Back to School Time for Smart Contracts — Oraichain Fundamental Analysis

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Coinmonks

23 min readJul 1, 2024

The irony is not lost on those that have learnt the ins-and-outs of smart contracts that, in many ways, they are not particularly smart.

Smart contracts operate in an isolated environment and cannot directly access external data from the real world (e.g., financial data, weather information, etc.). While this is touted as a feature, and not a bug in regards to operating on networks that have raised the bar for security in comparison to their Web 2 counterparts, this limitation hinders their ability to perform tasks that require real-time information.

In essence, smart contracts are designed to execute simple, deterministic logic. They struggle with complex computations, particularly those involving AI and machine learning algorithms, due to the constraints of the blockchain environment. Moreover, once deployed, the code of a smart contract is immutable, meaning it cannot be changed. While this ensures security and trustlessness, it also means that bugs or vulnerabilities discovered post-deployment cannot be easily fixed.

As we well know, the execution of smart contracts on blockchains can be slow and expensive, especially when dealing with high transaction volumes. This can limit their efficiency and scalability for more extensive and complex applications. While smart contracts can automate agreements and enforce rules, verifying the correctness of external data or computations they rely on can be challenging, leading to potential trust issues.

The advent of Chainlink pushed the envelope in terms of enabling smart contracts to integrate with oracles powered by Application Programming Interfaces (APIs), use cases of which we have covered extensively throughout the CCI Fundamental Analysis series. Chainlink excels in providing secure and decentralized data feeds, however a smart contract can only action data received from an API within strict parameters coded into the Smart Contract. In this sense, while Chainlink oracles are of immense importance to the broader cryptocurrency ecosystem, they are reactionary in nature given they only execute when data received from the API meets conditions within a smart contract.

In light of this, it stands to reason that the next evolution of Smart Contracts will enable them to become proactive rather than reactive.

It is becoming increasingly apparent that AI is set to usher in the next evolution of Smart Contracts, and in the spirit of exploring the possibilities of AI taking the Smart Contract functionality, and by extension the user experience (UX) to the next level, we touch on Oraichain.

At a sky-high level, Oraichain aims to address the limitations of centralized AI systems by offering a blockchain-based framework that ensures transparency, security, and verifiability in AI computations and data management. In this fundamental analysis, we deep dive into Oraichain’s technology stack that merges blockchain with AI, use cases for AI enabled smart contracts, $ORAI tokenomics, and we will discuss where Oraichain sits in the increasingly competitive AI landscape that is undoubtedly set to usher in capabilities beyond our imaginings.

This fundamental analysis was published June 2024, and is part of a weekly paid newsletter from the Crypto Consulting Institute as such trade insights are likely outdated. Crypto Consulting Institute provides exclusive market insights, actionable trade signals, and monthly fundamental analyses. For more information on receiving FAs as they are released, visit: https://www.cryptoconsultinginstitute.com/newsletter

Your TLDR summary, D.I.S.R.U.P.T. key takeaways.

What Makes Artificially Intelligent Contracts Tick

To understand what makes Oraichain tick, we would benefit from breaking down Oraichain to its key components.

Team

Since its inception in 2021, Oraichain has made significant strides as a pioneer in integrating AI with blockchain. At the core of Oraichain Labs is a diverse team of experts including AI and blockchain specialists, data scientists, and developers that compose of 6 PhDs, over 58 developers and employees, more than 10 part-timers, and over 10 interns annually.

Leadership and the exceptional quality of contributors are fundamental to Oraichain’s success. Chung Dao, Ph.D., CEO and Co-founder, brings expertise from the University of Tokyo and co-founding experience at Rikkeisoft. Tu Pham, CTO and Co-founder, has a strong tech background from AgileTech and Novalex Vietnam. Diep Nguyen, Ph.D., COO and Co-founder, boasts academic credentials from Keio University and a lecturing role at IAI, UET-VNU, Hanoi.

Their Accelerator Program fosters innovation by incubating several projects and demonstrating proof of concept. This collective effort propels Oraichain forward, merging AI’s potential with blockchain’s security and transparency, ensuring ease of use and reliability of information in digital transactions.

