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

DeFi

Blockchain

Altcoins

Kava Network is a Layer 1 blockchain that enables lightning-fast permissionless borrowing and lending by users with seamless interoperability.

Traditional banks are not necessarily the most favorable to individuals. The low-interest rates compounded by inflation devalue the money you save in them. And getting a loan is a cumbersome process that can end in failure. Decentralized finance (

) seeks to upend traditional finance by changing the game's rules. One of the DeFi platforms that have come to do that is Kava Network.

Developed to allow users to lend and borrow multiple cryptocurrencies within its network, Kava not only seeks to revolutionize the traditional finance industry, but also to improve the services of the current DeFi world.

 developed Kava Network as an open bank that allows users to earn more with their crypto assets holdings while providing capital to those who need it. Users are offered new ways of making a profit by receiving rewards when they move their assets to the platform.

 that are built on existing blockchains, 

. Layer 1 blockchains typically face the problem of limited 

. Kava Labs seeks to resolve this issue with its unique Co-Chain architecture.

The Kava ecosystem is the first DeFi platform built on Cosmos SDK that functions as an open-source, decentralized network. The Kava platform uniquely combines the strengths of two Co-Chain protocols: The power of the 

 Co-Chain and the seamless interoperability, speed, and low transaction fees of the 

 Co-Chain. This ensures that any decentralized finance application can integrate the Kava Network into its system to allow its users access to the platform's services.

As a decentralized financial service hub, Kava aims to help users maximize profit on their crypto assets by providing multiple services offering profit opportunities.

Kava Network has various protocols that offer different permissionless services to achieve its aim.

 (formerly Kava CDP). The platform mints a 

 for users who want to borrow. With Kava Mint, you can deposit your major crypto assets as collateral to borrow USDX, the stablecoin minted by the platform, for little to no interest.

This is ideal for coins that you wish to 

. When you take out USDX loans, you can hold on to your 

 and profit without trading your assets. 

 service allows users and investors to supply funds to Kava’s 

 and receive a yield on their investments. 

General market conditions determine current yield rates. For example, if there’s a low supply of Ethereum, the rate of yield of that investment on Kava Lend will be high, and vice versa.

When you supply your crypto to Kava’s borrowing pools, you can earn more APY while simultaneously collecting more rewards. Thereafter, you can borrow any coin against your collateral and re-supply, thus increasing your rewards.

The third service that the platform offers is 

 USDX tokens at fees lower than those of centralized crypto exchanges. Before swapping, you can scout for profit chances when the individual pool rates fall beneath the market standard. 

Kava Swap uses an automated market maker (

) to facilitate trades. Unlike an order book, which requires a seller for a trade before a person can purchase a cryptocurrency, the AMM allows a trade to be carried out as the trade occurs between a 

 — which has a stable supply of cryptocurrencies — and a buyer. This is made possible because the Kava Swap connects liquidity from other blockchains.

With Kava Earn, users can supply their assets and earn rewards, and maximize their returns by participating in liquidity pools and other financial activities on the platform.

Kava Staking lets you lock up your KAVA tokens in the network to support its security and operations. In return for staking KAVA tokens, users earn rewards in the form of additional KAVA tokens. Staking helps maintain the network's integrity and functionality, while the rewards serve as an incentive to participate in this process.

Kava Liquid offers a streamlined liquid staking mechanism for staking KAVA tokens and receiving 

 in return. By supplying or staking your KAVA, you can easily convert it into its liquid form, bKAVA, which can then be channeled into KAVA Earn, a yield optimizer that subsequently directs it to Kava Boost. Essentially, Kava Liquid Staking enhances your KAVA staking experience by integrating it with the KAVA Earn feature.

The Ethereum Co-Chain enables the Ethereum ecosystem to effectively merge with the Kava Network. This protocol provides an 

(EVM)–compatible program execution environment on the Kava Network. The setup allows developers skilled in 

 to craft DApps that not only operate within the Ethereum framework, but also harness the enhanced scalability and security features of the Kava Network.

Built on the Cosmos SDK, Kava offers a robust blockchain framework known for its scalability. The Cosmos Co-Chain serves as a bridge linking Kava to Cosmos, whose vast ecosystem comprises over 35 different blockchains developed using the Cosmos SDK that collectively represent assets worth over $60 billion. 

Kava DAO is the decentralized management team that governs the Kava Network's robust Co-Chain architecture. It’s a fully decentralized autonomous organization (

) which is responsible for the smooth operation of the network.

Kava DAO consists of those who stake the KAVA token and the network's validators.

As a truly decentralized organization, it makes various decisions on the network — including the distribution of on-chain incentives updates, etc. — without the arbitrary control of a single entity.

As mentioned above, Kava features a crypto-backed stablecoin called USDX. Besides its stablecoin, it has three native tokens — KAVA, HARD and SWP.

 of the Kava network. Holders use it to secure the platform, vet governmental decisions and represent a share of the network. The KAVA token also governs the Kava Mint protocol. This means that KAVA token holders can vote for all developments on Kava Mint.

Meanwhile, the Kava Lend protocol is governed by the HARD token, while SWP is Kava Swap’s governance token. The Kava Lend protocol rewards both lenders and borrowers with HARD tokens. Liquidity providers can earn SWP tokens in Kava Swap.

