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Market Panic Spreading, Which Assets Are Still Holding Strong?
Original Title: "Highlights and Shadows in a Downtrend | Frontier Lab Cryptocurrency Market Weekly Report"
Original Author: Frontier Lab
Market Overview
Overall Market Situation
This week, the cryptocurrency market has been in a rapid downtrend, with the market sentiment index dropping from 33% to 11%. The market capitalization of stablecoins has essentially ceased continuous growth (USDT reaching 142 billion, USDC reaching 55.9 billion, with changes of 0.02% and -0.53% respectively), indicating that as the market experienced a significant decline, institutional funds have stopped entering, leading to signs of exiting. Market sentiment saw panic mainly due to the Bybit exchange being hacked for $1.5 billion in assets and Trump's aggressive tariff policy, intensifying market concerns about inflation. This has reduced the likelihood of a Fed rate cut, heightened market fears of a U.S. economic recession, and had a strong impact on market sentiment, plunging it into extreme fear. Altcoins have generally underperformed the benchmark index.
Next Week Forecast Targets
Bullish Targets: LTC, S, SOSO, BERA
LTC: LTC rose against the trend this week, showing strength in the market as a whole declined. This strong performance was mainly due to market expectations for its LTC ETF approval. This week, the spot LTC ETF proposed by Canary Capital has been listed in the Depository Trust & Clearing Corporation (DTCC) system, and LTC has received 87% approval for staking on Polymarkt. The market currently has high expectations for the approval of the LTC spot ETF, so there will be continuous hype around the LTC spot ETF event until its formal approval.
S: Sonic has recently entered the DeFi industry, attracting a large number of on-chain users and funds through its on-chain DeFi project with high APY. In its on-chain primary liquidity staking projects, Beets and Origin, the APY for liquidity pools based on the S token can reach up to 32.22% and 123% respectively. The average interest rate for users borrowing the S token in Sonic's on-chain lending protocol is 10.21%, allowing users to achieve a yield of over 20%. Additionally, the recent surge in demand for the S token due to the popularity of Sonic's on-chain activities has driven up the price of the S token against the trend. This increase in price has further boosted the earnings of Sonic's on-chain users. Therefore, in the current bear market, users can still gain over 20% in risk-free returns, attracting a large number of users to participate through borrowing, increasing the market demand for the S token and driving its price into a spiral uptrend.
SOSO: The SoSoValue project team is able to continuously adjust its future development direction according to the market trend. Originally, SoSoValue positioned itself as an AI-technology-enhanced all-in-one investment service platform, aiming to keep up with the market trend of AI Agents. After the decline of AI Agents, market attention and funding shifted back to Defi projects. As a result, SoSoValue seized the current trend of high APY to attract users and transformed itself into a financial service center. While still leveraging its AI technology within the product, the focus of promotion shifted to highlighting the high APY it could provide. Recently, the project launched its second season of mining activities, allowing users to mine the SOSO token by holding or staking the SSI packaged index token. Through this initiative, users can earn staking rewards along with additional airdropped SOSO tokens, with APY reaching up to 42%. This move attracted more users to participate in mining, further increasing the bullish sentiment towards the SOSO token.
BERA: The overall market was in a downtrend this week. Initially, BERA was also affected by the market and experienced a decline. However, the Berachain project team quickly adjusted the on-chain APY of the LSD project. In Berachain's main LSD project, Infrared Finance, the APY of WBERA was increased to a maximum of 123%, and the borrowing rate of BERA in the on-chain lending project reached 23.68%. This adjustment allowed arbitrage participants to earn a 100% risk-free annualized return, swiftly reversing the downtrend to an uptrend. The strategy employed by the Berachain project team was similar to Sonic's, focusing on attracting on-chain users and funds through high APY to facilitate staking, liquidity provision, DeFi empowerment, and token appreciation. By offering high APY, the project aimed to increase the demand for the on-chain primary coin BERA in the market, thereby promoting an increase in the BERA token price.
