Our 2026 Outlook

Enduring Conviction: Rise of Valuable Adoption

-- Paul Hsu, Founder and CEO, Abdul Al Ali and Justin Patel, Venture Investors, and Eugene Tsai, Venture Data Analyst at Decasonic

Crypto and AI are entering a phase defined by durable adoption, measurable outcomes, and institutional participation. While volatility remains a defining feature of crypto markets, the nature of that volatility is changing. Reflexive, retail-driven speculation is giving way to real usage, real revenues, and valuable adoption. This shift is shaping the next wave of capital allocation toward innovators building at the frontier of crypto and AI.

2025 marked an acceleration of structural, regulatory change. AI adoption largely accelerated towards enterprise deployment, in part driven by the rapid adoption and advancement of AI. This year brought a pivotal number of advancements: From the introduction of DeepSeek in January, to the introduction of benchmarking defining Gemini-3 in November, introducing a new era of intelligence. Similarly, crypto matured under an increasingly pro-regulatory environment, with the introduction of GENIUS, MiCA, and other global frameworks that are accelerating the embrace of crypto. Capital is rapidly rotating towards innovations that are highly durable through valuable-adoption usage. In this environment, conviction shifts from being early to being right.

At Decasonic, we believe enduring conviction will win. Conviction that compounds through cycle and grounded in valuable adoption.

A Market in Transition: The Emergence of Valuable Adoption

Crypto is in a period of transition. Previous cycles disproportionately rewarded early adopters and narrative momentum. The next cycle rewards investors that maintain valuation discipline across both equity and tokens, strengthen their market timing parameters across this market volatility and deeply focus on valuable adoption. 

This transition is inherently volatile.

Macro forces, including monetary easing, currency debasement, and increasing geopolitical and trade fragmentation, continue to introduce uncertainty across global markets. At the same time, unprecedented levels of investment in AI industrial infrastructure are accelerating AI’s transition into the mainstream, reshaping how software is built, consumed, and monetized. Venture capital has rotated decisively toward AI, compressing the timeline from infrastructure buildout to application adoption. Across this backdrop of volatility, crypto is transitioning from reflexive speculation toward adoption-driven value creation, where value is increasingly measured by real economic activity and high-value outcomes.

In crypto, the transition will manifest as a shift from launches to lifecycles, and from speculative-volume to valuable output. Adoption is now increasingly observable. It is observable in stablecoin settlement, perpetuals and on-chain markets, in agentic-driven crypto participation, and increasingly in enterprise and institutional use-cases. Crypto, relative to overall venture capital, lags in AI, but we believe it will catch up.

Opportunities at the intersection of Web3 and AI are being defined by valuable adoption, where usage, monetization and outcomes reinforce one another. Open standards such as x402, an internet-native payments protocol supported by core contributors from Coinbase and Cloudflare illustrate this shift by enabling agents to transact autonomously. More than ~75.4M to date have been processed by the x402 standard. Similarly, emerging standards like ERC-8004 are establishing on-chain discoverability and reputation for agents, supporting persistent identity, coordination, and trust across AI-native systems. Together, these foundations reflect a broader transition from experimentation to adoption, where network activity, value accrual, and high-value outcomes are becoming observable, investable signals; creating a durable opportunity for builders and capital allocators operating at the Web3 x AI intersection.

Valuable Adoption

Valuable adoption is not driven by launches, incentives, or narrative momentum. It emerges where products solve real problems, users are willing to pay, and networks coordinate activity in ways that create durable economic outcomes. As crypto and AI mature, value accrues to systems that demonstrate repeat usage, clear monetization, and defensible coordination advantages. Valuable adoption is defined by usage that compounds independent of market-sentiment, and one that sustains and creates value over cycles. 

