Frontier Lab Crypto Market Weekly Report | W37

Frontier Lab

13 min readSep 13, 2024

BTC and ETH Weekly Overview

Market Performance

This week, the overall cryptocurrency market showed a rebound trend:

Bitcoin: Bitcoin experienced an overall rebound this week. Traders’ concerns about a potential economic recession have eased, with a general consensus that the likelihood of a recession in the U.S. has decreased. After the release of the U.S. August CPI data this week, it became clear that inflation has significantly moderated and is approaching the Federal Reserve’s target of 2%. Consequently, most traders are betting that the Fed will cut rates by 25 basis points next week, representing more of a precautionary cut rather than a response to an economic recession. Therefore, following the sharp declines of the past two weeks, Bitcoin rebounded this week.
Ethereum: Ethereum’s performance this week was weaker than Bitcoin, with its rebound lagging behind the broader market. Beyond external macroeconomic factors, the primary issue is the confusion surrounding Ethereum’s future direction. The market is not responding positively to the opinions of Ethereum developers, while the views of users are not being adopted by the developers, leading to significant discord. Moreover, there has been a lack of rapidly evolving or innovative flagship projects on the Ethereum network, diminishing its ability to tell compelling stories and generate wealth creation effects. As a result, capital has been shifting away from Ethereum to other public chains, posing serious challenges to the development of the Ethereum ecosystem.

Key Events

The U.S. CPI data came in lower than expected and below the previous value:

On September 11, the U.S. August year-over-year CPI, seasonally adjusted, was reported at 2.5%, significantly lower than the previous figure of 2.9% and below the forecasted value of 2.6%. This indicates that U.S. inflation is rapidly declining and is well under control, with the number steadily approaching the Federal Reserve’s target of 2%. This further reinforces expectations of a rate cut by the Fed next week. The market’s current concern centers on how many more rate cuts the Fed will implement and the magnitude of those cuts. Based on the latest CPI data, the market interprets the decline in inflation as being within a controllable range, reducing the risk of a rebound. As a result, it is likely that the Fed will continue to cut rates multiple times in the future.

Altcoin Market Overview

Overall Performance

This week, the market sentiment index quickly recovered, rising to 65.5%, a significant increase from last week’s 11%. As the market gradually rebounded this week, sentiment shifted from extreme fear to greed.

The altcoin market followed the broader market’s upward trend, with its rebound showing even greater strength. This surge was primarily driven by the market’s belief that the likelihood of a U.S. The economic recession has decreased, easing recession fears and triggering this week’s rally. Additionally, a substantial amount of capital has flowed out of the Ethereum ecosystem and into other public chains, leading to a rise in projects across various ecosystems.

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.

TON: TON is a public blockchain project backed by Telegram, gaining rapid popularity due to its integration with Telegram-bound mini-programs and games, alongside its impressive performance, with TPS (transactions per second) surpassing Solana in tests. A few weeks ago, TON’s ecosystem faced some negative impacts when Telegram’s founder was arrested in France. However, as time passed, the market gradually shrugged off the incident, and the TON ecosystem has begun to recover. Recently, the TON ecosystem distributed DOGS tokens to users, significantly increasing the number of on-chain users and helping restore its TVL (Total Value Locked).

Fantom: Fantom is an EVM-compatible public blockchain that primarily uses the Opera mainnet and is built on a layered architecture. The core layer manages consensus between nodes, the middleware layer handles rewards and payments, and the application layer hosts dApp APIs. This design allows Fantom to be a high-performance blockchain. Recently, Fantom rebranded to “Sonic,” and its mainnet went live this week. To encourage participation in the new network, the team announced a 190 million S-token airdrop for users of both Opera and Sonic, which has driven a surge in on-chain user activity.

Sei: Sei has been actively promoting its Gaming Week, focusing on GameFi projects and offering SEI token rewards to users. Additionally, the Sei Foundation and OKX Wallet launched a joint campaign with 2.67 million SEI tokens available for users to share. By lending USDC/USDT with minimal risk, participants can earn an annualized return of 11%-25%, along with SEI token rewards, further boosting on-chain user engagement.

Cardano: Cardano is following in the footsteps of Solana and Tron by actively introducing meme tokens and developing a meme token listing platform similar to Pump. It has launched several popular meme tokens, such as ADADOG. In the current environment, where profit opportunities are scarce, this move has helped to stimulate on-chain activity on the Cardano network.

Bitlayer: Bitlayer is a Bitcoin Layer-2 solution centered around BitVM. Recently, BTCFi has regained attention in the market, bringing Bitlayer back into the spotlight. Seizing this opportunity, Bitlayer partnered with OKX to launch an on-chain mining rewards program, distributing BTR tokens and Bitlayer chain points to staking participants. This has sparked user enthusiasm, leading to a rapid increase in Bitlayer’s TVL.

Overview of Project TVL Growth

Top 5 Projects with the Highest TVL Growth in the Past Week(Excluding projects with smaller TVL, the standard being over $30 million) Data Source: DefiLlama

DeSyn Protocol:

Project Overview: DeSyn Protocol is a decentralized asset management platform built on Ethereum, offering a comprehensive suite of financial products to maximize the potential of investors’ capital. These include synthetic derivative assets, leveraged staking ETFs, yield-earning funds, RWA (real-world assets) funds, and customized strategies, all driven by smart contracts.
Latest Developments: Over the past week, DeSyn Protocol partnered with HashrateAsset, Bullishs_io, AILayerXYZ, Ionic, and Bitfi_Org. These collaborations have attracted capital inflows into the protocol and enabled the joint development of various innovative financial products, including new cryptocurrency funds.

Suilend:

Project Overview: Suilend is a lending protocol on the Sui blockchain, launched by Solana’s lending protocol Solend. It has a strong financial foundation.
Latest Developments: This week, Suilend increased its ETH deposit cap from 2,000 ETH to 2,500 ETH and launched a two-week campaign, allowing users who deposit or borrow SUI, USDC, USDT, ETH, or SOL to share in a pool of 436,386 SUI. These moves have driven rapid TVL growth for Suilend this week.

Yei Finance:

Project Overview: Yei Finance is the largest lending project on the Sei blockchain, backed by the Sei project team.
Latest Developments: This week, Yei Finance raised its deposit limits for USDT and USDC from 50 million to 150 million USDT/USDC, respectively. Additionally, the Sei Foundation, in partnership with OKX Wallet, launched a campaign to distribute 2.67 million SEI tokens. Through Yei Finance, users can lend USDC/USDT with minimal risk, earning an annual yield of 11%-25%, along with SEI token rewards. These initiatives have led to a significant increase in Yei Finance’s TVL this week.

DeDust:

Project Overview: DeDust is a DEX (decentralized exchange) project on the Toncoin blockchain, utilizing the innovative DeDust Protocol 2.0. The platform focuses on user experience, gas efficiency, and scalability, and has developed cross-chain bridge products allowing seamless interaction between Toncoin and Ethereum.
Latest Developments: Due to the recent surge in the popularity of the meme token DOGS, which saw a significant price increase, DeDust has added DOGS/USDT and DOGS/TON liquidity pools. To incentivize users, the platform is offering SCALE tokens as rewards for those who provide liquidity in addition to the base APY.

Colend Protocol:

Project Overview: Colend is a lending protocol on the Core blockchain, where the primary collateral consists of BTC LST (liquid staking tokens), aiming to drive growth in the Bitcoin-Fi sector.
Latest Developments: This week, Core launched LstBTC, an ERC-20 liquid staking token pegged 1:1 with Bitcoin. LstBTC holders can maintain Bitcoin liquidity while earning CORE tokens as rewards daily. As a result, Core’s TVL has surged, and users seeking to unlock LstBTC liquidity have turned to Colend Protocol, driving a sharp increase in Colend’s TVL this week.

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)

This week’s leaderboard did not display a “sector concentration” pattern, as the rising tokens were spread across the DEX, GameFi, public blockchain, AI, and payments sectors.