Bearish Targets: ETH, SOL, ADA, AI, TKO, RUNE
ETH: Bybit was hacked this week, resulting in the theft of 491,000 ETH. Although Bybit has already fully recovered the stolen ETH through purchase and redemption, the buying pressure generated has not been reflected in the market price. This indicates that market investors still hold FUD sentiments towards ETH, as they anticipate continued selling pressure from the hacker. Furthermore, the investigation report on the Bybit hack explicitly stated that the main reason for the theft was a vulnerability in the platform's safe system, rather than a flaw in the exchange's infrastructure. This raised significant doubts in the market regarding safe technology, which is commonly used by most projects in the Ethereum ecosystem. Therefore, this poses a potential risk to the security of most projects in the Ethereum ecosystem. Additionally, Ethereum's Pectra upgrade is scheduled to go live on the testnet this weekend. Historically, price pumps occur before technical upgrades, followed by retracements post-implementation. Given that the Pectra upgrade has not injected much bullish momentum into ETH's price, a probable scenario after its implementation is a price decline for ETH.
SOL: This week, SOL experienced a significant drop following the overall market trend. This was mainly due to the recent retreat of the Meme coin craze. Solana, as the public chain with the highest Meme coin returns, also faced various FUD (Fear, Uncertainty, Doubt) voices in the market. This led to an outflow of funds from Solana's chain, with its Total Value Locked (TVL) dropping from $12.1 billion to $7.3 billion, a decrease of 39.66%. The on-chain liquidity staking yield on Solana also decreased from 10.29% to 7.26%. Additionally, on-chain transaction volume decreased from $35.5 billion to $2.4 billion, plunging by 93.23%. These indicators suggest that Solana's on-chain ecosystem is on the brink of collapse. Moreover, on March 1st, 11.2 million SOL tokens will be unlocked, with these tokens predominantly held by institutions. This unlocking may lead to continued selling pressure, exacerbating market investors' fear and panic regarding SOL.
ADA: This week, Cardano's on-chain TVL experienced a significant decline, dropping by 26.88% to $3.08 billion. This marks a 56.06% decrease from its peak of $7.01 billion. The TVL of all ecosystem projects on its chain also saw declines of over 10%, indicating a rapid outflow of funds from the Cardano ecosystem. This trend reflects the current market sentiment of FUD towards the Cardano ecosystem. Trading volume on its on-chain DEX has decreased by over 68%, and the ADA token's borrowing rate is currently at 3.29%. These numbers suggest that very few participants are engaging in borrowing and lending activities in the Cardano ecosystem, leading to borrowing rates significantly lower than those of other public chain tokens. Therefore, if outflows from the Cardano on-chain funds continue, it is expected that ADA will continue to decline next week.
AI: Sleepless AI is an AI-based GameFi project. Among all AI and GameFi projects, Sleepless AI experienced the deepest retracement during this downturn. This is because investors in the market have lost interest in the Play-to-Earn model of GameFi, resulting in a gradual decrease in users and minimal new capital inflow. There is a widespread belief that AI projects are currently overvalued, leading to a significant pullback trend in the AI track. Additionally, AI is set to unlock 17.27 million tokens next week, accounting for 1.73% of the current circulating supply. With a large unlocking percentage and the recent downturn in this track, it is expected that a downturn will occur shortly after the token unlocking.
TKO: Tokocrypto is the largest cryptocurrency exchange in Southeast Asia. Due to the recent Bybit hack incident, various centralized exchanges have been negatively impacted, causing the tokens of various exchanges to underperform. Additionally, TKO is about to unlock 100 million tokens, which accounts for 2.02% of the current circulating supply. The high unlock percentage is expected to lead to a price decline after the unlock.
RUNE: THORChain is a decentralized cross-chain AMM trading protocol. This week, it experienced a significant counter-trend surge from Monday to Wednesday. This surge was mainly caused by the hacker who stole from Bybit continually transferring ETH into THORChain to conduct money laundering transactions. As a result, THORChain saw a substantial increase in trading volume and fees. Despite not following the overall market trend, the exposure of the hacker's use of THORChain for money laundering led to THORChain's developer, Pluto, announcing resignation. It is expected that next week, the price will continue to fall due to reduced transaction volume and market FUD regarding its alleged money laundering activities.
