Market Overview

Main Market Trends

• The market sentiment index has dropped from 91% to 53%, still in the greed zone, but BTC maintains high-level fluctuations while altcoins are generally under pressure, indicating an intensifying market divergence.

• The market capitalization of USDT and USDC both increased (by +2.91% and +3.23% respectively), and the total locked value in 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 a certain DEX has seen its trading volume reach a new high for 2024 ($63 billion), demonstrating strong development momentum.

• The meme coin market has returned to the spotlight, showing active performance amidst market fluctuations, bringing new liquidity and user growth to the market.

• DEX projects are gaining the highest attention, while sectors such as AI and GameFi are performing weakly, reflecting that market focus is shifting towards infrastructure and liquidity sectors.

• Investors are advised to 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 fallen 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 lost ground. Due to leveraged positions, the market experienced approximately $2 billion in forced liquidations, with significant deleveraging among long positions. 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.

Overview of Overall Market Trends

• The cryptocurrency market has been in a wide-ranging fluctuation trend this week, and the sentiment index remains in the bullish phase.

• DeFi-related cryptocurrency projects have performed outstandingly, demonstrating the market's continued focus on improving fundamental yields.

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

• The Meme track has returned to the spotlight this week, gaining the market's attention.

Hot Track

DEX

This week, due to the overall price fluctuations in the market, many profit opportunities have been created for investors. On-chain investors are actively using DEX for trading. As on-chain capital and users continuously 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 for DEX is the TVL and trading volume, as these two indicators can directly reflect the state of the DEX sector.

• TVL: The TVL of DEX 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 can be seen that funds are actively entering DEX projects.

• DEX Weekly Trading Volume: The trading volume of DEX this week reached its highest level since mid-2024, hitting $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 a single trading function to a comprehensive financial infrastructure. This evolutionary path is reflected in the fact that the protocols are based on their own chain architecture, achieving vertical integration through functional aggregation to create a one-stop DeFi service ecosystem. Such architectural innovations signify that the DEX track is evolving from a single trading level to a comprehensive financial infrastructure direction, and the reconstruction of track value is underway.

SUI

The Sui ecosystem has been highly discussed 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 performance this week.

Sui blockchain Defi project data

• TVL: The TVL of Sui has risen rapidly this week, increasing from last week's 1.598b to the current 1.793b, an increase of 12.88%. It can be seen 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 seem significant, the ability to achieve this increase amid the volatile market 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 of $466 million, indicating that the DEXs on the Sui chain are very active.

• Defi project TVL growth: The top three projects in the Sui ecosystem by TVL 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 the trend is fluctuating, funds in the Sui ecosystem are continuously flowing into 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 data above, we can see that the Sui chain is currently maintaining rapid development. Due to the SUI price being stronger than the overall market, the underlying assets of the Sui ecosystem are continuously rising, which in turn boosts the APY of its on-chain DeFi projects. At the same time, there are significant fluctuations in the overall market, presenting profit opportunities, thus attracting a large number of on-chain users to participate and promoting the development of the entire Sui ecosystem.

DeFi Track

TVL Growth Ranking

The top 5 projects with the highest 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 | 7-Day 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): (Recommended Rating: ⭐️⭐️⭐️⭐️)

• Project Overview: Synthetix is a decentralized synthetic asset protocol built 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 Developments: This week, Synthetix increased the APY for LP users by implementing SCCP-373, raising the trading fee share for V3 LP from 40% to 60%. Meanwhile, Synthetix Treasury intends to charge some integration fees to increase 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 features, drive the launch through parameter improvements and redeployment of contracts, and introduce a leveraged token incentive program.

Babylon (Unreleased Token): (Recommendation Rating: ⭐️⭐️⭐️⭐️⭐️)

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

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

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

• Project Introduction: Usual Money is a stablecoin project supported by a large exchange, aiming to provide a new stablecoin solution through decentralization. The core mechanism of the project includes three main tokens: stablecoin USD0, bond product USD0++, and governance token USUAL.

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

BounceBit (BB): (Recommendation Index: ⭐️⭐️⭐️⭐️)

• Project Introduction: BounceBit is a re-staking foundational layer in the Bitcoin ecosystem. Designed in deep collaboration with a major exchange, it structures high-yield CeDeFi components; additionally, it builds the BounceBit Chain to create specific use cases for Restaking.

• Latest Development: Recently, BounceBit has increased the staking rates for various tokens, with USDT's 30-day annualized yield reaching 54.25%, BTC's 30-day annualized yield reaching 24.55%, BNB's 30-day annualized yield reaching 37.13%, and ETH's 30-day annualized yield reaching 37.7%. This has attracted a large number of users to invest their assets into BounceBit for staking. At the same time, this week BounceBit has partnered with Ondo to introduce tokenized RWA into BounceBit, marking its entry into the RWA sector.

Equilibria (EQB): (Recommended Index: ⭐️⭐️⭐️)

• Project Introduction: Equilibria is a yield farming project, with the primary goal of generating high returns for users. It utilizes the veToken-enhanced yield model adopted by Pendle, providing higher returns for LPs through the tokenized version of vePENDLE, ePENDLE, and offering additional rewards for PENDLE holders.

• Latest developments: This week, Equilibria and Curve strengthened their collaboration by launching the first enhanced pool - scrvUSD pool, aimed at increasing user returns. They later added enhanced pools for SolvBTC, cmETH, and ePENDLE, raising users' APY to a maximum of 59%, which attracted a large number of users to participate in arbitrage.

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

Overall Performance of the Track

• Stablecoin market capitalization steadily grows: USDT increased from $141 billion last week to $145.1 billion this week, with a growth rate of 2.91%. USDC grew from $40.2 billion last week to $41.5 billion this week, a growth rate of 3.23%. It is evident that this week both USDT, primarily in non-U.S. markets, and USDC, primarily in U.S. markets, have experienced growth, indicating that the entire market continues to see sustained capital inflow.

• Liquidity is gradually increasing: The risk-free arbitrage rate in traditional markets continues to decline with the ongoing interest rate cuts, while the arbitrage rate of on-chain DeFi projects is increasing due to the rising value of cryptocurrency assets. Returning to DeFi will be a very good choice.

• Financial Situation: The TVL of Defi projects has increased from 53.2 billion USD last week to 54.1 billion USD now, with new funds reaching 1.69%. This week continues to show positive growth, maintaining a sustained upward trend for nearly two months, proving that there is continuous capital entering Defi projects.

In-depth Analysis

Upward driving force:

The core driving factors of this round of increase can be summarized as follows: the market entering a bull market cycle has led to an increase in liquidity demand, subsequently pushing up the level of base lending rates, which has amplified the profit space of arbitrage loop strategies in DeFi protocols. Specifically:

• Market Environment: The bull market cycle brings overall liquidity