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

Clipper is a DEX specializing in buying and selling blue-chip tokens. Its unique architecture can provide better pricing for popular crypto, such as ETH.

When it comes to purchasing crypto for investments, the exchange you choose matters. Certain exchanges can offer more favorable prices or lower fees than their competitors. One new decentralized exchange,

, hopes to offer their users big savings and reduced market manipulation. In addition to being a crypto exchange, the network behind Clipper also offers some appealing DAO and token staking services. 

Does the Clipper network actually work, and should you try it? Here's what you need to know.

Clipper is a decentralized cryptocurrency exchange (

) that specializes in buying and selling 

. Its unique architecture can provide more favorable pricing for popular cryptocurrencies, such as 

Clipper and AdmiralDAO are part of a project initially launched by Shipyard Software. The

 consists of several developers and crypto experts. Founder/CEO Mark Lurie has also worked on other blockchain startups, such as Codex, and the team's Chief Scientist/CTO, Abe Othman, previously worked with Vitalik Buterin on the 

Shipyard Software's goal is to create customized exchanges for every type of crypto trader. While there are a lot of other exchanges available, Shipyard’s founders realized there was a demand for exchanges that use special features to assist with specific crypto trades. Clipper is just one of several exchanges that Shipyard Software runs.

The Clipper DEX and its governing DAO have specifically been created to optimize blue-chip 

. Clipper gets its name from a type of 19th-century ship, called a 

, that helped to revolutionize trade by increasing shipping speed. This basic concept of enhancing profitability by prioritizing efficiency has greatly influenced Clipper's design.

Clipper's aim is to facilitate blue-chip trades while optimizing liquidity provider profit. What does this mean for the average user? First of all, Clipper tries to solve the problem of excessive 

 and unstable prices. When trading blue-chip tokens like ETH and 

, many other exchanges perform pricing computations on-chain and then pass on the costs to the traders. Clipper's unique design is meant to save users money by reducing on-chain computations.

Another major goal of Clipper is to increase decentralization. Centralized crypto companies have

 due to their lack of privacy, the amount of trust the user must place in the platform and the security risks that come with centralization. By using a decentralized autonomous organization, Clipper hopes to solve some of these issues. They put power into the hands of users and ensure that no single party can manipulate the exchange.

In addition to making things better for traders, Clipper also strives to help liquidity providers, who supply tokens in exchange for fees that are a percentage of the total purchase. Since asset prices fluctuate, liquidity providers can end up losing more money than they make in a transaction. This happens when one contributes to a liquidity pool and the token values deviate from the initial prices. This is known as 

, and it's a major issue in the industry. Clipper's unique algorithm avoids impermanent loss, so it provides more money to liquidity providers and incentivizes more people to provide liquidity for the exchange.

The main mechanism behind Clipper is its method of pricing, called Formula Market Maker (

). This special pricing formula combines real-time prices from oracles and token ratios to create highly accurate pricing quotes. It also employs

a variety of complex mathematics, including an 

FMM provides many advantages for Clipper. Since prices are so accurate, liquidity providers are less likely to encounter impermanent loss when they provide tokens. In addition, Clipper's unique formula allows it to calculate pricing data off-chain, and go on-chain only to verify this information. By moving calculations off-chain, Clipper saves users more money. Its formula further verifies any variation in pricing data between on-chain and off-chain calculations to ensure all data remains as accurate as possible.

Although Clipper’s DEX is fairly small and specialized as compared to more popular crypto exchanges, it still manages to offer several helpful features.

