Decline in Major Memefunds Market Capitalizations

The market capitalizations of major memefunds on Daos.fun have experienced a notable decline over the past week, with leading funds such as ai16z and Norm Capital seeing reductions exceeding 80%. Analysts suggest that the initial hype surrounding these funds may be fading quickly.

According to recent data from the new platform, the top memefunds have shed substantial value, with ai16z, which has no connection to Andreessen Horowitz (a16z), falling from approximately $130 million to around $23.8 million—a drop of nearly 82% in just a week. The net asset value (NAV) for ai16z's assets under management stands at only $283,150, indicating a stark discrepancy between market cap and its holdings. The fund’s primary holdings include approximately $68,000 in Solana and $172 million in the Degensai memecoin.

Similarly, Norm Capital has seen its market capitalization plummet from about $170,000 to just $25,000, with a NAV of $2,481. This fund primarily consists of holdings in two memecoins, Retardio and Retire. As Norm Capital approaches its initial value of 33 Solana, approximately $5,346, holders could soon face restrictions on selling their tokens. According to the memefund's page, if NORM's value drops below its initial level, traders will be unable to sell their tokens at the current curve, a condition that applies to all funds on the platform.

DAOS.fun seeks to recreate the traditional hedge fund experience through a memecoin lens. Launched on Sept. 26, 2024, this Solana-based platform enables users to create and participate in VC-style “memefunds” and is currently in beta mode. Positioned as the next iteration after Pump.fun in the Solana-based memecoin narrative, DAOS.fun gives users access to various unique funds, such as ai16z, Norm Capital, and Sequoia Capital (not affiliated with the well-known VC firm), which invest in trending web3-AI projects and popular memecoins.

Olcabs developer Priyeshu Garg voiced concerns about the new platform on X.com. “Daos.fun is misleading its users by showing unrealistic market-cap gains—a metric which is often shown in some perspective like 24 hours,” Garg said. Speaking about the ai16z market cap 24 hours gain, currently standing at over 34,900%, the Olcabs developer added that this could be misleading. “It would paint a very rosy picture that it is up 39232.33% while the truth is – in 24 hours it's down 40%. These are dark UI patterns common in web2 now making their way in web3,” he said.

The alleged creator of ai16z, operating under the X.com handle pmairca, similar to Marc Andreessen's @pmarca handle, has not been active on the social media platform since Oct. 25, when they released a manifesto discussing the memefund's vision of integrating artificial intelligence and blockchain technology to reshape finance.

Analyst Insights on DAOS.fun’s Initial Hype

Bitget Wallet COO Alvin Kan noted that the initial surge in interest for ai16z stemmed from its unique positioning as an “AI investment DAO,” amplified by endorsements from high-profile figures like a16z co-founder Marc Andreessen. However, he added that the recent downturn reflects typical profit-taking as early investors lock in gains.

“Recent fluctuations in the market cap of memefunds like ai16z and Sequoia highlight a mix of speculative enthusiasm and unique crypto market dynamics,” Kan told The Block. “The initial price surge for ai16z on Daos.fun was likely driven by FOMO and the novelty of an ‘AI Investment DAO,’ while the platform's exclusive, invitation-only model boosted early demand. However, natural market corrections, combined with reports of potential coordinated activities, have tempered investor sentiment,” he added.

Ensemble.codes CEO Leon Prouger told The Block that the recent spike and drop in AI-focused tokens like $ai16z come down to a mix of hype, organic market behavior, and some external factors. “However, as is typical with high demand in crypto, the market corrected itself, and the initial enthusiasm cooled down, leading to a natural pullback in prices,” Prouger said.

Daos.fun, a platform allegedly founded by @baoskee, is stated to be designed to help memefund managers and creators raise capital to establish their own DAOs and invest in meme-related projects. Currently, the platform operates on an invitation-only basis for creators who have received official codes.

Creators must set fundraising targets and management fees and have a week to raise the required amount of Solana. If fundraising fails, buyers can redeem their Solana but will incur a 10% loss.