Crypto Market Weekly Report: Decentralized Finance and AI Tracks Lead Market Recovery Trend

Market Overview

This week, the crypto market has shown a clear warming trend, with the sentiment index rising from 11% to 35%. Although it is still in the panic zone, it has significantly improved. The market capitalization of stablecoins continues to grow, indicating that institutional funds are still entering the market. The market recovery is mainly driven by two factors: the U.S. CPI data meeting expectations and the optimistic outlook on the new government's relaxation of crypto regulation. Small-cap tokens have outperformed the broader market, especially DeFi and AI-related tokens, which have seen significant gains, showing that funds are starting to shift from Bitcoin to small-cap tokens.

The total locked value in the DeFi sector has slightly increased to $53.5 billion, with a month-on-month growth of about 1%. It is worth noting that DeFAI, as a product of the combination of DeFi and AI, saw its market value surge from $600 million to $3.2 billion within a week, demonstrating the market's strong enthusiasm for innovative DeFi applications.

The AI Agent sector continues to develop strongly, shifting from simple AI token trading to deeper application scenario development. The rise of DeFAI signifies that the application of AI in the crypto field has entered the 2.0 phase, mainly reflected in four directions: user-friendly AI interfaces, portfolio management, infrastructure development, and market analysis and forecasting. The development path of leading projects shows that the market is transitioning from the proof-of-concept stage to the practical application stage.

The Meme coin sector has performed relatively flat this week, with market attention significantly retreating from last year's fourth quarter peak. This indicates that investors' risk appetite is shifting from purely speculative Meme tokens to projects with actual application scenarios. However, with the rise of related political topics, the market anticipates a new wave of Meme coin speculation centered around political themes.

Mainstream public chains are generally showing a stable upward trend, but the increase is not as significant as that of the Decentralized Finance and AI sectors. Public chains with advantages in the AI and DeFi ecosystems are performing well, reflecting that the value of underlying public chains increasingly relies on the prosperity of upper-layer application ecosystems. It is worth noting that public chains supporting AI computation are starting to attract market attention, indicating that a new round of competition among public chains may focus on AI computational capabilities.

Hot Track Analysis

Decentralized Finance AI

DeFAI has become the market focus this week, with its market capitalization rising from $600 million last week to $3.2 billion, achieving more than a fourfold increase within a week. The DeFAI sector 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. Currently, DeFAI is still in its early stages, with most projects focusing on abstract AI and market analysis forecasting. Representative projects include Griffain, Anon, and AXIBT. Although DeFAI has been well received by the market, most functionalities are still in the proof-of-concept stage, and investors should pay attention to the actual implementation of the projects and be wary of speculative risks.

Decentralized Finance赛道

This week's projects with rapid TVL growth are mainly concentrated in the gun pool projects:

• Folks Finance: Collaborated with DeBank to implement xChain account monitoring features and launched a governance incentive program offering rewards of up to 4 times.
• Beets: stS token staking amount surpassed 88.99 million, exceeding FTM's highest record in nearly three years. Collaborated with PaintSwap to introduce SolvProtocol and launched a new liquidity pool.
• AlphaFi: Optimizing liquidity solutions, LST products contribute about 10% of the trading volume on the Sui chain. It demonstrates strong community participation and reveals that protocol revenue will be shared through token airdrops.
• Echelon Market: announced upcoming launch, actively recruiting engineers. Main token annual yield announced: USDC 12.88%, USDT 11.39%, WETH 8.76%.
• Astherus: Launched USDF stablecoin, TVL exceeded 100 million USD. Became the second largest perpetual contract trading platform in the market, collaborating with BNB Chain and Kernel DAO.

Overall, the TVL of DeFi projects increased from $53 billion to $53.5 billion, a growth of 0.94%, ending last week's negative growth situation. This is mainly attributed to the overall upward trend of the market and optimistic expectations of new government policies, attracting funds back into DeFi projects.

public chain track

The public chains that performed excellently in the past week include:

• Sonic: Launched a DeFi application that supports multiple encryption currencies, innovatively introducing real-time deposit functionality. Collaborated with RedotPay to develop a global payment solution, approved by Uniswap DAO to provide liquidity mining rewards.
• Hyperliquid: Successfully launched the SOLV token, achieving "Day 1 three-end synchronization". Reached a strategic partnership with the ANIME token backed by the NFT project Azuki.
• Algorand: Completed the upgrade to version 4.0 and launched the NodeKit tool. Established strategic partnerships with Mastercard and others to promote the implementation of instant settlement functions.
• BSquared: Successfully processed over 101 million transactions, collaborated with Segment Finance to strengthen the BTCFi ecosystem. Actively promoting the transformation of Bitcoin into an AI innovation center.
• Mode: Launching the "Agentic Economy" program, providing up to 2 million OP ecological incentives. Announcing the complete Decentralized Finance AI (DeFAI) technology stack development plan for Mode 2025.

Overview of the Rise List

The tokens that performed outstandingly in the past week include:

• ANON: Released the AUTOMATE TypeScript framework for DeFi, achieving multi-chain circulation support.
• BUZZ: Won first place in the Solana AI Hackathon, launching several important feature updates.
• CGPT: Successfully launched on multiple mainstream exchanges, introduced smart contract auditing tools and a new AI agent system.
• ARC: Reached a strategic partnership with AbstractChain, Shuttle_dev, and CryptoEternal AI.
• GRIFFAIN: Launched three key features: "Agent GM", "Agent Moby", and "Agent Backpack".

Market Outlook

The short-term market will be affected by the new government's inauguration, and increased volatility is expected. It is recommended that investors:

1. The DeFAI project focuses on selecting projects with existing practical application scenarios, avoiding the pursuit of pure conceptual hype.
2. Decentralized Finance investments can focus on the yield opportunities of machine gun pool projects, but it is essential to strictly control leverage risks.
3. Observe the new government's policy changes in the short term to avoid blindly chasing high prices and ensure the safety of the investment portfolio.
4. Pay attention to innovative projects that combine AI and Decentralized Finance, as this may become the next market breakout point.
5. Be wary of the potential risks of politically themed Meme coin speculation.