Market Sentiment Index Analysis
The market sentiment index decreased from 33% last week to 11%, placing it close to the extreme fear zone overall.
Hot Track
Sonic
· Current Status
In recent weeks, Sonic's chain TVL has maintained a rapid growth trend. This week, while the TVL of most other chains on the network experienced a downward trend, Sonic was the only chain with a TVL exceeding $50 million to maintain a 10% growth rate. The TVL on the chain increased to $683 million, demonstrating that its on-chain ecosystem can continue to attract funds even in a severely bearish market. Sonic's token, S, also saw a 7.63% increase this week. Although the rise is not significant, achieving an increase while the overall market is collapsing indicates market recognition.
· Reasons for Hot Trend
Recently, Sonic has shifted its project focus from GameFi to DeFi on-chain, using high APY to attract on-chain users. In its main liquidity projects on the chain, users can receive up to 123% APY, while the borrowing and lending side offers around 10% interest rates, enabling users to achieve over 100% APY arbitrage opportunity. In the current bearish market, APY over 100% is highly attractive to on-chain users, prompting them to participate in arbitrage through buying or borrowing, increasing the demand for token S and leading to its outperformance compared to most other tokens.
· Future Outlook
The recent popularity of the Sonic ecosystem can be attributed to the LSD project within the Sonic ecosystem, which increased the annual percentage yield (APY), attracting more on-chain users to participate in arbitrage activities. Therefore, we can see that a quick development path for an ecosystem is to achieve efficient driving of its economic flywheel, with the project focusing on the DeFi track to empower assets efficiently. In order to empower assets around DeFi, emphasis needs to be placed on asset collateralization and liquidity, allowing assets to generate compound returns in DEX, lending, and asset management. The on-chain ecosystem's economic flywheel must be formed through staking + liquidity + DeFi empowerment + user growth in a positive feedback loop. The core driving force lies in the dual-wheel drive of on-chain native token staking and liquidity release, enabling the generation of compound returns in scenarios such as DEX, lending, and asset management, achieving "staking as productivity." Once on-chain users are attracted by high APY to the on-chain ecosystem, it is necessary to establish a positive cycle of staking lockup → liquidity release → DeFi empowerment → token appreciation → user retention → re-staking → developer aggregation. Otherwise, if new users' funds entering the ecosystem are insufficient to cover the selling pressure from arbitrage, the token price will decline, leading to a reduction in project yields and causing arbitrageurs to exit. This would be a significant blow to an ecosystem, so we need to continue monitoring the APY of Sonic's on-chain DeFi projects to assess if the Sonic chain still has development momentum through on-chain APY.
However, it is important to note that although Sonic's TVL was the fastest-growing among all chains with over $1 billion TVL this week, its TVL did not consistently rise this week but experienced a peak and retreat phenomenon.
Berachain
· Current Status
This week, the entire market was in a rapid downturn trend, and the top ten projects by TVL were all in a declining state except for Berachain. Although Berachain's TVL only increased by 4.66% this week, maintaining positive growth in the current environment is already commendable. The TVL reached $3.194 billion, ranking sixth in TVL among all public chains, surpassing the Base chain. The price of its token, BERA, also saw an increase this week, with a rise of 7.26%, placing it in a strong position among Altcoins.
· Reasons for Popularity
This week, the TVL of the top DEX, Lending, and LSD projects in the Berachain ecosystem showed a slowing growth rate compared to the previous weeks. Additionally, there was a decrease in Berachain's TVL in the first half of the week. However, the situation reversed when the primary LSD project on Berachain, Infrared Finance, offered the highest WBERA APY of 121%, and the emerging LSD project, Stride, achieved an APY of 190.12%. Simultaneously, the borrowing rate for BERA in Berachain's lending projects was 23.68%, allowing arbitrageurs to earn a risk-free 100% annual percentage yield. This quickly halted the downward trend and shifted it towards an upward movement.
· Future Outlook
Berachain remained vibrant this week mainly due to the increased APY of its on-chain DeFi projects, maintaining a high level of attractiveness to on-chain users. This led to a substantial inflow of funds into Berachain. Berachain's development path is somewhat similar to Sonic, so it faces similar challenges. Currently, Berachain has achieved a process of staking lockups → liquidity release → DeFi empowerment → token value appreciation. However, it has not seen outstanding on-chain projects in the process of user retention → re-staking → developer aggregation. Therefore, while the high-yield model has enabled rapid development of the on-chain ecosystem in the short term and promoted a swift rise in the project's token, BERA, it will inevitably face increasing selling pressure in the future. When the capital from new users is insufficient to offset the sell pressure from arbitrage, the BERA token price will decline. Subsequently, the returns of various projects will decrease, causing arbitrageurs to exit. Therefore, in the future, more attention should be paid to whether new stellar projects emerge in the Berachain on-chain projects and whether the interest rates for on-chain LSD projects significantly decline.
Market Theme Overview
Data Source: SoSoValue
In terms of weekly returns, the Sociafi track performed the best, while the PayFi track performed the worst.
· Sociafi Track: In the Sociafi track, TON and CHZ account for a significant portion, totaling 95.17%. Their respective weekly declines were: -4.86% and -4.79%. Although both are in a downward trend, they still outperformed other Altcoins, resulting in the best performance of the entire Sociafi track index.
· PayFi Track: In the PayFi track, XRP, LTC, and XLM account for a significant portion, totaling 94.62%. Their weekly declines were: -19.23%, -1.21%, and -16.96%, respectively, making the PayFi track the worst performer.
Next Week's Crypto Major Events Preview
Monday (March 3rd): U.S. February ISM Manufacturing PMI
Wednesday (March 5th): U.S. February ADP Employment Change; Pectra Network upgrade plan launches on the Ethereum testnet
Friday (March 7th): U.S. February Seasonally Adjusted Nonfarm Payrolls; U.S. February Unemployment Rate
Summary
This week, the cryptocurrency market experienced a significant decline, with the market sentiment index plummeting sharply, reflecting investors' widespread concerns. However, some projects such as LTC, Sonic, SoSoValue, and Berachain attracted users through high APY strategies. In the long run, market stability and the emergence of new projects will be key factors. It is advisable for investors to closely monitor market dynamics and exercise caution.
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Never Underestimate the Significance of the US Stablecoin 'Infrastructure Bill'
If the US stablecoin bill, the "GENIUS Act," passes smoothly this time, its significance will be tremendous. I even think it's significant enough to enter the top five in Crypto history.
Although abbreviated as the GENIUS Act, which translates directly to the Genius Act, it is actually the Guiding and Establishing National Innovation for U.S. Stablecoins, which translates to "Guiding and Establishing National Innovation for US Dollar Stablecoins."
The proposal is lengthy, with several key points summarized for everyone:
· Mandatory 1:1 Full Asset Backing: Assets include cash, demand deposits, and short-term US Treasuries. At the same time, misappropriation and rehypothecation are strictly prohibited.
· High-Frequency Disclosure: Reserve reports must be published at least monthly, introducing external audits.
· Licensing Requirement: Once the circulating market cap of the issuer's stablecoin exceeds $100 billion, it must transition into the federal regulatory system within a specified timeframe, adopting banking-grade regulation.
· Introduction of Custody: The custodian of the stablecoin and its reserve assets must be a regulated qualified financial institution.
· Clear Definition as a Payment Medium: The bill explicitly defines stablecoin as a new type of payment medium, primarily regulated by the banking regulatory system, rather than restricted by the securities or commodities regulatory system.
