Original Article Title: "Bitcoin Hits New All-Time High, Progress on the 'GENIUS Act,' and Stablecoin Growth Lead Market Recovery | Frontier Lab Crypto Market Weekly Report"

Original Source: Frontier Lab

Market Overview

Market Summary

This week, the cryptocurrency market has shown an upward trend, with Bitcoin (BTC) setting a new all-time high. Altcoins have also generally followed the upward trend. The market sentiment index decreased slightly from 73% last week to 71% this week. Although it has decreased from last week, the overall sentiment remains in bullish territory.

Stablecoin Market Dynamics

In the past month, the stablecoin market has shown a synchronous rise in USDT and USDC for the first time:

USDT: With a market capitalization of $151.9 billion, a weekly increase of 0.79%, and a consecutive weekly increase of over $1 billion for three weeks, it continues to maintain an upward trend.

USDC: With a market capitalization of $61 billion, a weekly increase of 0.83%, ending a three-week consecutive decline and starting to show an upward trend.

This phenomenon is worth noting: the continuous growth of USDT indicates that institutional funds, mainly from non-U.S. users, are increasing their entry positions. The end of USDC's three-week decline reflects that U.S. users may be accelerating their entry due to favorable Crypto policies enacted by the U.S. government and Bitcoin reaching new highs. The synchronous rise of USDT and USDC reflects that current market funds are actively entering, but investors should be aware of the possibility of FOMO sentiment.

Favorable Policies Driving Market Sentiment Recovery

The cryptocurrency market has shown an overall positive trend this week, mainly benefiting from two key favorable policy factors:

· Major Progress on the Amendment of the 'GENIUS Act'
· The bill has made a breakthrough in the U.S. Senate
· Core impact: Promoting stablecoin compliance and providing a clear regulatory framework for the industry
· Market expectations: After the bill is passed, a significant influx of funds is expected to significantly boost investor confidence

· Texas Bitcoin Strategic Reserve Bill Passed
· As an important state in the U.S., Texas's move signifies further mainstream recognition of Bitcoin
· Demonstrative effect: Expected to lead other states to follow similar policies
· Market impact: Strengthens Bitcoin's position as a reserve asset and greatly boosts market sentiment

Mitigate Macro-Economic Risks

Despite the visible policy tailwinds, macro-economic uncertainties persist:

· The Fed's monetary policy stance remains unchanged
· Several Fed officials have clearly stated that interest rates will not be cut in the near term
· The high-interest-rate environment will continue to impact market liquidity and risk asset valuation

· U.S. tariff issues remain unresolved
· Tariff negotiations between the U.S. and multiple countries are still ongoing
· The outcome is uncertain and may potentially cause volatility in the global economy and market sentiment

Risk Alerts and Outlook

In an environment where policy tailwinds coexist with macro-economic caution:

· Avoid FOMO sentiment: Despite the short-term benefits being evident, one should not blindly follow the crowd into the market

· Balanced allocation strategy: While capturing the policy dividend, maintain a reasonable position to guard against macro risks

Clarification of policies and regulations is a necessary step for the cryptocurrency market to mature. The "GENIUS Act" and each state's stance on Bitcoin signify the gradual integration of crypto assets into the traditional financial system. However, investors should remain rational amidst optimism and closely monitor how macroeconomic variables could potentially impact the market.

Next Week's Forecast Pick

Bullish Pick: DRIFT

DRIFT: Institutional-grade DeFi's Strategic Transformation

This Thursday, Drift, the largest perpetual decentralized exchange platform in the Solana ecosystem, announced the launch of its institutional edition. This collaboration with the traditional financial giant Apollo signifies Drift's official entry into the institutional-grade DeFi development strategy. Through this partnership, Drift has not only expanded its presence in real-world assets (RWA) and private credit business but has also brought new opportunities for collaborative development with traditional financial institutions. This move is expected to help Drift significantly increase its market share and revenue.

The Bridging of Traditional Finance and Blockchain

With the advantage of its on-chain performance and the recently proposed Alpenglow upgrade, the Solana ecosystem is signaling its readiness to introduce institutional-grade financial services. The launch of Drift's institutional version marks the beginning of this transformation, addressing pain points of traditional financial institutions through on-chain technology, injecting institutional liquidity and endorsement of trust into the entire ecosystem.