There is a total supply of 711 million KAVA tokens, with a circulating supply of 711 million and a market cap of $495.7 million. Its current market cap is close to $495.7 million. 

of the Cosmos network was developed to support proof-of-stake systems like Kava so that it can provide seamless scalability.

The engine's impressive speed means it can process an unrivaled amount of transactions in minutes. Moreover, the lightning-fast speed doesn’t weaken its decentralized feature or the security of the network, offering a viable solution to the 

. This gives Kava an edge over DeFi competitors like 

, which are built primarily on the Ethereum network.

Kava's incorporation of the two Co-Chains enables developers to seamlessly connect their projects with a wide variety of assets, and millions of users within a single network.

On-chain incentives for developers will attract the best hands in the Ethereum and Cosmos ecosystems to build projects and DApps on the existing Kava blockchain.

The Inter-Blockchain Communication feature of the Cosmos ecosystem enables blockchains built on the same network to communicate. The Cosmos SDK has been used to develop over 30 blockchains specialized for various purposes.

This means Kava can implement favorable features from other open-source networks, thus increasing its growth.

Though termed a stablecoin, USDX may not be as stable as this category implies. It de-pegged in early May 2022, 

 like TerraUSD (UST), USDX is a stablecoin backed by a variety of crypto assets as collateral reserves, so the collapse of a single crypto asset could greatly affect the stability of the coin. Before the collapse of UST, USDX had included UST in its collateral loan; hence, when UST lost its value, USDX was implicated. 

Kava is a relative newcomer to the major Layer 1 networks that lead the crypto market today, so it has to compete for relevance with the older networks. For example, Bitcoin is about ten years older than Kava, and the major smart contract network, Ethereum, is also much older. Since they came on the scene first, they’ve attracted larger market shares. Therefore, Kava will have to do more to gain prominence.

The current price of KAVA is $0.684488 (as of Aug 25, 2023). It reached an all-time high (ATH) of $9.12 on Aug 30, 2021 and an all-time low of $0.287137 on Mar 13, 2020. Although its current price is 92.49% below its ATH, experts are positive that the KAVA token’s price will rise in the next few years.

Analysts from PricePrediction forecast that the 

 by the end of 2023, $2.36 in 2025 and $4.70 in 2027. KAVA is then expected to break its ATH and increase to $14.91 in 2030. 

This positive growth outlook is supported by DigitalCoinPrice, whose experts believe 

 by 2023, $2.48 in 2025, $3.12 in 2027 and $7.10 in 2030.

Is Kava Network (KAVA) a Good Investment?

Kava Network has broken the deadlock by virtue of its cross-chain functionality within a single network. Although it wasn't the first blockchain to achieve this, combined with its other features it’s undoubtedly a major addition to DeFi.

With its scalability ensured by the Tendermint Core consensus engine, DeFi is now sure to be able to serve very large and complicated economies, which are accompanied by millions of transactions.

Kava’s service spectrum is impressively broad. Notably, Kava Labs ventured into the 

 and NFT realms in May 2022, indicating its adaptability to emerging trends. The inauguration of the Kava Network mainnet has further solidified Kava’s commitment to seamless cross-chain services. 

While the crypto domain faced a bearish trend in the early months of 2022, the market’s potential rebound could see a surge in bullish sentiments toward investments like Kava that showcase promising growth trajectories.

 highlight significant developments, suggesting that Kava is continuously innovating and expanding its offerings. This makes it a potential investment to watch in the crypto space. 

While all investments come with inherent risks, Kava’s consistent advancements and adaptability to the evolving DeFi landscape make it a compelling consideration for investors. Always 

 and consult with financial experts before making any investment decisions.

The three types of individuals who will find Kava an attractive investment include:

If you’re interested in trading KAVA tokens, you’ll be glad to know that Bybit offers both the KAVA/USDT Spot trading pair and KAVAUSDT Perpetual Contracts. To get started, you’ll need to first establish a Bybit account and fund it with cryptocurrency. Then, you can navigate to the 

While Bybit has offered KAVAUSDT Perpetual Contracts all along, the KAVA/USDT Spot trading pair is a new addition to the Bybit trading platform. In celebration of this listing, Bybit is holding 

 for users to share from a total prize pool of 150,000 KAVA tokens.

For the first event, simply be among the first 2,000 new users to complete the following two steps from Aug 22, 2023, 10AM UTC through Sep 5, 2023, 10AM UTC to receive 50 KAVA:

The second event is exclusively for existing users who already have an account with Bybit prior to Aug 22, 2023, 10AM UTC. You can earn 10 KAVA by accumulating a deposit volume of at least 100 USDT worth of KAVA from now through Sep 5, 2023, 10AM UTC, or depositing 100 USDT and buying at least 100 USDT worth of KAVA using your Bybit account. Please note that the rewards will be distributed on a first come, first served basis to the first 5,000 existing users.

The Kava platform has bright prospects of changing the lending and borrowing niche in the DeFi ecosystem. With not just one but six protocols, Kava diversifies its financial services, allowing people to not just lend and borrow, but to mint, swap and earn tokens as well.

In addition, the unique Co-Chain architecture of the network allows major blockchains to participate and encourages scalability. This sets the stage for DeFi to be more widely adopted in the world economy.

The cross-chain framework is still in its early stages of development, so we can expect even more exciting updates that will take Kava to the next level.

Kava Network (KAVA): Cosmos' Speed Meets Ethe​​reum's Power

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards

Kava Network (KAVA): Cosmos' Speed Meets Ethereum's Power