This week, we’re diving into some game-changing innovations in AI and DeFi.

We’ll break down Bittensor’s decentralized approach to incentivizing AI development and how this might transform the way AI models evolve.

But we don’t stop there—as we next look at the latest in the stablecoin market, which continues to grow and evolve, including a glance at Ethena’s latest stablecoin moves in collab with BlackRock.

And of course, we’ll have a roundup of key market updates and data insights to keep you ahead of the curve.

🔍️ MARKET WATCH

As we dive into another action-packed week, here’s a look at what’s been happening, what’s going on now, and what’s coming up next.

Project updates: 

• $AVAX: Major platform upgrade "Avalanche9000" expected to roll out this week

• $RUNE: Thorchain prepares to unveil new DeFi application layer expected this week

• $EIGEN: Token mobility feature set to activate Sep 30

• $METIS/$JEWEL: Colosseum PvP game debuts on Metis network Oct 2

• $SIDUS: Launch of Hero enhancement facility scheduled for Oct 1

• $XDB: Upcoming token reduction event planned for Oct 1, 14:00 UTC

• $WEMIX: New geo-restrictions for Singaporean users effective Oct 2

• $WLD: Expanding to Binance Futures platform on Oct 2

• $AXL: Key announcement slated for Oct 3

• $KUJI: Revamping liquidity provision strategy on Oct 3

• $ETH: Community gathering for Rome conference beginning Oct 4

Token Unlocks Schedule:

• $SUI: 107M USD (2.40%) Oct 1

• $OP: 60M USD (2.50%) sep 30

• $IMX: 59M USD (2.02%) Oct 4

• $ZETA: 39M USD (13.43%) Oct 1

• $DYDX: 9M USD (1.32%) Oct 1

• $MAV: 9M USD (9.56%) Oct 1

• $ADA: 7.5M USD (0.05%) Oct 2

• $GAL: 4.9M USD (1.57%) Oct 1

• $MANTA: 1.8M USD (0.50%) Oct 1

• $LQTY: 7.5M USD (0.05%) Oct 2

Economic Calendar:

• Mon: Fed Chair Powell delivered a crucial economic speech & gave insight into rate cuts.

• Tue: JOLTS report released, projecting 7.6M job openings

• Thu: Weekly jobless claims data, estimated at 221K

• Fri: Non-Farm Payroll (NFP)

Data Bites:

SUI is preparing for a significant $110M token unlock this week, with the majority allocated to Series A and B investors, while early contributors will receive 16% of the total. Interestingly, SUI has surged 48% over the past weeks.

Additionally, SUI's Total Value Locked (TVL) has reached a new all-time high of $1B, adding more intrigue as the unlock approaches.

Solana’s total value locked has reached approximately $5.5 billion, a multi-month high, according to DefiLlama data (excluding all staked token variants).

Who received the largest EIGEN airdrop?

The 2nd largest claimant was Justin Sun, who received $8.75 million EIGEN. He later transferred his entire amount to HTX.

And today, Justin Sun deposited 5.37 million $EIGEN, sold it at an average price of $4.03, and received $21.66 million in $USDT.

Stay alert this week, watch the markets closely, and be ready to act. Opportunities are out there—let's grab them.

💵 STABLECOIN MARKET ANALYSIS

Let's take a moment to analyze the stablecoin market. Currently, the total supply of stablecoins is $172 billion—only 8.5% down from the all-time high of $188 billion reached in April 2022.

Stablecoin supply is key to understanding DeFi's overall “health” as it serves as a beta indicator of the liquidity available across all blockchains.

As we can see from the following chart, USDT, with a total supply of $119 billion, outperforms its competitors and accounts for 70% of the entire market.

USDC is the second most available stablecoin, with a total supply of $35 billion, accounting for 31% of the market. The key takeaway here is that centralized issuers are still preferred by users and institutions.

Stablecoins on Layer 2

As USDT remains the undisputed leader in the stablecoin market, a similar pattern emerges when we analyze how these assets are distributed across different blockchains, with one dominant leader standing out.

Ethereum alone controls over 74% of the total stablecoin supply, a dominance largely attributed to its reputation as the most secure DeFi-chain and its role as the backbone of the sector.

However, things are starting to change…

In the following chart, we analyze stablecoin supply across various Ethereum Layer 2 (L2) networks. Since 2023, there’s been a steady uptrend, with the 2024 introduction of proto-danksharding accelerating this growth.

Arbitrum leads the L2 ecosystem with over $4.5 billion in stablecoins, but Base—the L2 backed by Coinbase—is showing explosive growth that could take it to the top. Over the past year, the stablecoin supply on Base has surged by an incredible 2095%!

Ethena: A New Stablecoin Backed by BlackRock

Ethena launched the stablecoin USDe in February 2024, and since then, its supply has rapidly grown to over $2.5 billion, with an all-time high of over $3.6 billion.

This growth is driven by a sophisticated system that combines rewards from short-selling perpetuals with staking rewards from collateral (ETH and its derivatives).

Although still far from Tether and USDT's dominance, it's a remarkable achievement for such a young project. But there’s more.

