DeFi track valuation reconstruction, sector rotation appears｜Frontier Lab Crypto Market Weekly Report

市場 概述

Main market trends

• Market sentiment and trends: The market sentiment index dropped from 91% to 53%. Although it is still in the greed range, BTC maintained high-level fluctuations while Altcoins were generally under pressure, indicating that market differentiation was intensifying.

• Analysis of capital flows: The market capitalizations of USDT and USDC both increased (+2.91% and +3.23% respectively), and the total TVL of DeFi continued to rise to US$54.1 billion, indicating that the market as a whole is still attracting new funds.

• DeFi track performance: The DeFi track led the market with a weekly return rate of 16.47%, and DEX trading volume hit a 2024 high (US$63 billion), showing strong development momentum.

• Meme coin market: The Meme track has returned to the markets attention and has performed actively amid market fluctuations, bringing new liquidity and user growth points to the market.

• Hot spot attention: DEX projects received the highest attention, while tracks such as AI and GameFi performed weakly, reflecting that market hotspots are concentrating on infrastructure and liquidity tracks.

• Investment advice: Investors are advised to remain cautious and focus on re-pledge projects and DEX sector opportunities, while paying close attention to the market fluctuations that may be caused by the Federal Reserve’s interest rate meeting next week.

Market Sentiment Index Analysis

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

• Altcoins underperformed the benchmark index this week, showing a volatile downward trend. After falling in the first half of the week, most of the targets failed to recover their losses. Affected by leveraged positions, the market saw forced liquidation of about $2 billion in positions, and long positions were significantly deleveraged. Given the current market structure, it is expected that Altcoins will keep pace with the benchmark index in the short term, and the probability of independent market trends is low.

Overview of overall market trends

• 這 加密貨幣currency market is in a wide range this week, and the sentiment index is still in the bullish phase.

• Defi-related crypto projects performed outstandingly, showing the markets continued focus on improving basic returns.

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

• This week, the Meme track has returned to the forefront and started to attract market attention.

Hot Tracks

地塞米松

This week, due to the large fluctuations in overall market prices, many profit opportunities were created for investors. On-chain investors used DEX to trade. As on-chain funds and users continued to enter the DEX track, the DEX project grew this week.

DEX on-chain data

The most intuitive data for observing DEX is DEXs TVL and trading volume. These two indicators can most directly reflect the status of the DEX track.

• TVL: The TVL of DEX track projects has risen rapidly this week, from 25.22B last week to 26.58B now, an increase of 5.39%. It can be seen that funds are actively entering into DEX projects.

TVL of DEX track (data source: https://去中心化金融llama.com/p rotocols /Dexes )

• DEX weekly trading volume: DEXs trading volume this week reached its highest level since mid-2024, reaching US$63 billion. The trading volume in the past 24 hours reached US$7.58 billion, which shows a surge in trading volume in the DEX track.

DEX transaction volume (data source: https://dune.com/haga etc /dex-metrics )

The DEX sector shows a clear trend of business model upgrading. Head protocols represented by Hyperliquid and dYdX are undergoing a strategic transformation from a single transaction function to a comprehensive financial infrastructure. This evolutionary path is reflected in the following: the protocol is based on its own chain layer architecture, vertically integrated through functional aggregation, and creates a one-stop DeFi service ecosystem. This kind of architectural innovation indicates that the DEX track is evolving from a single transaction level to a full range of financial infrastructure, and the track value reconstruction is underway.

隋

The Sui ecosystem has been hotly discussed in the market this week. The price of SUI has risen by 7.8% this week, outperforming BTC and ETH. The Defi projects in the Sui ecosystem have also performed very well this week.

Sui on-chain Defi project data

• TVL: Suis TVL rose rapidly this week, from 1.598 b last week to 1.793 b now, an increase of 12.88%. It can be seen that on-chain funds are actively entering the Sui chain.

• Account: The total number of users on Sui Chain reached 66,543,317, an increase of 2,184,755 from 64,358,562 last week, an increase of 3.39%. Although the increase does not seem large, the fact that it was able to achieve growth amidst the volatile market this week also shows that Sui Chain has a certain effect in attracting traffic.

• DEX transaction volume: The main DEXs on the Sui chain are Cetus, Aftermath Finance and BlueMove DEX. This week, the total transaction volume of DEX on the Sui chain exceeded US$35 billion, and the average daily transaction volume reached US$466 million. It can be seen that DEX on the Sui chain is very active.

• Defi project TVL increment: The top three projects in the Sui ecosystem by TVL are NAVI Protocol, Suilend, and Aftermath Finance, which belong to the lending and DEX tracks, respectively. This week, their TVL growth rates are 1.14%, 17.22%, and 1.72%, respectively. It can be seen that although the trend is volatile, funds in the Sui ecosystem are constantly entering the Defi track projects.

The most direct criterion for judging whether a public chain is favored by the market is the increase or decrease in its TVL. Based on the above data, we can see that the Sui chain is maintaining rapid development at this stage. Since the SUI price is stronger than the market, the underlying assets of the Sui ecosystem are constantly rising, thereby driving the growth of the APY of its on-chain Defi projects. At the same time, the overall market conditions have large fluctuations and there are profit opportunities, which has attracted a large number of on-chain users to participate and promoted the development of the entire Sui ecosystem.

DeFi 賽道

TVL Growth Ranking

近一週市場項目TVL成長前5名（不包括TVL較小的公共項目，標準為3000萬美元以上），資料來源：Defilama

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

• Project Introduction: Synthetix is a decentralized synthetic asset protocol based on Ethereum that aims to provide on-chain exposure to real-world assets through blockchain technology. The core functions of Synthetix include allowing users to mint synthetic assets by pledging their SNX tokens.

• Latest developments: This week, Synthetix increased the APY of LP users, increasing the share of V3 LP transaction fees from 40% to 60% through the implementation of SCCP-373, while Synthetix Treasury intends to charge some integrator fees to increase V3 LP revenue. In addition, Synthetix announced this week that it has completed the acquisition of leveraged token platform TLX, and will integrate TLXs leveraged token function, promote the launch by improving parameters and redeploying contracts, and launch a leveraged token incentive plan.

Babylon (unissued coin): (Recommendation index: ⭐️⭐️⭐️⭐️⭐️)

• Project Introduction: The Babylon project is a project that aims to use the security of Bitcoin to enhance the security of other proof-of-stake blockchains. The core concept is to activate idle Bitcoin assets through a trustless staking mechanism, solving the contradiction between Bitcoin holders pursuit of asset security and participation in high-return projects.

• Latest development: Although the market price fluctuated violently this week, BTCs performance was very strong and remained at a high level. In addition, users are generally optimistic about the subsequent development of BTC, so they are more determined to hold and want to liberate the liquidity of holding BTC, so they will choose more interest-bearing projects based on BTC. In addition, this week Binance announced that it is possible to directly pledge BTC in Babylon from Binance accounts to obtain income, which brought huge new funds to Babylon. At the same time, during the event period, Binance users who participated in the event will receive a maximum of 12% points increase, which has encouraged a large number of Binance users to participate.

Usual Money（USUAL）：（Recommendation index: ⭐️⭐️⭐️）

• Project Introduction: Usual Money is a stablecoin project supported by Binance, which aims to provide a new stablecoin solution in a decentralized way. The core mechanism of the project includes three main tokens: stablecoin USD 0, bond product USD 0++ and governance token USUAL.

• Latest development: Usual Money recently upgraded Checker. After the upgrade, the annualized return of bond product USD 0++ holders reached 48%, the average APY of USD 0/USD 0++ in Curve was 54%, and the average annualized return of USD 0/USDC was 52%. At the same time, the minting volume of USUAL was reduced by 17%, and the price of USUAL was increased. This attracted many users to participate in Usual Money to obtain high annualized arbitrage returns.

BounceBit（BB）：（Recommendation index: ⭐️⭐️⭐️⭐️）

• Project Introduction: BounceBit is a restaking foundation layer in the Bitcoin ecosystem. In terms of design, it cooperates deeply with Binance to build a high-yield CeDeFi component; in addition, it builds its own BounceBit Chain to build a specific use case for Restaking.

• Latest development: BounceBit has recently increased the staking rates of various tokens, including 54.25% for USDT, 24.55% for BTC, 37.13% for BNB, and 37.7% for ETH, which has attracted a large number of users to invest their assets in BounceBit for staking. At the same time, this week BounceBit reached a cooperation with Ondo to introduce tokenized RWA into BounceBit and began to enter the RWA track.

Equilibria (EQB): (Recommendation index: ⭐️⭐️⭐️)

• Project Introduction: Equilibria is a machine gun pool project whose main goal is to create high returns for users. It uses the ve代幣 used by Pendle to improve the profit model, provide higher returns to LPs through the tokenized version of vePENDLE, ePENDLE, and provide additional rewards to PENDLE holders.

• Latest development: This week, Equilibria strengthened its cooperation with Curve and launched the first new enhanced pool – scrvUSD pool to increase users income. Later, SolvBTC, cmETH, and ePENDLE enhanced pools were added, raising users APY to 59%, thereby attracting a large number of users to participate in arbitrage.

To sum up, we can see that the projects with faster TVL growth this week are mainly concentrated in the stablecoin income sector (machine gun pool).

Overall performance on the track

• The market value of stablecoins has grown steadily: USDT has increased from $141 billion last week to $145.1 billion, an increase of 2.91%, and USDC has increased from $40.2 billion last week to $41.5 billion, an increase of 3.23%. It can be seen that both USDT, which is mainly based on the non-US market, and USDC, which is mainly based on the US market, have increased this week, indicating that the entire market is still maintaining a continuous inflow of funds.

• Liquidity gradually increases: The risk-free arbitrage rate in the traditional market continues to decline as interest rates continue to fall, while the arbitrage rate of on-chain Defi projects continues to increase due to the increase in the value of cryptocurrency assets. Returning to Defi will be a very good choice.

Defi TVL of each track (data source: https://defillama.com/ca tegories )

Funding situation: The TVL of Defi projects has increased from US$53.2 billion last week to US$54.1 billion now, with new funds reaching 1.69%. This week, it continued to maintain positive growth and has maintained a continuous upward trend for nearly two months, proving that funds are constantly flowing into Defi projects.

Deep analysis

Driving force for growth:

The core driving factors of this round of increase can be summarized as the following transmission path: the market entered a bull market cycle, driving up liquidity demand, which in turn pushed up the basic lending rate level, magnifying the profit space of the arbitrage cycle strategy in the DeFi protocol. Specifically:

具體來說：

• Market environment: The bull market cycle brings an increase in overall liquidity demand

• Interest rate: The base lending rate has risen, reflecting the markets pricing expectations for funds.

• On the income side: the yield of the circular arbitrage strategy has expanded, and the intrinsic income of the protocol has significantly improved. This transmission mechanism has strengthened the intrinsic value support of the DeFi sector and formed a healthy growth momentum.

Other track performance

公鏈

近一週TVL增幅最高的前5名公鏈（不包括TVL較小的公鏈），資料來源：Defilama

Hyperliquid: Due to the large fluctuations in the market this week, the number of users participating in on-chain transactions has increased sharply, especially those participating in contract transactions. This week, Hyperliquids open interest reached US$3.5 billion, quickly surpassing the traditional Perp DEX leader DYDX to become the largest Perp DEX on the chain. Therefore, Hyperliquids trading volume this week has rapidly increased, especially after the launch of the popular project ME, which has further increased its trading volume.

Sui: This week, Movement issued a coin, which led to the rise of the Move series. As the leader of the Move series, Sui has received widespread attention from the market. This week, Sui reached a cooperation with Backpack, and the Backpack wallet will support SUI tokens. It also reached an agreement with the Phantom wallet to integrate SUI. At the same time, the popular Meme coin KAPI appeared on the Sui chain this week, attracting a wave of traffic and funds for the Sui ecosystem. This week, the daily transaction volume of the DEX on the Sui chain exceeded 466 million US dollars, proving that the Sui chain ecosystem is developing rapidly.

Algorand: This week, the Meme coin project MONKO on the Algorand chain was quite popular in the market, attracting some attention and funds for the Algorand chain. At the same time, Algorand announced its strong support for the RWA track project on the Algorand chain. This week, Coinbase announced to European customers that it would no longer support stablecoins that did not meet the MiCA standard, while Algorands two main stablecoins USDCa and EURD are in line with the MiCA standard and can continue to provide stablecoin services on the chain to European users.

PulseChain: This week, the Meme coin project on PulseChain chain began to become active. Although there are no particularly outstanding projects, it still brought a certain wealth-making effect on the chain, so it contributed some attention and new funds to the PulseChain chain. The largest DEX on the chain, PulseX, saw a 62% increase in trading volume this week, which increased the TVL of PulseChain. At the same time, the PLS token that flowed out of PulseChain on the market will be listed on Binance, so users on the chain began to enter the PulseChain ecosystem to earn PLS.

Bitcoin: The market corrected in the first half of this week, and the prices of the entire market fell sharply. However, BTC performed well during the period, with a smaller decline, and returned to its historical high in the second half of the week. Users are more optimistic about the future rise of BTC and are more determined to hold BTC. Therefore, in the process of holding BTC, they will choose to invest BTC in the BTCFi project to earn additional income. Therefore, users have begun to deposit BTC assets into the BTCFi project to earn income, which has led to an increase in Bitcoins TVL.

新星概述

近一週漲幅最高的前5個代幣（不包括交易量較小的代幣和meme幣），資料來源：Coinmarketcap

This week, the list of rising tokens showed a sector concentration feature, and most of the rising tokens belong to the public chain track.

USUAL: Usual Money recently upgraded its Checker. After the upgrade, the annualized return of the bond product USD 0++ holders reached 48%, the average APY of USD 0/USD 0++ in Curve was 54%, and the average annualized return of USD 0/USDC was 52%. At the same time, the minting volume of USUAL was reduced by 17%, and the price of USUAL was increased. This attracted many users to participate in Usual Money to obtain high annualized arbitrage returns.

BGB: Recently, Bitget has been continuously listing popular tokens, especially some Meme tokens, which have brought a certain amount of users and funds to Bitget, helping it increase its trading volume. This week, Bitgets CEO announced that it is reconsidering entering the US market and plans to expand its business under the Trump administrations possible pro-cryptocurrency policy. This week, Bitgets trading volume has surpassed OKX, becoming the third largest exchange among CEXs.

SUSHI: Sushi recently launched the Dojo Agent and Tweet Token functions, which allow users to tokenize their favorite tweets or create their own Meme coins directly from Twitter. This function has greatly increased Sushis trading volume. This week, Sushi Dao proposed a fund diversification strategy, shifting assets from 100% SUSHI tokens to 70% stablecoins, 20% blue-chip cryptocurrencies and 10% Defi tokens, in order to reduce volatility, enhance liquidity, and generate income through staking, lending and liquidity provision.

ORCA: ORCA strengthened its cooperation with Binance this week. Binance financial management, one-click coin purchase, flash exchange trading platform, leverage, fixed investment platform and Binance contract are all online with ORCA. At the same time, ORCA launched a new token creation tool this week, supporting Solana and Eclipse networks. Users do not need to code, and ORCA provides complete token customization functions. Cooperate with HawkFi and NATIX Network to enhance the DeFi experience, and support Solana AI Hackathon.

ACX: This week, Across Protocol announced an important cooperation with Binance. ACX tokens were launched without paying listing fees. At the same time, Binance financial management, one-click coin purchase, flash exchange trading platform, leverage, fixed investment platform and Binance contracts were all launched on ACX. In addition, it reached cooperation with HTX Global and Bitvavo exchanges, cooperated with Yodl to provide cross-chain payment services, and continued to deepen cooperation with Uniswap.

Meme Token Gainer List

數據 來源 : coin marketcap.com

This week, the Meme project has returned to the markets attention. Although the overall market has been in a wide range of fluctuations this week, the Meme project has performed well, creating a wealth effect on the chain and attracting more users to participate in the Meme project on the chain.

社群媒體熱點

Based on the top five daily growth in LunarCrush and the top five AI scores in Scopechat, the statistics for this week (12.7-12.13) are as follows:

The most frequently appearing topic is DEX, and the tokens on the list are as follows (tokens with too small trading volumes and meme coins are not included):

資料來源：Lunarcrush 和 Scopechat

According to data analysis, the DEX project received the most attention on social media this week, and generally showed an upward trend, performing better than other track projects. This week, the market was in a wide range of fluctuations, and prices fluctuated violently, resulting in more trading opportunities. Therefore, on-chain users actively participated in transactions, resulting in a large increase in the trading volume of each DEX, which was also reflected in the prices of DEX track projects.

Overall overview of market themes

數據來源：SoSoValue

According to weekly returns, the Defi track performed the best, while the AI track performed the worst.

• Defi track: There are many projects in the Defi track. In the sampling of SoSoValue, LINK, UNI and AAVE accounted for the largest proportion, reaching 36.93%, 22.33% and 11.12% respectively, totaling 70.38%. This week, LINK, UNI and AAVE rose by 13.71%, 19.92% and 42.85% respectively, resulting in the largest increase in the entire Defi track among all tracks. And with the drastic price fluctuations this week, many arbitrage opportunities have been generated on the chain, so the Defi track projects performed best this week.

• AI track: FET, RENDER, WLD, and TAO account for a large proportion of the AI track, with a total share of 80.75%. This week, their declines were -4.16%, -2.59%, -9.79%, and -11.85%, respectively, resulting in the worst index performance of the entire AI track. Although the price of the AI track did not perform well this week, it has maintained a relatively high increase in recent weeks. Although the price was not good this week, the market discussion remained hot, mainly focusing on AI Agent.

下週的加密貨幣活動

• Tuesday (December 17) U.S. November retail sales monthly rate

• On Wednesday (December 18), the Hong Kong Stablecoin Bill was submitted to the Legislative Council for the first reading.

• Thursday (December 19) Federal Reserve interest rate decision (upper limit), Federal Reserve announces interest rate decision and economic forecast summary

• Friday (December 20) US November core PCE price index annual rate, Asia Blockchain and AI Week Hainan International Blockchain Week

下週展望

Macroeconomic factors analysis

• The market has fully digested the expectation of a 25 basis point rate cut at the Federal Reserves December meeting

• Focus turns to Chairman Powells speech and summary of economic projections to assess the direction of monetary policy in January 2025

• In the short term, Microsofts shareholder meeting resolution and macro data may dominate market sentiment, and the crypto asset market is expected to remain volatile.

Sector rotation trend

• Restaking projects in the DeFi track benefited from the rising risk aversion sentiment and the improvement in capital allocation preferences. Against the backdrop of intensified market volatility, the arbitrage demand in the DEX sector has driven up on-chain activity and the tracks prosperity has improved.

• The Agent segment of the AI sector maintains a high level of attention, with a market size of US$6-7 billion. The Web2 and Web3 ecosystems are accelerating their integration, and the integration of data networks and functional AI Agents with existing encryption products is accelerating.

Investment strategy advice

• Maintain a defensive configuration and focus on the safe-haven properties of top assets BTC and ETH

• While hedging risks, you can choose to invest in high-quality DeFi tracks with inherent returns

• Investors are advised to remain cautious, strictly control their positions, and do a good job of risk management.

This article is sourced from the internet: DeFi track valuation reconstruction, sector rotation appears｜Frontier Lab Crypto Market Weekly Report

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