I. Attention Value - Market Highlights

1. Market Conditions

(1) Macroeconomic Environment:

l Federal Reserve's Inflation Indicators Remain Low, Paving the Way for Rate Cuts in September

The Federal Reserve's inflation indicators continued to remain low last month, further indicating that price pressures are steadily cooling, laying the groundwork for a rate cut in September. According to data from the U.S. Department of Commerce, prices rose only 0.1% from May to June, with the year-on-year inflation rate dropping from 2.6% to 2.5%. The core inflation rate (excluding food and energy) increased by 0.2% during this period, maintaining a year-on-year rate of 2.6%. Economists are closely monitoring core prices as they often better reflect future inflation trends.

Overall data suggests that the most severe inflation cycle in forty years is coming to an end, with Federal Reserve Chairman Jerome Powell stating that the recent cooling in price data has bolstered his confidence in returning inflation to the 2% target. Lower interest rates and inflation, coupled with a solid job market, may improve Americans' perceptions of the economy and influence the upcoming presidential campaign.

Additionally, consumer spending rose slightly by 0.3% in June, although income growth of 0.2% was below the previous month's 0.4%. The report indicated that inflation-adjusted average income increased by 1% compared to the same period last year. The Federal Reserve is expected to consider a rate cut at its mid-September meeting, with the market widely anticipating this decision as almost certain. Economists believe Powell may express confidence in the rate cut during the meeting.

Food prices rose only 0.1% in June, while energy prices fell by 2.1%. Despite the decline in inflation levels, the cost of everyday essentials remains higher than three years ago, leading to voter dissatisfaction with the government's economic management. Although the economy continues to grow, hiring activity is primarily concentrated in healthcare and government sectors, with the unemployment rate slightly rising to 4.1%.

(2) Web3 Sector:

l Jeff Ren Attends WebX2024 to Discuss OKX Ventures' Investment Strategy in Crypto-Native Projects

OKX Ventures partner Jeff Ren recently participated in a roundtable forum themed "VC Perspective" at the WebX2024 conference in Tokyo, hosted by Shin Labs founder Alex Shin, with other guests including Eight Roads Ventures partner Nao Kitazawa and 1kx partner Diana Biggs, among other prominent Web3 investors. During the discussion, Jeff emphasized OKX Ventures' focus on "crypto-native" projects, pointing out that the team prioritizes the actual utility of tokens within the blockchain ecosystem when investing, and hopes these tokens can integrate into the Web3 ecosystem.

He also mentioned that OKX Ventures will maintain a moderate level of involvement without excessive intervention in projects, believing that the development of the Bitcoin ecosystem will lead to more financial operations and value creation. Jeff encouraged practitioners to maintain faith in innovation and seek like-minded partners to jointly promote the development of blockchain technology. He firmly believes that true innovation is just beginning, and OKX Ventures will continue to support innovative projects.

l Over 110 Companies Establishing Bitcoin Operations in Africa

Bitcoin Magazine recently pointed out that there are over 110 companies actively building Bitcoin-related businesses across the African continent. These Bitcoin activities are widely distributed across countries such as Nigeria, South Africa, Kenya, and Uganda, covering areas including technology development, mining, education, financial services, and media.

In recent years, Africa's cryptocurrency market has been rapidly developing, despite facing regulatory challenges and economic instability. Many communities in various countries are increasingly accepting Bitcoin, particularly in South Africa and Nigeria, which rank high on the global cryptocurrency adoption index. For instance, despite relatively strict government regulations on cryptocurrencies, Nigeria's peer-to-peer Bitcoin trading market is very active.

2. Hot Events

(1) Macroeconomic Environment:

l Increased Expectations for Federal Reserve Rate Cuts: Traders Bet on 25 Basis Points Cut in September

Traders have increased their expectations that the Federal Reserve will initiate a rate cut next month, anticipating a reduction of 25 basis points rather than a larger cut of 50 basis points. This expectation stems from the Fed's July inflation indicators showing that inflation is rising in line with economists' expectations, despite strong consumer spending. Traders also expect the Fed to cumulatively cut rates by 1 percentage point over the last three meetings of the year. Federal Reserve Chairman Jerome Powell stated last week, "Now is the time to ease policy."

(2) Web3 Sector:

l Telegram Under Investigation by EU for User Count Issues

According to the Financial Times, the EU is investigating whether Telegram violated the Digital Services Act (DSA) by failing to provide accurate user counts. EU officials suspect that Telegram may have intentionally underreported its user numbers in the EU to remain below the threshold of 45 million users and avoid stricter regulations.

This investigation coincides with a French investigation into alleged criminal activities by Telegram, which led to the arrest of its founder Pavel Durov. Telegram stated that Durov "has nothing to hide."

In February, Telegram claimed it had 41 million users in the EU. According to the DSA, Telegram was supposed to provide updated data this month, but it only stated that the user count was "far below 45 million." EU officials indicated that the failure to provide new data constitutes a violation of regulations and added that the investigation might reveal that its actual user count exceeds the threshold for "very large online platforms."

