GM frens, and welcome to another edition of The Castle Chronicle.

Not much has changed from last week. The calls for doom of last week are quickly turning into cheers of joy for a possible bottom.

It’s crazy how sensitive some people are, uh?

Here’s what we got for you today:

• 🔍 Market Watch – Price action & Relevant metrics across sectors and assets

• 🗳️ OnChain Sleuthing – Most profitable $S point strategies

• 📖 Recommended Reads – The best reads you might have missed

📈 PRICE ACTION

Nothing new on the BTC chart this week. The current price action still looks like a healthy re-accumulation and my overall expectation here is for price to eventually break out of this range and continue its bullish run.

• Healthy uptrend

• Re-accumulation

Remember, the main purpose of re-accumulation is to liquidate people out of their positions before continuing to move higher. I generally like to stay out of this phase and only get involved after some back and forth and a clear directional cue - an impulsive move to the upside that I can follow. Until that happens, this market is off the watchlist.

TOP PERFORMERS

In previous weeks we didn’t see much green. Usually it was one or two coins that randomly pumped on some news and the rest was in red. This week however, we can definitely see a bit more green in the markets.

XCN in particular looks fairly interesting to me. After a long period of sideways, price broke out higher with good momentum, started re-accumulating and is now showing strength. This is exactly the kind of context I like to see.

• Breaking out of long accumulation range

• Good momentum

• Re-accumulation

Once again I want to emphasize an important part of the puzzle - while this is a good looking chart, the overall context of the broader market is not that good, which makes me generally very risk averse. If this was happening during an overall bullish phase, I’d be eager to risk. But that’s not quite the case. NFA.

CAPITAL FLOW

Nothing peaks my interest in the capital flows this week. We can see the usual inflow/outflow tug of war in Ethereum, minor net inflows into Unichain, and minor net outflows from OP Mainnet.

NARRATIVE PERFORMANCE

Narrative performance is a little more balanced this week. DeFAI is having a bit of a bounce after getting hammered for numerous weeks in a row, and Cross-chain is performing the worst. None of these numbers on either side are anything spectacular that could indicate a newly forming narrative.

🌪️ ON-CHAIN SLEUTHING: BEST STRATEGIES ON SONIC

An Analysis of the TOP Holders of $Sonic points - what are their strategies?

Degens and on-chain farmers are focusing a lot of attention on the $Sonic chain nowadays, and this is mostly because of their point season, which is up and running until June 2025.

See : Sonic Points Simplified

200 million points are to be distributed during this event and many strategies have already been presented on CT but I decided to CHECK THE CHAIN manually to see which strategy the big players were doing.

Via this link, Sonic Points, you can access a view of the biggest $SONIC points holders.

I decided to analyze the wallets of each of the top 5 holders to get a clear image of the most profitable strategy.

#1 Holder

This wallet has deposited close to 16 million USD of $S & 1.5 million of USDC on Aave, and holds a small spot position of about 200k USD of $S.

But that’s not only! It also holds over $1m in the Vertex orderbook: $542k of $wS and $512k in USDC.

Thanks to these strategies, this whale has accumulated a total of 12,1 million $S points.

#2 Holder

This address went a lil bit more degen than the one above.

This address:

• Provides around 500k USD of $S and $anon paired on the dex Wagmi (from the famous Sesta)

• 135k USD of $S and $Snake on Snake Finance

• Stakes around 100k USD of Shadow dex tokens.

  With a portfolio of 760k USD and a total of 9,5 million $S points, this account succeeded in getting a very high number of points for the amount of capital it has invested.

#3 Holder

The strategy this user is carrying out is built around Silo Finance to gather as many points as possible. Providing around 12,5 million mostly in $S and borrowing 4 million of USDC of collateral.

They are also staking 150k USD of $Shadow on Shadow Exchange

In total, this account has 8 millions USD exposed to the Sonic ecosystem and has accumulated a little bit more than 8 millions $Sonic points.

#4 Holder 

This address is staking most of its $S bag on Beets.fi, the liquid staking hub of the Sonic ecosystem.

With over 200 million USD in TVL, Beets finance has attracted lots of capital.

The other position they have is on Silo finance, providing 2,4 millions $S and borrowing 1,2 millions USDC on the platform.

In total, this address is exposed to the Sonic eco for 11,7 millions USD and has accumulated 7,7 million points.

#5 Holder

Interestingly, this address is a multisig providing over 9 million USD of ETH on Euler & Shadow

It also has 724k USD of ETH too on Rings Protocol (a liquid staking protocol on Sonic):

With over 10 millions USD exposed to Sonic eco, this address accumulated 7,3 millions Sonic points.

Obviously a big ETH farmer or an ETH defi-focused fund that bridged a part of its portfolio on the new EVM to farm the season.

Conclusion

With 1 billion USD TVL on the network, the point season is obviously popular with Degens & farmers alike.

After briefly analyzing the wallets of the big $S POINTS holders, I can identify three different strategies that those whales follow.

1. Focus on providing USDC or $SONIC or ETH on borrow/ lending protocols like Aave, Silo finance & Euler. Can also provide ETH on Shadow dex. This strategy seems to yield a conservative amount of points.

2. LPing volatile pairs on WAGMI or Shadow DEX seems to be yielding a good amount of Points from my analysis. Wallet #2 has the best performance in terms of points/versus capital invested, and its biggest position is LPing on WAGMI.

3. Liquid staking $Sonic & bridge ETH on Beets finance, Rings protocol, or Staking $SHADOW token on its own platform. Three of the five wallets analyzed have used this strategy in part, which seems to be a good indicator that liquid staking $S/$ETH on the chain is a good idea.

WAGMI dex, staking $SHADOW & liquid staking SONIC are, imo, the strategy yielding the best amount of points / capital invested.

🏰 CASTLE WEEKLY READS

1. AI newsletter:

2. Evolution of Consensus with Hyperliquid, Monad, Sonic:

3. A research report on OpenServ and agent-to-agent collaboration:

4. Chilla on Mantle:

5. We’re having an Arbitrum AMA with Jojo next Wednesday. Interested in learning or applying to incentive programs? Tune in and shoot your questions:

🔍️ RECOMMENDED READS

1. Big $TRUMP unlock this week: Are you going to try to play it? Waiting for the president to Tweet?

2. Lots of Base drama on the timeline, from a token they launched on Zora:

3. Keep an eye on new campaigns on Kaito:

4. Converge, a RWA-focused chain built by Ethena and Securitize is building on the Arbitrum stack.

5. Coffeezilla interviewing $OM CEO after huge token dump:

That’s it for this week - expect more changes to the newsletter coming soon as we revamp our format in the upcoming months!