· Market Transformation Timing: The development of blockchain has transitioned from the infrastructure construction phase to the application implementation phase. Institutional capital is seeking to enter the space, and Drift accurately seizes this timing to become a key bridge connecting traditional finance with DeFi.

· Precise Pain Point Solutions: Addressing the three core pain points of the traditional private credit market (high entry barriers, restricted liquidity, and low capital efficiency), Drift provides an on-chain solution, bringing a market of over $2 trillion into the blockchain world.

· Building Technological Barriers: Through a partnership with Securitize to implement sToken insurance pool technology, Drift successfully tokenized the $1 billion multi-asset credit fund ACRED managed by Apollo. It achieved the fund's first on-chain collateral application, establishing an irreplicable technological barrier.

Capital Efficiency-Driven Institutional Service Ecosystem

Drift Institutional Edition has evolved from a simple DeFi product to a complete institutional-grade financial service ecosystem. Through capital efficiency optimization and a compliance-first strategy, it not only meets the requirements of institutional investors but also maintains the innovation advantage of blockchain.

· White-Glove Service: Providing professional service channels for institutional assets such as credit funds, real estate, and commodities, Drift ensures compliance and transparency while leveraging Solana's native transaction speed and capital efficiency.

· Comprehensive Product System: Building a comprehensive service system including Drift Borrow/Lend and Drift Earn, supporting ACRED token holders in on-chain lending, automated strategy management, and liquidity interaction, forming a closed-loop ecosystem.

· Innovative Leverage Strategies: Providing leverage strategies for tokenized private credit to create enhanced yield opportunities not available in traditional finance. Through risk management, system security is ensured, striking a balance between innovation and stability.

Network Effect Catalyzed by Institutional Capital Inflow

As the first institutional-grade DeFi product on Solana, Drift Institutional Edition not only brings growth momentum to itself but also creates a network effect for the entire Solana ecosystem. By introducing high-quality institutional capital, it enhances the overall ecosystem's value and attractiveness.

· Top-tier Institutional Endorsement: By partnering with Apollo, which manages $750 billion in assets, Solana has received institutional-level trust endorsement, enhancing the overall network's market recognition and security perception.

· Increased Liquidity Depth: The entry of institutional funds will significantly increase the Total Value Locked (TVL) on Solana, enhancing liquidity depth, reducing volatility, and creating a better trading environment for both institutional and retail users.

· Standard-setting Leadership: As the first institutional-grade product, Drift has established standards for compliance, risk management, and institutional services across the entire Solana DeFi ecosystem, driving the ecosystem towards a more mature and regulated direction.

From Speculative Narrative to Value Capture Paradigm

The Drift Institutional Edition represents a key step in Solana's ecosystem's transformation from speculation-driven to value capture, establishing a sustainable growth model based on real-world asset tokenization and integration into the DeFi ecosystem.

· Physical Asset Anchoring: In contrast to purely speculative meme coins, Drift's introduction of ACRED represents a real asset portfolio managed by Apollo, providing on-chain activities with the value support of the real economy.

· Compliance-First Strategy: Amid an increasingly stringent regulatory environment, Drift follows a "compliance-first" approach to ensure that institutional services meet regulatory requirements, laying a foundation for long-term sustainable development.

· Value Capture Mechanism: By providing value-added services for tokenized assets, Drift can capture value from the significant capital flow migrating from traditional finance to blockchain, establishing a profit model based on actual services rather than relying solely on token speculation.

Drift On-chain Data

Drift's TVL (Data Source: https://defillama.com/protocol/drift?dexVolume=false&perpsVolume=false&tokenVolume=false)

Drift Price Trend (Data Source: https://www.coingecko.com/en/coins/drift-protocol)

Drift Trading Volume Change (Data Source: https://defillama.com/protocol/drift?dexVolume=false&perpsVolume=false&tokenVolume=false)

From the above chart, we can see that Drift's trading volume has been steadily increasing this week, and compared to the previous month, this month Drift's overall trading volume is at a high level.