· Embracing Existing Stablecoins: A maximum 18-month grace period after the bill's enactment, aimed at encouraging existing stablecoin issuers (such as USDT, USDC, etc.) to promptly obtain licenses or become compliant.
After finishing the main content, let's talk about the significance of this matter with an excited heart.
Over the years, when others asked, "After working in the Crypto industry for 16 years, what application have you created?"
In the future, you can confidently tell others—Stablecoins.
Some people have held opposing views. In the past, people's impression of stablecoins was that they were an opaque black box. Every few months, there would be FUD — whether Tether's assets were frozen or Circle had a significant black hole deficit.
In fact, if you think about it, Tether easily rakes in billions of dollars a year just from the interest on those underlying government bonds. Circle, slightly less, also made a $1.7 billion profit last year.
They basically made money while standing there. From a motivational standpoint, they have no malicious intentions. In fact, they are the most eager for compliance.
Now, this opaque black box will become a transparent white box.
In the past, the only complaint was that Tether's funds might have been frozen by the United States. Now, they will be directly placed into U.S. compliant custodial institutions, with high-frequency disclosures, so you can rest assured.
【No need to worry about a rug pull】 is such a huge advantage—I think especially all Crypto people understand this.
Stablecoins were once almost on the verge of being overtaken by CBDCs. In any country, if a central bank digital currency really exists, it is highly likely not built on a blockchain, at most it is built on some internal central bank consortium chain, which to be honest, is meaningless.
When CBDCs were at their peak, that was the most dangerous time for stablecoins.
If CBDCs had become a reality back then, stablecoins today would have been relentlessly suppressed into a dark corner, and blockchain would only be able to play a minimal role.
The remaining half-dead stablecoins would even have to learn the standards of central bank digital currencies, completely relinquishing their standard-setting power.
And now, stablecoins have won (or are about to).
Instead, everyone should learn the 【Blockchain + Token】 standard.
Nowadays, many blockchains actually have no meaningful applications on top, only stablecoin transfers. For example, with Aptos, the only scenario I use Aptos for is transfers between Binance and OKX.
And now, stablecoins will be legislated, what does that mean?
That's right, blockchain will become the only standard.
In the future, every stablecoin user will be the first to learn how to use a wallet.
As an aside, I actually think Ethereum's concerted push for EIP-7702 is quite forward-thinking. While other chains are all about memes, thank you Ethereum for sticking to account abstraction.
EIP-7702 is about Account Abstraction, which can support, for example:
· Social Account Registration Wallet
· Paying GAS with Native Coin
· And more
This paves the way for future new users to heavily use stablecoins, solving the last-mile problem.
Furthermore, once stablecoins receive legislative support, deposits and withdrawals will become even easier.
Let's imagine a scenario: previously, hindered by the gray nature of stablecoins, but after the bill passes, many traditional brokerages can support stablecoins themselves. The money from a US stock investor can be converted into stablecoins in minutes and instantly deposited into Coinbase. Believe it or not.
Let's imagine another scenario: if the brilliant bill smoothly passes through the House of Representatives, next, you will see:
Due to the extremely lucrative nature of this trading, existing stablecoin leaders and newly entering traditional giants will crazily start promoting their stablecoin products.
And an outsider, due to these promotions, will start using stablecoins. And then one day, after finding out that the wallet account has been created, will explore Bitcoin inside. Is mining Bitcoin difficult?
Stablecoins are a huge Trojan horse. The moment you start using stablecoins, you unwittingly step half a foot into the Crypto world.
As a large reservoir for digesting US debt, although stablecoins cannot directly absorb debt, they at least provide ammunition for the US debt secondary market. These functions are quite important, and slowly, stablecoins are becoming a part of the US debt market's body. Therefore, once the US legislation is passed and experiences the benefits, there is no turning back.
And, we are also confident that stablecoins are indeed one of the great innovations in our industry. People who have used stablecoins will find it hard to return to the traditional cash-banking system.
Once the bill is passed, users can't go back. In the future, concerns are about to be resolved, standards will be mastered, and the era of large deposits seems to be on the horizon.
Original Article Link
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HTX Research Latest Research Report丨Sonic: A Case Study of the New DeFi Paradigm
While the industry was still embroiled in the Layer 2 scaling debate, Sonic offered a new answer through a "foundational revolution." Recently, HTX Research released its latest research report "Sonic: A Blueprint for the DeFi New Paradigm," detailing the new public chain Sonic. While fully compatible with the EVM, Sonic has achieved a throughput of over 2000 TPS, 0.7-second transaction finality, and a transaction cost of 0.0001 USD, outperforming mainstream Layer 1 solutions and even surpassing most Layer 2 solutions. The performance-boosting Sonic is reshaping public chain infrastructure, officially ushering in the "sub-second era" of public chains.
As a high-performance public chain based on a Directed Acyclic Graph (aDAG), Fantom Opera initially stood out for its high throughput and fast confirmation capabilities. However, as the on-chain ecosystem expanded, the limitations of its traditional EVM architecture became increasingly apparent: state storage expansion, slow node synchronization, and constrained execution efficiency. To address this, Fantom introduced the new upgrade solution Sonic, aimed at achieving performance leaps through fundamental reconstruction without relying on sharding or Layer 2.
Led by the restructured Sonic Labs, Sonic's core development team brought together top industry talents, including CEO Michael Kong, CTO Andre Cronje (founder of Yearn Finance), and Chief Research Officer Bernhard Scholz. Over a period of two and a half years, the team comprehensively optimized from the virtual machine, storage engine to the consensus mechanism, ultimately creating the standalone new chain Sonic. While being EVM-compatible, Sonic has achieved over 2000 TPS, 0.7-second finality, $0.0001 transaction cost, a 90% improvement in storage efficiency, and reduced node synchronization time from weeks to within two days.
· SonicVM: The new virtual machine dynamically compiles EVM bytecode, caches high-frequency operations (such as SHA3 hashing), and pre-analyzes jump instructions, improving execution efficiency several times over to support high-throughput demands.
· SonicDB: Using a layered storage design, it separates real-time state (LiveDB) from historical data (ArchiveDB), compressing storage space by 90%, reducing node maintenance thresholds, and enhancing decentralization.
· Sonic Gateway: A Layer 2-like cross-chain bridge to Ethereum, balancing security and efficiency through a batch processing mechanism, supporting bi-directional asset migration, and seamless integration with the Ethereum ecosystem.
Sonic introduces its native token S, exchanged 1:1 with the old token FTM, undertaking functions such as gas payment and governance staking. Its innovative mechanisms include:
· Gas Fee Monetization (FeeM): Developers can receive up to 90% of transaction fee sharing, incentivizing ecosystem app innovation; non-FeeM apps have 50% of fees burned to deter inflation.
· Point Airdrop System: Users earn points (Passive/Activity Points and Gems) through holding tokens, participating in DeFi, or ecosystem interactions, redeemable for a total of 200 million S tokens, creating a "usage is mining" positive feedback loop.
During the market downturn in 2025, Sonic's on-chain TVL grew over 500% against the trend, with stablecoin volume surpassing $260 million, driven by high-leverage yield strategies:
· Silo v2 Recurring Borrowing: Pledge S tokens to borrow stablecoins, leverage up to 20x, capturing multiple points and spread yields.
· Euler+Rings Combination: Deposit USDC to mint overcollateralized stablecoin scUSD, leverage up to 10x, while receiving Sonic points and protocol airdrops.
· Shadow DEX Liquidity Mining: Provide liquidity for mainstream trading pairs, earning up to 169% APY and receiving a share of trading fees.
The ecosystem's future plans involve introducing Real World Asset (RWA) yields and off-chain payment scenarios, expanding through compliant asset backing and consumer app integration, establishing a sustainable stablecoin utility loop.
