# I. Outlook

## 1. Macroeconomic Summary and Future Predictions

The U.S. Customs and Border Protection announced on the evening of the 11th local time that the federal government has agreed to exempt electronic products such as smartphones, computers, and chips from the so-called "reciprocal tariffs." As a result of the U.S. announcement to exempt certain goods from "reciprocal tariffs," market panic has dissipated.

Documents released by Customs and Border Protection indicate that these products are excluded from the government's so-called "reciprocal tariffs" imposed on trade partners. The documents show that the exempted products apply to electronic products entering the U.S. after April 5, and those who have already paid "reciprocal tariffs" can seek refunds. The temporary easing of the U.S. "reciprocal tariffs" policy has provided a sigh of relief for the market. After the Trump administration exempted popular consumer electronics and key components, the U.S. tech industry temporarily stepped back from the brink of collapse.

Due to the positive sentiment, global financial markets are expected to experience a "revenge" rebound this week.

## 2. Market Movements and Warnings in the Crypto Industry

Following the aforementioned positive news, BTC surged over 6% to return to the $80,000 level. The sustainability of this momentum depends on the continued clarity of the macroeconomic environment, technical strength, and market sentiment. It is predicted that BTC prices may fluctuate between $80,000 and $85,000; if risk appetite continues, the bullish direction could push towards $89,000; if uncertainty arises again, it may retreat to $78,000 to $79,000, and industry users should take precautions against risks.

## 3. Industry and Sector Hotspots

Last week, the stablecoin engine CAP provided users with a new option that does not rely on endogenous models. It opened a hidden revenue domain for users.

P2P.me eliminates the need for custodianship by utilizing zk proofs to meet KYC standards and fiat transfer needs, thus becoming a completely decentralized protocol governed by the collective interests of users.

PumpBTC, as Babylon's liquid staking solution, aims to bring decentralized finance (DeFi) into the Bitcoin ecosystem, relying on an ecosystem-centric approach and supported by experienced DeFi experts and industry-leading partners.

Arcadia Finance allows everyone, whether professional market makers or ordinary users, to earn yields by utilizing automated market maker (AMM) liquidity positions. It supports virtual liquidity and concentrated liquidity positions and integrates with major decentralized exchanges (DEX) such as Uniswap, Aerodrome, and Alienbase.

# II. Market Hotspot Sectors and Potential Projects of the Week

## 1. Performance of Potential Sectors

1.1. CAP Raises $8 Million, How the Stablecoin Engine CAP Breaks the Revenue Structure of the Crypto Class to Achieve the WEB3 Vision

CAP provides users with a new option that does not rely on endogenous models. It opens a hidden revenue domain for users that was previously accessible only to wealthy insiders and their institutions. External revenue sources, such as arbitrage, are among the most profitable business models in the crypto space. However, due to its complexity, only a few participants dominate this field. With CAP, any user can access this scalable and adaptive native yield.

Technical Explanation

Solution: CAP

CAP is a stablecoin engine designed to free users from the cycle of endogenous models. It achieves this by not relying on suboptimal traditional financial solutions and predatory token pump designs.

The CAP stablecoin engine will issue redeemable stablecoins covering various denominations, such as USD, Bitcoin, and Ethereum. Its goal is to democratize revenue opportunities that were previously limited to a few knowledgeable and wealthy participants. This includes deep revenue sources such as arbitrage, maximum extractable value (MEV), and real-world assets (RWA).

Users are never directly exposed to custodians, centralized exchanges, cross-chain bridges, or other infrastructures related to yield generation. CAP underwrites the risks of these operations through innovative shared security network implementations.

1. Yield

CAP stablecoins aim to provide competitive yields in any market environment. Due to its competitive agent model, strategies will continuously adapt as the market evolves. Stablecoin holders simply need to choose the denomination of stablecoin they wish to hold, and the yield will be generated in the background.

2. Scalability

A competitive network composed of agents will execute yields based on independent strategies. These strategies must continuously adapt to market conditions to outperform the median benchmark yield established by agent performance. This will enable CAP to consistently provide competitive yields under any market conditions while maintaining stability as it scales. Since the protocol does not rely on slow infrastructures like off-chain legal agreements and insider human dependencies, CAP is ready to scale with deposit growth.