In practice, valuable adoption typically exhibits the following characteristics:

• A clear customer with purchasing authority, whether an individual, enterprise, or institution

• Legible ROI within a cycle, measured through cost reduction, revenue generation, or productivity gains

• Retention that persists without heavy subsidization, reflecting genuine product pull

• Distribution that compounds, through integrations, platforms, and embedded workflows rather than paid acquisition

• Economic value accrual, where networks generate real fees and revenues rather than relying on emissions, leading to high customer LTV

• Strengthening network effects over time, including data advantages, product value propositions, AI memory lock in, AI context personalization,  and regulatory positioning

  
  

We focus on leading indicators that signal valuable adoption early. At the network level, this includes Network DAU, which captures sustained user engagement at the protocol layer, and token value accrual, which reflects real economic throughput.

This lens applies across both crypto and AI. AI acts as an accelerant, compressing time-to-value, improving monetization, and expanding the surface area of adoption. Crypto provides the coordination layer, enabling ownership, trust, and incentive alignment across decentralized participants. Where these systems intersect, valuable adoption emerges fastest when market timing aligns with clear economic utility.

We are consistent in applying this framework across our pre and post-investment activities. In 2026, conviction is no longer built on being early to a trend, but on underwriting systems that can sustain usage, generate value, and compound outcomes as markets evolve.

The Signals We Track Heading into 2026

We are focused on signals that map directly to durable value-creation.

1- Company/product-level signals:

AI tools in 2025 delivered productivity gains of 20-50% for users immediately upon adoption, accelerating user satisfaction and integration. This rapid realization of benefits supports strong conversion rates compared to traditional SaaS, fostering long-term customer commitment.

Such conversions enhance retention that persists with minimal incentives. AIi-powered onboarding and smart technologies in Web3 redacted friction for users, boosting retention rates in apps and ensuring sustained engagement without ongoing subsidies. Retention ties into effective distribution mechanics. AI and LLMs enabled startups to personalize experiences and win user acquisition channels faster, compounding growth through and embedded workflows.

These mechanics underpin pricing power and willingness to pay. Average monthly AI spends reached $85,521 across enterprises in 2025, demonstrating defensible monetization.

Finally, pricing aligns with shipping cadence and team velocity. High-performing tech teams in 2025 increased developer output by 10-30% through AI-driven processes, enabling faster iteration and market responsiveness.

2- Market-level signals (Web3 x AI):

Network DAU including agentic users showed strong activity on Base chain with around 500,000 daily active addresses in late 2025, signaling broadening participation and utility. This user activity drives token value accrual through real fees and revenues.

Fees contribute to lifetime value for users, developers, and capital. AI-enhanced tools and predictions in 2025 supported higher retention and revenue per participant in Web3 cohorts. Higher LTV attracts developer adoption and integrations.

Developer growth signals institutional and enterprise readiness. Digital asset allocations rose rapidly among investors in 2025, supported by clearer regulations and hybrid finance models.

Any single metrics can be noisy. The combination usually tells the truth. Taken together, these signals point to a market that is maturing. While volatility remains, the underlying system is becoming more resilient, with stronger infrastructure, clearer compliance pathways, and more grounded adoption. We view this as a healthy recalibration that supports sustainable growth over time.

Visions for Tomorrow:  Our Outlook for 2026

Looking ahead, our 2026 outlook reflects our enduring conviction in Web3, AI, and the intersection:

1- Blockchain restructures the economics of AI infrastructure, shifting advantage from scale to coordination. By 2026, the question centers on how decentralized AI outperforms centralized AI.  As AI deployment scales, cost efficiency, transparency, and coordination become binding constraints, with AI capex expected to exceed $500B in 2026 across hyperscalers and broader infrastructure providers. Decentralized compute, open models and inference, and data platforms provide flexible, market-driven alternatives. Blockchain enables verifiable provenance and incentive alignment across the ecosystem, supporting composable AI stacks where compute, data, and models can be efficiently combined, governed, and scaled. We recently wrote about the spectrum of trust here.  

2- Web3 tokens evolve from funding mechanisms into operating systems for agentic innovation. In 2026, tokens increasingly function as coordination layers rather than speculative instruments, enabling the permissionless funding and operation of AI-native systems. Tokenized incentive frameworks allow communities to deploy AI that perform economically meaningful work across workflows and commerce, as seen in the x402 standard, where 100+ projects are already building, integrating, or utilizing x402 and the protocol has processed over 1.7M+ lifetime transactions moving over 1 million dollars in value. These AI systems augment human agency, enabling scalable autonomy under human oversight.

