Market Overview

This week, the cryptocurrency market has shown a clear warming trend, with the sentiment index rising from 11% to 35%. Although it remains in the fear zone, this is a significant improvement. The market capitalization of stablecoins continues to grow, with USDT reaching 137.4 billion and USDC at 46.5 billion, indicating that institutional funds are continuously entering the market. The market recovery is primarily driven by two factors: first, the U.S. CPI data met expectations, and second, the market's optimistic expectation of relaxed crypto regulations following a potential victory by Trump. Small-cap tokens have generally outperformed the broader market, especially DeFi and AI-related tokens, which have seen significant gains, indicating a trend of funds beginning to shift from Bitcoin to small-cap tokens.

Development of DeFi Ecosystem

The total locked value in the DeFi sector is ( TVL), which has increased slightly to 53.5 billion USD, representing a month-on-month growth of about 1%. It is noteworthy that DeFAI, as a product combining DeFi and AI, saw its market value surge from 600 million USD to 3.2 billion USD within a week, demonstrating the market's strong enthusiasm for innovative DeFi applications.

Development of the AI Track

The AI Agent sector has continued its strong development trend since the end of last year, shifting from simple AI token trading to deeper application scenario development. The rise of DeFAI marks the entry of AI applications in the cryptocurrency field into the 2.0 stage, mainly reflected in four directions: user-friendly AI interfaces, portfolio management, infrastructure construction, and market analysis and forecasting. Leading projects such as Griffain, Anon, and AXIBT show that the market is transitioning from the proof-of-concept stage to the practical application stage.

Meme Coin Trends

The performance of the Meme coin sector has been relatively muted this week, with market attention significantly retreating from the high points of the fourth quarter of last year. This indicates that investors' risk appetite is shifting from purely speculative Meme tokens to projects with actual application scenarios. However, with the rise in discussions related to Trump, the market may anticipate a new wave of Meme coin speculation centered around political themes.

Public Chain Performance Analysis

Layer 1 public chains are overall showing a stable upward trend, but the increase is not as significant as that of the DeFi and AI sectors. Among mainstream public chains, those with advantages in AI and DeFi ecosystems are performing better, reflecting that the value of underlying public chains increasingly depends on the prosperity of their upper-layer application ecosystems. It is worth noting that public chains supporting AI computation are beginning to attract market attention, indicating that a new round of competition among public chains may unfold around AI computing capabilities.

Future Market Outlook

The short-term market will be influenced by the Federal Reserve's interest rate meeting in January and Trump's inauguration, with increased volatility expected. Investors are advised to focus on projects within the DeFAI initiative that have real application scenarios and to avoid chasing purely conceptual hype. In terms of DeFi investments, opportunities in yield from machine gun pool projects can be considered, but strict control of leverage risk is necessary. Regarding timing, it is recommended to observe the policy changes brought about by Trump's inauguration in the short term, avoiding blind chasing of highs to ensure the safety of the investment portfolio.

Market Sentiment Index Analysis

• The market sentiment index has risen from 11% last week to 35%, still in the panic zone, but has recovered somewhat.
• Small-cap tokens outperformed the benchmark index this week, with most tokens showing greater gains than the overall market. This is mainly due to the CPI data released this week and the optimistic market sentiment resulting from the anticipated easing of regulations on the crypto market following Trump's upcoming inauguration as President of the United States next week, leading to an increase in market prices. Given the current market structure, it is expected that small-cap tokens will move in sync with the benchmark index in the short term.

Overview of Overall Market Trends

• The cryptocurrency market is on an upward trend this week, and the sentiment index remains in the panic range.

• DeFi-related cryptocurrency projects have shown outstanding performance compared to other sectors, indicating that the market continues to focus on enhancing basic yields.

• The public sentiment regarding the DeFAI project is quite high this week, indicating that investors are starting to actively seek the next market breakout point.

Hot Tracks

DeFAI

This week, the overall market is in a trend of fluctuating upward, with all sectors in an upward state. Due to the significant decline in the AI sector last week, the rebound this week has been very strong. Additionally, the current hotspots in the AI sector are beginning to shift from the asset issuance model of AI Meme to the DeFAI model, which combines AI with DeFi. Since DeFAI has just begun to emerge in the market, and it combines the most promising sector in the current cryptocurrency field—AI—with the sector that has the most concentrated funds in the cryptocurrency industry—DeFi, the attention to DeFAI in the market is currently the highest.

This week, DeFAI has become the focus of market attention, with its market capitalization rising from $600 million last week to $3.2 billion, achieving more than a fourfold increase within a week. It is evident that DeFAI is currently in high demand in the market. The DeFAI space can be divided into four categories of projects: abstract/user-friendly AI, yield optimization and portfolio management, DeFAI infrastructure or platforms, and market analysis and forecasting. At this stage, DeFAI is still in its early phase, with most DeFAI projects focusing only on abstract/user-friendly AI and market analysis and forecasting, among which the most representative projects are: Griffain, Anon, and AXIBT. Although DeFAI has seen rapid growth recently and gained a lot of market attention, its applications are still in the proof-of-concept stage, and most functionalities have not yet been realized. Therefore, in our upcoming investment process, we should not blindly follow trends but instead pay more attention to the implementation of DeFAI projects in various fields and be aware of the risks of market speculation.

DeFi Track

TVL Growth Ranking

The top 5 market projects with the highest TVL growth in the past week, excluding public projects with a smaller TVL, defined as over 30 million USD, data source: Defilama.

( Folks Finance) Unissued Token###:( Recommendation Index: ⭐️⭐️⭐️)

• Project Introduction: Folks Finance is a decentralized finance ( DeFi ) platform built primarily on the Algorand blockchain. It offers a range of permissionless DeFi tools, including lending, deposits, staking, and trading.

• Latest Developments: This week, Folks Finance mainly focused on two directions: ecological cooperation and community incentives. On one hand, a collaboration was reached with a data platform, enabling users to monitor their xChain accounts on that platform, along with the launch of social task activities. On the other hand, the partnership with Algorand continues to deepen, with a focus on promoting the gALGO liquid staking governance mechanism, launching a governance incentive program with rewards of up to 4 times, as well as social task activities combined with a certain social platform from November 14 to February 15.

( Beets ) Not Issued (: ) Recommendation Index: ⭐️⭐️⭐️ ###

• Project Introduction: Beets is a liquidity staking token hub based on the Sonic chain, supporting users to stake into liquidity pools focused on LST to earn actual returns.

• Latest Development: This week, Beets' Liquid Staked S token (stS) on the Sonic platform has surpassed 88.99 million in staking volume in less than a month, exceeding FTM's nearly three-year highest record on Fantom. At the same time, Beets is actively expanding ecological cooperation, reaching a partnership with a certain platform and introducing SolvProtocol, launching the scUSDC|USDC liquidity pool and providing 6 times points and approximately $165,000 in stS token rewards.

( AlphaFi)ALPHA(:)Recommendation Index:⭐️⭐️⭐️###

• Project Introduction: AlphaFi is an automated yield optimization platform based on the SUI blockchain, designed to simplify digital asset management. Through smart strategies and automated operations, users can maximize asset yields without the need for frequent actions.

• Latest Developments: This week, AlphaFi will focus mainly on technology optimization and ecological construction. On the technical level, an optimized liquidity solution has been launched, including functions such as optimized range, proactive rebalancing, and automatic compound rewards, which have contributed about 10% of the trading volume of its liquidity staking (LST) product on the Sui chain. In terms of ecological construction, the development of DeFi is promoted through deep integration with the Sui ecosystem, while also demonstrating strong community participation with a nearly 1:1 ratio of followers to stakers (, and revealing that approximately 1.8 million USD in protocol revenue will be shared with the community through ALPHA token airdrops.

) Echelon Market ( Not Issued ): ( Recommendation Index: ⭐️⭐️ )

• Project Introduction: Echelon Market is a decentralized finance market project built on the Move language. Users can indirectly borrow and lend assets through non-custodial pools and earn interest from it. In addition, Echelon Market also offers users leveraged trading services.

• Latest Developments: This week, Echelon Market is primarily focused on ecosystem building and community development: The Echelon project team officially announced its upcoming launch and is actively recruiting hardcore software engineers to develop comprehensive DeFi applications. In terms of community building, Echelon organized in-depth discussions with community members to explore the project roadmap and conduct community Q&A. At the same time, the project announced annualized returns based on lending yields and APT incentives of: USDC 12.88%, USDT 11.39%, WETH 8.76%, aiming to attract more on-chain users' participation through high interest rates.

Astherus( Unissued Token ): ( Recommendation Index: ⭐️⭐️⭐️)

• Project Introduction: Astherus is an innovative multi-asset liquidity hub designed to maximize the real returns of crypto assets by enhancing the utility of digital assets. At the same time, Astherus has also launched AstherusEx and AstherusEarn. AstherusEx is a decentralized exchange for perpetual contracts that supports derivatives trading of mainstream assets; while AstherusEarn is a strategy yield product that allows users to stake assets to earn returns.

• Latest Developments: This week, Astherus launched the USDF stablecoin ### supporting 1:1 USDT conversion with no minting fee (. Its TVL quickly surpassed 100 million USD, and Astherus's 24-hour trading volume reached 1.2 billion USD, making it the second-largest perpetual contract trading platform in the market. It has launched the asBNB minting feature in deep cooperation with a certain public chain, and collaborated with a certain DAO. At the same time, Astherus introduced the new Rh Points system to incentivize user participation and adjusted the Au multiplier of ALP.

In summary, we can see that the projects with rapid TVL growth this week are mainly concentrated in the machine gun pool projects.

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Overall Performance of the Track

• Liquidity is gradually increasing: The arbitrage rates of on-chain DeFi projects are continuously rising due to the increase in the value of cryptocurrency assets, and returning to DeFi will be a very good choice.

• Fund Status: The TVL of DeFi projects has risen from 53 billion USD last week to 53.5 billion USD now, an increase of 0.94%, ending the negative growth situation of TVL in various DeFi sectors last week. This is mainly because the market experienced a downward spike on Monday, followed by an overall upward trend, especially after the release of the US CPI on Wednesday, which led to a broad market rally, thus attracting funds to re-engage with DeFi projects, and