3. Stability

CAP stablecoins can be redeemed based on the collateral backing them. Users can choose the denomination of stablecoin and the basket of collateral they desire. This ensures the predictability of stablecoin prices and provides diversified directional risk exposure.

4. Censorship Resistance

CAP is opening a new application scenario for shared security networks (such as EigenLayer). By leveraging a coverage model of secure delegation, CAP will protect end users (stablecoin holders) from the risks associated with agent-generated yields. This innovative arrangement will allow restakers and agents to collaborate in assessing the risks and rewards of all strategies driving CAP value creation.

Alternatives to Stablecoins

Unique Unlocking Features of CAP

Adaptive Yield: CAP stablecoins do not rely on a single strategy or manual adjustments by human teams. Yield is a competition, and only the best strategies can persist.

High-Frequency Strategies: By utilizing MegaETH's speed, CAP strategies will interact with native decentralized applications (dApps) to ensure users receive an efficient decentralized finance (DeFi) experience. This includes market-making operations on GTE, liquidations in lending markets, and arbitrage on new applications.

Protected Agents: All active agents must obtain secure delegation from restakers to participate in the network. This will involve a careful review process by restakers and risk managers regarding participating agents and their strategies.

Evergreen Protocol: Since CAP does not rely on main agents, off-chain legal agreements, or other centralized execution components, it can continue to grow and thrive without a manual team.

Mega Mafia

A small group of high-performance teams has gathered to develop new applications on MegaETH, leveraging the chain's speed and low latency. These projects are fully supported by MegaETH and have built mutually beneficial relationships.

CAP stablecoins will integrate with all protocols using stablecoins on MegaETH and play a key role in TVL launch strategies.

Risk Highlights

Execution Risk Mitigation: The cutback feature regulates activities within CAP, protecting the protocol and users from malicious agents and force majeure events related to yield generation. The effective execution of these features relies on timely implementation of cutbacks when necessary. Such operations may face multiple potential obstacles, such as the risks of delegated tokens, especially when interacting with liquidity restaking token projects. Exposure to EigenLayer and other shared security market codebases may also pose potential risks to cutback execution.

Pre-existing Exposure Risks: Users need to make a decision regarding which tokens they wish to expose themselves to. The prices of these tokens may fluctuate, especially for gas tokens like BTC and ETH.

Commentary

The CAP project offers users a competitive and scalable stablecoin yield platform through its innovative yield model, decentralized protocol design, and deep integration with MegaETH. However, the complex technical architecture and high-frequency trading strategies introduce certain execution risks, and the price volatility risk of tokens faced by users cannot be ignored. Overall, CAP has significant potential to enhance market efficiency and yield competitiveness, but it also needs to ensure technical reliability and gradual market acceptance.

1.2. What Are the Features of the Decentralized Transfer Protocol P2P.me, Led by Multicoin and Coinbase, That Eliminates Custodial Needs Using ZK Technology?

P2P.me eliminates the need for custodianship by utilizing zk proofs to meet KYC standards and fiat transfer needs, thus becoming a completely decentralized protocol governed by the collective interests of users. In P2P.me, smart contracts reliably match buyers with highly vetted merchants who possess legitimate cryptocurrency assets through reputation scoring.

P2P.me is based on the Base network and aims to facilitate the on- and off-ramping of stablecoins and fiat through a fully decentralized protocol. The smart contracts driving the protocol are anonymously built by a group of developers.

P2P.me also strives to maintain an open protocol that serves the public interest and operates continuously.

Architecture Overview

The following is an end-to-end visualization of the process for executing fiat-to-stablecoin deposits (and withdrawals) through the P2P.me protocol.

Placing an Order: After installing the P2P.me app on their mobile device, users click the "Buy USDC" button (for withdrawal transactions, it would be "Sell USDC") to initiate an order request and then enter the desired purchase amount. Users can also import an existing Base USDC wallet address to start trading.

Order Matching Mechanism: An innovative "trust proof" algorithm maintains a list of rigorously vetted stablecoin merchants awaiting order matching. A fiat payment address is shared through smart contracts, which is encrypted with the user's key to ensure data privacy. (In the case of withdrawal transactions, the Base USDC wallet address is displayed.) The buyer then transfers the desired amount to the provided fiat account and waits for the merchant to verify the transaction.