Services classified as "very large online platforms" will face higher compliance requirements, including content moderation, third-party audits, and data-sharing obligations with the European Commission.

l OKX Releases Investigation Results and Explanation on FLOKI Staking Borrowing Mechanism

OKX officially released an investigation and explanation regarding the FLOKI staking borrowing mechanism. OKX's spot staking borrowing is a C2C market that triggers an automatic currency exchange mechanism when the platform's borrowing amount reaches 100% of the deposit amount. The triggering of this mechanism is unrelated to the individual user's staking risk rate but is based on the overall borrowing and deposit situation of the platform.

When the borrowing amount reaches the deposit amount, the platform will stop new borrowings. The trigger for this automatic currency exchange was due to significant redemptions by deposit users caused by FLOKI's on-chain activities, leading to a decrease in deposit amounts. Regarding user notification, OKX stated that the platform would notify potentially affected users in advance via email once the automatic currency exchange benchmark is reached. However, due to issues with the email system, some users did not receive the warning emails in time, and users can contact OKX customer service for feedback.

l Zypher Network Supports Cocos Creator Engine, Promoting Telegram Game Development Based on TON Chain

Zypher Network announced on social media that it supports developers using the Cocos Creator engine for front-end development and integrates ZK components to rapidly build Telegram games based on the TON chain. The platform's innovation allows Web2 games on Telegram to quickly transform into decentralized applications (dApps), effectively lowering the barriers for developers to create games on the TON network.

Zypher Network is a game asset protocol based on zero-knowledge proofs (ZK) and AI-driven technology, aimed at ensuring the security and verifiability of game data, supporting the Ethereum Virtual Machine (EVM) and the TON ecosystem. It is the first project to conduct ZK verification on the TON chain and has already achieved ZK game development on that chain. Additionally, Zypher Network has established strategic partnerships with several ZK projects, including Risc Zero, Gevulot, Ingonyama, and Polyhedra, and plans to launch a ZK-Proof mining network within the next two months.

3. Hot Narratives

l What’s the story behind Story Protocol, which raised $140 million?

On August 21, 2024, the intellectual property blockchain project Story Protocol announced the completion of an $80 million Series B funding round led by a16z. With a strong lineup of investors participating in this round, along with last year's seed and Series A funding rounds also led by a16z, Story Protocol's total funding has reached $140 million.

At first glance, Story's technology stack does not seem particularly special. It aims to improve the "time-consuming and costly" issues related to intellectual property in the Web2 world through three technological aspects: Story Network (L1), the Proof of Creativity protocol (smart contracts), and programmable IP licensing, ultimately achieving its goal of "IP Lego." a16z's willingness to lead such a large funding round may not be due to the technology itself, but rather the team's background, vision, and resources in the entertainment industry.

The CEO and co-founder of Story, Seung Yoon Lee, graduated from Oxford University and has worked in the South Korean National Assembly and the U.S. House of Representatives, as well as in two newspapers. His previously founded web novel platform Radish Fiction was acquired by Kakao for $440 million, giving him resources in government, media, and capital. The technical development lead and co-founder, Jason Zhao, graduated from Stanford University with a degree in computer science and previously worked at DeepMind.

Story's goal is to protect creators' ownership, aligning with a16z partner Chris Dixon's emphasis on the concept of "readable, writable, and ownable," both parties placing high importance on the concept of ownership. Additionally, the Story team may possess strong resources in the South Korean entertainment industry, with rumors of participation from well-known entertainment companies among its angel investors. If they can bring influential KPOP IP into the crypto space, its potential value could be significant.

In summary, the strong background of the Story Protocol team, alignment with the leading investment institution's vision, and possession of powerful resources in the South Korean entertainment industry seem to support its $140 million funding. However, Jason Zhao stated in an interview with Fortune that Story is unlikely to attract IP giants like Disney, as traditional IP still does not place enough emphasis on using AI for creation. Overall, the future development of Story is worth looking forward to, with its mainnet expected to launch later this year, warranting continued attention.

4. Potential Catalysts

l Exchange Bitcoin Reserves Hit Annual Low Near $60,000, Potentially Favoring Bull Market

Odaily Planet Daily reported that the Bitcoin reserves of cryptocurrency exchanges have dropped to a new supply low, which could serve as an important catalyst for Bitcoin to retest and break through the $60,000 mark. CryptoQuant contributor Gaah noted in an analysis report on August 29 that as exchange Bitcoin reserves hit a new low this year, it may indicate that the market's selling pressure is easing. If demand continues to rise, this will help drive the development of a bull market.

Since January 1, 2024, exchange Bitcoin reserves have decreased by approximately 12.9%, with the total Bitcoin reserves across all major cryptocurrency exchanges currently at 2.62 million. Transferring Bitcoin to cold wallets typically signifies investors' commitment to holding the asset long-term and optimism about its future price potential. An increase in long-term holders will make the market more robust and reduce the likelihood of large-scale panic selling.

