Original title: (Crypto market sentiment warms, MCP becomes a new benchmark in the AI sector | Frontier Lab Crypto Market Weekly Report)
Original source: Frontier Lab
Market overview
Overall market overview
This week, the cryptocurrency market is in an upward trend, with the overall market and the vast majority of altcoins showing an upward trajectory. Recent gloomy market sentiment has been greatly alleviated, with the market sentiment index rising from 55% to 79%, entering the bullish range. The market capitalization of stablecoins continues to extend the upward trend that began last week (USDT reached $145.7 billion, USDC reached $61.9 billion, with increases of 0.62% and 2.32% respectively), indicating that institutional capital is intensifying its entry, primarily driven by the growth of U.S. funds. It can be seen that this week's upward trend has greatly boosted the sentiment of U.S. investors, accelerating their entry.
This week's upward trend is mainly influenced by the U.S.'s easing attitude towards tariffs on China, Trump's declaration of not intending to dismiss Federal Reserve Chairman Powell, and the friendly attitude of the new SEC chairman Paul Atkins towards the crypto industry, facilitating a significant rebound in the market this week. However, the market still faces uncertainties regarding the upcoming economic recession and tariffs, so this week's increase can only be viewed as a rebound from a previous oversold state, not a reversal of market conditions.
Next week's forecast indicators
Bullish indicators: SOL, SNX
SOL: Comprehensive recovery of the Solana ecosystem, with the rise of meme tokens, stablecoins, and decentralized trading platforms driving market recovery.
Meme token market warming
This week, as the market trend warmed, the trading volume of meme tokens on the Solana chain increased significantly. The number of purchases of meme tokens continued to exceed the number of sales, driving a rapid recovery of data on the Solana chain. This indicates that although the previous retreat of the meme craze caused losses for on-chain users, investors' interest in meme tokens remains strong. Additionally, after Pump.fun launched PumpSwap, the daily trading volume of PumpSwap gradually increased, maintaining between $300 million and $480 million, accounting for 9% to 19% of the DEX trading volume on the Solana chain, indicating that the meme market is gradually warming. The activity of the meme token market helps to boost SOL's price in the short term.
Solana on-chain meme coin trading situation (data source: https://dune.com/pseudocode88_aux/solana-meme-token-analysis)
PumpSwap daily trading volume (data source: https://dune.com/pseudocode88_aux/solana-meme-token-analysis)
On-chain stablecoin supply growth
The supply of stablecoins on the Solana chain has been rapidly increasing, recently surpassing $12.8 billion, creating a historical high. This growth reflects investor confidence in the Solana ecosystem and the demand for on-chain liquidity support. The ample supply of stablecoins provides crucial liquidity support for financial activities on the Solana chain, promoting the development of the on-chain ecosystem. This liquidity not only enhances the activity of on-chain transactions but also provides investors with more trading and investment opportunities.
Solana on-chain stablecoin situation (data source: https://defillama.com/chain/solana)
Solana on-chain DEX trading volume growth
The decentralized trading platform (DEX) on the Solana chain has seen trading volumes exceed $3.5 billion in the past 24 hours, demonstrating a recovery in on-chain activity. The supply of stablecoins continues to grow, recently surpassing $18.2 billion. This reflects investor confidence in the Solana ecosystem and provides more liquidity support for on-chain activities.
Solana on-chain DEX trading volume (data source: https://defillama.com/chain/solana)
Solana's decentralized policy
The Solana Foundation has introduced new policies to strengthen decentralization. For newly added validators in its delegation program, if certain validators have been qualified to receive Solana Foundation delegation for at least 18 months on the mainnet, and the amount staked outside the foundation's delegation is less than 1,000 SOL, three of them will be removed. This policy aims to reduce dependence on foundation delegation and encourage community-supported validators.
Institutional companies increasing holdings
Canadian listed investment company SOL Strategies issued $500 million in convertible bonds to purchase and stake SOL. After this news was released by SOL Strategies, its stock price rose by 23.5%. SOL Strategies intends to learn from Michael Saylor's MicroStrategy, continuously issuing convertible corporate bonds to increase BTC holdings and achieve the goal of boosting stock prices. If SOL Strategies succeeds in this endeavor, it will provide substantial support and benefits for the price of SOL. Recently, a new emerging trend is that traditional companies are also beginning to increase their holdings of SOL in various ways.
