Layer One: Will 2026 be the year AI conquers crypto?

Welcome to Layer One: the newsletter and podcast on the intersection of crypto and the real world. Hosted by Steven Gates and Kelvin Sparks, Layer One brings you inside the conversations driving blockchain forward.

Last time on the podcast, we were joined by Jason DeSimone, CEO of SocialFi platform The Arena, to discuss the state of the Web3 creator economy and how AI agents may become the leading KOLs of the future. In this edition of the Layer One newsletter, we're taking a closer look at the AI agent trend, to ask whether the onchain future really does belong to the machines.

Will 2026 be the year AI conquers crypto?

It’s now a little over three years since the launch of ChatGPT unleashed AI mania upon the world, sweeping both the traditional and crypto markets along with it. Since then, industries have been transformed, and the ways in which billions of people work, communicate and interact with media have changed considerably.

Research from a leading video editing platform last year estimated that around 20% of YouTube Shorts are now low-quality ‘AI slop’. The shift in the online publishing industry is even more pronounced, with an October report from Axios revealing that around 52% of all new articles published online are now created with AI, with human-produced content being overtaken for the first time in early 2025.

Last time on the podcast Jason DeSimone talked with the Layer One hosts about how these trends could shape the future of the creator economy. They discussed a possible future where Web3 social media platforms are primarily dominated by AI agents producing fine-tuned content to compete for user attention. It’s a notion which may seem cold and alienating to many of us, but will probably appear perfectly natural for future generations to come. Thankfully, DeSimone and others still see this as a fairly remote prospect.

Visions of a sprawling ecosystem of autonomous onchain agents, transacting directly with one another to generate value for their creators and shareholders, have their roots in the Virtuals Protocol hype of late 2024 and early 2025. Buoyed by the momentum of AI equities in the traditional markets, the AI crypto sector enjoyed a bullish surge, peaking at around 0.8% of the total crypto market cap at the beginning of last year. Virtuals was one of the standout success stories of this narrative.

The platform — which allows users to create and monetize their own AI agents to “autonomously engage in onchain commerce” — saw its daily revenue spike up to almost $5 million during the peak. What followed was a general cooling off in the AI agents sector through the rest of the year, as the markets moved on to new trending narratives. The pendulum has, at least for the time being, swung backwards.

At the same time, the actual utility of many AI agents launched through the platform proved underwhelming: Far from being the interconnected, autonomous value producers touted by the protocol’s evangelists, their primary use case turned out to be posting memes on X. Any talk of an AI agent-driven onchain future has turned out to be, if not simply wrong, then at least premature.

Past Layer One podcast guest Haseeb Qureshi of Dragonfly Capital — a longtime Virtuals skeptic who once decried its output as “chatbots with memecoins attached” — earlier this week renewed his pessimism on X. Qureshi predicted that “AI agents will not be ‘paying each other’ or spending any meaningful money in 2026,” due to lingering concerns over "janky" prototype tech.

However, Qureshi and analysts at The Block are in agreement that AI is demonstrating growing utility in one sector: crypto scams. Our research team last month reported on the existence of a suite of sophisticated AI-powered call center tools offered on the dark web. These tools allow scammers to run agents capable of conversing with thousands of potential victims via voice call, with accent options tailored down to specific US states.

Likewise, AI tools are becoming ever more adept at identifying smart contract vulnerabilities, according to a warning issued by research firm Anthropic last month. Their benchmark test found that common LLMs were able to identify vulnerabilities in around half of contracts tested, along with two novel exploits not previously known to the researchers.

So while 2026 may not be the year that AI agents conquer the onchain world, what’s clear is that they will remain a central part of the conversation — though perhaps not always for the reasons we might hope.

Podcast Recap: How Arena outlasted rivals and built a real social crypto app

In the latest edition of the Layer One podcast. We were joined by Jason DeSimone, CEO of next-gen social media platform The Arena, to discuss the future of the creator economy and how he turned a struggling project into one of the longest-surviving social apps in Web3.

Subscribe to Layer One on Youtube, Apple, Spotify or wherever you get your podcasts.

In the Headlines: The stories driving the conversation this week

• 2025 was a record year for so-called “$5 wrench attacks.” These incidents, in which attackers inflict real physical harm on crypto holders in order to steal their assets, hit a high of 70 incidents logged last year according to security expert Jameson Lopp. To counter such attacks, security experts recommend measures such as creating a decoy account with a smaller amount of holdings, and practicing security drills before high-profile public events like crypto conferences.
• Avalanche C-Chain reported a record 400 million transactions last year, almost doubling its prior record. The L1's growth throughout 2025 was in part driven by enterprise adoption, via partnerships with firms like FIFA and Toyota. Onchain real-world asset growth also made a significant contribution to network activity, with the network's RWA TVL increasing around sevenfold over the course of the year.
• Crypto-native AI platform Surf raised $15 million in funding last month, building towards a new version release in February. The company, whose models reportedly perform four times as well as generalist LLMs on crypto-specific tasks, completed the funding round with contributions from Coinbase Ventures, Pantera Capital and the Digital Currency Group. 

Top of the Charts: AI equities continue to grow despite bubble fears

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