Jan 6, 2025: Our weekly Institutional Insights explores the latest market developments — market performance, industry news, exchange-traded fund (ETF) flows, trending topics, upcoming events and token unlocks — to help you supercharge your crypto trading.

Weekly Highlight — Markets Snap Five-Day Loss Streak 

Investors are now seizing the opportunity to buy the dip in U.S. stocks after a five-day decline that erased over $1 trillion in market value. Wall Street has broken its longest losing streak since April, with the Nasdaq-100 rebounding 1.7% and the S&P 500 rising 1.3% on Friday, January 3. These gains slightly offset the week's sell-off, which had continued into the new year following a tough December.

Despite concerns about slowing earnings growth among tech giants like the Magnificent Seven, traders remain optimistic, especially regarding AI leader NVIDIA Corporation. The market believes that, as long as retail investors keep investing in AI, the associated stock market boom is expected to persist. 

Stocks reached their session highs in the afternoon after Mike Johnson was reelected as speaker of the U.S. House of Representatives, indicating potential support for a business-friendly agenda. Meanwhile, bond yields rose, with the 10-year hitting 4.6% following comments from Richmond Fed President Tom Barkin about maintaining restrictive rates. U.S. manufacturing showed modest growth, with new orders at their highest since early last year, while investors assessed economic strength against the possibility of slower interest-rate cuts.

Weekly Crypto Highlight — AI Agent Spring Coming

Many investors are eagerly anticipating an Alt Season, a period when altcoins typically surge in value. However, current market dynamics suggest we may not see a widespread altcoin rally. The sheer number of tokens, combined with limited liquidity, has led to what's known as altcoin dispersion, making it crucial to select the right sectors and tokens.

, which are thriving even as the broader market declines. This nascent sector is experiencing rapid advancements, and its associated tokens face less pressure from venture capital unlocks. Many of its top protocols lack centralized exchange listings, indicating more buyers may enter the market.

Those investors who missed previous opportunities, such as the DeFi summer of 2020 and the Alt Layer 1 trade, now have another chance. Instead of targeting individual AI agents, the best risk/reward strategy lies in investing in infrastructure plays, which serve as the foundational tools for the sector.

The leading AI agent player is Virtuals Protocol, a platform for launching tokenized AI agents on the Base network. By purchasing tokens like Luna by Virtuals (LUNA) and VaderAI (VADER), users gain governance rights over specific agents, which allows them to both influence development and share in profits. 

Recently, daily protocol fee revenues dropped significantly in mid-December 2024 as activity slowed for the holidays. However, speculation around agent-associated tokens surged as the new year approached. Currently, Virtuals Protocol generates over $1 million in daily fees, though this is 50% less than figures for early December. Despite these challenges, the VIRTUAL token has more than doubled in value, reaching a market capitalization of $4.6 billion.

Other highlighted opportunities include Zerebro, which is pivoting to a full-stack framework for AI agents; ARC, with its Rust-based framework; and 

 (GRIFFAIN), a natural language on-chain search tool. These projects are well-positioned for future growth in the evolving landscape of AI technology.

 as we delve into leading AI agent tokens and the past week’s market movements. 

Advanced

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Weekly Institutional Insights: Market Snaps Five-Day Loss Streak; AI Agent Spring Coming

Our weekly crypto derivatives analytics report delves into macro events, the current state of crypto and trading signals from spot trading volume, and futures, options and perpetual contracts.

December's end-of-year options expiration brought an unexpected drop as realized volatility fell to the lowest levels of the month. Perpetual swap open interest remained stable, indicating these markets weren't heavily used for hedging against expired options, likely contributing to the muted volatility. 

While most expired open interest in Bitcoin (BTC) and Ethereum (ETH) hasn't been reinvested, the balance of calls and puts remains consistent. Notably, ETH options are pricing in higher implied volatility as compared to BTC, particularly for shorter expirations, leading to a flat term structure for ETH, while BTC is offering cheaper options exposure.

In the perpetual markets, low volatility and minimal spot movements have led funding rates for nearly all tokens to mirror broader market sentiment throughout the holiday season. On the options side, BTC's term structure is noticeably lower and steeper than ETH's, with realized volatility now dipping below implied volatility levels, highlighting an intriguing shift in market dynamics.

Please check out the report’s highlights.