Good news for SOL's spot ETF
The application for SOL's spot ETF has been repeatedly delayed, but with the new SEC Chair Paul Atkins taking office, the situation may change. Paul Atkins has a friendly stance toward the crypto industry and has made the establishment of a clear regulatory framework for digital assets a top priority, which is good news for the approval of SOL's spot ETF and may further drive up SOL's price.
SNX: From de-pegging crisis to recovery hope, how Synthetix rebuilds market confidence
Recently, the algorithmic stablecoin sUSD issued by Synthetix experienced a serious de-pegging event due to adjustments in Synthetix's debt management mechanism in the SIP-420 proposal. The price of sUSD dropped to a low of $0.68, and Synthetix's token SNX also fell to a low of $0.55. The total locked value (TVL) of Synthetix reached a minimum of $72.23 million. Market investors' confidence in Synthetix has been shaken.
Remedial measures
· Liquidity incentives: Synthetix increases yield to 49.18% by staking sUSD/sUSDe LP on Convex to attract more liquidity.
· Deposit incentives: Through the Infinex project, Synthetix incentivizes users to deposit sUSD, distributing 16,000 OP rewards to users who deposit more than 1,000 sUSD each week for six weeks.
· Staking incentives: Allow users to stake sUSD in the 420 pool, with a staking period of one year to earn 5 million SNX as an incentive.
· Negative incentives and staking optimizations: Require stakers to deposit a certain proportion of sUSD; if standards are not met, debt forgiveness is suspended, and the ratio is raised when pegging deviates. At the same time, implement SNX pooled staking, expand sUSD supply, and launch Perps V4 supporting multiple collateral and off-chain order matching.
Market response
With the promotion of these measures, the price of sUSD rose to a high of $0.88, and the price of SNX also increased to $0.74. In addition, Synthetix's total locked value (TVL) rose from $72.23 million to $89.25 million, an increase of 23.56%.
Subsequent impacts
Although the de-pegging issue of sUSD has not been fully resolved, Synthetix's proactive measures have allowed the market to see hope for recovery. If the price of sUSD can return to $1, investor confidence in Synthetix may be restored, further promoting the price increase of SNX.
Synthetix's TVL situation (data source: https://defillama.com/protocol/synthetix#information)
Bearish indicators: REZ, OMNI
REZ: In the context of the downturn in Restaking, the 8.64% token unlock may trigger concentrated sell-offs by investment institutions and teams.
Renzo is a liquidity restaking protocol based on the EigenLayer ecosystem, aimed at simplifying complex staking mechanisms for end users and achieving rapid collaboration with EigenLayer node operators and Active Validation Services (AVS). Due to the recent poor performance of the Ethereum ecosystem and the ongoing low price of ETH, the staking rate of ETH has also declined, leading to a loss of market attention for Restaking sector projects. REZ will see 864 million REZ tokens unlocked on April 30, accounting for 8.64% of the total locked amount, while the current circulation rate is only 21%. The linear unlocking chart published in its white paper indicates that the main recipients of this unlocking are investment institutions and project teams. Due to the relatively low popularity of Restaking projects at this stage, with fewer participants and poor performance in the Ethereum ecosystem, this large-scale unlocking may trigger significant sell-offs, impacting the price of REZ tokens.
OMNI: The large-scale unlocking of tokens is approaching, increasing the risk of market sell-off.
Omni is the interoperability layer of Ethereum, establishing low-latency communication between all Ethereum rollups, allowing Ethereum to operate as a coherent system in the modular era. Omni itself is also a public chain project. Due to the recent persistent low performance of the Ethereum ecosystem and the poor performance of various Layer-2 projects in this round, Omni, as the linking project between various Layer-2s, has also lost its value. OMNI will see 16.63 million OMNI tokens unlocked on May 2, accounting for 16.64% of the total locked amount, while the current circulation rate is only 19%, effectively doubling the existing circulating token amount. Moreover, the linear unlocking chart published in its white paper indicates that the main recipients of this unlocking are investment institutions and project teams. Due to the relatively low popularity of Omni at this stage, this large-scale unlocking may trigger significant sell-offs, thereby impacting the price of OMNI tokens.
Market sentiment index analysis
The market sentiment index has risen from 55% last week to 79%, entering the bullish range overall.
Hot sectors
MCP: Can it lead the future development direction of Crypto✖️AI?
Current situation
MCP stands for Model Context Protocol, introduced by Anthropic on November 25, 2024. After its launch, it did not receive market attention. Following the impact of Deepseek on existing AI software, the market began to gradually focus on optimizing algorithms and resource scheduling, changing the previous development model of AI relying on accumulated computing power. Thus, the standardization of how external data and applications interact with large language models (LLM) and provide context has gradually gained market attention.
Recently, with the good performance of the MCP-related token Dark on Binance Alpha after its launch, investors in the market have begun to show enthusiasm for and invest in MCP-related tokens, making MCP one of the few concentrated hot sectors recently.
Concept of MCP
Model Context Protocol (MCP) is an open-source standard introduced by Anthropic, initially as an extension of the Claude ecosystem, aimed at addressing the fragmentation of interactions between AI models and external tools and data. It has now evolved into a secure and standardized way for large language model-driven AI agents to interact with external systems to obtain real-time data. In practical use, MCP can serve as a universal adapter, enabling AI to access content repositories, business tools, and development environments.
The core goal of MCP is to enhance efficiency through standardized processes, enabling AI intelligences to shift from 'understanding' to 'practical action', providing efficient tools for developers and allowing enterprises and non-technical users to easily customize their intelligences. In this way, MCP can become a bridge connecting virtual intelligence and the real world, thus promoting personalized innovation and development across various industries.
How MCP works and its technology
Technology adopted by MCP
The technical foundation of MCP is JSON-RPC 2.0, a lightweight and efficient communication standard that supports real-time bidirectional interaction, similar to the high performance of WebSockets. It operates through a client-server architecture:
· MCP Host: User interaction applications, such as Claude Desktop, Cursor, or Windsurf, responsible for receiving requests and displaying results.
· MCP Client: Embedded within the host, establishing a one-to-one connection with the server, handling protocol communication, ensuring isolation and security.
· MCP Server: A lightweight program that provides specific functions, connecting to local (e.g., desktop files) or remote (e.g., cloud APIs) data sources.
Transmission methods include:
· Stdio: Standard input and output, suitable for local rapid deployment, such as file management, with latency as low as milliseconds.
· HTTP SSE: Server-Sent Events, supporting remote real-time interactions, such as cloud API calls, suitable for distributed scenarios.
How it works
MCP uses a client-server architecture. In simple terms, if the MCP host wants to retrieve data or perform operations, it needs to communicate and collaborate with the MCP Client and MCP Server. To ensure efficiency and security, MCP assigns a dedicated client to each server, forming a one-to-one isolated connection. Its core components include:
· Host: User interface, such as Claude Desktop, responsible for initiating requests and displaying results, serving as the interactive 'face'.
· Client: Communication intermediary, using JSON-RPC 2.0 to interact with the server, managing requests and responses, ensuring isolation.
· Server: Function provider, connecting external resources and executing tasks, such as reading files or calling APIs.
Flexible and diverse transmission methods:
· Stdio: Local deployment, suitable for rapid access to desktop files or local databases, with latency as low as milliseconds.
· HTTP SSE: Remote interaction, supporting cloud API calls, with strong real-time capability.
Advantages of MCP
MCP addresses the challenges faced by current AI applications through standardized interfaces:
· Real-time access: AI can obtain the latest data in a very short time.
· Security and control: Direct access to data avoids intermediate storage, with a reliability of permission management up to 98%, allowing users to restrict AI to access only specific files.
· Low computational load: No need to embed vectors, reducing computational costs by about 70%.
· Flexibility and scalability: The number of connections has been reduced from the traditional 100 million to 20,000, greatly simplifying the configuration process.
· Interoperability: A MCP Server can be reused by multiple models.
· Supplier flexibility: Switching LLMs without restructuring infrastructure, similar to USB-C compatibility.
· Autonomous agent support: Supports AI dynamic access to tools, executing complex tasks.
MCP ecological projects
Dark
Dark is an experimental MCP network based on Solana, focusing on trusted execution environments (TEE). By automatically integrating new tools and on-chain interactions, Dark aims to achieve innovation in decentralized technology. However, most project functionalities have not yet been launched, and it currently belongs to the conceptual stage; it has issued tokens, with the token being DARK.
SkyAI
SkyAI is a native AI infrastructure based on the BNB Chain, providing multi-chain data access and AI agent deployment. The project is still in the conceptual stage, and actual products have not yet been launched. Tokens have been issued, with the token being SKYAI, and a market capitalization of $43 million, making it the leading project in the MCP sector.
Solix
Solix is a DePIN network using MCP, focusing on intelligent bandwidth sharing. Users can share bandwidth through a browser extension and earn rewards, covering 63 countries worldwide. The project has a fast technological implementation but needs to validate user participation and the sustainability of its economic model. The project has not yet issued tokens.
HighKey
HighKey is a DeFAI project that is compatible with the MCP and DARP protocols, focusing on DeFi arbitrage and professional analysis. It has issued tokens, with the token being HIGHKEY, and a small market capitalization of only $5.68 million. The project has clear development functions but still needs to enhance user experience and differentiation.
DeMCP
DeMCP is a decentralized MCP project that focuses on trust and security, providing SSE proxy services. Currently, no tokens have been issued, and it is still in the development stage, needing to demonstrate actual products.
UnifAI
UnifAI is a DeFAI project that provides on-chain and off-chain task execution capabilities. Its flagship product, UniQ, simplifies complex on-chain operations. Although no tokens have been issued yet, a points program has been launched.
Future development direction
Currently, Web3 AI projects based on the MCP protocol are mostly in the early stages of development, with substantial products yet to be released, though some have already issued tokens. Despite MCP being a new hotspot in the AI niche at this stage, given the previous failures in the AI Agent sector, there is still a need to maintain a cautious attitude towards whether MCP projects are merely a fleeting issuance of AI Meme assets or if they can truly develop products that advance the AI sector. Therefore, the future direction of MCP should mainly focus on the implementation and application of decentralized technologies. With the rapid development of AI and blockchain technology, MCP will continue to optimize its technical architecture to support more efficient computing and data sharing. Additionally, MCP will strive to enhance interoperability, simplify the usage process for developers, and promote the adoption of decentralized applications.
Overall market overview
Data source: SoSoValue
According to weekly return statistics, the AI sector performed the best, while the Cefi sector performed the worst.
AI sector: In the AI sector, TAO, RENDER, FET, WLD, and FARTCOIN account for a large proportion, totaling 86.32%, while their increases this week were 50.96%, 18.93%, 53.36%, 33.58%, and 29.95%, with average increases higher than projects in other sectors, making the AI sector the best performer.
Cefi sector: In the Cefi sector, BNB, BGB, and OKB account for a large proportion, totaling 89.97%, while their increases this week were 2.35%, 2.51%, and 2.29% respectively, with average increases lower than those of projects in other sectors, making Cefi the worst-performing sector.
Next week's major Crypto events forecast
Wednesday (April 30) U.S. first quarter actual GDP annualized quarter-on-quarter revision; U.S. March core PCE price index annual rate; U.S. April ADP employment figures.
Thursday (May 1) U.S. April ISM manufacturing PMI
Friday (May 2) U.S. April seasonally adjusted non-farm payrolls; U.S. April unemployment rate.
Summary
This week, the cryptocurrency market welcomed a significant upward trend, with market sentiment shifting from a gloomy state to a positive one. This change is mainly influenced by the easing of U.S. policies and the friendly attitude of the new SEC chairman towards the crypto industry. As the policy environment changes, investor confidence in the market gradually recovers, leading to capital inflow into the cryptocurrency market and driving prices up. However, the market still needs to be vigilant about the uncertainties of economic recession and tariff policies, which may continue to affect market trends. While enjoying the market growth, investors should also remain cautious to cope with potential volatility.
Projects such as Solana and Synthetix show signs of recovery, especially in terms of positive progress in technical upgrades and community support. The accelerated development of Solana and the innovative initiatives of Synthetix have attracted more investor attention, and these projects are expected to continue to expand their market influence in 2025. However, projects like Omni face sell-off pressure from token unlocks, which may negatively affect their prices. Investors should allocate reasonably based on the specific conditions of the projects and the market environment to avoid potential risks.
Although the overall industry trend is improving, the market still faces uncertainties regarding an impending economic recession and tariffs, so this week's rise can only be viewed as a rebound from a previous oversold state and not a reversal of market conditions. Next week faces the release of several macro data, including:
· U.S. first quarter actual GDP annualized quarter-on-quarter revision;
· U.S. March core PCE price index annual rate;
· U.S. April ADP employment figures; U.S. April ISM manufacturing PMI;
· U.S. April seasonally adjusted non-farm payrolls; U.S. April unemployment rate.
These data can all influence future market trends. It is recommended that investors maintain a moderate position and manage risks, waiting for policy clarity, which will be the best strategy to respond to the current market.
This article comes from a submission and does not represent the views of BlockBeats.