Processing Orders: Typically, within a few minutes after placing the order, the buyer will receive confirmation of a successful transaction. Their wallet address will show the updated USDC balance. If the buyer attempts to proceed without first completing the fiat transfer, they risk losing 50 RPs—this involves broader dispute resolution issues.

Dispute Resolution: In P2P.me, every data sharing is conducted using zk proofs. If one party raises a dispute against the other due to lost funds or incomplete transactions, the latter (the prover) can confront the former (the verifier) simply by presenting and sharing the zk proof of their transaction, without submitting any additional data regarding identity or the transaction itself. Smart contracts will automatically resolve disputes based on the existence (or absence) of zk proofs.

On-chain Protocol Operations: The complete communication flow between merchants and buyers/sellers occurs entirely on-chain. There are no off-chain operations in the process, making it more secure and fully decentralized. Additionally, zk proofs are securely stored as on-chain credentials—this achievement is thanks to Reclaim.

Deposit Visualization

Withdrawal Visualization

Key Considerations

• The role of merchants is to provide liquidity intermediation for transactions.
• The responsibility for providing zk proofs always lies with the merchants.
• zk proofs allow users to perform trustless KYC (identity verification).
• zk proofs automatically resolve disputes for users.
• The Reclaim protocol securely encrypts all data transmitted through zk proofs.
• Reclaim supports the creation, storage, and transmission of zk proofs.

Commentary

The advantages of the P2P.me protocol lie in its provision of a decentralized, secure, and privacy-preserving trading platform, particularly in handling disputes and KYC identity verification through zk proofs, significantly enhancing user trust and operational efficiency. However, its disadvantages include reliance on the integrity of merchants, and the platform still faces challenges in terms of popularity, cross-chain compatibility, and the widespread understanding and adoption of zk proofs.

1.3. Analyzing the LST Platform PumpBTC, Which Maximizes Yield Through Staking BTC Derivatives and Relies on Babylon's Shared Security

PumpBTC, as Babylon's liquid staking solution, aims to bring decentralized finance (DeFi) into the Bitcoin ecosystem, relying on an ecosystem-centric approach and supported by experienced DeFi experts and industry-leading partners. By abstracting complexity, PumpBTC facilitates seamless collaboration between users and Babylon. Users only need to perform one operation through PumpBTC to stake Bitcoin into Babylon and immediately receive liquidity tokens without waiting.

PumpBTC is inspired by the "pump" culture within the Bitcoin community and aims to help Bitcoin holders maximize yields through Babylon's liquid staking—essentially reconstructing WBTC/BTCB with native yields.

Architecture Analysis

PumpBTC is revolutionizing how users leverage Bitcoin across multiple blockchain networks. PumpBTC first launched on the Binance Smart Chain (BSC) and plans to expand to other EVM-compatible chains such as Berachain and Scroll. Users can stake various forms of Bitcoin (such as BTCB and WBTC) and receive $pumpBTC tokens in return. These tokens automatically accumulate yields from the Babylon protocol, providing a seamless staking experience.

PumpBTC prioritizes security; it does not directly hold user assets but collaborates with licensed custodians such as Cobo MPC and Coincover. This approach significantly reduces the risks associated with traditional bridging (such as Multichain, Nomad, etc.) while still providing additional yields.

Transparency is at the core of PumpBTC's design, with the platform offering real-time dashboards displaying asset proof data, allowing users to monitor their staked Bitcoin at any time.

Custodians are responsible for delegating equivalent local Bitcoin to Babylon's finality provider and distributing rewards on the Bitcoin mainnet, managing user reward distribution. This integrated system ensures that PumpBTC never directly handles user assets, thereby minimizing security risks while enhancing potential yields.

By combining multi-chain accessibility, professional-grade asset security, real-time transparency, and efficient yield generation, PumpBTC offers a unique solution in the DeFi space. It provides Bitcoin holders with a secure and profitable way to participate in Babylon staking across multiple blockchain ecosystems while maintaining the security, liquidity, and integrity of their original assets.

