI, launched in May 2024, is a private and uncensored generative AI platform aimed at becoming an alternative to mainstream AI services like ChatGPT. In a world where AI interactions are increasingly monitored, Venice ensures user privacy by preventing data surveillance, censorship, and payment friction. The platform has grown rapidly, with over 450,000 registered users, over 50,000 daily active users, and 15,000 reasoning requests per hour.
Venice AI Team
Venice is led by Erik Voorhees, a legendary figure in the crypto industry who played a key role in Bitcoin adoption in 2013 and later expanded into a crypto exchange and gaming platform. His expertise in decentralized finance and user sovereignty makes him a strong advocate for permissionless AI.
The project's COO, Teana Baker-Taylor, has deep experience from major crypto companies like Crypto.com, Binance, Circle, and HSBC, adding credibility and execution to Venice's mission.
Venice Product Overview
Venice AI allows users to perform three main activities, leveraging different open-source AI models:
· Text Dialogue: LLama, Dolphin, Qwen or Deepseek
· Image Generation: Fluently, FLUX, Pony Realism and Stable Diffusion
· Code Development: Deepseek, LLama and Qwen.
Recently, the global attention on the Deepseek AI model has exploded, proving that open-source solutions can compete with and even outperform the most famous closed-source solutions like ChatGPT. The experience of using Venice is as smooth as the closed-source solutions provided by big tech companies.
How VVV Unlocks AI Reasoning at Zero Cost
VVV is Venice's native token, aimed at eliminating the cost barriers associated with AI reasoning. Users do not need to pay per request, but can instead:
· Stake VVV to get a proportional share of Venice's computing capacity.
· Earn staking rewards while using AI, creating a negative marginal cost structure.
· Monetize unused computing resources by reselling computing capacity.
This model transforms AI reasoning into an ownership-based resource, rather than a pay-per-use service.
Token Economics and Supply Dynamics
· Total VVV supply of 100 million - 50% airdropped to early users and AI/crypto community projects.
· 14% annual inflation rate - new tokens distributed to stakers, aligning rewards with network usage.
· No pre-sale or VC allocation - Venice provides liquidity directly on Aerodrome, ensuring transparency.
· Growth in resource value - as AI computing capacity improves, the reasoning power per staked VVV increases, making it a deflationary AI asset in terms of utility.
Bullish Thesis: Venice Aligns with Crypto+AI Trend
· AI reasoning as a scarce commodity - Reasoning is the "fuel" of AI, and as demand for AI agents explodes, access to computing power will become a high-value asset.
· Permissionless and uncensored AI - Unlike centralized models that restrict content and monitor users, Venice operates without censorship, aligning with crypto's self-sovereignty ethos.
· Crypto-native monetization - Stakers earn rewards while using AI, transforming a typical expense into an income-generating asset.
· Scalability and network effects - Venice's API adoption will drive VVV demand, tying its value to the expansion of the AI industry.
Venice AI and VVV represent a revolutionary shift in how AI computing access and monetization are approached.
Controversies Around Venice
The launch process of the Venice AI project has also faced some criticism, particularly around the behavior of team members and market participants. Wintermute and Kbit received a large amount of $VVV tokens before the project launch, accounting for 5.5% of the total supply. Wintermute sold $1.4 million worth of tokens before Coinbase listing, while Kbit deposited $8.8 million to Coinbase.
Additionally, a significant portion of Venice's incentive fund was transferred to market makers, and the team has not provided any explanation for this, raising questions about the project's transparency.
Welcome to join the official BlockBeats community:
Telegram Subscription Group: https://t.me/theblockbeats
Telegram Discussion Group: https://t.me/BlockBeats_App
Twitter Official Account: https://twitter.com/BlockBeatsAsia
