The Castle Chronicle: MegaETH Mainnet, Agentic Finance, Price Desolation
PLUS: Crypto's Future At The Frontier Of Technology
Welcome to Edition 158 of The Castle Chronicle!
Gm all!
Welcome to the newest edition of the Chronicle!
You’ll get a curated list of the most important macro news and DeFi news, along with insightful posts from guests and more! Actionable intel done the Castle way 🤝
Without further ado, let’s get into it, shall we?
In The Markets
Last week, we asked if anyone was still alive out there after BTC dropped back into the 74k area and turns out that was nowhere close to the bottom.
So now we ask again, is anyone still alive out there?
In another historically large liquidation moment (can we stop having these please), BTC found itself staring 59k right in the face. That’s right, we went from 125k in October and back down over 50%.
Most would say that’s fairly close to a full bear market cycle, and we did it in less than 6 months. Who knew we were trying to speed-run our demise?
ETH pulled off a similar manoeuvre, touching tips with 1.7k, capping off an underwhelming performance from the asset as a whole.
Why did this happen?
Who knows.
What we can say is that crypto has been hilariously weak since 10/10, and it’s altogether possible that we’re still experiencing some kind of fallout from that massacre. It’s also been rumoured that large Asian entities were selling (possibly liquidated, who knows) amongst general Yen carry-trade unwinding.
Not all is lost however, as we’re due for some kind of reversion. Very rarely do we get moves like this without some form of return to the mean.
This might be a good opportunity for people to exit certain holdings and refocus their capital into better assets. But also, with prices being so depressed, the odds are better that you’re able to scoop up some undervalued projects at a decent discount!
Will we go straight back up into a new bull market, though?
It’s not entirely clear because no one can be sure how much contagion remains from October.
But as always in crypto, we likely won’t find out anything until the dust settles, if at all, and we’re left looking at the fragments of our industry.
Carnage aside, there are still bullish things happening behind the scenes, and maybe crypto is starting to find its new purpose aside from DeFi/stablecoins!
Let’s dive into the rest of the newsletter to find out what that might be!
Crypto Round-Up
AI Agents Are The Next Unlock For DeFi
AI Agents are once again all the rage, but this time it’s less focused on tokenised agents with no moat and more on actually useful implementations. Agents are being created that act as personal assistants, run their own Polymarket arbitrage, and even ones that operate their own treasury.
Crypto is experiencing a crisis of identity, trying to find its way again, and while DeFi/stablecoins have been the north star, there is a case to be made for agentic finance.
This article makes a case for REI (Rei Labs) as a leading project in this burgeoning space. Rei Labs’ ‘Rei Core’ is “a cognitive architecture that delivers genuine reasoning: training at inference, mathematical logic, goal persistence, and adaptive learning.”
The goal: create AI Agents that can perform high-stakes financial tasks at a level that is not attainable with current LLMs.
If you look at this –
You can see that Ecliptica has Rei-powered agents trading live money with real, positive returns, while adapting to real market conditions. This is the beginning of a new age where agents can transact, trade, and interact with DeFi autonomously, similar to how projects like Moltbook have agents interacting autonomously.
This is just an extension and acceleration of their capabilities.
Rei Core allows agents to compound their intelligence with their shared learnings, so you can imagine how these agents can evolve over time.
Read the original article below, and for a more detailed thesis on Rei, and where it fits in the current/future environment.
Aave + Agentic Credit Lines?
No, that’s not a typo - Aave is actually looking into creating agentic credit lines.
Aave already has the most established moat in crypto out of all the altcoins, boasting the highest TVL of any money market. And in an agentic future, agents will need a place to secure and access credit onchain.
Imagine a world where tens of thousands of agents all have access to Aave credit lines – that feels like a big deal. Agents will eventually need to have access to their own capital without human intervention, and credit capabilities will make them much more efficient.
Here’s an early experiment for agents to get access to things like Aave -
Expect this to be a big push for all money markets going forward as agentic finance continues to gain footing and get more popularity.
Why do we think agentic finance will continue to grow?
Well, you have a huge push from various projects to grow agent usage, like:
Sui offering 20k USDC for agents built on their network
USDC offering cash prizes for an agent hackathon
MegaETH bringing ERC-8004 online to complete their agentic infrastructure suite
AI is advancing so rapidly that crypto has no choice but to evolve along with it!
AI Agents Want Our Stablecoins
With the advent of AI Agents, a shift is happening. Everyone is working on creating their own OpenClaw agent and directing them to act 24/7.
What happens when this agent is given control of funds and its human isn’t awake to fund it? Or the bank isn’t open for money to be moved?
Agents can’t make their own bank accounts; they need crypto to move and hold money.
This is why the intersection of crypto and AI is so interesting, because stablecoins perfectly fulfil this niche for agents.