While directly staking on the Babylon chain offers enticing rewards, $pumpBTC elevates the utility of your Bitcoin to a new level:

• Enhanced Liquidity: Unlike directly staking Bitcoin on Babylon, which may lock assets, $pumpBTC offers greater flexibility. You can trade $pumpBTC on various decentralized and centralized exchanges as long as there is sufficient liquidity. This feature allows you to quickly respond to market opportunities while maintaining exposure to Bitcoin's value.

• Simplified Staking Process: PumpBTC simplifies the BTC.B/WBTC staking experience, allowing you to stake BTC.B/WBTC directly across different chains. This method leverages the robust DeFi ecosystem and proven security infrastructure of EVM chains, providing a familiar and reliable environment for your staking activities.

• Amplified Yield Generation: By converting BTC.B/WBTC into $pumpBTC, you can access multiple streams of rewards, including Babylon's native rewards. This diversification can significantly enhance your overall yield potential, maximizing returns on your Bitcoin holdings.

• Ecosystem Integration: $pumpBTC serves as a gateway to various DeFi protocols and applications built on Ethereum and other EVM chains. This integration expands your options in yield farming, lending, and other DeFi strategies.

• Risk Mitigation: Rapidly trading $pumpBTC provides an additional layer of risk management. In volatile market conditions, you can quickly adjust your positions without facing the delays typically associated with the withdrawal process on other platforms.

• Compound Growth Opportunities: The liquidity of $pumpBTC makes it easy to reinvest yields, enabling compound growth strategies that could significantly enhance long-term returns.

From this more intuitive diagram, it can be seen that assets are either in EVM contracts (as wrapped Bitcoin) or in Babylon (as local Bitcoin).

Intermediary layers such as MultiSig -> Binance -> Cobo custody are merely channels and theoretically should not hold assets. The $pumpBTC contract is independently deployed on different chains, with each chain able to mint $pumpBTC through staking contracts and destroy $pumpBTC through unstaking.

The total supply of $pumpBTC equals the sum of the supplies of all on-chain $pumpBTC contracts. Each $pumpBTC is backed by a 1:1 full reserve of local Bitcoin. The PumpStaking contract serves as the deposit and withdrawal channel for wrapped Bitcoin tokens ($BTCB / $WBTC / $FBTC) across different chains.

Most assets are stored as local Bitcoin in Babylon, through Cobo custody. A smaller portion of assets is stored in PumpStaking as wrapped Bitcoin tokens.

PumpTokens can be transferred between different chains via cross-chain bridges. The cross-chain process is as follows:

1. The source chain destroys $pumpBTC.
2. The target chain mints $pumpBTC.

This cross-chain method does not affect the total supply, thereby maintaining a 1:1 local Bitcoin reserve backing for each $pumpBTC.

Minting and Burning Process

• Minting Process The minting process in PumpBTC represents the creation of new wrapped tokens (specifically $pumpBTC). This process begins when users deposit assets into the PumpBTC system. When users submit assets, these assets are transferred directly to the partnering custodians rather than directly to PumpBTC itself. Once the custodians receive these assets, they trigger a minting transaction that converts the assets into $pumpBTC tokens and sends them to the PumpBTC smart contract. This operation creates new $pumpBTC tokens at a 1:1 ratio. Finally, these newly minted $pumpBTC tokens are returned to the users.

• Burning Process

In the context of PumpBTC, burning refers to the process of exchanging $pumpBTC tokens back for Bitcoin. This operation is essentially the reverse of the minting process and plays a crucial role in maintaining system balance and token integrity. By burning $pumpBTC tokens, users can withdraw an equivalent amount of local Bitcoin, ensuring that each $pumpBTC token maintains 1:1 local Bitcoin reserve backing.

Commentary

PumpBTC has clear advantages in enhancing Bitcoin liquidity, simplifying the staking process, and expanding yield opportunities through multi-chain integration, making it particularly suitable for users looking to extend the utilization of Bitcoin assets within the DeFi ecosystem. However, it still relies on custodians, cross-chain bridges, and smart contracts, which may introduce certain risks. Overall, PumpBTC provides Bitcoin holders with a more flexible and secure staking method, but users need to assess potential market and technical risks when using it.