Clipper's DEX offers several different types of swaps. Since the site was originally designed for retail traders, it incentivizes smaller trades and only lists blue-chip tokens known for being reliable investments. With the 

 system, people can exchange various cryptos without having to pay excessive fees. Current tokens supported on Clipper Swap include ETH, 

If you're interested in earning rewards through Clipper, check out its 

 let you deposit crypto tokens to be used during swaps. There’s one Core Pool for each chain supported on Clipper. In addition, there are 

 with extra rewards for staked crypto. Entering a pool and earning rewards is as simple as connecting your wallet to your Clipper account. When you're done participating, you can withdraw your principal from the pool.

 are single-sided pools that offer especially low trade fees and flexible swapping. People can enter any asset into a Cove and then 

 in the form of the underlying asset and LP tokens. This helpful system facilitates boundless swapping and extremely cost-effective trades. Clipper Coves hasn’t officially launched yet, but users can join the Clipper community to get the latest news. 

Clipper's system relies on liquidity providers who temporarily make tokens available to the community. To compensate these providers, Clipper offers multiple 

. Each time someone uses your liquidity, you get a reward based on the size of the trade. As a liquidity provider, you can withdraw these rewards in the form of the assets in the pool for which you're providing liquidity. You also get some 

 in exchange for your liquidity, which can be used to participate in community governance.

 their system. After creating a working platform, they conducted a soft launch with $1 million in liquidity to test the system, and an official launch that opened the exchange and liquidity pools to the public. Clipper's road map has changed a little over the years. They originally focused on retail traders making small trades, but have expanded their project to include larger trades as well.

Now that Clipper has a workable platform and supports several trading pairs, their next goal is to fine-tune their DAO. Turning over control from the creators to the community takes time, so Clipper is in the process of welcoming new members, creating community guidelines and finalizing decision-making mechanisms. The platform hasn't announced many plans for what’s to come after getting the DAO up and running, but some users speculate they’ll be working to expand their exchange to support even more cryptos.

, Clipper's native token, comes with multiple use cases, the first of which is to provide rewards for liquidity providers. In addition, you can earn SAIL by staking blue-chip tokens in a liquidity pool and collecting SAIL rewards. Holding SAIL also gives you the ability to participate in the Clipper DAO because as a 

, SAIL gives you a voice in directly deciding how the AdmiralDAO will function.

 token with a total supply of 1 billion coins. This current supply is a soft cap, and more may be released as needed. Due to the way the tokens are set up, the DAO can also vote to 

 as needed. SAIL tokens are distributed in the following manner:

Just released on Aug 22, 2023, SAIL is still an extremely new token without a lot of pricing data available. When the token was first released, its price was $0.01390500, which is so far its all-time high. It then dropped to its current price of $0.00700693 (as of Aug 24, 2023).

Since SAIL is still so new, it's difficult to tell exactly what will happen to its price. The token is only listed on a few exchanges. Furthermore, the lack of a hard cap for token supply could cause some inflation issues that might drive prices down. However, Clipper has generated positive press with its move to welcome traders (besides retail traders) and its DAO launch. If the project continues to gain hype, SAIL prices could potentially rise. Since SAIL is a governance token with uses beyond price speculation, it retains some inherent value, no matter what happens.

If you want to buy SAIL without having to stake liquidity in Clipper, Bybit is currently one of the only exchanges listing the token. This reliable exchange offers the token as a SAIL/USDT Spot trading pair. Purchasing crypto through Bybit is fast and simple. Simply 

, fund it with cryptocurrency and go to the 

So far, SAIL doesn't seem like it's going to generate unusually impressive profits. Unlike many wildly popular crypto trends, SAIL doesn't have any notable investors, groundbreaking promises or newsworthy price swings. However, it's still a solidly reliable project that could be quietly successful. Shipyard Software has done well with past projects, and Clipper does offer users the potential to reduce impermanent loss. 

Those looking for an investment with slow-yet-steady growth might want to consider SAIL. It's neither high-risk nor low-risk, so this investment may be a great way to add some diversity to your portfolio.

With its ability to provide low fees to traders and improved profits to liquidity providers, Clipper is an exchange that benefits all participants. The addition of a DAO governance system and a unique algorithm to calculate token prices helps it stand out from competitors. Even those who don't plan on using the exchange may want to check out the project’s new SAIL token.

Clipper (SAIL): The DEX Designed for Blue Chip Token Swaps

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards