Frontier Lab Crypto Market Weekly Report｜W43

Frontier Lab

14 min readOct 26, 2024

Market Overview

Summary of Major Market Trends

The market sentiment index has dropped to 41%, indicating a neutral phase, with an overall downward trend in the market.
The DeFi sector has performed well, particularly with the TVL of BTCFi projects increasing against the trend, showing that investors are optimistic about Bitcoin’s future.
The market capitalization of stablecoins has remained largely stable, but USDC has seen a slight decline, reflecting reduced demand in the U.S. market.
Meme coin projects, especially those on the Solana chain, have been active, creating a wealth effect.
Layer 1 public chain projects have garnered the highest attention on social media, reflecting investors’ confidence in infrastructure projects.

Market Sentiment Index Analysis

The market sentiment index has dropped to 41%, a significant decline from last week’s 59%, indicating a neutral phase.

Altcoins followed the overall market trend this week. With no significant positive or negative news, and after last week’s considerable gains, the market has shown signs of a corrective pullback, with Altcoins experiencing greater declines than the overall market.

Currently, the market is in a neutral phase, during which Altcoins typically follow the main market’s direction, waiting for a clear trend to emerge. The absence of both bullish and bearish factors has resulted in continued market fluctuations.

Overall Market Trend Overview

The cryptocurrency market has experienced a downward trend this week, entering a neutral phase, but investor confidence in future developments remains strong.
DeFi-related crypto projects have performed well, indicating ongoing market interest in improving base yields.
In the DeFi sector, BTCFi projects have seen an increase in TVL this week, contrary to the overall market’s decline, showing that investors are optimistic about their future performance.

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.

Echo Lending (Token Not Yet Issued) (Recommendation Index: ⭐️⭐️⭐️)

Project Overview: Echo is a multifunctional DeFi protocol designed for bridging, re-staking, and decentralized finance, allowing seamless interoperability within the Move ecosystem. Currently, Echo has integrated BTCFi, transforming itself into a multifunctional BTCFi protocol within the Move ecosystem, primarily providing cross-chain services, liquid staking, and re-staking. Its goal is to bring BTC liquidity into the Move ecosystem and introduce innovative re-staking solutions for BTC assets. Echo also seamlessly integrates with the BTC ecosystem, supporting all native BTC — L2 solutions.
Latest Developments: On Tuesday, Echo Lending announced support from the Aptos, Movement, and Presto foundations, as well as funding from notable venture capital firms like Spartan and ABCDE Capital, alongside a deposit of 2,000 BTC. Additionally, it announced a new staking policy for aBTC, allowing users to earn a 10% annual yield in APT and Echo points, resulting in a rapid increase in Echo Lending’s TVL this week.

Wasabi Protocol (Token Not Yet Issued) (Recommendation Index: ⭐️⭐️)

Project Overview: Wasabi Protocol is a Web3 derivatives exchange for long-tail assets built on the Blast Chain, supporting leveraged trading, NFT options, asset staking, fragmented NFT trading, and meme coin trading.
Latest Developments: This week, Wasabi Protocol did not announce significant news, but its TVL showed a rapid increase over the weekend, coinciding with a surge in meme coin issuance on the Blast chain. This suggests that the rise in Wasabi Protocol’s TVL is linked to increased trading activity in meme and other long-tail assets on the Blast chain.

Polymarket (Token Not Yet Issued) (Recommendation Index: ⭐️⭐️⭐️⭐️)

Project Overview: Polymarket is a decentralized prediction market platform based on blockchain technology, primarily built on the Ethereum and Polygon networks. The platform allows users to bet on the future outcomes of various topics, such as elections, sports events, cultural events, and cryptocurrency prices. Polymarket’s standout feature is its scalability, extending beyond traditional gambling to cover a wide range of topics, including politics, science, and culture.
Latest Developments: With the U.S. elections approaching, Polymarket has become a hot topic. As Trump’s approval ratings have risen and gained recognition from mainstream media, more users have started betting on Trump’s victory. The total amount wagered on the U.S. elections have reached $2.3 billion, significantly boosting Polymarket’s TVL.