## 2. Detailed Overview of Projects to Watch This Week

2.1. Detailed Analysis of Arcadia Finance, a Highly Optimized Yield Strategy DeFi Platform Led by GFC and CoinBase

Introduction

Arcadia Finance allows everyone, whether professional market makers or ordinary users, to earn yields by utilizing automated market maker (AMM) liquidity positions. It supports virtual liquidity and concentrated liquidity positions and integrates with major decentralized exchanges (DEX) such as Uniswap, Aerodrome, and Alienbase. Arcadia Finance is the first user-facing application built on the Arcadia Protocol, designed to showcase its powerful capabilities.

Technical Analysis

Arcadia Protocol is the next-generation DeFi asset management protocol that powers Arcadia Finance. Through user-owned DeFi accounts, it provides:

• Simple one-click trading, allowing users to access complex high-yield strategies typically reserved for professionals.
• Automated asset and risk management while maintaining self-custody.
• Built-in margin.
• Interfaces provided for third parties and AI agents to manage assets within on-chain executable boundaries.

Pragma Labs is the research company developing the Arcadia Protocol and its underlying off-chain infrastructure.

Arcadia Protocol LLC develops, commercializes, and hosts user-facing applications built on the Arcadia Protocol.

1. Arcadia DeFi Account

Arcadia DeFi accounts are user-owned smart contracts that function similarly to self-custody wallets but with greater efficiency and automation. They allow users to batch execute multiple trades and automate portfolio management, making complex DeFi operations seamless.

Operations that typically require multiple steps—such as rebalancing liquidity positions, unwinding assets, or managing leverage—can be executed in a single transaction through Arcadia DeFi accounts.

There are two types of Arcadia accounts:

• Spot Accounts
• Create liquidity provision (LP) positions containing any assets.
• Do not support borrowing or leverage—just an optimal way to manage liquidity.
• Margin Accounts
• Support leverage through collateralized borrowing.
• Can only create liquidity provision positions using permitted assets.
• Assets within the account contribute to its overall health, providing greater flexibility in liquidity management.
• Both deposited and borrowed assets count as collateral.

Both account types benefit from Arcadia's automation tools, such as automatic rebalancers, automatic compounders, and one-click quick actions (zaps), helping users easily optimize their liquidity positions.

2. Arcadia Lending Pools

Arcadia lending provides independent lending pools that allow lenders to supply assets to earn passive income. Strategists and farmers can borrow from the lending pools using Arcadia accounts as collateral and pay interest to lenders. Deposits in Arcadia's lending pools are protected against risks arising from smart contract vulnerabilities.

Currently, Arcadia supports USDC, wETH, and cbBTC lending pools, each operating independently. These pools adhere to the ERC-4626 reserve standard, making them compatible with platforms like Superform and Vaults.fyi.

How It Works

• Lenders deposit assets and receive tokens that automatically generate income.
• Borrowers create leveraged liquidity positions across multiple decentralized exchanges (DEX) using Arcadia accounts as collateral.
• Interest rates are adjusted based on pool utilization—the higher the borrowing demand, the higher the returns for lenders.
• A liquidation mechanism ensures unhealthy positions are closed before bad debts occur, allowing lenders to earn a portion of the penalties paid by liquidated accounts.
• Arcadia does not charge protocol fees, so lenders retain 100% of interest and liquidation rewards.

1. Arcadia Farms

Arcadia Farms simplifies liquidity provision across multiple leading decentralized exchanges (DEX) through an intuitive interface that combines basic pool data with flexible position management. Depending on users' strategies and risk tolerance, they can choose to provide liquidity using margin accounts or spot accounts. Users with margin accounts can only provide liquidity to pools allowed as collateral by Arcadia's lending pools. As of now, over 100 pools can provide margin liquidity.

On the other hand, users with spot accounts can create liquidity provision (LP) positions for any token, including speculative meme coins or community tokens. Since leverage is not used, underlying assets do not need to be permitted as collateral.

Users maintain complete control over their liquidity provision positions, just as they would when interacting directly with decentralized exchanges. This includes adjusting position ranges, opening or closing positions, and modifying leverage ratios for margin positions. In addition to being a useful platform for beginner liquidity providers, it is also suitable for experienced liquidity providers who understand decentralized exchange mechanisms and wish to maintain fine control over liquidity management across multiple platforms.

4. Arcadia Reward System

Arcadia's reward system focuses on incentives designed to drive participation and usage.

