During the double festival period, the crypto market is weak, and institutional funds getting on board will inject momentum into the market for Q1 next year.

Crypto Market Weekly: The market is weak during the dual festivals, and Q1 next year may迎来pump行情

Market Overview

This week, the crypto market is showing a downward trend due to the impact of the Christmas holiday. Although the market sentiment index has slightly risen from 7% to 10%, it remains in the extreme fear zone. It is worth noting that despite the overall market weakness, USDC, which is primarily based in the US market, has still achieved a growth of 1.91%, indicating that institutional funds continue to enter the market, injecting some confidence into it.

In terms of the DeFi ecosystem, this week the TVL slightly decreased by 0.37% to $52.7 billion, but projects like the machine gun pool and other stablecoin yield projects performed remarkably. The total supply of stablecoins continues to grow, indicating that despite the market correction, the foundational liquidity is still flowing in, and stable yield projects like the machine gun pool are in high demand.

The AI Agent track continues to receive high attention, with a total scale reaching 10.9 billion USD. In particular, the aipool model combined with TEE technology has become a new market focus and is expected to become a new type of asset issuance method following "inscription", reflecting the development trend of deep integration of AI and blockchain technology.

Meme coins have been adversely affected by holidays and the overall market decline, performing poorly this week. Investor participation and capital inflow have significantly decreased, and market interest has temporarily shifted to other sectors, showcasing the high volatility characteristics of this sector.

The public chain sector shows strong resistance to decline. Stacks has achieved an important milestone with sBTC, BOB is advancing the development of BitVM Bridge, and Taiko has launched a new round of ecological plans, indicating that major public chains are continuously making efforts in technological innovation and ecological construction.

Looking ahead, the market is expected to continue its sluggish trend during the New Year's holiday. It is recommended that investors maintain a defensive allocation, increasing the proportion of head assets, while moderately participating in high-yield machine gun pool projects. In the long term, the market generally anticipates a pump in the first quarter of 2025, and AI Agent and DeFi machine gun pool projects are worth paying special attention to.

The market is weak during the double festival, and Q1 next year may welcome a pump market | Frontier Lab crypto market weekly report

Market Sentiment Index Analysis

The market sentiment index has risen from 7% last week to 10%, remaining in the extreme fear zone. Altcoins have underperformed the benchmark index this week, showing a significant downtrend. The Christmas holiday has led to a sharp decline in liquidity, increasing market price volatility and causing rapid rises and falls. Given the current market structure, it is expected that altcoins will remain in sync with the benchmark index in the short term, with a low probability of independent market trends. When altcoins are in the extreme fear zone, the market is often at a stage bottom, ready for a potential upward reversal at any time.

During the Double Festival, the market is weak, and Q1 next year may welcome a rise trend | Frontier Lab Crypto Market Weekly Report

Overview of Overall Market Trends

  • The crypto market has been in a downtrend this week, with the sentiment index still in extreme fear.

  • DeFi-related encryption projects have performed prominently, showing the market's continued focus on improving basic yields.

  • The AI Agent track project has seen high public sentiment this week, indicating that investors are actively looking for the next market breakout point.

Hot Tracks

AI Agent

This week, the overall market is in a downtrend, with all sectors experiencing a decline. Although most tokens in the AI Agent sector also saw a drop in price this week, it remains the most discussed topic in the market. The focus of discussion this week is on the development of aipool, an AI Agent + TEE model, in the future crypto market and its impact on DeFi.

One of the boosters for the periodic large rise in the crypto market is the new asset issuance methods. For example, ICOs, IEOs, INOs, IDOs, and inscriptions have all rapidly propelled market development and price increases. With AI and encryption quickly merging, aipool has become a highly popular asset issuance method at present, and it is also a continuation of "money printing FI" in early 2024. If the aipool method is widely accepted by the market, it may soon usher in a wave of small-scale asset issuance frenzy driven by the aipool model, making it worth paying close attention to such projects.