Therefore, based on the above data analysis, Drift's TVL has experienced rapid growth recently, reaching a historical high level of $1.124 billion, nearing the historical peak of $1.177 billion, and Drift's daily trading volume is at a high level this month and has shown a rapid upward trend this week. However, the DRIFT token price is still nearly double the historical high of $1.78U, so as a DEX project with real-world utility, its transaction volume and liquidity often represent its current development status. We can see that the DRIFT token price is currently significantly undervalued.

Bearish Targets: CETUS, REZ

CETUS: Trust Crisis and Survival Challenge Caused by a $223 Million Security Vulnerability

The largest decentralized exchange platform in the Sui blockchain ecosystem, Cetus Protocol, suffered a serious security vulnerability attack. Hackers exploited a calculation precision issue to steal over $223 million in assets (emergency freezing $162 million in assets after the incident), leading to almost complete depletion of platform liquidity, with TVL (Total Value Locked) plummeting to only $37.84 million.

Direct Economic Losses

· Fund Loss: $223 million in assets stolen, $162 million in assets emergency frozen after the incident, actual loss of $61 million, far exceeding the project's total revenue of $19 million

· TVL Collapse: The liquidity pool was drained, and the Total Value Locked (TVL) plummeted to only $37.84 million

· Token Price Plummet: The CETUS token experienced a significant price drop due to panic selling

Cetus Protocol's TVL (Data Source: https://defillama.com/protocol/cetus)

Technical Trust Crisis

· Exposed Design Flaw: A calculation precision issue was found as a fundamental design flaw, raising concerns about the project team's technical capabilities

· Inadequate Security Audit: Such a critical vulnerability was not discovered beforehand, indicating serious flaws in the security audit process

· Lack of Transparent Disclosure: A detailed technical analysis was not promptly published after the attack, increasing user uncertainty

User Behavior Chain Reaction

· Erosion of Trust: Users developed extreme distrust in the platform

· Fund Withdrawal: Remaining users may accelerate fund withdrawals, further reducing platform liquidity

· User Attrition: The lack of compensation expectations leads to permanent user loss

Long-Term Survival Threat

· Liquidity Death Spiral: User withdrawals → Liquidity decrease → Deteriorating trading experience → More user withdrawals

· Drying Up of Revenue Streams: Decreased trading volume results in reduced fee income

· Funding Shortfall for Development: Unable to secure new funds for product development and market expansion

This multi-layered negative impact has formed a self-reinforcing vicious cycle. If not promptly and effectively addressed, the outlook for Cetus Protocol as a sustainable DeFi project is highly bleak.

REZ: May 29th Large-Scale Token Unlock May Exacerbate Stagnation in the Staking Race

Renzo is an EigenLayer-based staking protocol. Renzo abstracts the complex process of end-user restaking, relieving stakers from the need to worry about operator and reward strategy active selection and management.

Industry Environment Deterioration

· Overall Ethereum Ecosystem Stagnation: The Ethereum ecosystem has faced challenges in the past six months, enduring ongoing market FUD.

· Severe Contraction in the Staking Race: As a niche field, staking projects have seen a general decline in attention.

· Lack of User Confidence: Market skepticism regarding the Ethereum ecosystem has influenced user willingness to participate in staking protocols.

Poor Project Performance

· TVL Plummets by 75%: The total value locked has dropped by three-quarters compared to its peak, indicating significant user exodus.

· Market Cap Shrinks: The current market cap is only $41.1 million, at a low level.

· Insufficient Liquidity: Daily trading volume is only $9 million, with inadequate market depth.

· Lack of Product Differentiation: Although it has streamlined the staking process, it has failed to establish sufficient moat in the competitive landscape.

Upcoming Token Unlock Pressure

· Imminent Large-Scale Unlock: On May 29th, 4.237 billion REZ tokens will unlock, accounting for 4.24% of the total locked amount.

· High Unlock Entity Risk: The unlocking entities are mainly investment institutions and the project team, with a strong sell-off motivation.

· Weak Market Absorption Capacity: The unlocked token value is imbalanced with the daily trading volume ratio, making it challenging for the market to effectively absorb the tokens.

These three adverse factors overlap and reinforce each other, creating a negative feedback loop: deteriorating industry conditions lead to poor project performance, poor project performance puts pressure on token price, and the upcoming large-scale unlock may further intensify downward price pressure, ultimately potentially plunging the project into deeper distress.