1. Lenders

The protocol tracks all lending rewards through ERC4626 yield-generating tokens, which represent your share in the lending pool. These tokens continuously accumulate value:

• Rewards automatically accumulate in real-time.
• Rewards are automatically compounded on your lending positions.

Interest

When users borrow assets from Arcadia's lending pools, they pay interest based on utilization rates. Unlike many protocols that charge fees, Arcadia allocates all these rewards to lenders:

• 100% of borrower interest payments flow to lenders.
• There are no hidden Arcadia fees; what you deposit is the minimum you can withdraw.

The protocol uses a dynamic interest rate model that responds to market demand. Interest rates are automatically adjusted based on pool utilization to maintain optimal liquidity levels. This curve ensures that lenders earn more when demand increases, while borrowers can obtain reasonably priced loans under normal market conditions.

Liquidation Rewards

When borrowers are liquidated, up to 6.5% of the liquidation penalties will be allocated to lenders.

AAA Emissions

In addition to all the aforementioned rewards, Arcadia may decide to incentivize its USDC, wETH, or cbBTC pools through additional AAA emissions.

Additional Rewards

In addition to the base protocol rewards, Arcadia collaborates with partners to provide additional yield opportunities:

• Extra incentives from partner protocols.
• Special rewards during ecosystem promotions (e.g., superchain rewards).

1. Accounts

Liquidity providers earn multiple sources of rewards when providing liquidity on DEX:

• Trading fees from standard liquidity positions.
• AERO tokens earned when using staked Slipstream positions.

For example:

• A margin account user might provide ETH-USDC liquidity to Aerodrome Staked Slipstream and earn AERO instead of trading fees along with MERKL incentives using borrowed funds.
• A spot account user can execute the same strategy without leverage, accessing more unique pairs like virtual, AIXBT, TOSHI, etc., which cannot be used as collateral.

Both account types can optimize their positions and claim rewards through the same mechanism, with rewards automatically collected during position adjustments or rebalancing.

5. Automated Market Makers (AMM)

Automated market makers (AMM) are smart contracts that enable decentralized trading without an order book. AMMs do not execute trades by matching buyers and sellers but rather facilitate transactions using liquidity pools funded by liquidity providers (LP).

Traditional virtual automated market makers (vAMM) allocate liquidity across all possible prices to ensure continuous trading but lead to capital inefficiency. Most liquidity remains unused, especially between stable or correlated asset pairs. Concentrated liquidity automated market makers (clAMM) address this issue by allowing liquidity providers (LP) to allocate funds within specific price ranges. This increases capital efficiency and boosts fee income, but there are trade-offs.

• No Earnings Outside Range

If the market price exceeds the range selected by the LP, their liquidity will no longer be active, meaning no fees can be earned until the price returns to the range or the position is adjusted.

• Impermanent Loss (IL)

Impermanent loss occurs when the relative prices of assets in the pool change, causing LPs to end up holding more underperforming assets. In concentrated liquidity pools (CL pools), IL is magnified when using narrower ranges, as price fluctuations can quickly push positions outside the range, forcing LPs to either incur losses or adjust the range at additional costs.

While concentrated liquidity pools offer greater efficiency, they require active management to remain profitable. LPs must balance range size, rebalancing frequency, and market volatility to minimize risks.

User Operation Flow

Different types of users can earn yields through the Arcadia protocol.

There are three distinct user groups. The following diagram illustrates how each type of user interacts with the Arcadia protocol.

1. Lenders Lenders are the least complex users. They do not directly engage with liquidity positions and only indirectly assume market or liquidation risks. Lenders simply need to choose the asset they wish to lend and how much to lend.
   Lenders deposit a single asset into one of Arcadia's lending pools, which can be borrowed by strategists and farmers to build leveraged positions.

Currently, there are three available lending pools, with more to be added in the future. The current lending pools include:

• USDC lending pool
• WETH lending pool
• cbBTC lending pool

Unless an auction is underway, lenders have no lock-up periods or withdrawal fees. There is also no impermanent loss incurred.

2. Strategists Strategists are a more complex user type. They need to understand the risks of using AMM liquidity positions.
   Choosing and managing yield strategies does not require any technical knowledge or experience. Strategists simply need to select one of four carefully curated yield strategies. The dApp will use data to optimize the pools, ranges, rebalancing frequencies, etc., used in the curated strategies. Strategists are yield-seeking users with specific goals and/or market outlooks who believe AMMs are a good way to earn yields but lack the technical expertise and/or time to monitor and manage individual pools.