Lorenzo Protocol (Token Not Yet Issued) (Recommendation Index: ⭐️⭐️⭐️⭐️)

Project Overview: Lorenzo Protocol is a decentralized liquid staking platform based in Babylon. Stakers can stake Bitcoin through Lorenzo while receiving liquid staking tokens pegged to the value of Bitcoin.
Latest Developments: Lorenzo Protocol updated its points system, allowing only users holding stBTC to earn points. It also introduced a DeFi multiplier rule to enhance user points through DeFi activities. This week, collaborations with the DeFi projects Corn and Hemi Network launched new incentive policies, bringing in $40 million in TVL.

Ionic Protocol (ION) (Recommendation Index: ⭐️⭐️⭐️)

Project Overview: Ionic Protocol is a decentralized, non-custodial money market protocol supported by comprehensive security monitoring and fail-safe systems. Ionic Protocol offers users the best rates on Mode Network, allowing them complete control over their funds.
Latest Developments: This week, Ionic Protocol launched on the Base chain’s largest perpetual DEX — Synfutures, where users can trade ION or provide liquidity with their ION to earn yields. Synthetix also announced support for ION, with liquidity providers earning up to 143% APY. Ionic Protocol initiated a voting activity this week, and users staking ION to receive veION for voting can earn rewards in ION tokens.

In summary, aside from Polymarket, which is experiencing significant attention due to the upcoming U.S. elections, Projects with rapid TVL growth this week are primarily focused on the BTCFi and DeFi sectors.

Sector Performance Overview

Stablecoin Market Capitalization Steadily Increasing: USDT has grown from $125.3 billion last week to $125.6 billion, while USDC has decreased from $34.7 billion at the beginning of the month to $34.4 billion, representing changes of 0.23% and -0.86%, respectively. The total amount of stable coins in the market remains stable, but USDC, which is primarily focused on the U.S. market, has experienced a decline.
Increasing Liquidity: The risk-free arbitrage rates in traditional markets continue to decrease due to ongoing interest rate cuts, while the arbitrage rates for on-chain DeFi projects are increasing as the value of cryptocurrency assets rises. Returning to DeFi is becoming a very attractive option.
New Growth Points: In addition to traditional projects like lending and DEX, the current phase of DeFi has introduced two powerful engines — BTC and ETH’s Liquid Staking Derivatives (LSD) and Restaking projects.

Funding Situation: The TVL of DeFi projects has increased from $33 billion last week to $33.2 billion now, remaining relatively stable. However, the overall market price has declined this week, indicating that the actual TVL of DeFi projects has seen growth.

In-Depth Analysis

Drivers of the RiseThis week, the market overall has experienced a volatile downward trend, yet the DeFi sector has maintained a relatively strong performance, continuing to offer users high APY returns. The primary reason for this is that market investors remain optimistic about the future price movements of the fundamental assets, BTC and ETH, leading them to hold these assets firmly and engage in various DeFi projects to enhance their returns.

Growth LeadersFor DeFi projects, the growth of TVL is the most direct indicator of performance. Although the prices of fundamental assets BTC and ETH have declined this week, the overall TVL of DeFi projects is actually trending upward. According to the TVL growth statistics, the projects with significant increases this week are in the BTCFi sector. The essence of BTCFi projects is to guide users to deposit their assets into the project, helping them find the underlying protocols with the highest returns in the market. Ultimately, the funds deposited by users are transferred to various underlying protocols.

Therefore, investors should pay close attention to BTCFi projects based on LRT issued by BTC when making recent investments.