Open Interest Solid Amid Year-End Options Expiration

Although open interest for both BTC and ETH perpetual swaps hasn’t returned to early December 2024 highs, it remained robust throughout the significant end-of-year options expiration event. This suggests that these markets weren’t heavily utilized to 

 of the expiring options contracts, likely contributing to the lack of volatility observed during this period. Instead, trading volumes have dipped noticeably during the winter holiday season, coinciding with a collapse in realized volatility back to December 2024’s lowest levels.

BTC Option Curve Remains Steep During Call-Put Parity

The expiration of December's end-of-year options didn’t trigger the anticipated surge in volatility; instead, realized volatility has plummeted to the lower end of its recent range. The implied volatility term structure remains steep compared to both its recent behavior and ETH's, with longer-dated implied volatility around 57%, and 1-week at-the-money options trading about five points lower. Much of the expired open interest hasn’t yet been rolled into new positions, maintaining a neutral balance between puts and calls. Consequently, BTC's options market positioning is relatively neutral, lacking the leverage it had at the start of December 2024.

Huge ETH Option Expiring Doesn’t Cause Volatility

A late December spike in realized volatility didn’t carry into the new year, with ETH’s spot price currently exhibiting volatility below that of short-tenor implied volatility. Interestingly, the implied volatility term structure has undergone a steepening and re-flattening over the past week, contrasting with BTC’s slightly steeper profile. This suggests that ETH’s options market is anticipating higher short-term volatility in spot price movements. 

Despite the significant expiration of options open interest at the end of December 2024, which didn’t lead to a rollover into later expirations, call options continue to dominate the market and have increased at the start of 2025.

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Bybit X Block Scholes Crypto Derivatives Analytics Report (Jan 2, 2025): BTC Options Continue to See Call-Put Parity, With Lower Short-Term Volatility Expected

Dive into FLock, a decentralized platform that revolutionizes the way AI models are developed, trained and deployed.

Artificial intelligence (AI) is poised to transform countless industries, but its development often raises questions about privacy, control and inclusivity. 

 is a unique decentralized platform that democratizes AI training, fine-tuning and inferencing. With its blockchain-powered infrastructure, FLock ensures transparency, security and community-driven decision-making, paving the way for AI models that align with established societal values. 

In this article, we’ll explore how FLock decentralizes AI training, its key features and its potential impact on developers, communities and users.

 platform that revolutionizes the way AI models are developed, trained and deployed. By leveraging blockchain technology and a novel approach called 

, FLock addresses critical issues in AI development, such as centralized control, lack of transparency and privacy concerns.

At its core, FLock’s mission is to democratize AI by enabling communities to participate directly in the creation and refinement of AI models. Through federated learning, FLock trains AI models across multiple decentralized devices or servers. This method ensures that data remains local, eliminating the need for raw data exchange while still enabling robust model training. By decentralizing the training process, FLock not only protects individual privacy, but also fosters a more inclusive ecosystem in which diverse contributors can collaborate.

What sets FLock apart is its integration of 

. This ensures that all contributions — whether data, compute power or feedback — are transparently recorded and fairly rewarded. Blockchain tech’s immutable ledger enhances trust among participants and safeguards the process against manipulation. Additionally, the platform’s on-chain incentive mechanisms encourage participation from a wide range of contributors, ensuring that rewards are distributed equitably.

Ultimately, FLock empowers communities to develop bespoke AI models tailored to their specific needs. By decentralizing the process and prioritizing transparency and collaboration, FLock breaks the monopoly of large corporations, creating an AI ecosystem that aligns with public ethics and societal values.

, an Oxford alumnus with a robust background in AI and blockchain technology. Sun, who serves as FLock's CEO, has an impressive career trajectory, having worked as the Director of AI for the Royal Bank of Canada and as an AI Research Fellow at Imperial College London. His vision for FLock stems from a deep understanding of both the technical and ethical challenges of AI development.

The founding team also includes other Oxford alumni, boasting over a decade of combined experience in AI research and the cryptocurrency industry. This team brings a collective blend of academic excellence and practical expertise that positions FLock to lead the decentralized AI movement.

FLock has successfully raised $11 million in funding across two rounds, reflecting strong investor confidence in its vision. In May 2024, FLock secured a $6 million seed round co-led by Lightspeed Faction and Tagus Capital, with additional backing from Digital Currency Group (DCG), Volt Capital, OKX Ventures and Inception Capital.

