A pre-announced harvesting case: After the cryptocurrency price dropped by 99%, the public chain Saga exited to transform into AI

Author: Zhou, ChainCatcher

News shows that Saga has announced the establishment of Saga AI Labs, shifting its focus towards AI consumer platforms and autonomous digital characters. Meanwhile, the operational rights of the Saga blockchain network will be handed over to Alapin Holdings under dao5.

Once focused on Layer 1, modularity, one-click chain launching, and gaming infrastructure, the project is now fully pivoting towards AI.

This turnaround occurs at an awkward time. The current price of SAGA is $0.01373, down 99.8% from its historical peak.

Two years ago, this project debuted with the highest halo of Binance Launchpool, attracting over $13 billion in staking before its launch, setting a historical record for Binance Launchpool. On its first day of trading, the token reached an intraday high of $7.60, with a fully diluted valuation once approaching $8 billion.

It precisely hit a complete market narrative cycle, and after this narrative failed, it entered the next round. Saga's problem has thus become sharper: as the company turns to AI Labs, what can SAGA token holders still gain from the new story?

Top Narratives and Harvesting Texts

Looking back at the report from Binance Research, Saga's positioning is very clear. It is a Layer 1 that helps developers quickly launch dedicated chains called Chainlets, essentially An L1 to launch L1s.

Developers can automatically launch dedicated chains that are compatible with different virtual machines, can run in parallel, and are interoperable through Saga. The uses of SAGA include payment for Chainlets, staking, and governance.

This design almost perfectly aligns with the keywords the market is most willing to pay for in the first half of 2024.

Layer 1, modularity, AppChain, gaming, shared security, infinite horizontal scalability—these terms collectively form the valuation language of Saga. Developers will need their own chains, games will require cheaper block space, applications will evolve from DApps to AppChains, and modularity will make chain launching as simple as deploying cloud services.

Public information shows that Saga has accumulated 350 ecosystem projects in less than two years, with 80% belonging to gaming, and has established partnerships with Polygon, Avalanche, Celestia, Com2uS, and others.

This makes Saga appear not as an early infrastructure project, but rather as a future platform that has already secured ecosystem entry.

This also gives Saga a valuation pricing power that is not cheap. Binance Research disclosed that Saga has completed three rounds of financing, totaling about $15 million, with investors including Placeholder, Maven11, Longhash, Samsung, Com2uS, Polygon, Merit Circle, Figment, Chorus One, and others.

Image source: RootData

What truly supports the valuation is the issuance structure and market window beyond financing.

When Saga launched, the initial total supply of SAGA was 1 billion tokens, with approximately 90 million in circulation at TGE, accounting for 9% of the total. Binance Launchpool allocated 45 million tokens, accounting for 4.5% of the total.

The problem is that infrastructure projects are most prone to early valuation realization. Product demand, protocol revenue, and real developer retention still need years of validation, while token prices can discount the future on the first day of trading.

According to CoinGecko data, SAGA reached an intraday high of $7.60 on its first day of trading, with a fully diluted valuation once approaching $8 billion. By June 10, 2026, SAGA fell to a historical low of $0.01174, down about 99.8% from its peak.

A batch of projects that launched around the same time as Saga also followed a similar path. For example, AltLayer tells the story of chain launching with rollups, with core products being native and restaked rollups, binding popular keywords like EigenLayer, Celestia, OP Stack, and Arbitrum Orbit.

According to RootData data, AltLayer has disclosed financing exceeding $20 million, with investors including Polychain, Jump Crypto, and YZi Labs, with TGE circulation at 11% and Launchpool allocation at 5%. Now, ALT has dropped about 99.1% from its historical peak.

[Manta Network](https://www.rootdata.com/zh/Projects/detail/Manta Network?k=NjY2 "A multi-module ecosystem for zero-knowledge applications") showcases another type of infrastructure narrative, with keywords like modular L2, ZK applications, Celestia DA, and Polygon CDK.

According to RootData data, Manta's Series A financing was $25 million, led by Polychain and Qiming, with a valuation of $500 million, and early rounds also included YZi Labs. TGE circulation is about 25.1%, with Launchpool allocation at 3%. Now, MANTA has dropped about 98.5% from its historical peak.

These projects are not entirely the same, but structurally similar. They all caught the market's willingness to pay a premium for infrastructure, and all completed early liquidity and attention import through Binance Launchpool.