They can choose a specialised stablecoin based on their preferences and needs and use it immediately as they see fit. They receive money tailored to their needs, rather than using a generic dollar-denominated stablecoin like USDC/USDT.
f(x) Protocol makes a strong case for why agents will gravitate towards decentralised stablecoin options as opposed to humans, who only choose decentralisation when it’s convenient.
Humans think emotionally; it’s built into our brains, with logic as an afterthought. Machines are programmed for logic and thus can think more deeply about their stablecoin choices.
Decentralisation, onchain verifiability, and resistance to human intervention matter to them. This is where decentralised stables like fxUSD, and many others, will thrive in an agentic economy.
Schizo’s Solitary Confinement
Holy smokes.
Can honestly say I wasn’t expecting last week to go how it did. Crypto got absolutely decimated, and honestly, it was kind of fun to watch.
I always get a sick pleasure out of watching the market implode, probably because I’ve seen it so many times I just know how it’s going to play out.
Things will be desolate for a while, crypto will evolve into its next form, and we will inevitably be just fine. This next evolution, in my opinion, is diving headlong into providing financial support for AI.
This needs to be crypto’s next milestone.
We’ve lost the battle with retail; they’re likely never coming back in any meaningful way. Janky tokenomics have ruined many recent launches and made token bloat a real issue.
There are too many tokens that do nothing and are sucking up time and liquidity. But if we can focus our energy on making sure that AI x crypto becomes a winning formula, then we have a good shot.
This is where I think DeFi and stablecoins are so important to this future structure, because when agents get full access to funds (and they undoubtedly will), they will look for ways to maximize returns/yield, look for asymmetric ways to manufacture more capital, and they will find the best monetary unit that they can use to transact.
AI can’t create bank accounts, they need crypto. This is one of the best use cases for our industry right now and DeFi will be a huge centerpiece for it.
If you couple that with the likelihood that Tradfi continues to onboard to crypto, we have a winning formula. We don’t need retail to make us successful again, it’s just a little less sexy.
The idea of an agentic explosion onchain excites me to no end. We don’t even need people to create AI/crypto projects, we just need them to make things that AI can use.
The exciting part is that we don’t necessarily need any AI tokens that aren’t agents, as most good financial ideas can incorporate them in some way. Think about how fast things have changed in the last few weeks alone – now fast forward that to 5 years, 10 years.
It will be a new world, one where crypto has its place alongside AI/robotics.
This is literally the frontier of technology, and if you’re not actively using AI to better yourself and your processes, then you’re falling behind.
I don’t subscribe to the belief that we only have a few years to ‘make it’ but I do think you only have a few years to figure out how to best take advantage of this opportunity before the world accelerates beyond our current understanding.
Thanks for reading my Ted Talk.
Schizo out!
In The Know: MegaETH edition
Normally, this section of the newsletter is filled with various news tidbits and headlines for the upcoming week, but as this is a predominantly crypto-specific newsletter, we’ve decided to focus on one thing in particular: MegaETH’s mainnet launch!
MegaETH has officially gone live and dropped the Rabbithole as your one-stop shop to all things MegaETH, including bridging, apps, onramping, and swapping.
Avon has gone live alongside mainnet, and introduced their bootstrapping program
Ever wondered what it’s like to launder dirty money? One of the first games to deploy on MegaETH, Offshore turns you into a laundering mogul with real prizes on the line
Kumbaya is live, enabling a launchpad/DEX for cults on MegaETH
Meridian Finance has deployed, introducing x402 to MegaETH, preparing for more agentic activity
DePin on MegaETH is here with Ubitel, powering eSims onchain
Showdown is also live, delivering a poker game created by topic Magic the Gathering and Hearthstone players onchain
If you’re interested in trading interest rates, crypto, and FX onchain in real time, then Supernova is live with that exact product
Fantasy Football is a hugely popular game (soccer for the Americans), and Top Strike brings that in a one-tap form, now live on MegaETH
Right now, this is the biggest launch in crypto and is bringing a lot of innovative projects to the space in a new way. The real-time aspect of MegaETH enables so much in the way of app creation, but we have to see if this is going to actually bring real users and TVL.
MegaETH is doing something a bit unique here to make sure that MEGA holders can be confident in the work they’ve done, making the TGE entirely dependent on the chain hitting its KPIs.
Make sure you’re reading this article if you’re wondering why there isn’t a MEGA token just yet.
That’s it for another edition of the Chronicle! Every week brings new opportunities, so don’t fret!
We’re all gonna make it eventually!
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In our newsletter, we may discuss projects or tokens in which we hold positions. While we aim to provide informative content, our views are not financial advice. Please conduct your research and consult professionals before making investment decisions. Crypto markets are volatile, and past performance doesn't guarantee future results. Invest responsibly, and be aware of the risks. Your capital is at risk, and we do not accept liability for any losses.