Market Overview

Major Market Trends

• The market sentiment index has dropped from 91% to 53%, remaining in the greed zone. BTC is maintaining high volatility, while altcoins are generally under pressure, leading to increased market differentiation.

• The market capitalization of both USDT and USDC has increased, and the total TVL of DeFi continues to rise to 54.1 billion USD, indicating that the market is still attracting new funds.

• The DeFi sector leads the market with a weekly return rate of 16.47%, and DEX trading volume has reached a new high of 630 billion USD in 2024, demonstrating strong momentum.

• Meme coins are re-entering the market spotlight, showing active performance amid market fluctuations, bringing new liquidity and user growth points to the market.

• DEX projects are receiving the highest attention, while AI, GameFi, and other sectors are performing poorly, reflecting the market's focus shifting towards infrastructure and liquidity sectors.

• It is recommended that investors remain cautious, focusing on re-staking projects and opportunities in the DEX sector, while closely monitoring the market fluctuations that may arise from next week's Federal Reserve interest rate meeting.

Market Sentiment Index Analysis

• The market sentiment index has dropped from 91% last week to 53%, still remaining in the bullish range.

• Altcoins performed weaker than the benchmark index this week, showing a fluctuating downward trend. After a decline in the first half of the week, most assets failed to recover their losses. Due to leveraged positions, the market experienced forced liquidations of about $2 billion in positions, significantly reducing long positions. 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.

Overview of Overall Market Trends

• The cryptocurrency market has been in a wide range of fluctuations this week, and the sentiment index remains in a bullish phase.

• DeFi-related cryptocurrency projects have performed prominently, demonstrating the market's ongoing focus on enhancing fundamental returns.

• DEX projects performed well this week, indicating that on-chain investors are starting to actively participate in on-chain investment activities.

• This week, the Meme track has returned to the spotlight and is starting to attract market attention.

Hot Tracks

DEX

This week, due to the overall price volatility in the market, many profitable opportunities have been created for investors. On-chain investors are actively using DEX for trading, and as on-chain funds and users continue to enter the DEX space, it has driven the growth trend of DEX projects this week.

( on-chain data of DEX

The most intuitive data to observe about DEX is its TVL and trading volume, as these two indicators can most directly reflect the state of the DEX sector.

• TVL: The TVL of DEX track projects has risen rapidly this week, increasing from last week's 25.22B to the current 26.58B, a growth rate of 5.39%. It is evident that funds are actively flowing into DEX projects.

• DEX Weekly Trading Volume: The trading volume of DEX this week has reached its highest level since mid-2024, reaching $63 billion, with a trading volume of $7.58 billion in the last 24 hours, indicating a surge in trading volume in the DEX sector.

The DEX sector is showing a clear trend of upgrading its business model. Leading protocols represented by Hyperliquid and dYdX are undergoing a strategic transformation from single trading functions to comprehensive financial infrastructure. This evolution is manifested in the following way: protocols are based on their own chain architecture, achieving vertical integration through functional aggregation, and creating a one-stop DeFi service ecosystem. Such architectural innovations signify that the DEX track is evolving from a single trading level to an all-encompassing financial infrastructure, and the reconstruction of track value is underway.

![Reconstructing Valuations in the DeFi Sector, Sector Rotation Apparent｜Frontier Lab Crypto Market Weekly])https://img-cdn.gateio.im/webp-social/moments-b30b5d38b44bf527742aea9a0a7119f6.webp###

SUI

The Sui ecosystem has been a hot topic in the market this week, with the SUI price rising by 7.8%, outperforming BTC and ETH. The Defi projects within the Sui ecosystem have shown outstanding growth this week.

( Sui blockchain Defi project data

• TVL: Sui's TVL has risen rapidly this week, increasing from last week's 1.598b to the current 1.793b, a rise of 12.88%, indicating that on-chain funds are actively entering the Sui chain.

• Accounts: The total number of users on the Sui chain has reached 66,543,317, an increase of 2,184,755 from last week's 64,358,562, representing a growth rate of 3.39%. Although the growth rate may not appear significant, the ability to achieve this increase amidst the volatile market conditions this week indicates that the Sui chain has a certain capacity to attract traffic.

• DEX Trading Volume: The main DEXs on the Sui chain are: Cetus, Aftermath Finance, and BlueMove DEX. This week, the total trading volume on the Sui chain's DEX surpassed $35 billion, with an average daily trading volume reaching $466 million, indicating that DEXs on the Sui chain are very active.

• Defi Project TVL Increment: The top three projects by TVL in the Sui ecosystem are NAVI Protocol, Suilend, and Aftermath Finance, which belong to the lending and DEX sectors. This week, their TVL growth rates are 1.14%, 17.22%, and 1.72%, respectively. It can be seen that although there is a fluctuating trend, funds in the Sui ecosystem are continuously entering Defi projects.

To determine whether a public chain is favored by the market, the most direct criterion is the fluctuation in its TVL. Based on the above data, we can see that the Sui chain is currently maintaining rapid development. Due to the stronger performance of SUI compared to the overall market, the underlying assets of the Sui ecosystem are continuously appreciating, which in turn drives the growth of APY in its on-chain DeFi projects. Additionally, the overall market has significant volatility, creating profit opportunities, thus attracting a large number of on-chain users to participate, which promotes the development of the entire Sui ecosystem.

DeFi Track

TVL Growth 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, data source: Defilama.

| Project Name | Weekly Increase | TVL)million### | |--------|--------|--------------| | Synthetix | 87.69% | 576.82 | | Babylon | 67.32% | 3782.36 | | Usual Money | 53.61% | 833.76 | | BounceBit | 50.31% | 664.98 | | Equilibria | 40.27% | 281.03 |

( Synthetix)SNX(:) Recommendation Index: ⭐️⭐️⭐️⭐️###

• Project Introduction: Synthetix is a decentralized synthetic asset protocol based on Ethereum, aimed at providing on-chain exposure to real-world assets through blockchain technology. The core functionality of Synthetix includes allowing users to mint synthetic assets by collateralizing their SNX tokens.

• Latest Development: This week, Synthetix has increased the APY for LP users. Through the implementation of SCCP-373, the trading fee share for V3 LP has risen from 40% to 60%. Meanwhile, Synthetix Treasury intends to charge some integration fees to increase the revenue for V3 LP. Additionally, Synthetix announced this week the completion of its acquisition of the leveraged token platform TLX, which will integrate TLX's leveraged token functionality, promote its launch through improved parameters and redeployed contracts, while also introducing a leveraged token incentive program.

( Babylon) Unissued Token(:) Recommendation Index: ⭐️⭐️⭐️⭐️⭐️###

• Project Introduction: The Babylon project is aimed at leveraging the security of Bitcoin to enhance the security of other proof-of-stake blockchains. The core idea is to activate idle Bitcoin assets through a trustless staking mechanism, addressing the contradiction between Bitcoin holders' pursuit of asset security and their participation in high-return projects.

• Latest Developments: Although the market prices have been quite volatile this week, BTC has shown very strong performance, remaining at a high level. Moreover, users are generally optimistic about BTC's future development, which strengthens their resolve to hold it while also seeking to unlock the liquidity of their BTC holdings. As a result, more users are likely to choose income-generating projects based on BTC. Additionally, this week, a trading platform announced that users can directly stake BTC from their accounts on that platform to earn returns in Babylon, bringing a significant influx of new capital to Babylon. During the promotional period, users participating in the event are offered up to a 12% points boost, which has encouraged a large number of users to participate.

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

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

• Latest Development: Recently, Usual Money underwent a Checker upgrade. After the upgrade, the annualized yield for holders of the bond product USD0++ reached 48%. The average APY for USD0/USD0++ in Curve is 54%, and the average annualized return for USD0/USDC is 52%. At the same time, the minting volume of USUAL has been reduced by 17%, which has increased the price of USUAL. This has attracted many users to participate in Usual Money to obtain high annual arbitrage returns.

( BounceBit)BB(:) Recommended Index: ⭐️⭐️⭐️⭐️###

• Project Introduction: BounceBit is a re-staking foundational layer within the Bitcoin ecosystem. By design, it collaborates deeply with a certain trading platform to architect high-yield CeDeFi components; additionally, it builds the BounceBit Chain to create specific use cases for Restaking.

• Latest Developments: Recently, BounceBit has increased the staking rates for various tokens, with the 30-day annualized return for USDT reaching 54.25%, BTC at 24.55%, BNB at 37.13%, and ETH at 37.7%, attracting a large number of users to stake their assets in BounceBit. Meanwhile, this week, BounceBit has partnered with Ondo to introduce tokenized RWA into BounceBit, marking its entry into the RWA sector.

( Equilibria)EQB(:)Recommendation Index:⭐️⭐️⭐️###

• Project Introduction: Equilibria is a gun pool project aimed at generating high returns for users. By utilizing the yield enhancement model of veToken adopted by Pendle, it provides higher returns for LPs through the tokenized version of vePENDLE, ePENDLE, and offers additional rewards for PENDLE holders.

• Latest Development: This week, Equilibria strengthened its collaboration with Curve and launched the first enhanced pool - the scrvUSD pool, aimed at increasing user returns. Subsequently, new enhanced pools for SolvBTC, cmETH, and ePENDLE were added, raising users' APY to a maximum of 59%, thereby attracting a large number of users to participate in arbitrage.

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

Overall Performance of the Track

• Stablecoin market capitalization is steadily increasing: USDT has grown from 141 billion USD last week to 145.1 billion USD, an increase of 2.91%, while USDC has grown from 40.2 billion USD last week to 41.5 billion USD, an increase of 3.23%. It can be seen that this week both USDT, which is primarily in non-US markets, and USDC, which is primarily in the US market, have shown growth, indicating that the entire market continues to see a sustained influx of capital.

• Increasing liquidity: The risk-free arbitrage rates in traditional markets continue to decline with ongoing interest rate cuts, 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 increased from 53.2 billion dollars last week to 54.1 billion dollars now, with new funds reaching 1.69%. This week continues to show positive growth, maintaining a continuous upward trend for nearly two months, proving that funds are continuously entering Defi projects.

( In-depth Analysis

Driving force of the rise:

The core driving factors of this round of increase can be summarized as follows: the market has entered a bull market cycle, driving up liquidity demand, which in turn pushes up the basic borrowing interest rates, amplifying the profit potential of arbitrage cycle strategies in DeFi protocols. Specifically:

• Market Environment: Bull market cycle brings an overall increase in liquidity demand

• Interest rate side: The base lending rate has been raised, reflecting the market's expectations for the pricing of funds.

• Yield Side: The yield rate of the cyclical arbitrage strategy expands, protocol