Renzo's TVL (Data Source: https://defillama.com/protocol/renzo)

Sentiment Analysis

The market sentiment index has decreased from 73% last week to 71% this week. Despite the decline, the overall sentiment remains in bullish territory.

Hot Topic - GENIUS Act

GENIUS Act Amendment Passed: Clear Regulation of Stablecoins to Lead DeFi Expansion

Overview

The GENIUS Act amendment has made significant progress in the U.S. Senate by establishing a layered regulatory framework, requiring USD asset backing, limiting Big Tech involvement, and providing a clear legal structure for the stablecoin market. Despite introducing strict regulations, the act effectively ends the long-standing regulatory uncertainty and will attract traditional financial institutions and Wall Street capital into the market, bringing substantial incremental funding to the crypto ecosystem. In the various sub-sectors, the DeFi space, especially projects deeply integrated with stablecoins like Aave and Pendle, will be the biggest beneficiaries. These projects offer arbitrage opportunities matching the expertise of traditional financial institutions and have established mature stablecoin use cases, poised to experience significant growth in the new regulatory environment.

Interpretation of GENIUS Act Amendment

The GENIUS Act amendment, which was previously obstructed in the U.S. Federal Senate last week, has been amended and continued to be introduced by Republican Senators in the U.S. Federal Senate, making significant progress. As of Tuesday morning Beijing time, the procedural motion for the passage of the GENIUS Act amendment was approved by a vote of 66 in favor and 32 against, clearing the way for final legislation.

Layered Regulatory Framework

The amended act adopts a market cap-based layered regulatory strategy:

· Large Stablecoins (>100 billion USD): Regulated directly by the Federal Reserve (FED)

· Small Stablecoins (<100 billion USD): Regulated by state regulatory bodies

This layered regulatory model is essentially aimed at maintaining federal government control over important stablecoins while avoiding excessive regulatory fragmentation. It can effectively prevent "regulatory arbitrage" resulting from varying state regulatory standards, while ensuring that systemically important stablecoins are subject to rigorous oversight.

Asset Backing Requirement and U.S. Treasury Financing

This bill requires all stablecoins to be fully backed by high-liquidity assets such as the U.S. dollar or U.S. Treasury bonds:

· Anchoring to the U.S. Dollar Financial System: Binding stablecoins within the U.S. dollar ecosystem to maintain market demand for the U.S. dollar

· U.S. Treasury Financing Tool: Due to current pressure on U.S. debt, the demand for U.S. Treasury bonds within the traditional financial system is decreasing, creating a new demand channel for U.S. Treasury bonds, helping alleviate the U.S. government's financing pressure

· Continuation of U.S. Dollar Hegemony: Amid the declining influence of the U.S. dollar, expanding the influence of U.S. dollar-based stablecoins aims to sustain the influence of the U.S. dollar

This bill effectively transforms the stablecoin market into a new indirect purchaser and channel for U.S. Treasury bonds, easing the pressure on U.S. debt, forming a virtuous cycle of "stablecoin issuance → purchase of U.S. Treasury bonds → support for U.S. government financing." By forcibly linking new innovative economies to the U.S. dollar, it increases the market demand for the U.S. dollar, thereby sustaining U.S. Dollar hegemony.

Restriction of Big Tech and Financial Power Balance

This bill restricts large non-financial technology companies such as Tesla, Meta (formerly Facebook), Amazon, Google, and Microsoft from issuing stablecoins, imposing higher requirements if such companies were to issue stablecoins.

· Preventing Financial Power Shift: Restricting big tech companies from leveraging their massive user base and technological advantage to enter the currency issuance domain

· Upholding Traditional Financial Dominance: Ensuring that currency issuance authority remains primarily in regulated financial institutions

· Avoiding "Hyper-sovereignty" Risk: Preventing multinational tech companies from creating payment networks that could challenge national currency sovereignty

This provision in the bill can be understood as a power play between the traditional financial system and emerging economies, rigorously limiting the issuance rights of emerging tech companies to ensure that currency issuance authority remains in the hands of national financial institutions.

