Market Overview

Main Market Trends

This week, the cryptocurrency market is overall in a downtrend, with the sentiment index plummeting from 53% to 7%, entering an extreme fear zone. Influenced by the Federal Reserve's hawkish statements, market rate cut expectations have decreased from 4 times to 2 times, triggering about $1 billion in forced liquidations, indicating that the market is undergoing a significant deleveraging process.

The DeFi sector has seen its first negative TVL growth in nearly two months at -2.21%, but the market capitalization of mainstream stablecoins like USDT and USDC continues to grow, indicating that despite the market correction, fundamental liquidity is still flowing in. Projects like gun pools and other stable yield offerings are in high demand.

The market size of the AI Agent track has reached 9.9 billion USD, with investment focus shifting from speculative AI Meme coins to infrastructure development, indicating a gradual maturation of the market. The popularity of Meme coins has significantly cooled down, with large-scale capital withdrawal, and investors are more inclined to seek projects with substantial application value.

The public chain sector has shown strong resilience during significant market fluctuations, becoming the preferred choice for investors seeking refuge, reflecting the market's continued confidence in infrastructure.

As the Christmas holiday approaches, market liquidity is expected to decrease. It is recommended that investors adopt a defensive allocation strategy, focusing on BTC and ETH, paying attention to DeFi stable yield and AI infrastructure projects, and being wary of the increased volatility risk that may occur during the holiday period.

Market Sentiment Index Analysis

The market sentiment index has fallen from 53% last week to 7%, indicating an extreme fear zone. Altcoins have performed worse than the benchmark index this week, showing a significant downward trend. Due to leveraged positions, the market has seen forced liquidations of over $1 billion, with a significant de-leveraging of long positions. It is expected that Altcoins will closely follow the benchmark index in the short term, with a low probability of independent market movements.

Altcoins often experience upward reversals when they are in extreme panic zones.

Overview of Overall Market Trends

• The cryptocurrency market is in a downtrend this week, with the sentiment index in extreme fear.

• DeFi-related crypto projects have performed outstandingly, showing the market's ongoing interest in improving fundamental yields.

• The AI Agent track project has seen high public sentiment this week, indicating that investors are actively looking for the next market breakout point.

• Meme project in the market has generally declined, with funds starting to withdraw, reflecting a gradual decrease in market enthusiasm for Meme coins.

Hot Tracks

( AI Agent

Despite the market downturn this week, the AI Agent sector remains highly discussed. Market attention has shifted from AI Agent Meme tokens to infrastructure development. AI Agents are expected to lead the next phase of market development, as they can integrate with multiple sectors such as AI DePIN, AI Platform, AI Rollup, and AI infra. Essentially, AI Agents are born to enhance smart contracts and are inherently compatible with blockchain.

The top five AI Agent projects by market capitalization:

| Project Name | Last Seven Days Growth | TVL)million### | |---------|-----------|--------------| | Worldcoin | -22.92% | $144.14 | | Fetch.ai | -20.67% | $553.49 | | SingularityNET | -19.06% | $256.07 | | Ocean Protocol | -17.05% | $163.30 | | Oasis Network | -8.81% | $325.69 |

( DeFi track

)# TVL Growth Ranking

The top 5 projects by TVL growth in the past week ### TVL > 30 million USD ###:

| Project Name | Last 7 Days Increase | TVL(million) | |---------|-----------|--------------| | VaultCraft | 5344.32% | 102.41 | | Hyperliquid | 183.98% | 2754.63 | | Resolv | 77.31% | 131.34 | | Babylon | 64.43% | 5774.49 | | DAO List | 48.52% | 859.86 |

VaultCraft(VCX): This week, we launched the stETH 4X leverage Looper based on Lido Finance, supporting multi-chain deployment and offering an APY yield of up to 7%+. We established a partnership with Matrixport to secure a custody business of 1000 BTC, resulting in rapid TVL growth.

