Market Weekly Report: The market is weak during the double festival period, and Q1 next year may迎来 a rise market.

Market Overview

This week, the cryptocurrency market is showing a downward trend influenced by the Christmas holiday. The market sentiment index has slightly risen from 7% to 10%, but it remains in the extreme fear range. It is worth noting that despite the overall market weakness, USDC, which is primarily based in the US market, has still achieved a 1.91% rise, indicating that institutional funds continue to enter the market, injecting some confidence.

The DeFi sector's TVL slightly decreased by 0.37% this week to $52.7 billion, but projects like the machine gun pool and other stablecoin yield projects performed impressively. The overall supply of stablecoins continues to grow, indicating that despite the market correction, the underlying liquidity is still flowing in, and stable yield projects like the machine gun pool are in high demand.

The AI Agent track continues to attract significant market attention, with a total scale reaching $10.9 billion. In particular, the aipool model combined with TEE technology has become a new focus in the market, likely to become a new type of asset issuance method following "inscription," demonstrating the development trend of deep integration between AI and blockchain technology.

Due to the impact of the holidays and the overall market decline, the Meme coin sector performed sluggishly this week, with a noticeable decrease in investor participation and capital inflow. The market's enthusiasm has temporarily shifted to other sectors, highlighting the high volatility characteristics of this sector.

The public chain sector shows strong resilience against market downturns, with Stacks achieving an important milestone for sBTC, BOB advancing the development of the BitVM Bridge, and Taiko launching a new round of ecological plans, indicating that major public chains continue to focus on technological innovation and ecological development.

Looking to the future, the market is expected to continue its sluggish trend during the New Year's holiday, and it is recommended that investors maintain a defensive allocation, increase the proportion of top assets allocation, and moderately participate in high-yield machine gun pool projects. In the long term, the market generally anticipates that the first quarter of 2025 may welcome a rise in the market, and AI Agent and DeFi machine gun pool projects are worth focusing on.

Market Sentiment Index Analysis

The market sentiment index has risen from 7% last week to 10%, still in the extreme fear range. Altcoins performed weaker than the benchmark index this week, showing a significant downtrend. Due to the Christmas holiday, liquidity has sharply decreased, leading to increased market price volatility, making sudden rises and drops more likely. 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 movements.

When Altcoin is in a state of extreme panic, the market is often at a phase bottom and an upward reversal can happen at any time.

Overview of Overall Market Trends

The cryptocurrency market is in a downward trend this week, with the sentiment index still in extreme fear.

DeFi-related crypto projects have performed outstandingly, showing the market's continued focus on improving base yields.

The AI Agent track project has generated high public sentiment this week, indicating that investors are actively seeking the next market breakout point.

Hot Tracks

AI Agent

This week, the overall market is in a downward trend, with all sectors experiencing a decline. Although most tokens in the AI Agent sector have also been in a downward trend this week, they have garnered the highest level of discussion in the market. The main topic of discussion this week has been the development of the aipool model, which combines AI Agent and TEE, and its impact on the future of Crypto and Defi.

One of the boosters for the cyclical big rises in the Crypto market is the emergence of new asset issuance methods. For instance, past asset issuance methods like ICOs, IEOs, INOs, IDOs, and inscriptions have rapidly propelled market development and boosted Crypto market prices. With the rapid integration of AI and Crypto, aipool has become a highly popular asset issuance method at the moment, and it continues the "money printing FI" trend from early 2024. If the aipool asset issuance method is widely accepted by the market, we can expect a small wave of asset issuance frenzy brought about by the aipool model in the near future, so we should pay close attention to aipool-type projects.

DeFi track

TVL rise ranking

The top 5 projects by TVL increase in the market over the past week, excluding projects with a smaller TVL, with a standard of over 30 million USD (:

| Project Name | Recent 7-Day rise | TVL)million( | |---------|----------|--------------| | Resolv | 82.04% | 239.01 | | USDX Money | 74.25% | 446.42 | | Usual | 55.56% | 1599.36 | | Hashnote | 52.54% | 1652.47 | | Spectra | 51.81% | 122.55 |

Resolv) Unissued Token (: ) Recommended Index: ⭐️⭐️⭐️ (

Project Introduction: Resolv is a Delta-neutral stablecoin project that revolves around the tokenization of market-neutral investment portfolios. This architecture is based on economically viable and fiat-independent sources of income. This allows for competitive returns to be distributed to the liquidity providers of the protocol.

Latest developments: This week, Resolv completed an important technical upgrade, successfully transforming into an Omnichain project by integrating LayerZero and StarGate technologies, while its adopted OFT standard passed security audits from multiple institutions. Resolv performed outstandingly in ecological development this week, attracting a second $100 million capital inflow within the week, with an ecological growth rate of 84%. Its USDC Vault provided an APY of up to 36.36% on Euler Finance, attracting $5.67 million in TVL within the week. Resolv also launched the wstUSR pool on Pendle.fi and introduced a unified points structure.

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

Project Introduction: The USDX Money project is an emerging synthetic dollar stablecoin protocol aimed at providing a new type of crypto-native stablecoin solution through a multi-chain, multi-currency strategy. The core objective of this project is to build next-generation stablecoin infrastructure and maintain the peg stability of USDX to the US dollar through a Delta-neutral hedging strategy.

