The AI token sector is facing a massive crash, with Sahara AI plummeting 74% from its $0.3264 all-time high just one day after launch, and Humanity Protocol crashing 87% from $0.1575 within 48 hours.
Sahara AI, the Ethereum-based project, gained 40,389% following its Binance listing before crashing 73% within 11 hours.
Source: CoinMarketCap
Despite listings on major exchanges, including Upbit, OKX, and Bybit, selling pressure overwhelmed buyer interest, resulting in a drop in market capitalization to $180.27 million.
Humanity Protocol’s trajectory mirrors this pattern, with an 87.4% decline leaving its market cap at $36.34 million. The project’s 24-hour volume decreased by 47.85% to $64.27 million, indicating a decline in trader confidence despite the strength of the broader AI narrative.
Source: CoinMarketCap
This carnage contradicts fundamental adoption data, as DappRadar’s recent report on AI-related on-chain activity showed an 86% surge since January, reaching 4.5 million daily unique active wallets.
AI now commands 19% market dominance, nearly matching gaming’s 20% share after starting 2025 at just 9%.
The broader AI token market tells a similar story of disconnected fundamentals and prices.
The total market capitalization has dropped 64% from $16.6 billion in early June to $5.9 billion currently. However, daily trading volume remains robust at $1.4 billion, indicating continued speculative interest.
Investment flows present another contradiction. AI agent projects raised $1.39 billion in 2025, representing a 9.4% increase over the full-year total in 2024.
Virtuals Protocol has launched over 17,000 agents since November 2024, averaging 85 new deployments daily.
Source: Dune
Token Crash Exposes Market’s Speculation Addiction
Sahara AI’s journey, from a 40,389% surge to a 74% crash within 48 hours, shows perfectly the extreme volatility that plagues these AI narratives.
Major exchange listings, traditionally viewed as validation and liquidity catalysts, failed to provide price support for either project.
Sahara AI’s presence on these exchanges couldn’t prevent massive sell-offs as early investors rapidly took profits.
The SAHARA/USDT and SAHARA/KRW pairs recorded the highest volumes during the decline.
This is not limited to SAHARA token alone. Over the past few months, AI tokens have proven to be more speculative vehicles than utility-driven assets.
With only 20.4% of Sahara’s 10 billion token supply in circulation, the project maintains a fully diluted valuation of $883.72 million despite limited proven use cases.
Research by Phut Crypto reveals systemic problems across the AI token sector. Their study found 88% of AI agent tokens have failed, with an average lifespan of just 17 days. Additionally, 75% of traders involved in AI agent tokens currently operate at a loss.
Source: Phut Crypto
This pattern suggests many projects launch tokens prematurely to capitalize on narrative momentum rather than demonstrating sustainable value creation.
However, the rapid deployment of over 17,000 agents on Virtuals Protocol indicates genuine technological progress; yet, token prices fail to reflect this underlying innovation.
Source: Dune
Particularly, industry experts warn that current tokenomics models may be fundamentally flawed. BQ9 CEO Irina Karagyaur recently predicted that centralized AI systems will crash by 2030, potentially taking dependent crypto projects with them.
Projects relying on partnerships with OpenAI or Anthropic face existential risks if those platforms fail.
Decentralized Infrastructure Offers Long-Term Hope
Despite token market turmoil, the underlying blockchain infrastructure supporting AI applications shows remarkable resilience and growth potential.
DappRadar’s data reveals sustained user engagement across multiple chains, with Matchain dominating at 1.9 million daily users, followed by opBNB and Nebula networks.
Geographic distribution patterns indicate a global momentum in adoption. Europe leads AI dapp interactions at 26.2%, followed by Asia at 21.9% and North America at 15.8%.
Source: DappRadar
The infrastructure layer appears better positioned for sustainable development than speculative tokens.
Decentralized Physical Infrastructure Networks (DePIN) projects offer cost-efficient alternatives to centralized cloud providers by distributing computational costs across millions of nodes worldwide.
Real-world applications are emerging beyond speculative trading. AI agents now function as DeFi copilots, social media assistants, and gaming companions, creating genuine utility that transcends fluctuations in token prices.
Investment patterns reflect this utility focus. The $1.39 billion raised by AI agent projects in 2025 increasingly targets infrastructure development rather than token speculation.
Projects within decentralized computation, privacy-preserving techniques, and sustainable business models attract more institutional capital.
Karagyaur envisions a future “Internet of Value” where the fusion of AI and blockchain creates everyday tools that preserve privacy while generating income for data contributors.
This model contrasts sharply with current token-centric approaches that prioritize short-term speculation over long-term value creation.
The sector’s evolution toward utility-focused applications suggests token crashes might be just necessary market corrections rather than fundamental failures.
Projects building their value around genuine AI capabilities, sustainable tokenomics, and real-world problem-solving are likely to survive the current speculative purge.
The post Sahara AI Down 74% After Launch, Humanity Protocol Drops 87% in Days – Is the AI Token Hype Over? appeared first on Cryptonews.
