Market Overview

This week, the cryptocurrency market has shown a downward trend under the influence of the holiday. Although the market sentiment index has slightly risen to 10%, it remains in the extreme fear zone. Notably, despite the overall market weakness, USDC still achieved a growth of 1.91%, indicating that institutional funds continue to enter the market, injecting some confidence.

The DeFi sector's TVL dropped slightly by 0.37% this week to $52.7 billion, but projects like the Gun Pool have shown impressive performance in stablecoin yields. The overall supply of stablecoins continues to grow, indicating that despite the market correction, the underlying liquidity is still flowing in, and projects like the Gun Pool are in high demand.

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

Affected by the holidays and the overall market decline, the Meme coin sector performed poorly this week, with investor participation and capital inflow significantly reduced, and market enthusiasm temporarily shifting to other sectors.

The public chain sector has shown strong anti-decline resilience, 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 make efforts in technological innovation and ecological construction.

Looking ahead, 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, increasing the proportion of core asset allocation, while moderately participating in high-yield liquidity pool projects. In the long term, the market generally anticipates an upward trend in the first quarter of 2025, and AI Agents and DeFi liquidity pool projects are worth paying special attention to.

Market Sentiment Index Analysis

• The market sentiment index rose from 7% last week to 10%, still in the extreme fear range.
• Altcoins underperformed the benchmark index this week, showing a significant downward trend. Due to the Christmas holiday, liquidity sharply declined, leading to increased volatility in market prices, which makes sudden surges and drops more likely.
• Given the current market structure, it is expected that Altcoins will move in sync with the benchmark index in the short term, with a low probability of independent market trends.
• When Altcoins are in an extreme fear zone, the market is often at a temporary bottom and can reverse upwards 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 cryptocurrency projects have performed outstandingly, indicating the market's ongoing focus on enhancing underlying returns.

• The AI Agent track project has garnered significant public attention this week, indicating that investors are actively seeking the next market breakthrough.

Hot Tracks

AI Agent

This week, the overall market is in a downtrend, with various sectors also experiencing declines. Although most tokens in the AI Agent sector are also in a downward trend this week, they have the highest level of discussion in the market. The topic that has been discussed the most this week is 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 cryptocurrency market's periodic surges is the emergence of new asset issuance methods. For example, past asset issuance methods such as ICOs, IEOs, INOs, IDOs, and inscription have rapidly propelled the market's development and increased cryptocurrency prices. In the current context of the rapid integration of AI and crypto, aipool has become a highly popular asset issuance method, continuing the trend of "money printing FI" that began in early 2024. If the aipool asset issuance method is widely accepted by the market, we can expect a small wave of asset issuance driven by the aipool model in the near future, so we should pay close attention to aipool-type projects.

The top five AI Agent projects by market capitalization:

| Project Name | Market Cap (million) | 24h Change | 7d Change | |---------|--------------|-----------|----------| | WorldCoin | 349.52 | -1.33% | -9.04% | | Fetch.ai | 332.51 | -6.11% | -18.98% | | SingularityNET | 297.90 | -4.10% | -12.84% | | Oasis Network | 294.03 | -4.98% | -11.21% | | Ocean Protocol | 216.93 | -3.42% | -9.38% |

DeFi Track

TVL Growth Ranking

The top 5 projects by TVL growth 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 | 7-Day Price Change | 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 (Token Not Issued): (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 revenue sources that are independent of fiat currency. This allows 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. Meanwhile, the OFT standard it adopted passed security audits from multiple institutions. This week, Resolv performed exceptionally in ecological development, attracting a second $100 million inflow within the week, with an ecological growth rate of 84%. Its USDC Vault offered up to 36.36% APY on a certain platform, attracting $5.67 million in TVL within the week. Resolv also launched the wstUSR pool on a certain platform and introduced a unified points structure.

USDX Money (Unreleased): (Recommendation Index: ⭐️⭐️⭐️)

• Project Introduction: The USDX Money project is an emerging synthetic dollar stablecoin protocol that aims to provide a new type of crypto-native stablecoin solution through a multi-chain and multi-currency strategy. The core goal of this project is to build the 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 completed a brand new UI/UX upgrade this week to optimize user interaction experience, and launched USDX/USDT and sUSDX/USDX liquidity pools on a certain platform, continuously expanding its ecosystem scale. Among them, sUSDX reached a TVL of 170 million USD through cooperation with a certain DAO. USDX Money also launched the X-Points incentive program, which includes content creation and angel program, and held a special Christmas event.

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

• Project Introduction: Usual 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: the stablecoin USD0, the bond product USD0++, and the governance token USUAL.

• Latest Developments: Recently, Usual secured a $10 million Series A funding led by a certain institution and partnered with a certain foundation to launch the new product UsualM, while becoming the largest USD0/USD0++ pool on a certain platform. With Usual's TVL surpassing $1.5 billion, it has entered the top five global stablecoins. 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): (Recommendation index: ⭐️⭐️)

• Project Overview: 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 Developments: Hashnote has reached a strategic cooperation with a certain public chain this week and participated in its ecological panel meeting, focusing on the launch of an innovative Bitcoin dual-staking model that combines BTC and a certain public chain token, aiming to provide users with sustainable income solutions. Meanwhile, the project's CEO shared new strategies at the meeting, which garnered over 14,000 views, demonstrating the market's strong 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 yield-bearing tokens from other protocols within a specified future timeframe and trade the future earnings generated by that asset in advance. The way Spectra works is by placing interest-bearing tokens (IBT) or any fixed-term yield-bearing assets 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 mainnet of a certain public blockchain, and introduced the Gauges and ncentivize pages in the Spectra App. At the same time, the multi-locking feature for veSPECTRA holders has been optimized to allow for more efficient participation in the Gauge voting mechanism. Additionally, Spectra has 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 (machine gun pools).

Overall performance of the track

• Stablecoin market capitalization steadily increases: USDT decreased from $145.1 billion last week to $144.7 billion this week, a decline of 0.27%. USDC increased from $42.1 billion last week to $42.9 billion this week, 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, has still shown growth, indicating that the main buying force in the market continues to keep funds flowing in.

• Liquidity is gradually increasing: The risk-free arbitrage rates in traditional markets continue to decline with the 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 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 decline is small, at 0.37%. The main reason is that the Western markets, led by the US market, are in the Christmas holiday this week, resulting in decreased trading volumes and on-chain activities across various tokens. Additionally, next week marks the New Year's holiday, and it is expected that there will not be significant improvements. Therefore, attention should be focused on the overall TVL changes in the market in January and whether the downward trend continues.

In-depth Analysis

Upward driving force:

The core driving factors for this round of increases can be summarized as follows: Due to the recent downward trend in the market, the APYs of various DeFi protocols have declined. However, stablecoin yield projects have boosted their yields through token/points rewards, giving gun pool projects a significant advantage in APY from an overall market perspective. Specifically:

• Market Environment: Although it is in a bull market cycle, the recent market has been in a downward trend, resulting in a significant decrease in the base interest rate.

• 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 stablecoin yield projects has expanded compared to other projects, thus attracting more users to participate.

This transmission 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 more focused on yields and borrowing leverage, while neglecting the downside risks. Additionally, this week, due to the Christmas holiday, liquidity in the market has been affected.