Latest Development: USDX Money has completed a brand new UI/UX upgrade this week to optimize user interaction experience, while launching USDX/USDT and sUSDX/USDX liquidity pools on Curve Finance, continuously expanding the ecosystem scale, among which sUSDX has reached a TVL of 170 million USD through cooperation with Lista DAO. USDX Money has also launched the X-Points incentive program, which includes content creation and angel plan, and hosted a special Christmas event.

Usual)USUAL(:)Recommended Index:⭐️⭐️⭐️⭐️⭐️(

Project Introduction: Usual is a stablecoin project supported by Binance, aimed at providing a new stablecoin solution through decentralization. The core mechanism of the project includes three main tokens: the stablecoin USD0, the bond product USD0++, and the governance token USUAL.

Latest Development: Recently, Usual has secured $10 million in Series A funding led by Binance Labs and Kraken Ventures, and has partnered with the M^0 Foundation to launch a new product, UsualM, while becoming the largest USD0/USD0++ pool on Curve Finance. As Usual's TVL surpasses $1.5 billion, placing it among the top five stablecoins globally, the DAO treasury has also doubled to $17 million, and the Usual project has launched USUALx staking rewards with an APY of up to 18,000%, along with a community airdrop event.

Hashnote) not issued coin (: ) recommendation index: ⭐️⭐️(

Project Introduction: The Hashnote project is a solution focused on institutional cryptocurrency management, aimed at providing transparency and optimizing asset management through blockchain technology. Hashnote combines digital assets and traditional finance to offer users innovative yield enhancement solutions, such as USYC.

Latest Development: Hashnote has reached a strategic cooperation with CoreDAO this week and participated in its ecosystem panel meeting, focusing on the launch of an innovative dual staking model for Bitcoin, which combines BTC and Core Token, aimed at providing users with sustainable yield solutions. At the meeting, the project's CEO shared the new strategy, which garnered over 14,000 views, demonstrating strong market interest in this innovative model.

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

Project Introduction: Spectra is a protocol for the tokenization of future yields. DeFi users can deposit interest-generating tokens from other protocols within a specified future period and trade the future earnings generated by the asset in advance. The way Spectra works is by placing interest-bearing tokens )IBT( or any fixed-term yield-bearing asset in a smart contract and issuing future yield tokens )FYT( in return.

Latest Developments: This week, Spectra successfully launched a new governance contract on the Base mainnet and introduced the Gauges and incentivize pages in the Spectra App, while optimizing the multi-locking function for veSPECTRA holders to participate more efficiently in the Gauge voting mechanism. Additionally, Spectra completed the APW emission adjustment, with the new emission mechanism implemented at a ratio of 1:20.

In summary, we can see that the projects with rapid TVL growth this week are mainly concentrated in the stablecoin yield sector ) and the gun pool (.

)# Overall performance of the track

Stablecoin market capitalization steadily increases: USDT decreased from 145.1 billion USD last week to 144.7 billion USD, a decline of 0.27%. USDC increased from 42.1 billion USD last week to 42.9 billion USD, an increase of 1.91%. It can be seen that although the market is in a downward trend this week, USDC, which is primarily based in the US market, still experienced growth, indicating that the buying power in the market continues to maintain a sustained influx of funds.

Liquidity is gradually increasing: The risk-free arbitrage rates in traditional markets continue to decline as interest rates are lowered, while the arbitrage rates of on-chain DeFi projects are increasing due to the rising value of cryptocurrency assets. Returning to DeFi will be a very good choice.

Funding situation: The TVL of DeFi projects has risen from 52.9 billion USD last week to 52.7 billion USD now. Although there has been negative growth for two consecutive weeks, the extent of the negative growth is small, at 0.37%. The main reason is that this week, the Western market led by the US is in the Christmas holiday, and both the trading volume of various tokens and on-chain activities have declined. Additionally, next week marks the New Year's holiday, and it is expected that there will be no significant changes. Therefore, attention should be focused on the overall TVL changes in January, observing whether the downward trend continues.

In-depth Analysis

Pump Driving Force:

The core driving factors of this round of pump can be summarized as follows: due to the recent downtrend in the market, the APY of various DeFi protocols has decreased, while stablecoin yield projects have raised their yields through token/point rewards, resulting in a clear advantage for the APY of liquidity mining projects from an overall market perspective. Specifically:

• Market Environment: Although in a bull market cycle, the market has recently been in a downtrend, leading to a significant decrease in the base interest rate.
• Interest rate side: The base lending rate has risen, reflecting the market's pricing expectations for funds.
• Yield side: The yield rate of stablecoin yield projects is higher than that of other projects, thereby attracting more users to participate.

This conduction mechanism strengthens the value support of stablecoin yield projects, creating a positive growth momentum.

Potential Risks:

Due to the recent upward trend in the market, investors are paying more attention to yield and borrowing leverage, while neglecting the risk of decline. Additionally, this week, due to the Christmas holiday, there has been a sharp reduction in market liquidity, resulting in selling pressure without sufficient liquidity to absorb it, leading to a continuous drop in prices and triggering liquidations of long contracts in the market, causing losses for investors. The risk of cascading liquidations caused by this has greatly increased, further lowering prices and liquidating more assets.

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) Other tracks performance

public chain