Credit Isolation and Responsibility Boundary

The bill explicitly prohibits stablecoin issuers from falsely claiming that their product is backed by Federal Deposit Insurance Corporation (FDIC) insurance or the endorsement of the U.S. government, a provision that holds significant risk management implications:

· Mitigating Moral Hazard: Clearly stating that the government does not provide implicit backing for stablecoins reduces issuers' risk-taking incentives

· Safeguarding Government Credit: In potential stablecoin market turbulence, protecting the credit ratings of the U.S. government and FDIC

· Risk Isolation Mechanism: Establishing a firewall between the stablecoin market and the traditional financial system to prevent risk contagion

· Crisis Prevention: Avoiding a stablecoin crisis evolving into a systemic financial crisis requiring government bailout

This credit isolation strategy reflects regulators' efforts to prevent potential systemic risks by clarifying responsibility boundaries.

Enhanced Protection Mechanisms and Ethical Standards

The latest amendments supplement three key aspects:

· Consumer Protection Mechanism: Strengthening protection measures for stablecoin users to ensure transparency and fairness

· Bankruptcy Protection Mechanism: Establishing a clear bankruptcy process to prevent the collapse of stablecoins from impacting the broader financial system

· Expanded Ethical Standards: Specifically targeting regulatory oversight of government officials and prominent business figures, explicitly mentioning figures like the Trump family and Musk

These supplementary provisions aim to enhance overall security through strengthened industry regulations while boosting investor confidence. These measures include consumer protection laws and bankruptcy protection mechanisms, with the goal of providing more comprehensive protection for investors and consumers.

Benefits of the GENIUS Act Amendment for the Crypto Market

Through an analysis of the GENIUS Act amendment, it is evident that while the bill introduces various regulatory provisions, it fundamentally propels the compliance of the stablecoin market, providing a clear legal framework and ending long-standing regulatory uncertainty.

The implementation of this act will attract more institutional investors and traditional financial institutions to enter the crypto market. Traditional U.S. banking giants and Wall Street enterprises will accelerate their stablecoin business expansions, potentially bringing in billions or even trillions of dollars in capital inflow. For the crypto market, stablecoins are a key infrastructure of the crypto economy and a foundation for market development. The quantity of stablecoins can also to some extent reflect market liquidity. While not all stablecoin funds will flow into the crypto industry after the implementation of the GENIUS Act, a portion of incremental funds is expected to enter. With the current size of the crypto market at only $3 trillion, still relatively small compared to traditional funds, even a partial inflow of traditional funds into the crypto market will undoubtedly drive rapid industry growth.

For the Crypto industry, the track that is most impacted by newly added funds should be the Defi track. Because most projects in the Defi track allow for fund arbitrage, which is something traditional funds are better at, once a significant amount of traditional funds start entering stablecoins, they will inevitably look for new use cases, and Defi track projects are excellent use cases for them.

In the Defi track, the most widely used projects for stablecoin are Aave and Pendle. Aave is the largest on-chain

Market Transformation Due to Regulatory Clarity

The GENIUS Act amendment, while introducing strict regulatory clauses, primarily aims to provide a clear legal framework for the stablecoin market, ending long-standing regulatory uncertainties:

· Compliance Certainty: The Act provides market participants with clear compliance guidelines through a tiered regulatory structure, asset backing requirements, and credit isolation mechanisms. Stablecoin issuers no longer need to navigate in a vague environment but have clear rules to follow, enabling companies to formulate long-term development strategies and reduce regulatory risks.

· Attracting More Institutions: Traditional financial institutions are extremely sensitive to legal risks. The GENIUS Act provides a reliable compliance path for these institutions by clarifying the legal status and operational requirements of stablecoins. In particular, for institutions managing client assets, the Act's implementation means they can explore stablecoin business without breaching their fiduciary duties.

· Boosting Investor Confidence: The regulatory framework not only provides certainty for issuers but also offers security for investors. By requiring stablecoins to be 100% backed by the US dollar or US Treasury bonds and prohibiting misleading advertising, the Act reduces default risks and asymmetric information problems. Institutional investors, in particular, value these safeguards, making them more willing to include stablecoins in their portfolios.