BTCFi Sector Overview

Sector OverviewThis week, BTCFi projects experienced a degree of cooling due to the market price decline. However, within the BTCFi sector, liquid staking projects that mint wrapped assets (LST) through BTC staking have shown the most resilience, with many projects experiencing varying degrees of TVL growth despite the decline in BTC prices. This segment remains a strong performer within the BTCFi sector.

Current Sector Situation

BTC has dropped 3.61% this week. Excluding the BTC decline, the TVL of various LRT projects based on BTC, including Bedrock, Lombard, Lorenzo, Pell Network, PumpBTC, Solv Protocol, and Stakestone, has grown by 1.55%, 3.78%, 31.63%, 2.56%, 2.6%, 1.7%, and -2.38%, respectively.
BedRock supports staking wBTC to earn uniBTC and offers base yield from wBTC staking. This week, BedRock collaborated with more DeFi projects, including Velodrome and Mind, providing users with additional incentives. They also partnered with Arbitrum to promote the development of uniBTC on Arbitrum, offering users participating in uniBTC on the Arbitrum chain 150,000 ARB and 5,000 diamonds as rewards.
Lombard allows users to stake Bitcoin via Babylon, managing the re-staking process. This week, the EtherFi project’s LST — eBTC — received significant promotion from Pendle, offering a 20% APY through YT, with the primary support for minting eBTC being LBTC issued by Lombard. This has indirectly increased the demand for LBTC as eBTC demand rises.
Solv Protocol expanded to the Base chain this week, integrating several DeFi projects: Aerodrome, SynFutures, Morpho Labs, and KiloEx, all supporting solvBTC. They partnered with OkxWeb3 to provide a 15% APY, along with Solv XP and Babylon points.
Lorenzo Protocol updated its points system, allowing only users holding stBTC to earn points. It also introduced a DeFi multiplier rule to enhance user points through DeFi activities. Collaborating with the DeFi projects Corn and Hemi Network, new incentive policies have brought in $40 million in TVL.
PumpBTC recently opened four minting paths for pumpBTC: Pump on Bera Windows, PumpBeraFrens Window, wallet window, and whale window, expanding the minting capacity. This week, they partnered with Bitget Wallet to allow users to connect to Bitget Wallet and collaborated with DeFi projects like Zircuit and Loop to offer higher APYs.
Pell Network partnered with Binance this week to conduct activities on the BNB chain, allowing users who connect with Binance Web3 Wallet to receive rewards.
Stakestone is expected to adopt a model similar to ETH-STONE, allowing users to stake native Bitcoin in Babylon and mint yield-bearing STONEBTC for cross-chain liquidity. This week, Stakestone announced collaborations with Sonic, Pyth, and Form to provide users with more profit growth points.

Overall, the standout performers within BTCFi are the projects based on LST issued by BTC. For BTCFi projects, TVL is a crucial indicator of prosperity. Despite the BTC price drop this week, the TVL of BTCFi projects has not declined; instead, most have seen increases. This is primarily due to users’ optimism about BTC’s future development, with many investors believing that BTC is worth holding at this stage. As they hold BTC, they seek additional returns by depositing their BTC into other protocols, packaging it as wrapped assets to create LST tokens, which they then use to stake in other projects for greater yields. This strategy allows them to maximize their returns on BTC. Therefore, from a medium- to long-term perspective, BTC has the conditions and potential for upward movement, serving as a foundational driving force for the robust development of BTCFi projects. As such, the BTCFi sector is worthy of consideration for investment users.

Other Sector Performance

Public Chains

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

Aptos: Recently, Meme projects within the Aptos ecosystem have become quite active, boosting on-chain engagement. This week, Aptos recorded 27.1 million on-chain transactions, with 2.4 million weekly active users and 1.02 million new users. Weekly DEX trading volume also hit a record high, reaching $450 million. Additionally, Echo Lending has bridged BTC assets to the Aptos chain, depositing 2,000 BTC this week and announcing a new staking policy for aBTC. Users can earn an annualized return of 10% in APT and earn Echo points, resulting in a rapid increase in Aptos’s TVL.