Later, in December 2024, FLock announced a $3 million successful funding round led by DCG and joined by prominent names like Animoca Brands, Fenbushi Capital, GnosisVC and GSR. These investments are being channelled into enhancing the platform’s testnet and federated learning client, accelerating FLock’s mission of enabling secure, collaborative AI development.

With this funding and over 1,500 nodes contributing from platforms like Numerai and Kaggle, FLock is rapidly scaling its impact on decentralized AI training.

FLock AI revolutionizes AI development through its decentralized training framework. This approach allows participants to contribute to AI model training without ever sharing their personal data. Instead, models are trained locally across devices using federated learning, which ensures that data remains with its owners while still enhancing the accuracy of the model overall. 

FLock’s reward system is designed to incentivize active participation. Contributors who provide data, computational power and/or feedback are compensated with FLOCK tokens, ensuring a fair distribution of rewards. 

FLock empowers its community through a robust governance framework. Decisions regarding AI model development, deployment and ethical considerations are driven by the community, ensuring alignment with established societal values. Through blockchain-based voting mechanisms, contributors can influence the direction of AI projects, fostering transparency and public accountability. 

FLock’s modular architecture allows contributors to participate in specific aspects of AI model development. Whether providing raw data or computational power or even refining algorithms, the platform enables a collaborative and scalable development process. 

At the core of FLock’s philosophy is its commitment to privacy and security. By leveraging blockchain technology, the platform ensures that no single entity controls the AI development process. Data remains local and protected by cryptographic measures, while the immutability of blockchain guarantees transparency in every transaction and model update. 

 begins with a blockchain and an AI layer.

The blockchain layer underpins FLock’s incentivization and security mechanisms.

The AI layer facilitates model training, refinement and deployment, leveraging both centralized and federated approaches.

Let’s have a look at the supply and demand for the FLOCK token.

FLock adopts a 1:2 ratio model between team/investors (33.3%) and community (66.7%), prioritizing community-driven growth and ecosystem expansion. The majority of tokens are allocated to incentivize user participation and long-term ecosystem success.

FLock aims to improve the future of AI development by decentralizing the training process and ensuring transparency, privacy and inclusivity. By leveraging blockchain and federated learning, FLock empowers communities to contribute to AI creation without compromising on privacy. Its innovative reward system and community-driven governance foster a fair and collaborative ecosystem. 

With significant backing and a growing network of contributors, FLock is positioning itself as a leader in decentralized AI, offering a more ethical and secure alternative to traditional AI development models. As it continues to scale, FLock is set to transform the way AI models are built and deployed.

 — and earn a share of a 10 million FLOCK prize pool. For more details, visit 

Intermediate

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FLock AI: Decentralized AI Training

In this tutorial, we’ll explore how you can complete a series of tasks in Network3 for Bybit Web3 Airdrop Arcade.

Task 1: Register for a Network3 Account and Connect Your Bybit Wallet 

: Navigate to the campaign page and click on the 

task. Click on the task, and Galxe will ask to redirect you to the Network3 register page.

: Register for a Network3 account using your email address. You may indicate a 

Task 2: Download the Network3 App and Run a Node for One Hour

 and choose your operating system to download the Network3 app.

 or powerbutton, depending upon which operating system you’re using. For ease of reference, we’ve used macOS and iOS as examples below.

: Keep running the node until the timer reaches 

Beginner

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How to Complete Network3 Tasks for Bybit Web3 Airdrop Arcade

Bybit Learn

Crypto

Explainers

Altcoins

Starknet is an L2 Ethereum scaling solution that uses zero-knowledge rollups and STARK cryptographic proofs. Learn more about it in this article.

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As more and more people become interested in 

, many networks are realizing it can be hard to handle transactions securely and quickly. Starknet hopes to address this issue with a new scaling solution that improves transaction speed and lowers gas fees. How does Starknet work, and what makes it different from other scaling software? Explore this guide for all the details about the Starknet ecosystem.

 and STARK cryptographic proofs to create a faster and more reliable way of processing large batches of transactions.

 is the programming language used to design and operate Starknet. It's the first Turing-complete language focused on designing provable programs for general computation.

Starknet began when Eli Ben-Sasson and Uri Kolodny joined forces to tackle the problem of Ethereum’s limited 

. Along with input from several other blockchain and mathematics experts, they created STARK, a cryptographic proof with a lot of scaling potential. Initially, STARK was only available as paid software that business clients could use. However, the team eventually decided to create a permissionless version that was more accessible.