3- AI upgrades Web3 to adaptive, dynamic and reasoning-based systems.  AI increasingly injects advanced reasoning into blockchain-based applications, transforming Web3 from static infrastructure into adaptive systems.  AI-native interfaces reduce friction and broaden access for crypto. In 2026, reinforcement learning frameworks begin to meaningfully shape decentralized systems, allowing protocols to evolve based on outcomes and feedback rather than fixed rules.    

4- AI personalizes human relationships across hybrid physical and digital environments, or the “metaverse.”  By 2026, AI-driven interfaces increasingly mediate how humans interact across digital platforms and immersive environments. Autonomous agents personalize experiences across commerce, media, productivity, and social systems, adapting dynamically to context and intent. As these agents move from screens into the environments where people live and work, adoption depends on the hardware surfaces they can inhabit, and in 2025 that surface area expanded meaningfully, with global smart glasses shipments growing 110% YoY in the first half of the year and AI-enabled models accounting for 78% of shipped units. AI-powered content creation and real-time adaptation make virtual environments deeply resonant, responsive and participatory, and consumer devices such as AI-enabled smart glasses signal the emergence of ambient computing.  

Taken together, these themes reflect a transition from experimentation to integration, where blockchain and AI move from enabling technologies into foundational systems that coordinate intelligence, capital, and human resources at scale. As these technologies converge, they create the conditions for value-creation to emerge. 

Our Investment Thesis

Our 2026 investment thesis is centered around valuable adoption, where crypto and AI converge to create durable, compounding value. In sum our thesis around the Web3 x AI supercycle covers three areas: 

1. Coordination: Web3 enables economically enforced coordination for AI; providing ownership and trust across global, decentralized networks. 

2. Agency: Tokens align agent-native economies by coordinating ecosystem participants across digital and physical systems through ownership and incentives. 

3. Relationships and Outcomes: Users pay for AI that reliably converts intent into compounding, high-value outcomes over-time with transparent attribution and aligned value-capture. 

Welcoming 2026: Key Sectors of Interest

As of this publication, the collective market capitalization of the Web3 x AI token market cap stands at $29.18B. Recent growth has been largely driven by core infrastructure development, including agentic frameworks and agentic-economy participants. Capital formation, user-engagement and product development is increasingly concentrated in sectors where AI accelerates monetization and crypto enables coordination, ownership, and settlement. AI itself is being embedded across core Web3 sectors, reshaping how value is created, distributed, and captured.

The next phase of growth will be driven by alignment of users, developers, agents, and institutions:

1. Consumer AI Interfaces: Interfaces are becoming the primary access layer for intelligence. Web3 enables users to own relationships, align incentives, and coordinate value across adaptive and generative experiences. 

   1. Valuable adoption emerges where AI interfaces become generative, adaptive, and owned by users. 

      
      

2. Physical AI: Physical AI translates intelligence into real-world system-action. Web3 provides the economic coordination layer that enables Physical AI to scale. Tokens align resource contributors and provide a pathway towards usage-driven ownership. The emergence of agentic identity, agentic commerce, and agentic coordination will expand to the physical realm, with machine-to-machine payments and the foundation for the machine economy emerging. 

   1. Valuable adoption emerges where physical AI is coordinated through scale in resource contribution and ownership.

   
   

3. Consumer AI Applications: Applications translate intelligence into daily workflows across commerce, education, and entertainment. As AI apps emerge as the primary gateway for consumer behavior, Web3 serves as the moat that safeguards relationship, ownership, and value capture from platform lock-in.

   1. Valuable adoption emerges where consumer AI products drive repeat, outcome-driven usage and crypto enables ownership, attribution, and durable monetization.

   
   

4. DeFAI: DeFAI upgrades DeFi from dashboards into intent-driven execution. AI-native agents compress complexity across discovery, routing, and risk management, while crypto provides composable liquidity, transparent settlement, and permissionless market access.

   1. Valuable adoption emerges where AI reduces friction and improves risk-adjusted outcomes in on-chain finance, with recurring fees and durable retention without heavy subsidization.