The Catalyzing Effect of Traditional Financial Capital Inflows

Accelerated Deployment of Institutional Capital

· Involvement of Banking Giants: US traditional banks will gain a clear path to participate in stablecoin business. Financial giants such as JPMorgan Chase, Citibank, and others may enter the market by directly issuing compliant stablecoins, providing custody services, or developing payment solutions based on stablecoins, bringing significant capital and market credibility.

· Wall Street Capital Injection: Asset management giants such as BlackRock and Vanguard will seek strategic positioning in the stablecoin space, not only making direct investments in projects but also developing investment products based on stablecoins. Wall Street's participation signifies the introduction of more complex financial instruments and larger-scale capital inflows.

· Scale Expectation: Considering the total assets of the U.S. banking industry exceed $23 trillion, even if only a small proportion flows into the stablecoin market, it will bring in incremental funds of tens to hundreds of billions of dollars, fundamentally altering market depth and liquidity.

Strengthening Stablecoins as Infrastructure for the Crypto Economy

Stablecoins play a crucial role in the crypto ecosystem:

· Medium of Exchange and Store of Value: Addressing cryptocurrency volatility to support the day-to-day operation of the entire ecosystem.

· Bridge Between Traditional Finance and Crypto Finance: Connecting the fiat world and the crypto world, providing efficient channels for funds to move between the two systems.

· Market Liquidity Indicator and Provider: The market cap and circulation of stablecoins are important indicators of market liquidity and sentiment.

While not all newly added stablecoin funds will flow directly into the crypto market, even a portion of the funds entering will have a significant impact on the current $3 trillion crypto market. Compared to the massive size of traditional financial markets, the crypto market still has tremendous room for growth.

DeFi Track's Strategic Advantage

Among various crypto sectors, the DeFi track may become the biggest beneficiary:

· Alignment with Arbitrage Mechanisms: The yield arbitrage opportunities provided by DeFi projects align closely with the specialized capabilities of traditional financial institutions. These institutions possess advanced quantitative trading systems and risk management models that can efficiently identify and leverage yield differentials in the DeFi ecosystem, such as interest rate arbitrage and liquidity mining optimization.

· Clearly Defined Use Cases for Funds: Compared to other crypto sectors, DeFi offers a clearer path for fund applications. Traditional institutions can easily understand core functions such as lending, trading, and market-making, as these concepts closely resemble traditional financial operations. The transparency of DeFi platforms also makes fund flows and risks more visible.

· Familiar Risk-Reward Structure: Many DeFi products are designed based on traditional financial instruments, lowering the barrier for institutional understanding and assessment. DeFi protocols often provide customizable risk exposure options, allowing institutions to choose strategies based on their risk preferences.

The Most Potentially High-Yield Project

In the Defi space, the project that is most closely tied to stablecoins is Aave and Pendle.

Aave

Aave is the largest decentralized lending project in the crypto market. Since lending projects provide liquidity to the market, and most users in lending projects use collateralized token assets to borrow stablecoins, Aave adopts a lending pool model. Therefore, the more funds in the pool, the better the depth, which also leads to a decrease in the loan interest rate, helping users borrow more assets.

Crypto Market Lending Total Volume and Share (Source: https://dune.com/green_team/defi-lending-and-borrowing)

From the graph, it can be seen that Aave occupies an absolute dominant position in the lending market, accounting for 85.75% of all loans.

Aave's TVL (Source: https://defillama.com/protocol/aave?tokenLiquidity=false&borrowed=false&revenue=true)

From the graph, it can be seen that Aave's TVL has surpassed $243.84 billion, reaching a new all-time high, indicating that Aave's business development is on a healthy and rapid upward trend.

Aave's Total Borrowed Amount (Source: https://app.aave.com/markets/)

Aave's Various Lending Pool Status (Source: https://app.aave.com/markets/)

According to data from Aave's official website, it can be seen that in Aave's lending business, a total of 12.7 billion US dollars have been lent out, with stablecoins lent out totaling 6.114 billion US dollars, occupying a major position in lending.

In summary, based on Aave's industry position in the lending space and the scale of Aave's internal business division, it can be seen that Aave's project support is still primarily focused on stablecoin lending. Therefore, if the stablecoin bill is passed and a large amount of stablecoin enters the crypto space, Aave is definitely the ideal project for these stablecoins to generate income.