In 2021, they launched Starknet as the developer-friendly version of their software. Anyone can try it and explore the STARK technology. Starknet is currently run by a

. Its team includes math and science professors, along with people who have worked at other crypto companies, such as 

. This common phrase refers to a popular problem that blockchains face: all blockchain networks desire security, scalability and decentralization, but it's difficult to excel at more than two of these features.

So far, the Ethereum network has been able to create a system that’s sufficiently secure and decentralized. However, it can be pricey to use Ethereum when a lot of people are processing transactions on the network. By offering a third-party scaling solution, Starknet hopes to help people build on Ethereum while still enjoying fairly fast transaction times and low 

 blockchain on Ethereum. It increases Ethereum's scalability with zero-knowledge rollup technology. 

 allow Starknet to transmit the proof of a transaction’s validity to Ethereum without having to include all of the excess metadata and proving steps. Furthermore, all of these proofs are bundled into a "rollup" that’s sent to Ethereum as a single, efficient block. 

Starknet uses the following additional features to help its system run smoothly.

To provide clients with a secure and reliable system, Starknet uses 

 to verify transactions. This system relies on a mathematical function known as polylogarithmic verification, so it’s both secure and compact, enabling Starknet to process vital transactions quickly without sacrificing any security.

The Starknet sequencer helps to organize all transactions before they're processed. It starts by accepting a transaction from the 

 and performing a preliminary validation. Next, it executes the transaction to ensure it's valid on Ethereum. Once items run through the sequencer, they’re fully accepted on Starknet's Layer 2 chain.

The Starknet Prover uses STARK technology to turn sequencer proofs into fully valid blocks. All transaction proofs are bundled together into a single rollup, and then the Prover transfers the verification to the 

In addition to helping people process vital transactions on the Ethereum blockchain ecosystem, Starknet also offers many other helpful features to its community members.

Starknet provides support and promotional opportunities for developers who design systems that run on its service. Its 

, gaming, decentralized autonomous organizations (

) products. Interacting with these products can make it easier to get into the 

To help you interact with the blockchain ecosystem, Starknet includes several compatible 

 options. Clients can choose from multiple wallets with built-in Starknet capabilities and use them to automatically pay transaction fees or move assets to and from the Starknet system.

 tokens to and from Starknet. Tokens can move from the Starknet chain to Ethereum, and vice versa. This makes it easier to develop projects on Starknet and to access Ethereum features.

Though Starknet is mainly an Ethereum-compatible system, future contributions may include compatibility with other chains. The various bridges available on Starknet are the first step to increasing cross-chain communication. Through a variety of bridges and cross-chain exchanges, people can move tokens from other chains to or from the Starknet system.

Block Explorers, Indexers and Enhanced API

Explore Starknet transactions through its enhanced APIs. These features make it easy to check out metrics and see how the Starknet core infrastructure works. They're mostly designed for developers, but can also provide helpful analytic data for investors.

If you're interested in helping the Starknet Foundation, you can sign up to 

. This provides a valuable service to the blockchain ecosystem, in addition to giving you some helpful financial perks.

The Starknet Foundation will soon unveil the 

, a key initiative for distributing the Starknet Token (STRK) to its community members, who are at the forefront of developing and engaging with DApps that promise to revolutionize the digital landscape. STRK is central to the Starknet ecosystem, facilitating network fee payments, enabling user participation in staking and allowing governance decisions.

Starknet is set to distribute a substantial 1.8 billion STRK tokens through a combination of airdrops, rebates and incentives, aimed at both current and future DeFi participants. Via its official Provisions portal, Starknet sets a precedent as the first Layer 2 network to bear the gas costs for users claiming tokens, demonstrating its commitment to community engagement.

The Starknet Provisions Program embodies Starknet’s commitment to decentralization, transparency and inclusivity. By leveraging STARK cryptography, Starknet significantly enhances Ethereum's scalability and security. It offers the Cairo programming language for ease of DApp development and introduces 

 to simplify transactions, thus contributing to a rapidly expanding ecosystem of user-friendly DApps.