For this type of user, Arcadia provides a set of carefully curated, easy-to-use strategies that allow them to access well-performing AMM liquidity pools with just a few clicks. These strategies only use stablecoins or tokens related to major assets (such as ETH and BTC).

Currently, Arcadia offers four strategies:

• Delta Neutral USD: Aim to keep the USD value of the portfolio stable while earning yields.
• Delta Neutral ETH: Aim to keep the ETH value of the portfolio stable while earning yields.
• Bullish Cryptocurrency: When total market capitalization increases, the USD value of the portfolio increases while earning yields.
• Bearish Cryptocurrency: When total market capitalization decreases, the USD value of the portfolio increases while earning yields.

1. Farmers Farmers are the most complex user type. Farmers can flexibly build and manage their yield portfolios. Farmers can choose and combine liquidity positions from any available pools, select custom ranges, use leverage, customize automation features, etc.

Farmers can fully leverage all the features offered by Arcadia, such as:

• Selecting AMM pools from any supported DEX.
• Setting custom price ranges for liquidity positions.
• Setting automation features for their positions, such as compounding or automatic rebalancing.
• Choosing various rebalancing strategies.
• Using leverage to hedge against impermanent loss (IL) risks or maximize yields. They can also choose the assets to borrow and the leverage multiples.
• Fine control over operations such as depositing, withdrawing, borrowing, and repaying assets from their accounts.

Summary

Arcadia has significant advantages in providing liquidity management and yield strategies for different types of users, especially its automation tools and flexibility. However, as it is more suited for users with a certain technical background and management capability, beginners or non-technical users may face some management challenges and risks.

# III. Industry Data Analysis

1. Overall Market Performance

1.1 Spot BTC & ETH ETF

On November 1 (Eastern Time), the total net outflow of Ethereum spot ETFs was $10.9256 million.

1.2. Spot BTC vs ETH Price Trends

BTC

Analysis

Last week, BTC formed a 4H-level W bottom around $74,500 as expected, and the subsequent rebound was slow but relatively stable, which is a good sign for bulls. However, as the price approached above $84,000, the short-term trend faced resistance at $86,200. Given that current market sentiment remains relatively panicked, this former weak resistance may also exert considerable pressure on bulls. If the short-term rebound cannot sustain above this level, a pullback to around $81,200 to seek strong support is highly likely.

Conversely, if the trend can quickly break through and stabilize above $86,200 in the first half of this week, users can look upward towards $89,000 or even $92,000.

ETH

Analysis

ETH's poor performance last week saw it break below $1,530, forming bottom support around $1,380, which is the bottom from March 2023. However, the rebound remains weak, with the first resistance to watch at around $1,750. If the rebound is blocked and buying remains sluggish, there is a high probability of further testing the previous low ($1,380). Conversely, if the fundamentals improve, a sustained rebound to around $2,000 is also possible.

1.3. Fear & Greed Index

2. Public Chain Data

2.1. BTC Layer 2 Summary

Analysis

From April 7 to April 11, 2025, the ongoing evolution of Bitcoin Layer 2 solutions was marked. The Nakamoto upgrade of the Stacks ecosystem and the integration with sBTC are key initiatives to enhance Bitcoin's programmability and scalability. Meanwhile, the Bitcoin L2 ecosystem is experiencing significant growth, driven by increased institutional investment and the development of innovative platforms. These advancements position Bitcoin Layer 2 solutions as a critical component of the future development of decentralized finance and blockchain technology.

2.2. EVM & Non-EVM Layer 1 Summary

Analysis

EVM-Compatible Layer 1 Blockchains:

• EOS Network: The EOS Network Foundation is leading the upgrade of its consensus mechanism and plans to integrate the Ethereum Virtual Machine (EVM) system. The EVM mainnet is scheduled to launch on April 14, 2025. This integration aims to enhance EOS's scalability and performance, making it a competitive platform for decentralized applications (dApps).

• Telos Blockchain: Telos has launched a fully EVM-compatible Layer 1 blockchain, allowing developers to deploy existing Ethereum dApps without modification. Telos EVM offers significantly higher speed and capacity compared to Ethereum, providing a more efficient environment for decentralized applications.

• Polkadot: Polkadot's 2025 roadmap includes support for EVM and Solidity, enhancing its interoperability and scalability. The implementation of a multi-core architecture aims to increase capacity and address the growing demand for on-chain transactions.

Non-EVM Layer 1 Blockchains:

• W Chain: W Chain, a hybrid blockchain network based in Singapore, has initiated a soft launch of its Layer 1 mainnet. This phase follows the successful testing period and introduces the W Chain Bridge to enhance cross-platform compatibility. A full commercial mainnet is planned for release in March 2025.
• N1 Blockchain: N1, an ultra-low latency Layer 1 blockchain, has confirmed the commitment of its original investors and is preparing for mainnet release. N1 is designed to support high-throughput decentralized applications, offering features such as horizontal scalability and sub-millisecond latency, aimed at simplifying the development process for decentralized applications.

2.3. EVM Layer 2 Summary

Analysis

From April 7 to April 11, 2025, several significant developments occurred in the EVM Layer 2 ecosystem:

1. Academic Research: On April 7, 2025, a research paper titled "Hollow Victories: How Malicious Proposers Exploit Validator Incentive Mechanisms in Optimistic Rollup Dispute Games" was published. The study analyzes vulnerabilities in the incentive structure of optimistic rollups, revealing potential exploitation methods by malicious proposers and suggesting countermeasures to enhance the security of Layer 2 solutions.
2. Market Performance: As of April 12, 2025, the total locked value (TVL) of Ethereum Layer 2 platforms has exceeded $51 billion, representing a 205% increase since November 2023. Leading platforms like Arbitrum and Base have played significant roles in this growth, reflecting strong investor interest and the expansion of Layer 2 solution applications.
3. Technical Progress: The Telos Foundation announced its development roadmap for a zero-knowledge EVM (ZK-EVM). Plans include deploying hardware-accelerated zkEVM to the testnet in Q4 2024, integrating it into the mainnet in Q1 2025, and achieving full SNARKtor integration by Q4 2025. These advancements aim to enhance the scalability and efficiency of the Telos network.
4. Industry Collaboration: Interlay launched the minimum viable product (MVP) of its "Build on Bitcoin" (BOB) solution, a Bitcoin Layer 2 network fully compatible with the Ethereum Virtual Machine (EVM). This development aims to bridge the gap between the Bitcoin and Ethereum ecosystems, enabling developers to create decentralized applications on Bitcoin using Ethereum smart contract functionalities.

# IV. Macroeconomic Data Review and Key Data Release Nodes for Next Week

The U.S. March unadjusted CPI year-on-year fell to 2.4%, the lowest in six months, below the market expectation of 2.6% and the previous value of 2.8%. Following the data release, the market increased its bets on a Federal Reserve rate cut. CME interest rate futures show that the probability of a rate cut in June has risen to 68% (up from 52% before the data release), with expectations for rate cuts throughout 2025 expanding to 75-100 basis points.

This data confirms the trend of falling inflation, but the stubbornness of core inflation may prompt the Federal Reserve to maintain a "gradual rate cut" statement in subsequent meetings.

Important macro data nodes for this week (April 14-18) include:

April 16: U.S. March Retail Sales Month-on-Month

April 17: U.S. Initial Jobless Claims for the Week Ending April 12

# V. Regulatory Policies

United States

Trump Administration Strengthens Support for Cryptocurrency Policies: U.S. President Donald Trump signed an executive order designating cryptocurrency as a national priority, establishing a "Presidential Task Force on Digital Asset Markets" to create a regulatory framework and assess national digital asset reserves. The order protects fair banking access for self-custody and crypto businesses and explicitly prohibits the launch of Central Bank Digital Currency (CBDC) in the U.S.

Europe

EU Crypto Asset Market Bill (MiCA) Advances: The European Commission continues to advance the drafting of the MiCA bill, aimed at providing a unified regulatory framework for crypto assets, enhancing market transparency and investor protection.

Japan

Japanese Government Takes a Cautious Stance on Bitcoin as a Strategic Reserve: Japanese Prime Minister Shigeru Ishiba stated that the government currently lacks sufficient information to consider Bitcoin as a strategic reserve.