Pendle

Pendle is the largest and best depth of market rate trading project in the crypto market, positioned in the DeFi space's sub-track—interest rate derivatives track. For institutional-level participants, earning stable arbitrage income is one of their main sources of income, and Pendle's products include dedicated products involving the principal and interest separation of stablecoins, allowing users to trade YT of various stablecoins and obtain greater returns through derivatives.

Pendle's TVL (Data Source: https://defillama.com/protocol/pendle)

From the chart, it can be seen that Pendle's TVL has reached a scale of 4.198 billion US dollars. Although it is not at its project's peak, the upward curve of its TVL also shows that Pendle's business scale is in a phase of rapid recovery.

Partial Stablecoin TVL of Pendle (Data Source: https://app.pendle.finance/trade/markets)

According to data from Pendle's official website, Pendle's total stablecoin TVL can reach a scale of over 3.7 billion US dollars, accounting for over 88% of Pendle's overall TVL. It can be seen that Pendle's interest rate market is mainly dominated by the stablecoin interest rate market.

Stablecoin Market of Pendle (Data Source: https://app.pendle.finance/trade/markets)

As can be seen, Pendle's stablecoin yield generally exceeds 10%, which is a very high yield for traditional funds. If traditional funds can enter the crypto market compliantly, stablecoin yields of over 10% will undoubtedly attract a large amount of traditional funds to join.

In conclusion, based on Pendle's scale in the stablecoin interest rate segmentation track, Pendle's business foundation lies in the stablecoin interest rate market. Therefore, if the stablecoin bill is passed, with a large amount of stablecoins entering the crypto space, Pendle will be the primary market for institutional participation in stablecoin interest rate trading.

Market Theme Overview

Data Source: SoSoValue

According to weekly return rate statistics, the AI track performed the best, while the PayFi track performed the worst.

AI Track: TAO, RENDER, FET, and WLD account for a large proportion in the AI track, totaling 75.26%. Their respective price changes this week were 9.31%, 7.12%, 12.28%, and 25.71%. It can be seen that the main projects in the AI track were all on an upward trend this week with significant price increases, making the AI track the best performer.

PayFi Track: XRP, XLM, and BCH account for a large proportion in the PayFi track, totaling 94.17%. Their respective price changes this week were -1.46%, 1.76%, and 10.13%, with average price increases lower than projects in other tracks. Even the largest holding, XRP (83.25% allocation), experienced a decline, resulting in the worst performance in the PayFi track.

Next Week's Crypto Major Events Preview

· Thursday (May 29) U.S. Initial Jobless Claims for the Week

· Friday (May 30) U.S. May Final University of Michigan Consumer Sentiment Index; U.S. April Core PCE Price Index YoY; Launch of the second round of compensation to FTX users

Summary

This week, the cryptocurrency market has shown a significant upward trend, with Bitcoin hitting a new high, driving the rise of altcoins. However, the market sentiment index has slightly decreased to 71%, but still remains in the bullish range. On the policy front, the "GENIUS Act" amendment made significant progress in the U.S. Senate, and the Texas Bitcoin Strategic Reserve Act was passed, injecting strong confidence into the market. The stablecoin market saw a positive signal with simultaneous growth of USDT and USDC, indicating that global investors are accelerating their entry. In terms of projects, DRIFT, through its strategic partnership with traditional finance giant Apollo, is officially entering the institutional DeFi field, potentially leading the Solana ecosystem into a new chapter.

However, investors still need to remain cautious and vigilant against the possibility of FOMO sentiment in the market and macroeconomic uncertainty. The Federal Reserve's maintaining a hawkish stance and the unresolved issue of U.S. tariffs could both potentially lead to market volatility. At the same time, security risks should not be overlooked, as demonstrated by the $223 million exploit suffered by the Cetus Protocol, which serves as a wake-up call for our security awareness. It is recommended that investors, while taking advantage of policy dividends, prudently manage their positions, employ a balanced allocation strategy, closely monitor the release of U.S. economic data on May 29th and 30th, and consider the potential impact of important events such as the second round of compensation for FTX users on the market.

This article is contributed content and does not represent the views of BlockBeats.

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia