Frontier Lab Crypto Market Weekly Report | W40

Frontier Lab

13 min readOct 4, 2024

Market Overview

Summary of Major Market Trends

Market sentiment has entered an extreme fear stage, with the Fear and Greed Index dropping to 13%, a significant decrease from last week’s 91%. This extreme sentiment could indicate a potential market reversal in the short term.
The cryptocurrency market as a whole is on a downward trend, but DeFi-related projects have performed relatively well, showing sustained market attention to improving base yields.
The BTCFi sector, especially projects issuing LSTs (Liquid Staking Tokens) based on BTC, has remained stable. Despite the drop in BTC prices, the TVL (Total Value Locked) of these projects has seen varying degrees of growth.
Among public chains, emerging chains like PulseChain, Sui, and Base have been active, attracting users and capital.
Meme coin projects have outperformed the broader market, creating some wealth effects that have drawn funds into the sector.
Concerns about an economic recession and war have resurfaced, which could lead to continued market volatility and downward movement next week.

Market Sentiment Index Analysis

The Fear and Greed Index has dropped to 13%, a significant decline from last week’s 91%, signaling that the market has entered an extreme fear stage.
Altcoins have seen greater declines than the broader market. This week, fears over war and recession have resurfaced, causing panic among investors, leading to large-scale sell-offs and substantial drops in altcoin prices.
The market has entered an extreme fear phase, and historically, when sentiment falls below 10%, a significant reversal often occurs.

General Market Trend Summary

The cryptocurrency market has been on a downward trend this week and has entered an extreme fear phase, which could signal a potential reversal in the short term.
DeFi-related crypto projects have performed well, indicating that the market continues to focus on improving base yields.

Hot Sectors

DeFi Sector

TVL Growth Rankings

Top 5 projects by TVL growth over the past week (excluding projects with smaller TVLs, with the threshold set at $30 million). Data source: DefiLlama.

Astherus (No Token Issued Yet) (Recommendation Rating: ⭐️⭐️)

Project Overview: Astherus is a liquidity hub for staked assets, supporting Liquid Staking Tokens (LST) and Liquid Re-Staking Tokens (LRT). Astherus is building a comprehensive DApp ecosystem for re-staked assets like LST and LRT. Users can not only earn staking APR but also use their assets for trading spot and derivatives, stablecoin yield, and other profit-generating strategies.
Latest Developments: This week, Astherus announced a partnership with pumpBTC, allowing users to deposit pumpBTC to earn 1.15x Au points and 2x pumpBTC multipliers. At the same time, pumpBTC can be used as collateral for perpetual trading of cryptocurrencies and memecoins, with Astherus providing up to 100x leverage.

Liqwid (LQ): (Recommendation Rating: ⭐️⭐️)

Project Overview: Liqwid Finance is a non-custodial liquidity protocol for staking and lending on Cardano.
Latest Developments: Currently, Liqwid Finance is the second-largest DeFi protocol on Cardano and the largest lending protocol in the Cardano ecosystem. Users can earn a 4.5% APY plus an additional 2.3% LQ reward APY for depositing assets in the protocol, resulting in a total annual APY of 6.8%. This high yield has attracted a significant number of users to participate.

Solv Protocol (No Token Issued Yet) (Recommendation Rating: ⭐️⭐️⭐️⭐️)

Project Overview: Solv Protocol is a decentralized asset management platform focusing on yield aggregation across the decentralized industry, making it a full-chain yield platform. Currently, the Solv Protocol allows users to stake mainstream decentralized assets, including BTC, ETH, and USDT, into wrapped assets — LSTs — to, to earn yields while maintaining liquidity in the market.
Latest Developments: This week, Solv Protocol launched SolvBTC.CORE, enabling users to stake BTC on Core and earn up to 4% annual yield while maintaining DeFi liquidity. Users can also unlock up to 10% APY through Core incentives, and they are awarded Core badges and Solv multipliers. The staking cap was set at 500 BTC, which was reached within one hour of the event launch, significantly boosting TVL growth.

Treehouse Protocol (No Token Issued Yet) (Recommendation Rating: ⭐️⭐️⭐️)

Project Overview: Treehouse Protocol is a decentralized application supporting deterministic reference rates. Its core objective is to generate final interest rates through consensus mechanisms, based on verifiable objective data such as trade data or index formulas, ensuring decentralized rate quotations are free from external manipulation or influence.
Latest Developments: Recently, Treehouse Protocol launched its first LST, tETH, which provides a real yield above the risk-free on-chain rate through interest rate arbitrage. Currently, the annual yield for tETH is 3.41%, compared to Lido’s stETH rate of 3.21%. The additional 0.2% is earned through arbitrage using users’ ETH or LSTs in the market. Additionally, users depositing tETH receive system NFTs as rewards.

Anzen Finance (No Token Issued Yet) (Recommendation Rating: ⭐️)

Project Overview: Anzen is a decentralized lending platform aimed at bringing stability to the DeFi space and providing more use cases for stablecoins. Users can lend on the platform to earn yields backed by Real-World Assets (RWA). Loans are collateralized by secure, tangible, and appreciating assets, offering lenders a predictable income stream tied to RWA performance.
Latest Developments: Recently, Anzen launched an initiative encouraging users to mint its stablecoin USDz and started rewarding USDz holders with additional z-points. Users can also earn multipliers on their z-points, starting from 1x and increasing by 2% daily.

Sector Performance Overview

Stablecoin Market Cap Growth: USDT grew from $118.9 billion last week to $124.9 billion, while USDC fell from $36 billion at the beginning of the month to $35.6 billion. The percentage changes were 5.04% and -6.65%, respectively. While the total stablecoin supply increased, USDC, primarily in the U.S. market, saw a decline.
Liquidity Gradually Increasing: Risk-free arbitrage rates in traditional markets continue to fall, making a return to DeFi a highly attractive option.
New Growth Drivers: In addition to traditional DeFi projects, such as lending and DEXs, the introduction of two powerful engines — BTC and ETH LSD (Liquid Staking Derivatives) and re-staking projects — has provided new growth momentum.

Capital Decline: The TVL of DeFi projects dropped from $35 billion last week to $32 billion now, representing a decline of 8.57%. This decline is primarily due to the drop in the prices of underlying assets like BTC and ETH. Despite the overall downtrend in the market, it’s important to note that when the price decreases of underlying assets are excluded, the TVL of DeFi projects hasn’t seen a real decline. This indicates that market enthusiasm for participating in DeFi projects remains strong.

In-Depth Analysis

Drivers of GrowthDespite the market downturn this week, the DeFi sector has shown relative strength, continuing to offer users high APY yields. Investors remain optimistic about the future price movements of BTC and ETH, the two primary assets, and are thus holding onto these assets. At the same time, they are actively participating in various DeFi projects to enhance the yields on their holdings.
Top Growth LeadersTVL growth is the most direct indicator of performance for DeFi projects. Analysis of TVL growth shows that projects with the largest increases are those in the vault (or “yield aggregator”) category and BTCFi projects.
Vault Projects: These projects help users maximize their yields while holding assets. They work by automatically allocating user funds into different yield-generating opportunities to optimize returns.
BTCFi Projects: These involve wrapping BTC into tokenized assets and participating in various arbitrage or yield farming strategies within DeFi.
Both types of projects aim to guide users to deposit their assets into the projects, which in turn allocate these funds to the underlying protocols with the highest yields. As a result, deposited funds are ultimately funneled into various base-layer protocols.

Given this, investors should pay close attention to vault projects and BTCFi projects when making investment decisions in the near term.

BTCFi Sector Overview

Recent Developments

This week, the BTCFi sector saw some cooling due to the decline in BTC’s market price. However, liquidity staking projects that mint tokenized assets (LST) from staked BTC showed resilience, with most projects seeing TVL increases despite the price drop. These liquidity staking projects remain one of the strongest-performing subsectors in BTCFi.

Current Sector Status

BTC has dropped by 9.12% this week, but excluding the BTC price decline, projects issuing LSTs based on BTC, such as Bedrock, Lombard, Lorenzo, Pell Network, PumpBTC, Solv Protocol, and Stakestone, have shown varied TVL growth: Bedrock: +0.82% Lombard: +15.04% Lorenzo: +4.09% Pell Network: +9.11% PumpBTC: +52.52% Solv Protocol: +45.54% Stakestone: -2.46%

Project Highlights

BedRock: Supports staking wBTC to mint uniBTC, with additional basic yield rewards. After previously hitting its limit, BedRock reopened staking this week, raising the cap to 2,100 wBTC. Users have already staked 2,000 wBTC, close to the new limit.
Lombard: Allows users to stake BTC via Babylon, minting LBTC on Ethereum. This week, Lombard announced partnerships with multiple crypto teams to enhance security for users’ stake assets. They also launched the Luminary Program, doubling the reward points for users minting LBTC.
Solv Protocol: Launched SolvBTC.CORE, allowing users to stake BTC on Core to earn up to 4% APY, while maintaining liquidity. Additionally, users can unlock up to 10% APY through Core incentives and earn exclusive badges and multipliers. The 500 BTC cap was reached within one hour of the event launch.
Lorenzo Protocol: Expanded upon Babylon’s foundation by introducing a BTC principal-yield split, similar to Pendle. Users can stake BTC or BTCB to receive stBTC (liquidity principal token) and YAT (yield token). The dual-token system lets users earn Babylon’s native staking rewards while accumulating Lorenzo points. This week, Lorenzo increased Cap 2 YAT (yLRZ2) bonuses from 0.1% of LRZ token supply to $3 million worth of LRZ tokens.
PumpBTC: Supports the use of LSTs to mint pumpBTC. Participants earn a mix of rewards, including Babylon points, PumpBTC points, FBTC points, and Staking APR. PumpBTC integrated into the Base chain this week, establishing partnerships with multiple DeFi projects on Base, allowing rapid adoption of pumpBTC on the network.
Pell Network: The first security network built on Bitcoin’s restaking, operating on Babylon’s AVS network. Pell now has over 410,000 user addresses. It offers four restaking methods, covering everything from native BTC staking to LP token staking with liquidity BTC derivatives. The AVS architecture enables Pell to capture significant revenue from middleware, oracles, modular chains, and more.
Stakestone: Expected to follow a model similar to ETH-STONE, allowing users to stake native BTC on Babylon and mint yield-bearing STONEBTC for cross-chain liquidity. There were no new updates from Stakestone this week.

Sector Analysis: Among BTCFi projects, those minting LSTs based on BTC have performed the best recently. TVL growth is a key indicator of prosperity in BTCFi. Despite the significant price drop in BTC this week, LST projects have largely seen increases in TVL, as BTC is often seen as a relatively stable asset during downturns. Users who remain bullish on BTC’s long-term potential are holding BTC while simultaneously using it to earn additional returns through staking and yield strategies. This behavior leads to the wrapping of BTC into LSTs, which are then used in other DeFi protocols for staking to maximize returns.

From a medium- to long-term perspective, BTC’s potential for price appreciation, combined with its strong role in DeFi, provides a solid foundation for the growth of BTCFi projects. Investors should consider BTCFi as a promising investment sector.

Other Sector Performance

Public Chains

Top 5 Public Chains by TVL Growth Over the Past Week (Data Source:

DefiLlama)

PulseChain: PulseChain is a full-state hard fork of Ethereum, which means it retains every transaction, user account, and smart contract interaction from Ethereum. The platform aims to reduce computational strain on Ethereum and provide a cost-effective alternative for smart contract developers. This week, there were no notable positive developments for PulseChain.

Sui: The Sui ecosystem has been quite active recently. The Meme coin project HIPPO on Sui performed exceptionally well, topping the growth charts for three consecutive days and surpassing a $100 million market cap, drawing significant traffic and liquidity to the Sui chain. Additionally, Sui upgraded its mainnet to version V1.34.2 this week.

Base: Base is an Ethereum Layer 2 solution built on OP Stack and backed by Coinbase. Recently, it has been influenced by the BTCFi narrative, particularly with the launch of cbBTC by Coinbase. In two weeks, the supply of cbBTC has reached 5,416 coins. Despite a generally declining market, Meme projects on Base have been thriving, contributing to a surge in TVL as users flock to Base for its wealth-generation opportunities.

dYdX: As the largest perpetual DEX in the market, dYdX has transitioned to become an independent chain within the Cosmos ecosystem. This week, due to market volatility and a downward trend, many users engaged in contract trading on dYdX, seeking higher profits. Consequently, dYdX experienced a rapid increase in trading volume, which in turn boosted its TVL.

Aptos: Aptos recently joined the Hong Kong Monetary Authority’s e-HKD pilot program and partnered with Hang Seng Bank and BCG to assess the settlement of tokenized assets on public blockchains, drawing attention from traditional markets. With the rise of BTCFi narratives, Aptos collaborated with the Stacks Foundation to introduce sBTC into its ecosystem. Moreover, Aptos teamed up with Tether to integrate native USDT, expanding its stablecoin business on-chain.

Top 5 Tokens by Growth in the Past Week

(Excluding tokens with low trading volume and meme coins. Data Source: CoinMarketCap)

This Week’s Top Gainers Exhibit “Sector Concentration” Phenomenon, Tokens Belong to Public Chain Sector

REEF: REEF is a Layer-1 blockchain project built on the Substrate framework, focusing on decentralized finance (DeFi), NFTs, and GameFi. It uses the Nominated Proof of Stake (NPoS) consensus mechanism to ensure blockchain security and efficiency. This week, REEF engaged in listing discussions with several centralized exchanges (CEXs) and partnered with Pigmo, where REEF will be used for crypto transactions, casino games, and sports betting.
DIA: DIA is a decentralized financial data platform aimed at providing reliable information services through decentralized oracle technology. Binance announced the launch of a DIA/USDT perpetual contract with up to 75x leverage this week, which boosted the token’s performance.
UMA: UMA is a decentralized financial protocol built on Ethereum, designed to provide synthetic assets and decentralized financial contract platforms. It allows users to create custom collateralized synthetic tokens that can track the prices of almost any asset, including gold and Tesla stock. This week, institutional investor Grayscale included UMA in its forecast of promising tokens for Q4, drawing attention to the token.
ALEO: ALEO is a privacy-focused blockchain project utilizing zero-knowledge proof technology to achieve highly private smart contracts and decentralized applications. ALEO aims to provide a fully privatized app development platform. Recently, ALEO was listed on CEXs, although its listing price was unfavorable compared to OTC prices, causing losses for many users. However, HIBTGlobal introduced partial compensation measures, regaining some trust for ALEO.
FTN: Fasttoken is the native currency of the Bahamut blockchain, a public EVM-based Layer-1 solution that uses a novel Proof of Staked Authority (PoSA) consensus mechanism. There was no notable positive news for Fasttoken this week.

The top five gainers this week belong to the AI and GameFi sectors, clearly showing a sectoral concentration of growth. Capital rotation is becoming evident across various sectors.

Meme Token Gains Ranking

This week, the overall market trend has been downward, reflecting a pessimistic sentiment. Fears regarding the war and concerns about recession have resurfaced, prompting many to sell off assets for safety. However, the performance of meme coin projects has outpaced the broader market, generating some wealth effects and attracting a portion of funds into the meme coin sector.

Social Media Hot Topics

Based on the top five daily growth metrics from LunarCrush and the AI score from Scopechat, the statistical data for this week (September 28 — October 4) reveals that the most frequently discussed theme is L1s. The following tokens made the list (excluding those with low trading volumes and meme coins):

According to the data analysis, the Layer 1 blockchain projects with the highest social media attention this week generally showed a downward trend, primarily influenced by the overall market’s continuous decline since Tuesday. In the context of market fluctuations and a lack of standout projects or sector rotations, major public chains often outperform other sectors. This phenomenon reflects investors’ relatively stable confidence in infrastructure projects in the current market environment.

Overall Market Themes Overview

According to Weekly Return Rate Statistics, the CeFi sector performed the best, while the DePin sector showed the weakest performance.

CeFi Sector: In the CeFi sector, BNB holds a significant share of 85.93%. Although BNB also followed the overall market trend of decline this week, its drop was relatively smaller compared to other sectors, with a decrease of 8.12%. This has allowed the entire CeFi sector to perform the best this week.
DePin Sector: Last week, the DePin sector ranked second among all sectors, with a growth rate of 13.81%. While this growth was relatively significant compared to other sectors, it also followed the market’s downward trend this week. Due to last week’s substantial gains, the pullback this week was deeper, although there were no negative news reports concerning the DePin sector itself.

Upcoming Major Crypto Events Next Week

Thursday (October 10): U.S. September Adjusted CPI Year-on-Year; Zebu Live 2024
Saturday (October 12): Bitcoin 2024 Amsterdam

Outlook for Next Week

With renewed concerns about economic recession and war, it is likely that the market will continue the downward trend observed this week. Consequently, BTC will remain the preferred asset for investors, leading to further development opportunities in the BTCFi sector.

BTCFi: Lombard primarily focuses on using BTC to mint wrapped assets like LBTC, allowing users to hold LBTC and participate in DeFi projects. Currently, investors have a positive outlook on BTC’s future, indicating that BTCFi, as a foundational asset, is expected to have good development in the future. Following its partnership with Symbiotic, Lombard is expected to innovate its staking user channels and strategies. Furthermore, Lombard’s recent growth trends show promise of surpassing the leading Solv, with more DeFi projects announcing support for LBTC, suggesting that Lombard will likely experience considerable development in the future.