Crypto’s best ai play?

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By Edgy - April 22, 2025

$TAO Thesis: The Best AI Play

AI is eating the world. Over the next five years, the Total Addressable Market (TAM) for AI is expected to surpass $12 trillion.

Now, guess the current market cap of all AI tokens in crypto? Just $22 billion.

Let’s do some quick math.

If crypto captures even 1% of the AI TAM, that’s a ~6x opportunity from here. But here’s the catch: there are way too many AI tokens. Most of them? Just noise.

If you’re looking for the signal in the chaos, my pick right now is Bittensor ($TAO).

What is Bittensor? It’s a decentralized network that connects machine learning models to end users. It distributes both computation and governance across a global network of users.

Bittensor is composed of several distinct subnets. Each subnet usually focuses on specific tasks like text generation or image recognition. It’s a marketplace where users can trade AI generation and $TAO.

Now, why is it on my radar?

Firstly, it is the market leader for the AI narrative. It covers all the basics like a legit team, an actual useful product, solid fundamentals, and so on. Additionally, even web2 people like Chamath talk about. But I have more reasons to believe in it.

Thesis #1: Dynamic TAO upgrade

It’s a recent upgrade to their system. Previously, a root network (relatively centralized) determined TAO emissions to subnets. Now the amount of TAO that users have staked into subnets will determine the emissions.

Additionally, subnets will be issuing their own tokens called “Alpha Tokens”.TAO stakers will receive Alpha Tokens as staking rewards. The price of Alpha Tokens is determined by the amount of staked TAO in a subnet. The more TAO staked, the higher the price will be.

These changes will massively increase the demand for $TAO.

Thesis #2: More subnets are coming

Since the dTAO upgrade in February 2025, the number of subnets has grown 41% to 92 total subnets. This is due to several reasons.

Better tokenomics. Alpha Tokens are great for subnet teams.
Cheaper registration, which is 10 times lower than the average of last year.
The team actively helps subnet teams with various aspects of launch, like upfront $TAO costs.

Thesis #3: Less selling pressure

Selling pressure usually comes from VCs and team allocations. But TAO was fair-launched in 2021, with no pre-mined tokens and no pre-sales to VCs. So users don’t have to worry about them dumping.

New TAO emissions are distributed stakers as network rewards. And ~72% of the total circulating TAO is locked. In the staked TAO, ~80% is staked at Root Staking and only ~20% is staked at Subnets.

If 50% of the root staking moves to subnets, the total market cap of subnets will go 3x from the current number. Pumping subnet tokens will drive attention to TAO as well.

On 5th September 2025, $TAO emissions will be halved. They’re usually bullish catalyst. In the last halving, the $TAO price has surged 437% in 5 months.

But we are in a bear market. So this as a long-term (6-12 months) investment rather than a short-term trade.

$TAO isn’t a “useless” governance token either. You can use it to earn yield.

One strategy is to stake $TAO and get exposure to good subnets. You can find the subnet list here and choose a subnet with high reward emission.

For example, let’s say you have 100 $TAO.

Withdraw 100 $TAO to your Bittensor wallet
Create an account on taostats
Choose Root & Chutes Subnet at the taostats Stake dashboard
Stake 70 $TAO to Root staking & the rest 30 $TAO to the Chutes subnet

This strategy has risks. Alpha Tokens are basically leveraged TAO tokens, they can fall much faster. Plus, your rewards are dependent on validator performance.

By the way, this information was pulled from a 40 minute video deep-dive we published last week inside The DeFi Edge Pro. We shared our thesis around $230 before it made its recent pump to $330.

You can join the waitlist to know when we’ll open signups again.

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Protocol

Zora: Failed Pump.fun or Next gen social media?

Crypto has wanted a consumer application for a long time. Well, last week all eyes were on one.

What is Zora? It’s an onchain social network. Like Instagram, you can upload content to the platform. But additionally, you’ll have a token attached to the content.

Initially, Zora had attached NFTs to each content. Creators could set the value of NFTs, and users could collect them. In the beginning, when NFTs were still hot, this model got some traction.

But NFTs went out of fashion. And Zora lost traction. In this cycle, memecoins powered by Pump.fun got all the hype. So Zora adopted their model. Instead of NFTs, they created ERC-20 tokens for each piece of content on Zora.

The content coins will have a supply of 1 billion.
Creators automatically receive 10 million coins on launch.
Zora will create a liquidity pool for the content coins to make them tradable.

It went under the radar for some time, but it really took off last week.

Why is it getting traction? Base, the Coinbase L2, promoted their Zora tokens from their official account last week. The memecoin-like activity on the token created massive controversy. The ethics of such action is another topic, and we covered it in last week’s newsletter.

But it attracted many people to Zora. Look at the new posts on Zora below, it exploded after last week.