Core: The BTCFi sector has been under continuous market attention. As an innovative EVM-compatible blockchain, Core’s TVL has been rising since the launch of the ERC-20 liquid staking token, LstBTC, pegged 1:1 to Bitcoin. While various tokens experienced price fluctuations this week, BTC remained relatively stable. With growing optimism for BTC’s future, more investors are holding BTC’s LST to earn additional profits while maintaining their positions. Core is also preparing for a Fusion upgrade to further enhance the staking rate of BTC-based LST, thereby increasing BTC’s liquidity and attracting more user participation.

Solana: The Solana ecosystem has seen significant gains driven by Meme coin projects, especially those on the Solana chain, which have shown substantial increases in the past two weeks. Notably, Meme coins like GOAT have pioneered the AI + Meme concept, attracting substantial funding due to their strong wealth generation effects. This has also positively impacted other segments of the Solana ecosystem, including DEXs and oracle projects, showcasing a flourishing environment.

BSquared: This week, BSquared secured financing from HashKey Capital, OKX Ventures, IDG Capital, KuCoin Ventures, ABCDELabs, Waterdrip Fund, Satoshi Labs, and the OGs Fund, though the amount has not been disclosed. As a BTC-L2 project, BSquared has recently entered the BTCFi sector, launching its native BTC yield product — B² Farming — and collaborating with various LST projects and BTCFi protocols to offer a range of yield strategies.

Ronin: Ronin, the sidechain for Axie Infinity, is designed specifically for GameFi. Recently, the Ronin API was officially launched, centralizing real-time cross-chain data, making it easier for game developers. This has led to a surge of GameFi projects being launched on the Ronin chain.

Top 5 Tokens by Growth in the Past Week

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

This week, the list of top gainers did not show a “sector concentration” characteristic; instead, the rising tokens were spread across Restaking, DePIN, public chains, AI, and decentralized oracles.

DEEP: Deepbook serves as a floating layer infrastructure for DeFi on the Sui chain, providing maximum liquidity for DeFi projects on Sui. As the Sui ecosystem gains momentum, Deepbook has gradually increased its APY for users. Recently, Deepbook has been conducting airdrops, and this week, the Deepbook V3 version was officially launched on the mainnet.

SAFE: Safe is a leading multi-signature wallet provider and digital asset management platform. Its smart contract wallet enables enterprises to manage funds through predefined access control schemes with multiple private keys and other access modules. This week, SAFE was listed on the South Korean exchange Upbit, triggering a significant price surge.

RAY: Raydium is an AMM protocol and decentralized exchange (DEX) on the Solana chain that utilizes Serum’s on-chain central order book, allowing users to achieve near real-time trading, share liquidity, and access new yield farming opportunities. This week, driven by the prosperity of Meme coin projects in the Solana ecosystem, Raydium, as the largest DEX on Solana, saw its trading volume increase by 263%, surpassing $300 billion in total trading volume. It also announced a $50 million buyback for RAY tokens, contributing to a rise in RAY’s price.

BIGTIME: This week, Big Time launched a “Crazy Game Week” event, during which all leaderboard reward activities would earn 50% more than usual. This significantly boosted the earnings of on-chain gold farmers, leading many GameFi players to engage in gold farming within Big Time.

DRIFT: Drift is a decentralized finance (DeFi) platform on the Solana chain focused on providing derivatives trading services. It operates as a decentralized exchange (DEX) for perpetual futures trading, supporting spot and swap trading. With the surge in trading activity on the Solana chain, Drift, as the primary Perp DEX on Solana, also experienced a rapid increase in its trading volume this week.

Meme Token Gains Ranking

This week, the overall market experienced a downward trend, with tokens across various sectors also declining. However, Meme projects outperformed the broader market, particularly those on the Solana chain, which saw significant gains and created a wealth effect that attracted funds into the Solana ecosystem and the Meme coin sector.