II. Attention Value - Hot Projects

1. Social Media Highlights

Solana has recently gained widespread attention on social media platforms, with its popularity continuing to rise. The Solana ecosystem has developed rapidly in recent years, becoming one of the major players in the cryptocurrency market. As of 2024, Solana's TVL has reached approximately $4.8 billion, a 20-fold increase from 2023, with the daily active addresses on the Solana network reaching 1.3 million and monthly active addresses exceeding 15.6 million, showing significant growth compared to 2023. In the second quarter, Solana's total economic value grew by 53% quarter-on-quarter, reaching $151 million, demonstrating its continued activity in the cryptocurrency market. These data indicate that the Solana ecosystem is showing strong growth momentum in 2024, attracting more developers and investors' attention.

Key Projects:

· IO

Recently, io.net launched a staking program, which may positively impact its price. The recent sentiment towards io.net is optimistic regarding its application prospects in the DePIN field. Notably, io.net has reached a strategic partnership with Chainbase, and both parties will work together to promote the application of AI large models on the blockchain, accelerating the development of the io.net ecosystem.

2. KOL Attention

· Fastest Growing Projects Among KOLs:

Today, the projects with significant KOL increases include FET, TAO, BNB, CREO, HEX, CPOOL, BOG, and ARC.

Among them, Bittensor recently launched the mainnet for Bittensor Subnet 42, leading the market to be optimistic about its decentralized AI data network's development prospects, with market sentiment being positive. Notably, Bittensor's core consensus algorithm Yuma can convert first-layer staking into second-layer incentives, which is an emerging field of neural incentive design; meanwhile, HEX recently launched PulseChain, which is expected to have a positive impact on its price. However, opinions on HEX are divided, leading to relatively unstable market sentiment.

Data Source: AlphaScan, Dot Labs

· AI Automatically Selected Projects:

Automatically selected based on public sentiment and overall positive emotions.

Data Source: AlphaScan, Dot Labs

· Important KOL Recommendations for New Projects:

1. NAKA (@NakamotoGames /X)

Nakamoto Games is a powerful Web3 gaming ecosystem that provides a platform for games based on skill, strategy, and in-depth gaming knowledge rather than luck (gambling). Developers will also have tools to publish their own games on the platform and profit from them. Currently, NAKAMOTO GAMES has successfully launched over 200 games. Recently, Nakamoto Games has been continuously improving and updating its platform, launching many new games, and has an excellent marketing strategy, leading the market to have a positive outlook on Nakamoto Games. The market considers Nakamoto Games to be one of the most promising GameFi projects, based on its successful launch of the MMORPG game Outlanders and its performance in the Web3 gaming space.

2. TRADE (@Polytrade_fin /X)

POLYTRADE has established the largest RWA ecosystem to date, featuring a market with USDY, a tokenized note backed by short-term U.S. Treasury bonds and bank demand deposits. POLYTRADE is unlocking liquidity trapped in stagnant invoices, enabling small and medium-sized enterprises worldwide to improve their working capital. In trade finance, significant capital is often restricted due to regulatory or limited partner-related constraints. Polytrade can deploy funds more flexibly using decentralized funding pools and provide products and services in environments where competitors or other participants do not yet exist.

3. PALM (@palmaierc /X)

PALM AI is a multi-platform web3 AI application system powered by Google. The team leverages the latest developments in AI, focusing on product practicality, innovation, and revenue sharing. From GameFi applications and hardware to Web3 solutions related to Ethereum scaling, combined with Google's AI toolset and internal innovative algorithms, it elevates on-chain AI integration to a new level.

Recently, PALM AI launched its new product - a Web3 embedded entertainment system, which is the first AI device based on Web3 supporting microcontrollers, allowing complex interactions with the blockchain with just a voice command or a click.

4. ORAI (@oraichain /X)

Oraichain is the world's first AI-driven blockchain oracle and ecosystem, now transforming into a high-level AI Layer 1 for data economy and oracle services, serving as the foundational layer for creating the next generation of smart contracts and DApps, and establishing a complete AI ecosystem on the blockchain. Recently, Oraichain partnered with Allora Network, which has led to a more positive market outlook on Oraichain, believing it has significant potential in the AI and data fields. Additionally, Oraichain has also partnered with the well-known fund DWF Labs, which has a successful investment track record in the cryptocurrency market.

3. Smart Money Accumulation

· Smart Money Holdings

Data Source: ChainEDGE, Dot Labs

· Smart Money Inflows

Data Source: ChainEDGE, Dot Labs

III. Attention Value - Sector Rotation

1. Hot Sectors

Data Source: Dune, Dot Labs

Data Source: Dune, Dot Labs

2. Internal Sector

Data Source: Dune, Dot Labs