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

Bybit Institutional_Weekly Poster.png

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.

block-scholes-x-bybit-report.jpeg

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

flock.png

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

network3 tutorial.png

How to Complete Network3 Tasks for Bybit Web3 Airdrop Arcade

Bybit Learn

GameFi

Metaverse

Are you a fan of blockchain games? Yield Guild Games bring different titles together for the ultimate player experience. Find out more here.

According to Chainalysis, a top analysis firm, the valuation of the 

. While several factors are responsible for this explosive growth, one major factor was undoubtedly the increase in the global adoption rate of 

The rise of NFTs also gave rise to innovations like the

play-to-earn, NFT-based blockchain gaming model. This 

 model started gaining popularity during the pandemic in 2020, when many people lost their sources of income and were homebound as a result of mobility restrictions.

In the same period, blockchain gaming platforms like 

 recorded an exponential increase in registrations and participation globally. However, Axies (pet monsters in 

) became quite expensive. In September 2021, the 

. This was when a brilliant project rose to the occasion — a gaming guild that lends NFTs to gamers who can't afford them, and lowers the entry barrier into the P2E system significantly. In this article, we’ll take a look at

To help you grasp the workings of Yield Guild Games, we’ll start by breaking down some terms: Guild, DAO, play-to-earn, and NFTs.

A guild, according to the Oxford Dictionary, is an “association of people for mutual aid or the pursuit of a common goal.” Its connotations reach as far back as the medieval association of craftsmen and merchants.

, is an organization that’s controlled by computer codes and runs autonomously, without the need for a central entity. 

, refers to online games in which the players can generate real-world rewards for their in-game activities. These are typically limited to NFT-based blockchain games, as they rely on transferable rewards on an open market.

, are digital representations of real-world assets such as music, art, videos, and in-game items, with a one-of-a-kind digital signature that can't be duplicated.

Yield Guild Games is a gaming guild that operates as a DAO and primarily invests in NFTs used in blockchain games and virtual worlds. It’s a community-centric organization, whose mission is to institute the largest virtual economy by optimizing its community-owned assets for maximum profit and sharing this with its community.

In simple terms, Yield Guild Games is a community of NFT-based blockchain gamers coming together to play games and increase their earning capacity within different P2E gaming communities, and to grow their NFT assets. Yield Guild Games is focused on building a global gaming community that lowers the barrier for entering P2E games, and onboarding as many people as possible into the P2E era.

YGG is the utility and governance token of the Yield Guild Games DAO. It’s an

 that allows its holders to contribute to the governance of the YGG DAO. As the platform's utility token, YGG can be used to pay for all transactions within the YGG community, and also staked to earn specific rewards.

According to YGG tokenomics, there are 1 billion YGG tokens, with 45% (450 million YGG) reserved for community allocation. 

The YGG can be used in three primary ways within its ecosystem: For transaction purposes, administration and governance, and rewards systems. 

The YGG token is the payment medium for everything, including services, within the Yield Guild Games network. To purchase in-game items, different tokens are first converted to YGG tokens to complete transactions.

At its inception, Yield Guild Games’ founders were the core team of the DAO. The team gradually grew into early investors, asset owners and players in the blockchain gaming and NFT space. As part of being a community-centered DAO, YGG token holders will eventually replace the early teams as administrators of the protocol.

YGG token holders can submit proposals and vote through YGG's website on subjects related to the gaming guilds, NFT game products and projects, YGG token distribution, and the general governance structure of the gaming guild.

Yield Guild Games is a community-oriented platform that gives back to its community members, creating many activities, contests and incentives to encourage participation and overall contribution to the gaming guild’s growth.

 is used to issue rewards to community members, with an impressive 450 million YGG tokens reserved for them. 

Community members holding YGG tokens can create liquidity flow to LPs (liquidity providers) for decentralized exchanges, and obtain 

Yield Guild Games operates with an innovative model that combines the P2E model, a DAO, and decentralized finance (

i) to create a virtual economy powered by

Its smart contracts are multifunctional, and work to issue rewards, enable government and administration by guild members, and facilitate NFT purchases and rentals.

Since Yield Guild Games is a global innovation, its structure comprises numerous

 that group players by NFT game choice or locations. The SubDAOs are built as independent protocols with different rules that manage the operations and assets of each P2E game.

This model of creating SubDAOs apart from the main DAO increases the efficiency of the DAO, as well as the effectiveness of players maximizing in-game profits from different NFT games. 

Yield Guild Games has a number of exciting features that help it easily stand out in the NFT games market. Some of these are as follows.

Yield Guild Games has a unique Treasury that oversees the management of all Yield Guild Games assets to maximize the value returned to the YGG DAO over time.

The economic activities of the YGG Treasury consist of: 

 that group players based on the P2E game they choose, or by location. This grouping enables players with similar interests to come together as a team to maximize performance and increase overall earnings. 

SubDAOs come with rules and regulations that guide gaming activities and assets. Each SubDAO has a leader, a group wallet, and a SubDAO token for the organization's use. Yields generated by token holders from each gameplay are shared based on individual contributions to the SubDAO. Token holders also get to make proposals and vote on the SubDAO’s rules.

The YGG DAO has incorporated an improved way of staking that’s different from traditional

 systems. Typically, tokens are staked to earn more tokens at a fixed interest rate, but the YGG DAO introduces a dynamic staking system that allows you to earn from multiple sources it calls “vaults.”

Each vault at YGG represents a token rewards program for specific activities, or for all activities within YGG. Token holders need to decide which vault they want rewards from. For example, a vault can be specific to NFT rentals, or Axie breeding activities.

There’s also the option of staking in an all-in-one system. You’ll be rewarded with a portion of earnings from each vault, equivalent to the amount of YGG staked by each guild member.

The YGG DAO has a program that rents NFTs to guild members who cannot afford one. Within the YGG guild, this program is called “scholarships.” Recipients of scholarships don’t need to make repayment upfront. Instead, they share a portion of their earnings with the guild, contributing to its overall development.

The Yield Guild Games built the YGG DAO with its guild members in mind. Since the guild members run the administration and governance of the guild, who better to receive more compensation? The YGG DAO has set aside 45% of its total supply for community allocation, which will be spread out to guild members over four years through

, special incentives and achievement rewards.

 Figures below are accurate and approximated up to two decimal places as of this writing.

Is Yield Guild Games a Good Investment? 

Yield Guild Games is an exciting project with unique selling points, positioned in a fast-growing market worldwide. It sits at the intersection of three markets with solid potential for growth: NFTs, blockchain gaming and DeFi. Here are some noteworthy statistics:

The above data shows the growth potential of the YGG DAO for the long term, with many people gradually adopting and participating in NFT-based blockchain games. Overall, YGG DAO and its token, YGG, look to make viable investments in the long run.

 on many reliable exchanges, including Bybit. 

On Bybit, the trading of YGG derivatives is made simple by pairing it with USDT as a

. Essentially, you’re using the USDT stablecoin as collateral to trade the YGG derivative, with all of the settlements done in USDT alone. 

You must have a registered Bybit account to trade any asset on the exchange. If you already have an account, please skip to the next step. If not, complete the quick

 website. After you enter the requested personal information, create a strong password, and make sure to complete a simple verification process to transact fiat money on the exchange. 

Once done, you’re ready to place your trade. You can do this by using a limit, market, or conditional order. We recommend using a limit order to avoid slippage, and to enter the market at your desired price. Bybit allows a 10x margin on the YGG/USDT perpetual contract with which you can maximize your profits. If you’re using a limit order, enter the price at which you want to enter the market and the number of YGG contracts you want to trade.

All you need to do now is place your order. You can go long or short, based on your technical analysis and market conditions. Make sure to place accurate take-profit and stop-loss orders to mitigate the risk of liquidation. The crypto market is volatile, and following strict money management rules is essential — especially while

Once the order is placed, you can see all of the details in the order section at the bottom of the trading terminal. The trade will be closed once the asset class price reaches either the take-profit or stop-loss level. If you wish to exit the 

 within just three years, and the game has paved the way for subsequent P2E models. Following its lead, Yield Guild Games has decided to expand on what 

 started by reaching even more people worldwide and lowering the barrier for P2E entry.

 during the devastating global wave of COVID-19 in helping people earn money. For some, it’s served as a much-needed source of income, and blockchain gaming platforms recorded a surge in registration during those periods. (

 While P2E games can be highly lucrative, they are not risk-free and we do not recommend relying on them as your sole source of income.)

 started with something great, YGG offers even more through its unique model, dynamic staking system, scholarships, vaults and tokens. P2E models are here to stay, which means YGG is too, for the long run. If YGG continues to onboard games like 

, its future will certainly be a bright one. We can’t wait to see what it has in store next.

Yield Guild Games (YGG): A GameFi DAO That Gives Back

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards