Weekly Market Insight: January Week 4

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Market Updates

21 Jan 2025

Headline News

- The U.S. President-elect Donald Trump launched its own TRUMP memecoin on Solana last weekend with 20% allocated to liquidity and public distribution equally, while the remaining 80% is reserved for the team. The FDV of TRUMP coin surged over $75 billion last Sunday and Solana's market cap has increased by 34% in the past week to $130 billion. TRUMP token has quickly been listed across major exchanges, including Binance and Coinbase, and the annualised funding rate in Binance was trading at approximately 100%. The Moonshot app surged to the top 1 among financial apps in the U.S on the AppStore.
- The multi-million fees generated by the LP contract on Meteora DEX have actively swapped for SOL and transferred to CEX, while WLFI has been actively accumulating ETH. Shortly after, first lady Melania Trump also launched her memecoin.
- Despite Donald Trump being expected to issue an Executive Crypto Policy Order that addresses the de-banking of crypto-related organisations and repeal of crypto accounting policy that requires banks holding digital assets to count as liability on its balance sheet, the president didn't make mention of Bitcoin or crypto in his inauguration speech.

Macro-Outlook

- The U.S. PPI increased by 0.2% in December, lower than the market expectation of 0.3%.
- The U.S. Core inflation rate increased by 0.2% in December, below from 0.3% in November and slightly below market expectation of 0.3%. Analysts projected the core PCE index in December to rise between 0.16% and 0.19%, which has been seen as positive signs reinforcing expectations of 2 rate cuts in 2025.
- The U.S. Retail sales increased by 0.4% in December, well below market expectation of 0.6%.

Upcoming Economic Calendar including,

- Friday, January 24, 11:00am: BoJ Interest Rate Decision (25bps hike is expected)

Weekly-Cryptos-Overview

- Nasdaq has filed Litecoin ETF with the SEC. Bloomberg analyst, Eric Balchunas predicted Litecoin is likely to be the crypto ETF to be approved.
- VanEck filed Onchain Economy ETF with the SEC, aiming to invest in crypto-focused companies such as exchanges, crypto payment platforms and mining firms.

Layer 1 and Layer 2s

- Vitalik announced a structural change to Ethereum Foundation leadership, improving technical expertise and communications skills within EF leadership. Vitalik also changed his X profile picture to Milady NFT.
- Soneium has launched its mainnet, focusing on entertainment, gaming, consumer, social, NFT and DeFi development. Shortly after the launch, Soneium blacklisted certain memecoins, citing intellectual property rights violations. The actions led to some backlash, while Vitalik demonstrated his support toward corporate-control L2s.
- Saga introduced Metropolis, enabling AI agents to its own Layer 1 on Saga infrastructure. Metropolis is partnered with Eliza Labs, Virtuals and Wayfinder.

Dapps

- The Eliza team has published its whitepaper, introducing the AI agent modular operating system for developers.
- Virtuals announced a buyback-and-burn for agent tokens from the post-bonding taxes using 30-day TWAP. 30% of the revenue will be allocated to the agent deployer wallet.
- Coinbase launched the cbBTC lending vault powered by Morpho on Coinbase exchange, users are able to borrow USDC against their cbBTC holding.
- Tether launched USDT0, an OFT standard token powered by Layer Zero, which enables the stablecoin cross-chain across major blockchain with low fees.
- Ethena USDe and sUSDe are approved to be integrated into Spark's Liquidity Layer, enabling Spark to access Ethena rewards directly rather than via the lending market.
- Liquity introduced sBOLD, yield-bearing version of its V2 stablecoin BOLD, which compounding ETH rewards back into BOLD from V2 Stability Pools.
- Fluid launched GHO/USDC smart vault. Fluid has facilitated over $1 billion trading volume in the past week, ranked in the top 3 among Uniswap and Curve, despite being as lending protocol as its core.
- Solv launched its SOLV token across multiple major exchanges including Binance and Hyperliquid. Approximately 18% of SOLV was circulating at launch and the token can be used to enjoy fee discounts such as redemption fees for SolvBTC.
- Pyth introduced Pyth Lazer, offering 1ms update times for price feeds and market data.
- Justin Sun announced USDD 2.0, offering 20% APY.
- Worldcoin announced new upgrades to World Mini Apps and the launch of Mini Apps incubator.
- Frax Finance launched frxETH V2, enabling LendingPool for validators with minimum 8 ETH to borrow 24 ETH from the pool to run a node.

Upcoming Alpha and Governance

- Azuki announced ANIME token will be launched on January 23.
- World Liberty Financial is expected to deliver a major announcement this week.
- Multicoin Capital partners proposed SIMD-0224, suggesting Solana adapting Smart Emissions to its network emissions. The example given in the proposal suggests a target staking participation rate of 50%, 70% participation rate will reduce the inflation rate by 1% and 40% participation rate will increase the inflation rate by 0.5%.

Token Unlock

- WELL token unlocked on January 23rd, amount representing 1.17% of the token supply.
- IMX token unlocked on January 24th, amount representing 1.43% of the token supply.
- ALT token unlocked on January 25th, amount representing 10.4% of the token supply.
- RON token unlocked on January 27th, amount representing 8.86% of the token supply.
- GRASS token unlocked on January 28th, amount representing 1.51% of the token supply.
- OP token unlocked on January 31st, amount representing 2.38% of the token supply.
- SUI token unlocked on February 1st, amount representing 2.66% of the token supply.
- JTO token unlocked on February 7th, amount representing 3.97% of the token supply.

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