DRIFT: Drift Protocol is the largest perpetual exchange on the Solana blockchain. Recently, prominent investment firm Multicoin Capital announced that it has accumulated significant positions in Drift and believes its fair value is 3.58, while the current price is 0.62, indicating a large price gap. After Multicoin Capital’s endorsement, several KOLs (key opinion leaders) followed suit in promoting DRIFT, leading to a substantial price increase this week.
SUPER: SuperVerse is a decentralized ecosystem that unites various products under one governance token, SUPER. SuperVerse has two core verticals: the NFT marketplace and gaming. This week, SuperVerse launched the Super Champs Chain, a Layer 3 chain optimized for gaming, based on the Base blockchain, attracting investments from institutions like Coinbase Ventures.
SUI: Sui’s gaming console entered pre-sale this week, similar to Solana’s mobile airdrop. It was evident this week that capital began flowing into the Sui ecosystem, with BLUB and LIQ tokens on the Sui chain rising rapidly, creating a wealth effect. Additionally, Grayscale announced that the Sui Trust has opened to qualified investors, increasing the purchasing volume of SUI tokens.
FET: The Super AI Alliance (ASI), formed by FET, AGIX, and OCEAN, proposed adding the distributed AI computing project Cudos to its collective, with a conversion rate of 112.427:1 between Cudos tokens and FET tokens. A 15% price arbitrage opportunity existed, resulting in a sharp increase in FET’s price this week.
COTI: A new sector called PayFi has emerged in the market, with Solana positioning it as a key focus for future development. As an established project in the payments sector, COTI performed strongly this week, despite no direct positive news for the project itself.

The gains of these five tokens this week were significantly higher than last week. It is expected that after the Fed’s anticipated rate cut on Thursday, the market will experience significant volatility, likely trending downward.

Meme Token Leaderboard

Although the overall market was in an upward trend this week, the meme token sector, with the exception of a few tokens that saw significant gains, largely experienced a downtrend. This is primarily due to the limited capital available in the market at present. Following last week’s widespread market decline, capital either fled the market or shifted into larger-cap projects, with only a small portion flowing into the meme token sector. This lack of sufficient capital has made it difficult to support a broad rally in meme tokens. As a result, the meme token hype is visibly fading, and the risks associated with the meme sector are steadily increasing.

Social Media Hotspots

Based on data from LunarCrush’s top five daily growth tokens and Scopechat’s top five AI scores, the statistics for the week of September 6–13 are as follows:

The most frequently appearing theme was Layer 1 blockchains (L1s). The tokens that made the leaderboard (excluding low-volume and meme tokens) showed that the Layer 1 projects with the highest social media engagement generally followed the broader market’s upward trend and outperformed the market this week. Following internal disputes within Ethereum regarding its development path, attention has gradually shifted to various Layer 1 blockchain projects, and capital has started to flow into these ecosystems. As a result, many Layer 1 projects have carved out their own independent trajectories this week.

Topic Tracking

Based on weekly return rates, the SocialFi sector performed the best, while the Payment sector showed the weakest performance.

SocialFi Sector: In the SocialFi sector, TON remains the dominant force. A few weeks ago, the arrest of Telegram’s founder and an outage on the TON blockchain led to a significant decline in TON’s price. However, as time passed, the impact of these events faded, and the TON ecosystem began to recover. This week, TON hosted several activities, such as adding a ride-hailing service on-chain and a DOGS token airdrop for TON users, resulting in a significant rebound in TON. Other tokens within the SocialFi sector also saw a strong recovery, following the broader market’s rebound.
Payment Sector: In the Payment sector, XRP and BCH have a dominant share, accounting for 79.6% combined. Although both XRP and BCH followed the broader market’s rebound this week, their recovery was weaker compared to other sectors. Notably, XRP only rebounded by 5%, and since XRP holds a 65.88% share of the Payment sector, its underperformance heavily influenced the overall weaker performance of the Payment sector this week.

This Week’s Market Discussion Trends

Market Discussions on the Challenges and Future of Ethereum

Recently, Ethereum’s performance has not been strong, compounded by internal disagreements within the ecosystem regarding its development direction. This has led to market analyses of the challenges Ethereum is facing. A key finding is that as more transactions are handled by Layer 2 solutions, the fees and economic activity that would typically benefit Ethereum’s mainnet are being increasingly redirected. This shift could lead to a reduced demand for ETH, with a significant reduction in gas fees, which in turn lowers the amount of ETH being burned, thereby reintroducing inflationary pressure on the token.
In response to this situation, several suggestions have been made within the market. The consensus is that Ethereum should reduce its focus on heavy investment in infrastructure and instead recognize the fundamental nature of the current challenges. It needs to attract more users by introducing top-tier applications. Additionally, projects like Eigenlayer could increase staking rewards for ETH, while raising the base gas fee standard to increase Ethereum’s revenue, thereby boosting ETH burning through EIP-1559. Proposals have also been made to adjust the pricing mechanism for Blobs (data availability).