On September 26, Ethena announced UStb, a USD stablecoin fully backed by BlackRock BUIDL (a tokenized treasury fund on the Ethereum blockchain) in partnership with Securitize. This will be the second stablecoin issued by Ethena.

USDe, Ethena's first stablecoin, will also be able to use UStb as collateral during periods of weak funding conditions to enhance stability—marking the first real use case for UStb.

Key Takeaway from This Stablecoin Analysis

More stablecoins mean more users, more volume, and more fees. Remember the phrase, “Follow the money?” That’s exactly what this means.

One of the most talked-about protocols in recent months is Aerodrome and its token AERO.

The reason this DEX has exploded in terms of volume and user base is directly tied to the booming stablecoin supply on Base, the chain it’s deployed on.

As mentioned earlier, more stablecoins mean more users, which leads to more volumes—and ultimately, more revenue for decentralized exchanges like Aerodrome.

📈 ZOOMING OUT ON $ETH

Gm frens!

ETH seems to have defined a range for now. The expectation here is either sideways for accumulation purposes or more downside, making this an overall re-distribution. Only time will tell.

• Daily is currently bearish

• Expectation is sideways or down

While the markets are chopping like this I generally don’t like to look for any beta plays. It’s like trying to buy individual stocks when all the big indexes are in a downtrend (US30, US100, US500, etc). It’s a much better idea to wait for a friendlier market environment. Until that happens - Trade responsibly and I’ll see y’all next time!

☯️ BITTENSOR: THE AI NETWORK FOR EVERYONE

Building on last week’s introduction, it’s time to explore what really drives Bittensor: its incentivization model.

Bittensor isn’t just about decentralizing AI; it’s about creating a system where innovation is rewarded, and contributions are valued. This week, we’ll unpack how Bittensor’s TAO token creates a thriving marketplace for machine intelligence.

How Incentivization Works

In the traditional AI landscape, the entities that control the data and the models reap all the rewards. Bittensor changes this by introducing a decentralized marketplace where rewards are distributed based on the value of contributions. The TAO token is the lifeblood of this ecosystem, flowing to those who provide meaningful computational resources or enhance AI models.

Contributors, known as “miners” within the network, compete to offer the best resources and insights. The better the contribution, the greater the reward in TAO tokens. This not only drives competition but also ensures that the best models rise to the top, constantly improving the network.

Decentralization’s Role

By removing centralized control, Bittensor fosters a more open and collaborative environment. No single entity dictates the direction of AI development; instead, it’s shaped by the contributions of a global community.

This decentralized structure helps prevent the monopolization of AI and ensures that innovations are driven by the collective, not the few. It also enhances security and resilience, as the network isn’t dependent on a single point of failure.

Engagement and Community

One of the most exciting aspects of Bittensor is how it engages its community. By incentivizing contributions, Bittensor taps into the collective intelligence of its users. This approach encourages continuous learning and improvement, as contributors are constantly motivated to refine their models and strategies.

Next week, we’ll explore how Bittensor’s decentralized approach and incentivization model enables it to scale effectively, creating a robust platform for the development of machine intelligence.

🔑 KEY NEWS

MAJOR HEADLINES

• CZ officially released from prison

• Visa launches a Tokenized Asset Platform to assist banks in testing tokenized assets and smart contracts

• Paypal enables accounts to buy/sell crypto

• SEC Approves BNY Custody of Crypto Beyond ETFs

• Bithumb considers IPO on NASDAQ

PROJECT UPDATES

• Truflation exploited for $4.6M worth of native tokens, OnyxDAO exploited for $3.8M while Bedrock’s uniBTC got hit for $2M

• WEMIX & Kaiaswap controversies shared by JuhyukB

• Pike Finance rugs community

• Sonic going live December 2024

• Ethena reveals UStb backed by Blackrock BUIDL together with Securitize

• SuZhu shills a memecoin based on 3AC

• Eigen Layer goes live on Binance while they introduce Programmatic Incentives v1

• Ether Fi introduces eEIGEN while Renzo introduces ezEIGEN

INTERESTING PROJECTS

• Kinetiq: Liquid staking on HyperliquidX

• Mawari: Spatial Streaming tech

• Ethereal DEX: Derivatives platform powered by Ethena’s USDe

• PrediChain: AI marketplace and predictions

OUR ECOSYSTEM ALIGNMENT

⚔️ A CALL TO ARMS

Think you have what it takes to enter the Castle and contribute to research and writing in the collective, or maybe you want to invest in and advise projects?

We are always looking for well-connected, talented, or simply hungry contributors who can get involved across a range of activities.

Fill out an application form!

The landscape is shifting fast—AI is being decentralized, and stablecoins are evolving with stronger backing and broader utility. These aren’t just headlines; they’re opportunities in the making.

Whether it’s unlocking new liquidity with Ethena or exploring the power of decentralized intelligence with Bittensor, there’s a lot to gain if you stay one step ahead.

The opportunities are there—make sure you’re ready to seize them.

In our newsletter, we may discuss projects or tokens in which we hold positions. While we aim to provide informative content, our views are not financial advice. Please conduct your research and consult professionals before making investment decisions. Crypto markets are volatile, and past performance doesn't guarantee future results. Invest responsibly, and be aware of the risks. Your capital is at risk, and we do not accept liability for any losses.