GOAT and KOKO are Meme projects that combine AI and Meme elements, giving their projects an AI label. Currently, the AI + Meme fusion represents an innovative development direction for the Meme coin sector.

GOAT originated from an AI bot — Truth Terminal (@truth_terminal), which operates in a semi-autonomous mode where human administrators can approve its Twitter posts and decide whom to interact with. GOAT is now the official token of@truth_terminal, which utilizes a finely-tuned OPUS large language model trained on data from sites like Reddit and 4chan. Essentially, it is trained on extreme subcultural content and is designed to debate AI-generated belief systems while incorporating Meme elements.

Koala AI is a Meme coin project based on the Solana blockchain that aims to provide innovative meme art creation tools through artificial intelligence, focusing on AI image generation. Koala AI also advocates attracting new investors to the Solana chain through a zero trading tax rate, creating a secure and reliable trading space. Once liquidity is added to the contract, it will be fully burned.

Social Media Hot Topics

Based on data from LunarCrush’s daily top five growth and Scopechat’s AI scoring for the week (10.19–10.25), the most frequently mentioned theme was Layer 1s. The tokens that made the list are as follows (excluding those with minimal trading volume and Meme coins):

According to the data analysis, the most talked-about projects on social media this week were Layer 1 blockchain projects, which generally followed the market trend and experienced a decline. In a market characterized by fluctuations and a lack of standout projects or sector rotation, major public chains often outperform other sectors. This phenomenon reflects a relatively stable confidence among investors in infrastructure projects under the current market conditions.

Overall Market Themes Overview

According to weekly return statistics, the NFT sector performed the best, while the Payment sector was the weakest.

NFT Sector: APE has a significant share in the NFT sector, accounting for 32.44%. This week, APE performed exceptionally well, rising by 62.81%. With most other tokens in different sectors following the overall market decline, the NFT sector stood out this week.
Payment Sector: XRP dominates the Payment sector, with a share of 63.06%. This week, XRP’s decline exceeded that of the overall market, dropping by 4.82%, which severely impacted the growth of the entire Payment sector. BCH and LTC also hold significant shares in this sector, collectively accounting for 26.19%. Both followed the overall market trend and experienced similar declines to BTC, leading to the Payment sector performing the worst this week.

Upcoming Major Crypto Events

Monday (October 28): Hong Kong Fintech Week
Wednesday (October 30): U.S. ADP Employment Change for October; Binance Blockchain Week (featuring Zhao Changpeng); Palo Alto AI X Web3 Summit
Thursday (October 31): U.S. Core CPI Year-on-Year for September
Friday (November 1): U.S. Non-Farm Payrolls for October; U.S. Unemployment Rate for October; GameOn TON Hackathon Dev Workshop

Outlook for Next Week

This week, the market did not see any significant negative factors or news. The decline can be understood as a necessary correction following last week’s substantial gains, which had led to an overbought condition. Next week, a series of U.S. data releases may impact the market, causing price fluctuations based on positive or negative outcomes. Particularly, with only nine days left until the U.S. elections, market prices are expected to be heavily influenced by election sentiment, suggesting a high likelihood of continued volatility.

During these fluctuations, Bitcoin (BTC) typically outperforms other assets, reinforcing its position as the preferred investment choice. Thus, the BTCFi sector is likely to offer the greatest development opportunities next week.

BTCFi Sector

Recently, Solv Protocol introduced the concept of a Staking Abstraction Layer (SAL). This indicates a significant shift in its development strategy compared to other projects solely focused on BTC-based LSTs, with a greater potential for aggregating dispersed BTC liquidity across the entire chain. The SAL direction has garnered recognition from major institutions, with ongoing support in terms of funding and ecosystem development. Therefore, we believe Solv Protocol has more considerable growth potential compared to other BTCFi projects.