Solana’s Introduction of PayFi and Its Future Direction

Lily Liu, chair of the Solana Foundation, introduced the concept of PayFi: PayFi aims to fulfill Bitcoin’s original vision for payments. PayFi is not DeFi, but rather a new financial market built around the Time Value of Money (TVM). This on-chain financial market enables new financial paradigms and product experiences that traditional finance cannot achieve. PayFi represents the fusion of DeFi and Web3 payments, with the core goal of maximizing the time value of users’ money.
PayFi is applicable to various scenarios such as Web3 transactions, off-chain consumer contexts, retail environments, creator monetization, accounts receivable, payment processing, and private credit pools. From these application scenarios, PayFi can be seen as a subset of the RWA (Real World Assets) sector, primarily focusing on Web2 use cases like accounts receivable factoring and cross-border payments. In today’s market, which lacks significant hot topics, PayFi stands out as one of the few new concept sectors, with the main intent being to connect on-chain and off-chain capital and assets. Most projects within this sector are in the early stages, primarily presenting a promising vision to the market.

This Week’s Notable Projects

Nansen:

Overview: Nansen started as a blockchain analytics platform focused on tracking smart money movements on-chain, particularly valuable for NFT and meme coin traders. This week, Nansen acquired the staking project stakewith.us, enabling users to stake assets across more than 20 ecosystems, including Solana, Ronin Network, SuiNetwork, SkaleNetwork, Cosmos, and dYdX. Users can now analyze data, monitor their investment portfolios, and manage staked assets within the Nansen platform.
Recent Developments: The addition of staking services represents a significant shift in Nansen’s project narrative. Previously, Nansen had accumulated a large number of active on-chain users through its analytics services. Now, with staking across 20+ chains, users can seamlessly stake assets without switching applications, monitor real-time data, and withdraw stakes as needed. This integrated approach simplifies user operations and maximizes potential returns. Nansen’s recent developments have garnered increased attention from top KOLs and projects, boosting its market visibility.

Huma Finance:

Overview: Originally a decentralized lending platform focusing on loans and revolving credit within the RWA (Real World Assets) lending sector, Huma Finance recently upgraded its operations by acquiring the payment application Arf Financial. This move integrates RWA lending technology with Arf Financial’s cross-border payment licenses, transitioning into the PayFi sector.
Recent Developments: Huma Finance has added receivables-backed credit limits to attract institutional investors and adopted a modular approach, including trading, currency, custody, compliance, financing, and application layers. This framework aims to standardize and advance the PayFi sector, aligning with Lily Liu’s PayFi concept, which integrates programmable currency and token economics into the physical economy.

Next Week’s Crypto Events

Tuesday (September 17): US August Retail Sales MoM; Stable Rise
Wednesday (September 18): Verdict in Trump’s “hush money” case; TON Asia-Singapore
Thursday (September 19): Federal Reserve Interest Rate Decision; Solana Breakpoint; DeFi 2049 — Beyond THE Horizon; Impact 2049
Friday (September 20): ETHGlobal Singapore
Saturday (September 21): SEC Decision on Bitcoin ETF Options

Outlook for Next Week

Bitcoin: Bitcoin currently lacks significant bullish factors, with price movements largely influenced by market news and macroeconomic data. After a substantial decline due to recession fears, market sentiment has eased, and with the August CPI data showing significant improvement, traders are betting on a 25bps Fed rate cut next week. This anticipated defensive rate cut suggests no recession is imminent. Bitcoin’s price is expected to fluctuate around the Fed’s rate decision and be influenced by the updated dot plot.
Ethereum: Ethereum underperformed relative to the market this week, with the ETH/BTC ratio continuing to decline. Beyond macro factors, Ethereum faces internal conflicts regarding its development direction. Discrepancies between developers and market users, coupled with a lack of innovative projects, have led to a significant capital shift from Ethereum to other blockchains. ETH’s performance is likely to lag behind Bitcoin, and the ETH/BTC ratio is expected to continue declining.
Altcoins: Although altcoins mirrored the market’s rebound this week, no single sector or project emerged as a dominant market hotspot. Emerging sectors are still in early stages and not fully developed, leading to dispersed capital and a lack of collective momentum. With limited market funds and a lack of confidence in future developments, altcoins are likely to follow Bitcoin’s lead without establishing independent trends. Altcoins are expected to continue mirroring Bitcoin’s movements in the upcoming week.