The top five AI Agent projects by market capitalization:

  1. Worldcoin (WLD)
  2. Fetch.ai (FET)
  3. SingularityNET (AGIX)
  4. Ocean Protocol (OCEAN)
  5. Oasis Network (ROSE)

DeFi track

TVL rise ranking

In the past week, the top 5 projects by TVL rise ( excluding smaller projects with a standard of over 30 million USD ):

  1. Resolv: 82.04%, TVL 239.01 million USD
  2. USDX Money: 74.25%, TVL 446.42 million USD
  3. Usual: 55.56%, TVL 1599.36 million USD
  4. Hashnote: 52.54%, TVL 1652.47 million USD
  5. Spectra: 51.81%, TVL 122.55 million USD

Resolv( has not issued tokens)( Recommendation Index:⭐⭐⭐):

  • Project Introduction: Resolv is a Delta-neutral stablecoin project that focuses on the tokenization of market-neutral investment portfolios. This architecture is based on economically viable and fiat-independent sources of yield, allowing competitive returns to be distributed to the liquidity providers of the protocol.
  • Latest Developments: Important technical upgrades were completed this week, successfully transforming into an Omnichain project through the integration of LayerZero and StarGate. The OFT standard has passed security audits by multiple institutions. The ecosystem growth rate reached 84%, and the USDC Vault on Euler Finance offers a 36.36% APY, attracting a TVL of $5.67 million. A wstUSR pool was launched on Pendle.fi with a unified points structure.

USDX Money( Unissued Coin ) Recommended Index:⭐⭐⭐(:

  • Project Introduction: USDX Money is an emerging synthetic dollar stablecoin protocol aimed at providing a new type of encryption native stablecoin solution through multi-chain and multi-currency strategies. The core goal is to build the next-generation stablecoin infrastructure, maintaining the stability of USDX pegged to the dollar through Delta neutral hedging strategies.
  • Latest developments: Completed a brand new UI/UX upgrade to optimize user experience. Launched USDX/USDT and sUSDX/USDX liquidity pools on Curve Finance. sUSDX achieved $170 million TVL through collaboration with Lista DAO. Launched the X-Points incentive program, which includes content creation and angel program, and hosted a special Christmas event.

Usual)USUAL()Recommendation Index:⭐⭐⭐⭐⭐(:

  • Project Introduction: Usual is a stablecoin project supported by Binance, aimed at providing new stablecoin solutions through a decentralized approach. The core mechanisms include the stablecoin USD0, bond product USD0++, and governance token USUAL.
  • Latest developments: Recently secured a $10 million Series A funding round led by Binance Labs and Kraken Ventures. Launched the UsualM new product in collaboration with the M^0 Foundation. Became the largest USD0/USD0++ pool on Curve Finance. TVL surpassed $1.5 billion, ranking among the top five global stablecoins. The DAO treasury doubled to $17 million. Launched USUALx staking rewards with up to 18,000% APY and initiated a community airdrop event.

Hashnote) has not issued tokens () recommendation index:⭐⭐(:

  • Project Introduction: Hashnote is a solution focused on institutional cryptocurrency management, aimed at providing transparency and optimizing asset management through blockchain technology. It combines digital assets and traditional finance to offer users innovative yield enhancement solutions, such as USYC.
  • Latest developments: Strategic cooperation reached with CoreDAO and participation in its ecological group panel meeting. Launched an innovative Bitcoin dual-staking model, combining BTC and Core Token to provide users with sustainable yield solutions. The CEO shared new strategies at the meeting, garnering over 14,000 views, demonstrating strong market interest in this innovative model.

Spectra)SPECTRA()Recommendation Index:⭐⭐⭐(:

  • Project Introduction: Spectra is a future yield tokenization protocol. DeFi users can deposit interest-bearing tokens from other protocols within a specified period and trade the future earnings generated by the asset in advance. Spectra places interest-bearing tokens )IBT( or fixed-term yield-bearing assets in smart contracts and issues future yield tokens )FYT( as a return.
  • Latest developments: A new governance contract has been launched on the Base mainnet. The Spectra App has introduced Gauges and an Incentivize page. The multi-locking feature for veSPECTRA holders has been optimized to improve the efficiency of Gauge voting mechanism participation. The APW emission adjustment has been completed, and the new emission mechanism will be executed at a ratio of 1:20.

In summary, this week's projects with rapid TVL growth are mainly concentrated in the stablecoin yield sector ) machine gun pool (.

)# Overall performance of the track

  • The market value of stablecoins is steadily growing: USDT decreased from $145.1 billion last week to $144.7 billion, a drop of 0.27%. USDC increased from $42.1 billion to $42.9 billion, a rise of 1.91%. Although the market fell this week, USDC, which is primarily based in the U.S. market, still grew, indicating that major funds continue to enter the market.

  • Liquidity is gradually increasing: The risk-free arbitrage rates in traditional markets continue to decline with interest rate cuts, while the arbitrage rates of on-chain DeFi projects have increased due to the rise in the value of encryption assets, making a return to DeFi a good choice.

  • Funding situation: The TVL of DeFi projects has decreased from $52.9 billion to $52.7 billion, marking a negative growth for two consecutive weeks, with a decline of 0.37%. This is mainly due to the Christmas holiday in Western markets, resulting in a decrease in token trading volume and on-chain activities. The New Year's holiday next week is expected to show no significant changes. It is recommended to pay close attention to the overall TVL changes in January and whether the downtrend continues.

![The market is weak during the Double Festival period, and Q1 next year may welcome a pump market | Frontier Lab Crypto Market Weekly Report]###https://img-cdn.gateio.im/webp-social/moments-51965377ad7fc1e885518a59f44b637c.webp(

)# In-depth analysis

pump driving force: The core driving factors of this round of rise can be summarized as follows: the recent market decline has led to a decrease in the APY of various DeFi protocols, while stablecoin yield projects have boosted their yields through token/points rewards, giving machine gun pool projects a significant advantage in APY. Specifically:

  • Market Environment: Although in a bull market cycle, recent declines have caused a significant drop in the base interest rate.
  • Interest rate side: The base lending rate is raised, reflecting the market's expectations for funding pricing.
  • Yield side: The yield rate of stablecoin yield projects has expanded compared to other projects, attracting more users to participate.

This mechanism strengthens the value support of stablecoin yield projects, forming a virtuous growth momentum.

Potential risks: Due to the recent pump in the market, investors are paying more attention to yield and borrowing leverage, neglecting the risk of decline. This week's Christmas holiday has caused a sharp reduction in liquidity, and the market's selling pressure lacks sufficient liquidity support, leading to continuous price drops and triggering long contract liquidations, resulting in losses for investors. The risk of cascading liquidations has increased, which may further lower prices and liquidate more assets.

Other tracks performance

public chain

The top 5 public chains by TVL rise in the past week ### did not include smaller public chains (:

  1. Stacks: 16.95%, TVL 130.62 million USD
  2. BOB: 12.81%, TVL 232.55 million USD
  3. Taiko: 4.22%, TVL 413.49 million USD
  4. Cardano: 2.94%, TVL 503.44 million USD
  5. Sei: 1.23%, TVL 224.31 million USD

Stacks: This week, 922 BTC were transferred to the Stacks network, completing the first phase of the sBTC deposit cap at 1000 BTC. 35% of sBTC is generating returns in the Zest Protocol. The ALEX community voted to allocate 12 million ALEX tokens for the Surge plan. L1/L2 asset exchange functionality has been achieved through Bitflow Finance and the AI console. The "Stackies" community reward program has been launched to incentivize developer contributions.

BOB: Collaborated with Fiamma Labs to develop and release a prototype of the BitVM Bridge based on zero-knowledge technology, with plans to test it online in early 2025. Collaborated with Lombard Finance to deploy on the BOB chain. Preliminary discussions with Aave to introduce the protocol. Launched a 6-week DeFi incentive campaign, incentivizing LST holders to participate through Babylon Points. Conducted multiple community education tasks and Spaces events.

Taiko: Launching the Trailblazers Season 3 plan with a reward pool of 6 million TAIKO tokens. Introducing the Liquidity Royale event to provide a reward of 12,000 TAIKO tokens for the top 100 liquidity providers. The number of on-chain ecological projects has increased to 130, with Symmetric added as an important DEX partner. Hosting the first community meetup in Turkey with ITU Blockchain and Node 101. Strengthening community building through holiday giveaways and meme competitions.

Cardano: Key points on slashing mechanism

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OnchainDetectivevip
· 23h ago
Hmm, the fund flow from institutions is obviously suspicious, the frequency is too regular, it's completely a trap-like behavior of getting a meal...
View OriginalReply0
CompoundPersonalityvip
· 23h ago
When will BTC take off?
View OriginalReply0
ValidatorVibesvip
· 23h ago
meh... institutional money can't save weak protocol fundamentals tbh
Reply0
SeasonedInvestorvip
· 23h ago
Oh no, the bearish traders haven't retreated yet.
View OriginalReply0
BoredRiceBallvip
· 23h ago
What confidence do we have? Let's wait for the fall to the bottom.
View OriginalReply0
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