On April 20th, they had ~6500 accounts posting on Zora. (We can assume these actual users due rather than bots due to the methodology.) And the user count isn’t heavily trending downwards. Similar to Farcaster, Zora seems to have found a niche as a web3 social platform.

Since the controversy, the new tokens on Zora have been increasing. Yesterday alone, >25k tokens were created on Zora. That’s huge. For contrast, on the same day, ~37k tokens were created on Pump.fun.

You can see more data on Zora here.

The content coin narrative

But Zora isn’t another memecoin launchpad. Jesse, the founder of Base, is trying really hard to create the content coin narrative.

While they are like memecoins, Jesse is trying to change the social expectations and norms surrounding the content coins. For example, memecoins usually have a team working to capture more attention and mindshare. Content coins wouldn’t have that.

If you look at Zora user numbers, Jesse has been somewhat successful. The controversy brought users to the platform.

But the market doesn’t have the liquidity to pump coins created from Zora. The chart below tracks the total market cap of all Zora coins. After hitting the peak on April 18th, it’s declining rapidly.

There are few examples of Zora coins hitting high market caps. If we exclude the coin from Base, no Zora token has >$1M in MC. Right now, only 9 coins have >100k.

So if Zora is trying to be the next Pump.fun, it has failed. It’s not a good place to launch a multi-million coin.

But I don’t think Zora is trying to be the next memecoin launchpad. It is trying to create a new niche of tokenized social media. But I don’t think their current token mechanisms are suited for that either. Generic liquidity pools are suited for memecoins masquerading as investments.

Instead of generic tokens with Uniswap LPs, Zora will need to customize the content coin mechanism with Uniswap hooks, sniper protection, and more. Maybe users should be able to bet on the creator instead of their content. Zora can create an algorithmic relationship between the Creator token and its content tokens. There’s a huge design space to explore.

Zora is experimenting on a niche with real potential. If executed correctly, users prefer onchain social media. They’ll earn more. The content won’t be dependent on any centralized database. You just have to create network effects first.

But Zora’s current mechanisms aren’t up to the task. For now, they can capitalize on the momentum using an incentive program. Create network effects. All the while trying to design the best mechanisms for the niche.

$ZORA Token launch

Zora has announced the launch of the $ZORA token on April 23rd. We can expect a reward program to incentivize Zora usage.

The token is framed as a pure “fun token”. With no governance rights or claims on Zora products. So I’m not sure how the market is going to value it.

They’ve taken two snapshots. First, include activity from January 2020 to 3rd March 2025. The second includes activity from March 3rd to April 20th, 2025.

If you’ve used Zora in that time period, you probably have some allocation. Make sure to claim that.

Edgy’s final thoughts: ewwwwww, I’ll pass.

DeFi Catalysts

Vitalik proposed a radical idea for the Ethereum Execution Layer. He suggested replacing Ethereum VM with RISC-V Virtual Machine.

Solana overtook Ethereum in the market cap of staked assets. This is another metric in which Solana has surpassed Ethereum.

Galaxy Research introduced a new voting system to reduce Solana’s inflation. It’s called Multiple Election Stake-Weight Aggregation (MESA).

HyperLiquid has captured ~70% market share of the onchain perps trading volume. This indicates the increasing dominance of the platform.

Rain.fi introduced Liquid. It provides instant liquidity and staking rewards on staked tokens. Currently, it’s available for $JUP.

Initia launched its Vested Interest Program (VIP). It’ll distribute $esINIT based on user activity and bridged liquidity across Interwoven Rollups.

CoreDAO announced a partnership with Maple Finance to enable users to earn yield on Bitcoin by depositing it in a Maple-managed vault.

Helium has hit new all-time-highs in DAO voting participation, $MOBILE validator onboarding, and usage-based rewards.

Jupiter Exchange has integrated Meteora‘s Dynamic AMM v2 into their trade routing. It’ll bring more volume to Meteora.

Mantra CEO & Founder JP Mullin is burning his allocation of team token, which is 300M $OM. He claims it to be a first step in building back trust.

Kinetiq partnered with Veda to introduce Kinetiq Earn. It’s an automated kHYPE DeFi strategy vault that gives yield for kHYPE stakers.

New Launches

Peapods Finance went live on Berachain. It provides yield on assets using volatility farming.

DeSwarm is an AI-powered Trading & Yield Optimization Platform on Berachain. The beta version of the terminal is live.

N1chain launched its invite-only testnet. Currently, it’s only accessible via direct message to 01 Exchange (@01_exchange).

RISC Zero introduced R0VM 2.0. It claims to reduce Ethereum block proving time from 35 minutes to 44 seconds. Real-time (<12s) is expected by July.

ai16z launched auto.fun, a fair launch platform that claims to reward builders. As of writing, it is down for maintenance.