Sonic's core DEX, FlyingTulip, designed by Andre Cronje, integrates trading, lending, and leverage functions, with key technological breakthroughs including:
· Adaptive AMM Curve: Combining Curve V2's liquidity aggregation advantage, introducing external oracle monitoring of volatility, dynamically adjusting the curve shape—close to a constant-product curve during low volatility (low slippage), and approaching a constant-product curve during high volatility (preventing liquidity depletion), reducing impermanent loss by 42%, and improving capital efficiency by 85%.
· Dynamic LTV Lending Model: Drawing inspiration from Curve's LLAMA liquidation mechanism but dynamically adjusting the loan-to-value (LTV) ratio based on market volatility. For example, the ETH collateral loan-to-value ratio can plummet from 80% during calm periods to 50% during volatile periods, reducing systemic risk.
With its triple advantage of "high performance + nested yield + low threshold," Sonic is expected to exceed $2 billion in TVL within 12 months, and its token S may impact billions of dollars in market capitalization. Its model has established a new paradigm for the industry: replacing liquidity speculation with on-chain efficiency and real returns, potentially triggering a fundamental shift in the logic of public chain competition.
Potential risks are concentrated at the technical level, including the Adaptive AMM relying on an external oracle, which could result in liquidity pool anomalies if the price feed is attacked. High-leverage strategies face liquidation risks during extreme market conditions and require hedging tools (such as perpetual contract shorts) to manage volatility.
From a macro perspective, Sonic is poised to be the dark horse in the 2025 DeFi revival wave, with the success of its stablecoin ecosystem creating broad upside potential for the ecosystem token S and overall network value. Sonic's rise validates a key proposition: even in a bear market, through mechanism innovation and performance breakthroughs, DeFi can still build a "yield fortress" to attract rational capital for long-term retention. Its nested yield model, developer incentive system, and efficient infrastructure provide the industry with a reusable template. If successfully integrated with RWAs and payment scenarios, Sonic may become a bridge connecting on-chain yield with real economic demand, propelling DeFi into a new stage of mass adoption.
To read the full report, please visit: https://square.htx.com/wp-content/uploads/2025/04/HTX-Research-Latest-Report.pdf
HTX Research is the dedicated research arm of HTX Group, responsible for in-depth analysis of a wide range of areas including cryptocurrency, blockchain technology, and emerging market trends. HTX Research produces comprehensive reports, offers professional evaluations, and is committed to providing data-driven insights and strategic foresight. It plays a key role in shaping industry perspectives and supporting informed decision-making in the digital asset space. With rigorous research methods and cutting-edge data analysis, HTX Research always remains at the forefront of innovation, driving industry thought leadership and facilitating a deep understanding of the evolving market dynamics.
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Never Underestimate the Significance of the US Stablecoin 'Infrastructure Bill'
If the US stablecoin bill, the "GENIUS Act," passes smoothly this time, its significance will be tremendous. I even think it's significant enough to enter the top five in Crypto history.
Although abbreviated as the GENIUS Act, which translates directly to the Genius Act, it is actually the Guiding and Establishing National Innovation for U.S. Stablecoins, which translates to "Guiding and Establishing National Innovation for US Dollar Stablecoins."
The proposal is lengthy, with several key points summarized for everyone:
· Mandatory 1:1 Full Asset Backing: Assets include cash, demand deposits, and short-term US Treasuries. At the same time, misappropriation and rehypothecation are strictly prohibited.
· High-Frequency Disclosure: Reserve reports must be published at least monthly, introducing external audits.
· Licensing Requirement: Once the circulating market cap of the issuer's stablecoin exceeds $100 billion, it must transition into the federal regulatory system within a specified timeframe, adopting banking-grade regulation.
· Introduction of Custody: The custodian of the stablecoin and its reserve assets must be a regulated qualified financial institution.
· Clear Definition as a Payment Medium: The bill explicitly defines stablecoin as a new type of payment medium, primarily regulated by the banking regulatory system, rather than restricted by the securities or commodities regulatory system.
· Embracing Existing Stablecoins: A maximum 18-month grace period after the bill's enactment, aimed at encouraging existing stablecoin issuers (such as USDT, USDC, etc.) to promptly obtain licenses or become compliant.