Hyperliquid(HYPE): Severe market fluctuations create a favorable environment for contract trading, with open contracts exceeding $4.3 billion. Multiple popular cryptocurrency trading pairs have been added, supporting up to 5x leverage.

Resolv: Completed integration with Base, reducing transaction costs and increasing speed. Launched lending services through Euler Finance and liquidity pools on Aerodrome.

Babylon: Deepening the application of ZK scalability technology in cooperation with Layeredge, establishing a strategic partnership with Sui to promote a modular ecosystem.

LISTA DAO(LISTA): Launching Gauge Voting and Bribe Market features to allow veLISTA holders to participate in liquidity pool LISTA emission decisions. Establishing strategic partnerships with multiple platforms to explore new opportunities in the BNBChain ecosystem.

(# Overall Performance of the Track

• The market capitalization of stablecoins is steadily increasing: USDT has grown by 0.55% to $145.9 billion, and USDC has increased by 1.44% to $42.1 billion, indicating a continuous influx of funds.

• Liquidity gradually increases: The risk-free arbitrage rates in traditional markets decline, while the arbitrage rates of on-chain DeFi projects increase due to the rising value of crypto assets, making a return to DeFi a good choice.

• Fund Status: The TVL of DeFi projects dropped from $54.1 billion to $52.9 billion, marking the first negative growth ) -2.21% ###, mainly due to a sharp market decline leading to forced liquidation of contracts and loans.

( public chain

The top 5 public chains by TVL growth in the past week:

| Project Name | Seven Day Increase | TVL)million### | |---------|-----------|--------------| | Hyperliquid | 183.98% | 2754.63 | | Bitcoin | 44.94% | 7021.98 | | BSC | 2.71% | 5793.56 | | AILayer | 2.02% | 219.18 | | Mantle | 0.75% | 489.23 |

Hyperliquid: Market volatility creates a favorable trading environment, with open contracts exceeding $4.3 billion. Multiple popular cryptocurrency trading pairs have been added, supporting high leverage.

Bitcoin: It has shown relative resilience during a significant market downturn, becoming a safe-haven choice. Users are optimistic about the future market and are investing BTC into BTCFi projects to earn additional returns.

BSC: Introduce new projects to join the ecosystem, promote the integration of AI and Web3 in the gaming field, and support the development of Meme projects.

AILayer: Focused on community operations and ecological cooperation, hosting multiple interactive activities to enhance user engagement.

Mantle: Integrating Compound III to implement $USDe lending functionality, expanding the Mantle Scouts Program, and launching a large incentive campaign.

Overview of the Gainers List (

The top 5 tokens with the highest price increase in the past week ) do not include small-cap tokens and meme coins ###:

| Token | Project Name | Weekly Change | Circulating Market Cap | Circulation Rate | |------|---------|-----------|---------|--------| | UXLINK | UXLINKl | 107.18% | $202,170,534 | 17.01% | | USUAL | Usual | 74.72% | $551,884,166 | 96.89% | | MOCA | Moca Network | 72.37% | $230,592,827 | 17.37% | | HYPE | Hyperliquid | 52.43% | $9,050,605,832 | 33.39% | | VELO | Velodrome Finance | 47.49% | $195,966,876 | 45.42% |

UXLINK: Strategic cooperation reached with DuckChain, investment from UFLY_Labs obtained. LINE platform user count exceeds 2 million, reaching a historic high on Upbit. A large-scale airdrop event has been launched.

USUAL: Launched innovative incentive vaults and strategies, offering up to 82% APY. TVL has rapidly grown to 800M USD, emphasizing a transparent operating model.

MOCA: Released version 3.0, introducing the concept of "integrated account." Collaborated with SK Planet to reach 28 million users in South Korea. Will soon launch on mainstream exchanges in South Korea.

HYPE: Market volatility creates a favorable trading environment, with open contracts exceeding $4.3 billion. Multiple popular cryptocurrency trading pairs have been added, supporting high leverage.

VELO: Collaborated with Sony Block Solutions Labs to expand into new Layer 2 solutions. Significant progress has been made in liquidity building.

( Meme Token Price Increase Ranking

| Token | Project Name | Last 7 Days Increase | Circulating Market Cap | Associated Public Chain | |------|---------|-----------|---------|---------| | FARTCOIN | Fartcoin | 96.66% | $1,042,961,684 | Solana | | AIXBT | aixbt by Virtuals | 18.83% | $274,894,511 | BSC | | CHEEMS | Cheems Token | 8.58% | $205,254,035 | BSC |

This week, Meme projects were greatly affected by the market downturn, with very few showing increases. It is evident that currently, market attention and funds are not focused on the Meme coin sector.

) social media hotspot

This week, the most frequent topic is L1s, with the following tokens listed: ###12.14-12.20###.

| Token | Market Cap ( Billion ) | FDV ( Billion ) | Circulation Rate | Weekly Change Rate | |------|---------|--------|--------|---------| | HBAR | 111.1621 | 145.3146 | 76.49% | -1.56% | | SUI | 132.4688 | 452.4736 | 29.27% | -4.25% | | XRP | 136.0616 | 237.8892 | 57.19% | -2.38% | | ETH | 4434.4717 | 4434.4717 | 100.00% | -6.72% | | TRX | 227.7421 | 227.7421 | 100.00% | -13.37% | | CRO | 49.1025 | 54.2489 | 90.51% | -4.93% | | AVAX | 174.7029 | 191.0429 | 91.44% | -15.03% | | ONDO | 27.1363 | 188.7985 | 14.37% | 2.73% | | OM | 37.8849 | 71.7898 | 52.77% | -4.43% | | QNT | 17.0345 | 17.1145 | 99.53% | -18.71% | | DOT | 115.9881 | 115.9881 | 100.00% | -17.97% |

This week, the most关注 on social media is the L1s project. When the market is broadly down, various public chains perform relatively well, becoming a safe haven choice for investors.

( Overall Overview of Market Themes

| Track | Weekly Return Rate | Monthly Return Rate | Quarterly Return Rate | |------|---------|---------|---------| | Cefi | -6.61% | 13.94% | 25.11% | | PayFi | -8.21% | 73.21% | 197.32% | | RWA | -9.55% | 26.98% | 91.38% | | Layer1 | -13.04% | 7.13% | 31.86% | | SocialFi | -18.86% | -0.06% | -5.32% | | Defi | -19.45% | 50.27% | 81.18% | | Layer2 | -21.78% | 17.72% | 18.98% | | Depin | -21.91% | 15.21% | 27.33% | | AI | -22.76% | 5.77% | 12.97% | | NFT | -24.39% | 14.72% | 45.89% | | Meme | -24.85% | -17.32% | 102.12% | | Gamefi | -26.37% | 23.63% | 26.67% |

According to the weekly return rate statistics, the CeFi sector performed the best, while the GameFi sector performed the worst.

Cefi track: BNB and BGB performed strongly, driving the entire sector. Binance continues to launch new products to attract traffic, and BGB has risen against the trend by 37.93%.

Gamefi sector: Long-term lack of market attention and capital inflow, resulting in a weakened wealth effect. Major tokens underperform relative to the market, dragging down overall performance.

![Market panic escalates, focus shifts to DeFi and AI Agent track｜Frontier Lab Crypto Market Weekly Report])https://img-cdn.gateio.im/webp-social/moments-5a157c17f1e3c1d653a5955ba445db9d.webp###

Upcoming Major Crypto Events Next Week

• December 26, ( Thursday ): U.S. initial jobless claims for the week are announced.

Outlook for Next Week

( Macroeconomic Factors Assessment

• Next week will enter the American Christmas holiday, with fewer macro data releases.
• In previous holiday periods, the purchasing power of the US-dominated market declined,