Frontier Lab Crypto Market Weekly Report | W35

Frontier Lab

8 min readAug 30, 2024

BTC and ETH Weekly Overview

Market Performance

This Week’s Cryptocurrency Market Overview: Volatility and Decline

Bitcoin: This week, Bitcoin showed a trend of volatility and decline. This movement was mainly influenced by two significant events: first, the arrest of the founder of Telegram, and second, the market adjustment following the release of Nvidia’s financial report. These events reflect the current weakness in market buying power and investor concerns about future uncertainties.
Ethereum: This week, Ethereum followed Bitcoin’s trend, also showing a pattern of volatility and decline. Ethereum’s co-founder, Vitalik Buterin, expressed on Twitter his lack of support for DeFi, which sparked opposition from Ethereum ecosystem project teams and users. The growing pessimism about Ethereum’s future has led to a weakened performance this week.

Key Events

Arrest of Telegram Founder

On August 26th, Telegram founder Pavel Durov was arrested in France and was charged with multiple felonies by the court on August 28th, restricting him from leaving the country. This incident has negatively impacted the TON ecosystem, leading to a decline in its market performance.

Vitalik’s Anti-DeFi Tweet

This week, Vitalik Buterin expressed his lack of support for DeFi on Twitter, which sparked widespread opposition from industry projects and users. The Ethereum ecosystem is heavily based on its extensive financial system, with on-chain gas fee data showing Uniswap at the top. If Ethereum does indeed abandon its support for DeFi in the future, it could lead to a mass migration of DeFi projects to other blockchains, not only weakening Ethereum’s competitiveness but also potentially accelerating the growth of the blockchains that attract these projects.

Nvidia’s Earnings Report

On Thursday, Nvidia released its earnings report, showing that its second-quarter revenue far exceeded that of the first quarter and surpassed market expectations. However, the report failed to surprise the market, leading to a brief downturn in both U.S. stocks and the cryptocurrency market.

Altcoin Market Overview

Overall Performance

Market Sentiment: This week, the market sentiment index dropped to 38%, a significant decline from last week’s 90%. Profit-taking behavior following a rapid rebound has shifted market sentiment from extreme greed to fear.
Altcoin Market: The Altcoin market was influenced by multiple factors this week, including the arrest of Telegram founder Pavel Durov, Vitalik Buterin’s anti-DeFi stance on Twitter, and the market downturn triggered by Nvidia’s earnings report. Additionally, the Altcoin market lacked significant hotspots this week, except for Meme coin projects.

Overview of Public Chain TVL Growth

The following are the top 5 public chains in terms of TVL (Total Value Locked) growth over the past week (excluding public chains with smaller TVL), with data sourced from Defilama.

Sei: This week, Sei integrated the confidential computing layer from Secret Network, adding a privacy layer to its L1. Additionally, Sei released a statement clarifying that recent on-chain security incidents were not due to external hacking or intrusions but possibly internal actions, aiming to alleviate users’ concerns about Sei’s security. Infrastructure developer Biconomy also announced its integration with Sei, enabling users to utilize account abstraction infrastructure stacks.

Merlin: With the launch of the Babylon mainnet, the BTC ecosystem has once again become a focal point in the market, drawing some attention and funds back to the BTC ecosystem.

Aptos: As Tron and Ethereum ecosystems gradually support Meme coin projects, various chains’ Meme coin projects have become active again. Aptos has seen the emergence of Pumpfun clones, which are continuously launching Meme projects and attracting market attention.

Near: Recently, Near underwent the Nightshade 2.0 update, introducing stateless validation, reducing the burden on individual validators, and improving on-chain efficiency. Due to internal disagreements within the Ethereum ecosystem, the market has once again begun discussing the chain abstraction track as a solution to the L2 liquidity fragmentation issue. Near, as a leader in the chain abstraction track, has returned to the spotlight.

Sui: As a top-ranking public chain project, the Meme coin BLUB on the Sui chain has performed well in the recent Meme coin surge. Additionally, Sui has launched a clone of the Pumpfun project, drawing inspiration from Solana’s strategy of continuously creating Meme coin projects, which has attracted some capital inflows.

Top Performers of the Week

Top 5 Gainers in the Market Over the Past Week (Excluding tokens with low trading volume and meme coins, data source: Coinmarketcap)

The top gainers this week did not exhibit a “sector concentration” pattern, with the rising tokens spread across the AI, LSDFi, cross-chain, L2, and oracle tracks.

FET: As the leader in the AI sector, FET began rising last weekend due to favorable expectations for Nvidia’s earnings report, leading the AI sector. However, after Nvidia’s earnings were released on Thursday, despite growth compared to the first quarter, the results fell short of market expectations, especially with a decline in gross margin. This led to a drop in both U.S. stocks and the crypto market, with the AI sector experiencing significant losses. Nevertheless, since FET’s rise started earlier, it still ranked at the top of this week’s gainers list.
PENDLE: This week, PENDLE launched the BTC asset eBTC, which serves as the Bitcoin LRT vault for EtherFi and is used for Symbioticfi’s restaking. Pendle’s expansion into the BTC asset series has been well-received, with the market optimistic about its future business growth potential.
ZRO: ZRO gained attention due to OKX listing the ERO/USDC trading pair and the launch of ENA and Ethena on the Solana chain through LayerZero’s cross-chain technology. Recently, opposition to Ethereum’s L2 has intensified, with liquidity fragmentation becoming a prominent issue. As a result, cross-chain technology has regained importance, with LayerZero, as a leading project in the cross-chain track, attracting market attention.
IMX and TRB: These tokens showed no significant news or project-related benefits this week.

The gains of the top five tokens this week were noticeably lower than last week, mainly due to the market’s downward trend since Monday, with gains concentrated over the weekend and early Thursday morning. It is expected that the market will remain volatile until the U.S. August employment rate is announced next week.

Meme Token Leaderboard

The rebound in the Meme coin sector was significantly stronger this week compared to last. Besides Tron founder Justin Sun’s public endorsement of Meme coin projects joining Tron last week, dissatisfaction within the Ethereum ecosystem over Vitalik Buterin’s stance on DeFi’s role has gradually led to increased support for the development of Meme projects this week. As the largest ecosystem within crypto space, Ethereum’s shift has provided new growth momentum for Meme coin projects. The focus of Meme project development is beginning to shift towards the Ethereum chain, which, thanks to the large scale of funds and users within the Ethereum ecosystem, can quickly drive the rapid development of Meme coin projects in the short term.

Social Media Hotspots

Weekly Analysis Based on LunarCrush and Scopechat Data (August 24 — August 30): The most frequently mentioned theme was Layer 1 blockchains (L1s), with the following tokens making the list (excluding tokens with low trading volume and meme coins).

According to data analysis, the Layer 1 blockchain projects with the highest social media attention this week generally showed a downward trend, mainly due to the overall market’s continuous decline since Tuesday. In a volatile market with a lack of standout projects or sector rotation, the performance of major Layer 1 blockchains often surpasses that of other sectors. This phenomenon reflects that, in the current market environment, investors maintain relatively stable confidence in infrastructure projects. However, it is still crucial to closely monitor macroeconomic factors and industry developments to assess the sustainability of this trend.

Topic Tracking

Weekly Return Rate Analysis: GameFi Outperforms, SocialFi Lags Behind

GameFi Sector: The GameFi sector had the best performance this week, with the IMX project holding the largest market share at 31.76%. This week, IMX’s price increased by 18.04%, contributing to the overall growth of the GameFi sector. However, despite the relatively better performance this week, the cumulative gain for the GameFi sector remains negative. The performance of various projects has been generally impacted by recent events in the crypto market, including the arrest of Telegram founder Pavel Durov, Vitalik Buterin’s public statement against DeFi on Twitter, and the market downturn following Nvidia’s earnings report. These factors have collectively led to a lackluster performance for GameFi projects this week.
SocialFi Sector: In the SocialFi sector, TON remains the dominant force, accounting for 92.91% of the sector’s market value. Early this week, the arrest of Telegram’s founder and subsequent charges for multiple felonies, along with a significant outage on the TON blockchain, led to a sharp decline in TON’s price. Although other tokens within the SocialFi sector showed an upward trend, TON’s overwhelming dominance resulted in poor overall performance for the sector this week.

Next Week’s Crypto Events

Monday (September 2): TON Asia
Tuesday (September 3): U.S. August ISM Manufacturing PMI
Wednesday (September 4): Bitcoin Odyssey
Thursday (September 5): U.S. August ADP Employment Change; Meta Expo Dubai 2024
Friday (September 6): U.S. August Unemployment Rate; U.S. August Nonfarm Payrolls (seasonally adjusted)

Outlook for Next Week

Bitcoin: Currently, Bitcoin lacks its own positive catalysts and remains in a volatile state, with its price fluctuations primarily influenced by market news and macroeconomic data. Next week, a series of macroeconomic data releases are scheduled, with particular focus on the U.S. August unemployment rate. It is widely believed that this data will impact the Federal Reserve’s rate cut decisions in September, potentially causing significant market volatility. Given the U.S. The Department of Labor’s revision of employment figures last week. The unemployment rate may come higher than expected, which could lead Bitcoin to exhibit a choppy upward trend under the influence of macroeconomic data.
Ethereum: This week, Ethereum founder Vitalik Buterin tweeted that he is not inclined to support the development of DeFi within the Ethereum ecosystem, sparking widespread opposition. In response, several projects and users within the ecosystem have begun to shift their support towards Meme projects, leading to Ethereum outperforming Bitcoin after Wednesday. Given the large scale of the Ethereum ecosystem and the support for Meme projects, Ethereum is expected to continue outperforming Bitcoin next week.
Altcoins: Next week is a significant week for U.S. macroeconomic data releases, and the recent crypto market has been relatively weak. Altcoins are expected to follow macroeconomic data trends and are unlikely to exhibit independent movement. Additionally, the Altcoin sector has been lacking hotspots recently, and it is expected that Altcoins will continue to closely track the broader market trend next week.