After finishing the main content, let's talk about the significance of this matter with an excited heart.
Over the years, when others asked, "After working in the Crypto industry for 16 years, what application have you created?"
In the future, you can confidently tell others—Stablecoins.
Some people have held opposing views. In the past, people's impression of stablecoins was that they were an opaque black box. Every few months, there would be FUD — whether Tether's assets were frozen or Circle had a significant black hole deficit.
In fact, if you think about it, Tether easily rakes in billions of dollars a year just from the interest on those underlying government bonds. Circle, slightly less, also made a $1.7 billion profit last year.
They basically made money while standing there. From a motivational standpoint, they have no malicious intentions. In fact, they are the most eager for compliance.
Now, this opaque black box will become a transparent white box.
In the past, the only complaint was that Tether's funds might have been frozen by the United States. Now, they will be directly placed into U.S. compliant custodial institutions, with high-frequency disclosures, so you can rest assured.
【No need to worry about a rug pull】 is such a huge advantage—I think especially all Crypto people understand this.
Stablecoins were once almost on the verge of being overtaken by CBDCs. In any country, if a central bank digital currency really exists, it is highly likely not built on a blockchain, at most it is built on some internal central bank consortium chain, which to be honest, is meaningless.
When CBDCs were at their peak, that was the most dangerous time for stablecoins.
If CBDCs had become a reality back then, stablecoins today would have been relentlessly suppressed into a dark corner, and blockchain would only be able to play a minimal role.
The remaining half-dead stablecoins would even have to learn the standards of central bank digital currencies, completely relinquishing their standard-setting power.
And now, stablecoins have won (or are about to).
Instead, everyone should learn the 【Blockchain + Token】 standard.
Nowadays, many blockchains actually have no meaningful applications on top, only stablecoin transfers. For example, with Aptos, the only scenario I use Aptos for is transfers between Binance and OKX.
And now, stablecoins will be legislated, what does that mean?
That's right, blockchain will become the only standard.
In the future, every stablecoin user will be the first to learn how to use a wallet.
As an aside, I actually think Ethereum's concerted push for EIP-7702 is quite forward-thinking. While other chains are all about memes, thank you Ethereum for sticking to account abstraction.
EIP-7702 is about Account Abstraction, which can support, for example:
· Social Account Registration Wallet
· Paying GAS with Native Coin
· And more
This paves the way for future new users to heavily use stablecoins, solving the last-mile problem.
Furthermore, once stablecoins receive legislative support, deposits and withdrawals will become even easier.
Let's imagine a scenario: previously, hindered by the gray nature of stablecoins, but after the bill passes, many traditional brokerages can support stablecoins themselves. The money from a US stock investor can be converted into stablecoins in minutes and instantly deposited into Coinbase. Believe it or not.
Let's imagine another scenario: if the brilliant bill smoothly passes through the House of Representatives, next, you will see:
Due to the extremely lucrative nature of this trading, existing stablecoin leaders and newly entering traditional giants will crazily start promoting their stablecoin products.
And an outsider, due to these promotions, will start using stablecoins. And then one day, after finding out that the wallet account has been created, will explore Bitcoin inside. Is mining Bitcoin difficult?
Stablecoins are a huge Trojan horse. The moment you start using stablecoins, you unwittingly step half a foot into the Crypto world.
As a large reservoir for digesting US debt, although stablecoins cannot directly absorb debt, they at least provide ammunition for the US debt secondary market. These functions are quite important, and slowly, stablecoins are becoming a part of the US debt market's body. Therefore, once the US legislation is passed and experiences the benefits, there is no turning back.
And, we are also confident that stablecoins are indeed one of the great innovations in our industry. People who have used stablecoins will find it hard to return to the traditional cash-banking system.
Once the bill is passed, users can't go back. In the future, concerns are about to be resolved, standards will be mastered, and the era of large deposits seems to be on the horizon.
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