Innovative Technology

Oraichain’s cutting-edge platform combines artificial intelligence (AI) with blockchain technology, overcoming traditional barriers to seamlessly integrate AI models into smart contracts. Smart contracts typically require high precision and deterministic operations, which AI models struggle to provide due to:

High precision demands
Incompatibility between smart contract languages (Solidity and Rust) and AI development languages (Python and Java)
Significant differences in data size requirements between blockchain storage capabilities and AI model dimensions

Core Technology and Architecture

The foundation of Oraichain’s solution is the Cosmos SDK, a robust framework for simplifying the development of blockchain applications. The Cosmos SDK facilitates the creation of interoperable, scalable, and customizable blockchain ecosystems essential for Oraichain’s AI-based capabilities. By leveraging the Cosmos SDK and Tendermint’s Byzantine Fault Tolerance (BFT) consensus mechanism, Oraichain significantly improves transaction speeds and security, enabling rapid and secure AI data requests and validations.

Decentralized Network and Validators

Oraichain’s architecture supports a decentralized network of validators who maintain network integrity by staking ORAI tokens and participating in a delegated proof-of-stake (DPoS) consensus model. Validators are responsible for retrieving and verifying data from AI providers against specific test cases, ensuring the accuracy and reliability of AI APIs.

Oracle Scripts and AI Integration

Oraichain employs oracle scripts to simplify the process of requesting AI APIs, allowing smart contracts and users to securely access external AI data. Thorough testing by randomly selected validators ensures the quality of AI APIs and guards against data manipulation, differentiating Oraichain from other oracle service providers like Band Protocol and Chainlink.

Blockchain Trustworthiness

Blockchain systems are inherently “trustless” because they enable peer-to-peer data and asset transfers without third-party intervention, eliminating censorship and providing an immutable record of balances. Oraichain’s DPoS architecture shares consensus responsibility among validators, ensuring a tamper-proof ledger and that the blockchain system is trustworthy.

AI and Blockchain Integration

AI is a significant frontier technology, creating new opportunities for personal and business development. The integration of AI and blockchain will inevitably lead to more powerful, innovative, and intelligent decentralized applications (dApps). When AI integrates with blockchain, trustworthiness becomes crucial for system safety and security, ensuring accurate and explainable results to maintain blockchain transparency.

Trusted Execution Environments (TEEs)

TEEs at the hardware level protect machine learning (ML) systems from code and data disclosure and modification during training and use. TEEs enable AI developers to train and deploy models securely, even in multi-tenant cloud environments. However, when dApp developers lack access to AI models’ training or inference processes, they cannot confirm the models’ proper functioning.

Smart Contracts and AI Integration Challenges

Smart contracts, which interact with blockchains, require 100% accurate input to produce reliable output, a precision that AI models often struggle to achieve. Additionally, smart contracts are typically written in Rust or Solidity, while AI models are developed in Python or Java, creating compatibility issues. Smart contracts also have limited storage to reduce transaction fees, while AI models are larger and difficult to store on-chain.

AI Oracle Technology

Oraichain’s flagship technology, AI Oracle, enhances the trustworthiness of AI integrated into dApps and blockchain. AI Oracle processes and feeds AI and data into smart contracts through APIs, facilitating dApp development. Verification and validation processes during AI execution are comprehensive and fall into two categories:

Verification of AI: Testing AI models for availability, speed, accuracy, and robustness against adversarial attacks. Only models that pass rigorous tests or achieve high-performance rankings are deemed reliable.
Validation of Verification: Multiple AI executor nodes perform initial verification to prevent biased results. An aggregation algorithm compiles verification outcomes and validates the best-performing AI model.

Node Architecture

The Oraichain node architecture consists of three components: the state machine, consensus, and networking. The state machine, built using the Cosmos SDK, ensures deterministic operations. CometBFT handles the consensus and networking layers, using a Byzantine-Fault-Tolerant algorithm to achieve consensus on transaction order. The Application Blockchain Interface (ABCI) facilitates communication between CometBFT and the application layer. Oraichain integrates the Inter-Blockchain Communication (IBC) protocol for seamless communication and asset transfer between different blockchains.

Network Architecture

Infrastructure Layer: This foundational layer comprises the validator nodes that support Oraichain’s hardware. It ensures network security, incentivizes active participation, and maintains a decentralized governance model. Participants can stake the native ORAI token through Validator nodes or the ORAI DAO, ensuring network equilibrium.
Networking Layer: This layer enables Inter-Blockchain Communication (IBC) protocols, facilitating safe and reliable communication between Oraichain and other blockchains.’
AI Layer: This modified version of the typical Execution Layer focuses on processing and executing smart contracts with enhanced AI capabilities for computations and data analysis.
Oracle Layer: Given Oraichain’s implementation of specialized AI Oracles, this dedicated layer ensures the correctness and reliability of information provided by AI models, playing a crucial role in the AI ecosystem.
Application Layer: This is where dApps and smart contracts interact, allowing programs to connect with the blockchain. Developers primarily work on this layer to create connected applications on Oraichain.
Layer 2 Rollup: This scaling layer enhances oracle services and protocols like Oraichains Verifiable Randomness Function (VRF) within a sub-network, allowing for public participation and increased transaction throughput.

Oraichain’s modular design, particularly through its Layer 2 solutions that enable VRF and AI oracle integrations, allows developers to customize chain modules for specific use cases, enhancing platform flexibility and applicability. By combining AI with blockchain technology, Oraichain is pioneering new frontiers in decentralized applications, ensuring security, transparency, and innovation. Moreover, Oraichain’s AI products are not trapped in a walled garden since through the IBC they are able to communicate with dApps on other blockchains, eliminating the need for developers to have to move from their native networks while generating revenue for Oraichain AI oracles and validators.

AI Contracts Use Cases

To provide an overall picture of what is possible with Oraichain, let’s review current use cases as well as projects currently under incubation.

Oraichain Data Hub:

Oraichain’s AI Ecosystem introduces a pivotal Data Hub, aimed at accelerating the integration of blockchain technology into AI academia and industry. This hub is designed to empower the data economy with Oraichain’s innovative Royalty Protocol. It provides all the necessary tools for working with and monetizing data while ensuring that creators’ royalties are preserved throughout future use and resale.

LLM ChatBot:

Oraichain’s finely tuned AI engine, combined with regular updates to their knowledge base, guarantees that users are kept abreast of the most recent developments and stay synchronized with the ever-evolving crypto market. Using only a handful of straightforward inquiries, the LLM Chatbot can keep you updated on the latest trends, concepts, and advancements.

aiRight:

To support a transparent and truly trustless NFT ecosystem, Oraichain has developed aiRight, a comprehensive copyright management and farming platform for NFTs. This platform utilizes the world’s first AI Oracle to verify the authenticity and origin of multimedia works minted on-chain.

AI Marketplace (DINO Hub):

Oraichain has launched a marketplace offering access to a variety of AI products and APIs, aiming to become the go-to destination for Artificial Intelligence services.

Yield Farming using AI Services:

Inspired by yearn.finance (YFI), Oraichain’s yield farming platform (yAI) simplifies yield trading by providing AI-based strategies as inputs to smart contracts. Unlike traditional crowdsourcing knowledge, Oraichain leverages AI to inform trading strategies through DAO voting.

Face Authentication:

Supported by Oraichain’s AI ecosystem, face recognition technology enables operations that utilize face authentication for enhanced security and user experience.

Fake News Detection:

This use case focuses on verifying the trustworthiness of news articles. Oraichain offers a decentralized marketplace that aggregates results from different providers. Providers must pass test cases to ensure their APIs return accurate results, thereby earning payments through the marketplace.

Block.AI.Care:

BlockAI.Care is an AI-driven platform specializing in healthcare information, enabling users to consult various AI models from different providers about their health concerns using any smart device. Conversely, AI providers can use BlockAI.Care as a marketing tool to directly connect with their target end users.

Oraichain VRF 2.0:

Oraichain VRF 2.0 is the pioneering subnetwork that delivers unpredictable, publicly verifiable, and bias-resistant random values in a completely decentralized manner.

DeFi Lens:

The DeFi Lens and LLM Layer are revolutionizing how DeFi users interact with market data and create strategies. These AI-powered tools simplify the research process, allowing users to personalize searches, perform extensive backtesting, implement strategies without coding, and use natural language for business communication.

OWallet:

OWallet is undergoing a transformation, expanding beyond its role as a mere gateway to the Oraichain ecosystem. With aspirations to offer multi-chain portfolio services, integrate DeFi Lens, introduce NFT Passes, and provide a native DEX interface, OWallet aims to enhance the Web3 user journey.

Additionally, it will feature Advanced Trading Features, catering to a broader array of assets and incorporating advanced order book capabilities. Furthermore, OWallet will introduce an AI Trading Bots marketplace, adding depth and sophistication to the trading landscape.

OraiDEX:

As OraiDEX prepares for a surge in adoption, it pledges to deliver innovative advantages to its users, such as multi-chain swaps, farming services, and an expanded array of trading choices.

The Universal Swap feature strives to streamline cross-chain swapping, ensuring simplicity for users. Through Farming and Trading Vaults, users gain access to diversified, low-risk yield opportunities. The expansion of derivatives trading widens the spectrum of trading preferences catered to. Moreover, Expanded Trading Options enrich both Automated Market Maker (AMM) and Futures trading, providing users with a diverse asset ecosystem to customize their portfolios.

KawaiiQ:

KawaiiQ marks a groundbreaking initiative that blends education technology (EduTech) with psychological technology (PsyTech), with a primary focus on enriching the parenting journey and educational trajectories for children. Leveraging AI and Web3 technologies, KawaiiQ aims to craft a smooth and delightful learning and developmental journey, firmly rooted in sound educational and psychological foundations.

Cupie:

Cupiee introduces a unique platform where users can share stories anonymously, supported by AI to recognize and manage emotions. This initiative aims to create a judgment-free zone, promoting mental health and positive personal development.

NestQuant:

NestQuant is positioned to foster a community where data specialists and investors join forces to develop and automate lucrative investment tactics. Through furnishing tools for visualizing market data and conducting analysis, NestQuant equips users with the intelligence needed to make informed choices and customize their investment path.

NestStock:

Neststock is geared towards revolutionizing the real estate search journey by merging AI and blockchain technologies. It delivers tailored search outcomes, influenced by both market insights and individual user preferences. This method not only enhances user satisfaction but also strengthens the platform’s data reservoir.

OrchAI:

Orchai aims to democratize the DeFi experience by utilizing the AI capabilities within the Oraichain ecosystem. It provides a low-code platform, ensuring reduced fees, increased ROI, and enhanced user experiences. With a total value locked (TVL) of $3M by the close of 2023 and a goal of reaching $30M TVL in 2024, Orchai is poised to reshape accessibility in DeFi.

GPU Staking (Oraichain Homebase):

Oraichain has generated substantial demand for GPU resources. To meet this demand cost-effectively, the Oraichain Foundation has acquired several NVIDIA A100 and RTX 3090 GPUs. These resources are provided free of charge to support incubation projects, however, projects using these GPUs at the application layer will need to compensate for the resources in USDC. This approach maintains a consistent demand for GPU services while creating a direct revenue stream for the ecosystem. The GPU staking interface enables users to acquire scORAI, stake it, monitor revenue from applications utilizing Oraichain GPUs, and claim their earnings in USDC.

$ORAI Tokenomics (As of 12.06.2024)

Price: $12.25

Market capitalization: $197,232,037

Circulating Supply: 16,061,132

Maximum Supply: 19,779,272

All-time high: $105.76

Notably, following $ORAI’s launch in 2020, there have since been significant changes to tokenomics.

1st token burn (equal to 73% of the initial total supply) occurred on December 22, 2020.
2nd token burn (258,449.4 ORAI burnt from the Team) took place on March 28, 2021.
3rd token burn (3,000,000 ORAI tokens from the Team, Advisors, and Foundation) was executed on June 23, 2021.

Allocations

Ecosystem: Mainly utilized for Block Rewards, though it may also be designated for establishing new liquidity pools and incentivizing liquidity mining.

DAO Treasury: The Oraichain DAO will persist in organizing and formalizing standard procedures for community-driven initiatives, encompassing developer incentive programs, marketing endeavors, and the creation of educational content. The Oraichain Foundation will continue to allocate resources to address the distinct needs and support the DAO as required.

Foundation: Principally allocated to support research and development for Oraichain’s open-source core protocols, provide funding for Foundation-hosted hackathons, and sustain the community-driven Foundation Delegation Campaign (FDC), which offers delegations to bolster Oraichain validators.

Token Utilities

The native ORAI tokens are essential for securing and powering the decentralized Oracle network of validators. The native ORAI token is employed in various scenarios as outlined below:

Transaction fees: ORAI tokens are requisite for initiating an AI request sent to the Oraichain network and for executing any transaction.

Staking for validators: All validators are mandated to stake ORAI to be eligible for block creation or fulfilling data requests.

Participation in network governance: The Oraichain network operates in a DAO manner, where all protoc

The token serves as a transaction fee, which is distributed among various parties, including:

Validators executing requests
AI-API providers
Test case providers
Validators creating blocks

The transaction fee varies depending on the fee requirements of the validators executing requests, AI-API providers, and test case providers. Upon receiving a request, the validators executing requests must determine whether to execute it. Subsequently, a random validator, responsible for proposing a block, executes the request and triggers an event to inform the request-executing validators.ol upgrades and parameter alterations that necessitate voting by token holders.

Per Oraichain’s performance compared to other Cosmos-based blockchains, they currently rank 13th with TVL sitting at $16.06M.

Make Contracts Smart Again! — Discussion

If you recall the CCI Fundamental Analysis on Fetch, we had discussed the likelihood that Fetch would be a front-runner in the ever evolving AI narrative.

Granted, we had also discussed Fetch as having working products that were largely confined to the backend, making it difficult to unravel investors’ interests in AI agents without a proof of concept that is accessible to the layperson.

Oraichain does not appear to have this problem while it is in a particularly interesting phase whereby we can see AI-in-action through its various products undergoing incubation.

Use cases for products launching on Oraichain are straight-forward and intuitive, and if you have been contemplating what the intersection of AI and blockchain may look like for some time, it is one of the more accessible proof of concepts, particularly when it comes to AI.

For starters, the team is brilliant. While we have tangible applications like ChatGPT and Google Gemini, the possibilities for AI are in discovery and a team boasting 6 PhDs in relevant industries like Machine Learning and Computer Science are precisely what the AI cryptos require to unravel what is possible with AI dApps. Creating an elaborate ecosystem intertwined with AI cannot be accomplished by a rag-tag group of programmers that are self-taught in Solidity, which given the open-source nature of blockchains and dApps leaves many teams in a position where the best they can hope for is launching a cloned product.

Secondly, Cosmos SDK is arguably the most effective foundation for the team to roll out a network that is capable of interoperability and aims to achieve the status of being blockchain agnostic. Oraichain offers interoperability through Interblockchain Communication (IBC), allowing for cross-chain transactions and the ability to offer oracle services to multiple chains.

Thirdly, the tokenomics are solid. 81% of the token is already in circulation with 32.3% of supply bonded to validator nodes. It is encouraging that the team had the foresight to discard their initial tokenomics and cease team and advisor allocations in favor of strengthening the DAO that currently holds 10.7% of circulating supply. Inflation sits at 8.5% with somewhat linear emissions until May 2027. Transitioning the role of the team and foundation to support the DAO and ecosystem fund, and the 88 active validators on the network, demonstrates a commitment to decentralization.

Which brings us to the problem that is being addressed by Oraichain — democratizing data integrity of AI oracles and utilizing AI to execute tasks within the prescribed parameters of a group of validators. Democratized trading and yield farming strategies through a DAO that is assisted by AI technology is an innovative approach to showcasing the possibilities of collective treasury management. What is good for the goose, is good for the gander.

Ultimately, it is inconceivable for a sophisticated array of smart contract functions to operate without AI on the backend executing assigned parameters of trusted LLM models. As we have covered extensively across the CCI FA series, blockchains are closed systems by design. The deployment of a smart contract is the only means for a blockchain to interact with real world data sets while preserving the integrity of the network. However, since smart contracts are deterministic in that they can only operate within its coded parameters, they lack versatility as they often require a migration to new contracts to facilitate updates which is a logistically difficult task. Chainlink presented a solution to this problem with the use of Oracles, but again, the range of functions available to a static smart contract are contingent on the data available from integrated oracles and whether they satisfy parameters of the contract.

On the other hand, integrating an AI oracle into a smart contract outsources the strictness of the smart contract to the AI oracle itself, which enables a more dynamic and constantly changing data set without compromising network security.

Now, we could not consider this an FA without taking a fine tooth comb through the project and weighing the pros with the cons. To that end, let’s jump into the charts and take it from there.

At first glance of the weekly chart, what one may observe is $ORAI failing to break out of its bear market accumulation zone, having spent the first two weeks of March 2024 failing a breakout retest of the range high at $19.19. However, the recent lower-high formation is encouraging to position for the next retest.

After zooming into the daily chart, observing quarterly opens, and marking release dates for ChatGPT iterations (which is widely accepted as the catalyst to give AI cryptos the jolt they had longed for), we can see that while price surged to $21 that $ORAI failed to close convincingly above the bear market range high of $19.19 set in November 15th 2021. The release of ChatGPT 3 had a remarkable impact on $ORAI’s price action seeing it surge from all-time lows to achieve a 10x prior to spending a year in capitulation. $ORAI closed above the ChatGPT 3 highs on February 29th 2024 and surged 76% to its 2024 all-time high before capitulation.

Zooming in to 4 hour time frames we can see that $ORAI has some significant levels ahead to regain. Firstly, with price currently retesting and finding support in the 12H demand zone, the most likely scenario is we consolidate at current price levels before retesting the June Open at $13.10. From here, we can reasonably predict price action will retest Q2 2024 open. However, failing to breakthrough and flip the June Open will likely see us retest the ChatGPT 3 ATH at $11.813. Losing this level would likely see us return to the next lower 12H demand zone, retesting ChatGPT 3 ATH would not be ideal but a price reaction at this level is a fair bet. If bulls are unable to take control here, then we may be looking at a retest of May Open.

In terms of the most ideal time to enter, if you are not inclined to dollar-cost average at the current levels, would be a successful retest of the November 15th range high of the bear market accumulation zone. Seeing price close above resistance on higher time frames and flipping to support at this level would be bullish.

Back to fundamentals — while $ORAI’s price has indeed produced a 10x for those accumulating during the bear market following the release of ChatGPT 3, $ORAI’s market cap has only managed to capture $307M market capitalization. Certainly nothing to sneeze at, but it begs the question as to how a project that demonstrates potential as a serious contender amongst AI cryptos has not managed to hold a candle to the likes of $FET that captured $6.38B in market capitalization prior to the $ASI merger announcement (as mentioned in last months FA, this capitulation is expected based on the migration rates for $FET, $AGIX, and $OCEAN).

CCI founder Joe Shew often shares a key piece of wisdom over the years when guiding CCI clients through fundamental analysis: “Does the project solve a real world problem today, or in the future?”.

Undoubtedly, prior to ChatGPT, AI Cryptos were a solution looking for a problem.

Based on Fetch’s performance, and since we have yet to see a fully bonafide bull market while $BTC is shaping up to retest all-time highs, it is not unreasonable to consider a moderate target for Oraichain to test $FETs all-time high per market capitalization. Moderate in the sense that we have no reliable ceiling benchmark by market capitalization for AI cryptos that steal the spotlight during a bullrun since they had previously amounted to little more than ideas that had little in the way of a tangible proof of concept.

Which now leads us to the key question, what is stopping $ORAI from breaking into blue-chip AI crypto status alongside FET, OCEAN, and AGIX (ASI)?

Let’s pick it apart.

First issue is when we open Oraichain’s landing page we see the following:

“Broadcast Trustworth Proofs. IBC-enabled Layer 1 to verify multidimensional trustworthiness of AI and to build Web3 applications with unique AI oracle”.

To start with, presenting specialist acronyms such as “IBC” means little to uneducated investors and likely warrants a mention further down the page, as opposed to being the first thing investors read. Unless new investors had kept up with the CCI FA series, or independently researched Cosmos, they are unlikely to know it stands for “Interblockchain Communication” and the implications of interoperability across different blockchains.

“Multidimensional trustworthiness” is a vague term with a lot of syllables, and similarly we cannot expect investors to understand the importance of the mechanics that remove trust from the user experience, or AI oracles if they do not have knowledge of Chainlink and the like as point of reference. It would likely be better suited to tease out such an abstract concept in their documents and whitepaper.

As far as first impressions go, some may consider it overwhelming, or as we have previously referred to in FAs: complexity as a barrier to entry.

Secondly, Oraichain’s branding in general is somewhat confusing. Investors that are clued in to AI cryptos likely outperforming the rest of the market when the time comes, it is not apparent that Oraichain is an AI crypto. While it is absolutely a layer-1 blockchain, and while they managed to sneak “AI” into the name, it would not hurt for them to consider a rebrand — as we have witnessed for Beam, previously known as Merit Circle, the price action reflects the rebrand was well received. As it stands, it is more likely investors will pounce on any crypto sneaking “AI” or “GPU” into their name or ticker before they invest into something that sounds more like an obscure L1.

Thirdly, Vietnam is one of the most innovative countries in the world when it comes to blockchain technology over the past decade as seen through rapid growth in urbanisation and adoption of mobile technologies. The downside to having brilliant developers that are well acquainted with “crypto culture” is their presence is minimal in markets outside of Vietnam. They had recently launched an Oraichain foundation branch in the United States and attended Consensys 2024 in Austin which may have an impact moving forward, however they are not short on competitors that have worked out how to break into US markets.

Fourth, and in extension of the above, while the team are beyond reproach when it comes to innovating with AI and blockchain technologies, it is worth observing that Head of Marketing listed on Oraichain’s website, Ha Khong, has a Bachelor’s degree in Accounting and a Masters of Science (Finance). Not to single out Ha Khong, as it appears she started in Business Development with Oraichain’s and worked her way into the role of marketing, however it is unclear whether her background warrants taking the lead in marketing efforts. If the issue for Oraichain is awareness, then it is worth getting to the bottom of whether Oraichain have the resources to effectively market themselves. As we know, fundamentals do not always equate to success. It is not much use building a great product if no one knows about it. Although, one could look at the X (Twitter) following for Oraichain at 65k and compare it to Fetch at 232k and hypothesize there is plenty of upside in regard to reaching new audiences. Indeed, according to Lunarcrush measures of social volume within the AI category they appear to have miniscule traction of around 0.5% on average.

At a high level, the approach seems to be to let the products built on Oraichain speak for themselves. In many ways they do, albeit most are either in incubation, proof of concept, or in beta. Currently, Defillama indicates that Oraichain currently has $16M TVL with $333k of volume for 12.06.2024.

The implications of this observation cuts both ways; if we consider TVL in confluence with market capitalization then it is fair to conclude that we are still early. Fetch, Singularity Net, and Ocean Protocol have been around longer than Oraichain. On the flipside, if there are only two dApps that are currently taking TVL (assuming Defillama have not missed any dApps), there is scarce opportunity on-chain at the minute. However, it is difficult to say as the current Oraichain explorer is clunky to navigate and does not dive deeper into providing insight toward where liquidity is flowing on-chain. Despite this, on-chain data for dApps have only been available since March 19th this year. Moreover, dApps like DeFiLens and HomeBase provide proof of concept without necessarily requiring liquidity to utilize their features.

On balance, Oraichain is in a healthy phase of its lifecycle with a strong team, solid tokenomics, and products that are arguably more accessible than their peers that align with a dominant investment narrative in AI. There are plenty of potential catalysts on their roadmap to look forward to stand a chance of gaining traction since the founders had stated that Oraichain is built on a “seven-year vision”. Albeit the concern remains around whether these developments will garner the attention they deserve. Particularly as we have observed in the past that investors tend to gravitate toward “shiny new toys” that make a lot of noise within nascent crypto categories. Should they get the marketing right, whether directly or indirectly through dApps that integrate AI oracles or deploy on chain, Oraichain stands to benefit from the AI hype that will undoubtedly be one of the most dominant narratives for investors into the next bull market and take smart contract functionality to greater heights.