AI Agents began as simple chatbots or automation scripts, but with advancements in large language models and reinforcement learning, they now exhibit near-human capabilities in communication, analytics, and decision-making. Web3 has enabled decentralized finance (DeFi), NFTs, and permissionless blockchains, but the next frontier is the "AI Agent Economy," where Agents not only serve humans but also transact and negotiate among themselves. Chemical Distillation is a domain-specific approach we adapted to AI: just as chemical distillation purifies a substance, we "distill" large data sets/models to produce lean, specialized models optimized for performance, cost, and synergy.