Launchpool provided listing certainty, user attention, mining enthusiasm, and trading depth.

The project parties are responsible for providing popular narratives, Binance is responsible for providing traffic entry and liquidity scenarios, low circulating supply creates price elasticity, and high FDV absorbs market imagination. What users see in Launchpool is staking mining, while the project parties gain concentrated exposure before and after token issuance, and the secondary market subsequently bears the pressure of valuation regression.

The Fork in the Road from Chain to AI

The decline of SAGA has lasted nearly two years, during which Saga seems to have failed to prove that Chainlet has become a necessity for developers, nor has it generated protocol revenue sufficient to support a high valuation.

The initial vision of modularity, gaming chains, and one-click chain launching has gradually lost pricing power in the secondary market.

By January 2025, the price of SAGA had clearly weakened. Saga announced a strategic partnership with Virtuals, Eliza Labs, and Wayfinder to jointly develop the cross-chain AI agent protocol Metropolis.

However, during this phase, AI still belonged to the Chainlet narrative. According to the plan at that time, AI agents could autonomously deploy and manage independent Chainlets through Saga's infrastructure. In other words, AI was not the new mainline of Saga, but rather sought new sources of demand for the old infrastructure.

This is also a key node in the migration of Saga's narrative.

In 2025, AI was about finding demand for chains. By 2026, AI began to transform into the company's own mainline.

Before this shift occurred, Saga's chain business faced another blow.

On January 21, 2026, the SagaEVM chain encountered a security incident, with approximately $7 million in funds being cross-chain transferred and exchanged for ETH, and the chain was urgently paused at block height 6593800. The protocol's TVL plummeted in a short time, and the stablecoin Saga Dollar briefly depegged.

Although the official statement claimed there was no consensus failure, validator intrusion, or key leakage, this security incident further weakened market trust in SagaEVM.

In June, SAGA hit a historical low of $0.01174. Almost simultaneously, Saga AI Labs officially came to the forefront.

This time, Saga no longer focused on chain launching tools but began to discuss the AI character business. According to the official website, Saga aims to help games, brands, and IP holders create AI characters that can interact online for long periods, appearing on platforms like X, Instagram, Discord, and WhatsApp, chatting with users, responding to messages, and guiding users back to games or communities.

In other words, Saga's story has shifted from helping developers launch chains to helping brands and games create AI digital humans.

Currently, Saga's official website has begun showcasing AI character cases, including Willy from Trivia Crack, Crystal Beaumont from GFAL Diamond Jewels, and Tío serving the Bonoxs gaming event community.

The subject of the story has changed. In the past, AI agents were potential users of the Saga chain; now AI characters have become the new business of the Saga team, while the chain network has been handed over to third-party operations.

However, for a normal project, transformation can be a business/strategic choice. For a high FDV project like Saga, transformation seems more like a repackaging after the failure of the previous narrative, attempting to find a new entry point in the AI craze.

As crypto practitioner Forgiven pointed out, a batch of unlocked or locked "heavenly-level" projects are experiencing a continuous decline, with FDV shrinking to only a few tens of millions of dollars, while the value of dollars, stablecoins, Bitcoin, and Ethereum in the project team's treasury exceeds the full circulating market value of the tokens.

He believes that the sources of such treasuries are mostly supported by early luxurious financing lineups and high valuations, or realized through mining pools and market-making futures shorts when listing on top exchanges, leaving the tokens for the market to fall freely, while the team takes the funds to reopen in new directions like AI, rarely proportionally distributing equity and rights to original investors.

Conclusion

After the old narrative failed to materialize, the token price nearly reached zero, and the chain business encountered security incidents, Saga finally shifted its company story to another track that is more easily accepted by the market.

This is also a thought-provoking aspect. In Web3, true failure often isn't a single price drop, but rather a pricing mechanism that repeatedly rewards storytellers while punishing those who believe in the stories.

Project parties can enter the next track with their teams, brands, and financing histories, but those paying in the secondary market face a K-line that has already completed price revaluation, along with a token that is gradually losing support from the main narrative.

If the last cycle taught the market anything, it is that grand narratives themselves are not scarce. What is truly scarce is the product, revenue, and users that remain in place after the narrative has been fulfilled.

And the answer left by Saga is not a pretty one.