   
   

5. Internet Capital Markets (ICM) : Internet Capital Markets turn capital formation into a natively on-chain lifecycle: issuance, distribution, governance, and secondary liquidity. Tokens become programmable ownership and coordination primitives, while AI makes markets more legible by upgrading underwriting, disclosures, compliance workflows, and real-time market intelligence.

   1. Valuable adoption emerges where capital can be formed and deployed on-chain with sustained liquidity, compliant distribution, and clear economic throughput.

   
   

6. AI Middleware: AI middleware enables persistence across systems - coordinating memory, identity, reputation, and execution. Web3 provides the economic orchestration layer that makes intelligence persistent. 

   1. Valuable adoption emerges where stateless AI becomes persistent, owned, and outcome-driven. 

Ushering in Mainstream, Durable Adoption

AI and blockchain are increasingly reinforcing one another, reshaping how decentralized systems are experienced, deployed, and adopted. AI-native interfaces reduce friction across onboarding, execution, and ongoing usage, translating intent into outcomes and making blockchain systems more accessible to both users and institutions. At the same time, blockchain provides the rails for ownership, incentives, and verification, allowing AI-driven workflows to operate with transparency and economic alignment. As AI accelerates time-to-value and improves monetization, blockchain adoption is shifting from experimentation toward durable, outcome-driven use cases. While still early, the direction is clear: AI and crypto together are defining the next phase of valuable adoption.

Heading into 2026, we continue to closely track adoption across stablecoins, tokenized assets, and on-chain financial infrastructure. Regulatory clarity and maturing compliance rails are expanding institutional participation, supporting growth in stablecoin settlement, payments, and capital markets activity. On-chain-first platforms and networks that prioritize usability, compliance, and integration are increasingly positioned as gateways for mainstream adoption. As institutions deepen their engagement with on-chain systems, blockchain’s role as a settlement, coordination, and ownership layer is becoming more durable, setting the foundation for sustained growth in the years ahead.

Building a Better Tomorrow, Faster: Enduring Conviction in AI-Led Execution

As we look beyond 2026, our focus is on how AI compounds durable innovation, across the companies we invest in and how we operate as an investment firm. We believe enduring advantages accrue to organizations that treat AI not as a point solution, but as an integrated operating capability that augments judgment, execution, and continual learning over time. At Decasonic, this means operating as an AI-native organization, where intelligence is embedded into decision-making systems.

Unlike prior cycles driven by reflexive optimism and price momentum, this phase of adoption is shaped by measurable outcomes. Value is created where products are used repeatedly, where AI accelerates time-to-value, and where crypto enables coordination, ownership, and settlement at scale. In this environment, innovation is rewarded for sustained usage, generating revenue, and compounding value across cycles.

Enduring conviction is built through discipline, underwriting innovations that work in uneven markets, supporting founders who ship through uncertainty, and allocating capital to pockets of valuable adoption that endure with market uncertainty. Internally, we apply the same standard by leading by example with execution. Our AI systems are designed with humans at the strategic layer, reinforcement learning as the optimization layer, and persistent memory to capture decisions, signals, and outcomes over time. This allows conviction to be tested, refined, and strengthened through continual learning and compounding improvements.

We enter this next phase with confidence that durable execution, thoughtful innovation, and high-value outcomes will continue to shape the most meaningful results ahead. As Web3 x AI converges, we believe the organizations that win will be those that treat intelligence itself as a compounding asset, reinforced through outcomes and aligned to real-world value creation.

From our family to yours, we wish you a prosperous year ahead.

The content of these blog posts is strictly for informational and educational purposes and is not intended as investment advice, or as a recommendation or solicitation to buy or sell any asset. Nothing herein should be considered legal or tax advice. You should consult your own professional advisor before making any financial decision. Decasonic makes no warranties regarding the accuracy, completeness, or reliability of the content in these blog posts. The opinions expressed are those of the authors and do not necessarily reflect the views of Decasonic. Decasonic disclaims liability for any errors or omissions in these blog posts and for any actions taken based on the information provided.