This initiative rewards those who have actively supported Starknet’s vision and principles, including contributors to Ethereum’s security, and the broader open-source software community. Their efforts are instrumental in advancing a more open, inclusive web, aligning with Starknet’s mission to democratize access to blockchain technology.

Announced by the Starknet Foundation, the Starknet Provisions Program signifies a strategic move to reward the network's community members and stakeholders for their ongoing contributions and engagement. 

Out of the 1.8 billion STRK tokens being airdropped, the Foundation has earmarked 900 million of them to acknowledge the contributions of its users and community members through its Starknet Provisions Program. 

In this first round, more than 700 million tokens will be distributed to close to 1.3 million addresses, making it one of the broadest distributions in a program of this kind. These tokens will be available for claiming on the Starknet Mainnet starting from Feb 20, 2024, 12PM UTC. 

Eligible participants will have a four-month post-launch window (until Jun 20, 2024) to claim their tokens. After this period, unclaimed tokens will be returned to the pool for redistribution in subsequent phases or initiatives.

Who Is Eligible to Claim the STRK Airdrop?

The Starknet Provisions Program aims to incentivize and recognize the diverse contributions that have supported Starknet's growth and development.

How to Check Eligibility and Claim STRK 

To check if you're eligible for the Starknet Provisions Program and to claim your STRK, visit the official 

: It's crucial to use this specific link and remain vigilant against fraudulent schemes.

Starting on Feb 20, 2024, 12PM UTC, you'll be able to claim STRK on the Starknet Mainnet via the Starknet Provisions Program. 

 that you'll require a Starknet wallet to claim your STRK through the portal. Ensure your Starknet wallet is updated to the latest version, and your account details are current.

Please also note that the Starknet Foundation will absorb all fees associated with claiming STRK through the official Provisions portal once the program launches on Feb 20, 2024.

Another 900 million tokens are allocated for rebates to offset transaction fees for users, with additional planning still in progress. Furthermore, Starknet plans to incentivize DeFi activities on its platform by allocating an additional 50 million STRK tokens, which will be distributed both directly and indirectly, including retroactive rewards for DeFi users on Starknet. The announcement has been met with enthusiasm from the Starknet community, who view it as a significant boost for the blockchain's ecosystem.

This move comes at a time when airdrops are increasingly being utilized by crypto and DeFi projects as a mechanism to expand their user bases and foster community loyalty. Starknet's growth is evidenced by its tenfold increase in total value locked (TVL) in May 2023, reaching over $10 million, and 

 to its current $54.54 million, showcasing the network's expanding influence and adoption within the DeFi space.

After completing its main goal of creating a zero-knowledge rollup system based on STARK, Starknet plans to improve its user experience. 

, Starknet is currently focusing on improving network stability. Next, it hopes to implement 

 protocols that will lower transaction fees. Future contributions suggested by the governing body also include plans to adjust fees further and address network congestion with a fee market.

Starknet's native crypto token, STRK, is used to pay transaction fees, allow community members to vote in the Starknet governing body, and assist with running the Early Community Member Program. STRK is an ERC-20 coin based on the Ethereum network, with a 

 of 10 billion tokens. The Starknet Foundation's 

 plans to distribute STRK in the following manner:

Looking to trade Starknet tokens? Bybit will soon offer the STRK/USDT Spot trading pair! To get started with trading, you’ll first need to 

, fund it with cryptocurrency and navigate to the STRK/USDT Spot trading page once it’s available.

STRK is a fairly promising new token to check out. It's backed by STARK technology and the Stark Foundation, which has already proven itself to be reliable. Since there’s a lot of excitement around the idea of letting individual developers access STARK technology for their projects, the Starknet ecosystem has done well so far. As long as Starknet continues to flourish, its token is likely to as well. It's been one of the most eagerly awaited crypto releases of early 2024, so you can expect to see quite a bit of hype surrounding this token.

However, don't forget that new cryptocurrencies are always volatile. There's some inherent uncertainty in these investments, so remain cautious and never invest more than you can afford to lose. Additionally, keep in mind that industry news may greatly affect STRK prices. You'll need to 

 and carefully monitor token prices to get the best outcome.

Starknet's ability to provide an affordable and convenient way of scaling the Ethereum network has many exciting applications. This software makes it much easier to develop blockchain projects without getting bogged down by network delays and pricey fees. The software's popularity may translate into a higher value for the STRK token.

Starknet (STRK): Scaling Ethereum With ZK Technology

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards