11.3 AI Daily Hot spots in the encryption industry emerge frequently, AI integration sparks transformation.

1. Headlines

1. Alpha Airdrop Kite AI Token Causes Controversy

The Alpha event launched the Kite AI token airdrop on November 3, sparking industry discussions. Kite AI is a Layer 1 blockchain project aimed at becoming the “world's first AI agent marketplace.” Eligible users can claim 500 KITE tokens within 24 hours, but they must spend 15 Alpha points.

This airdrop design has been questioned by some users. On one hand, the threshold for obtaining Alpha points is relatively high, making it difficult for ordinary users to participate; on the other hand, as an emerging project, Kite AI's development prospects are uncertain, and the rationale for spending Alpha points is being questioned.

At the same time, some analysts believe that this move is beneficial for promoting the Kite AI concept and attracting more users' attention to the innovative applications of the combination of AI and cryptocurrency. Leveraging its traffic advantages to provide exposure opportunities for new projects will help diversify the development of the industry ecosystem.

Overall, this airdrop design reflects the cryptocurrency industry's desire for and cautious attitude towards emerging concepts. There are divergent views within the industry regarding the prospects of the integration of AI and cryptocurrency, and more practice is needed to test its development potential.

2. The Hong Kong Securities and Futures Commission has released new guidelines to promote liquidity sharing among virtual asset trading platforms.

The Hong Kong Securities and Futures Commission ( issued two new regulatory guidelines on November 3, aimed at promoting liquidity sharing among virtual asset trading platforms and expanding the range of products and services. This is seen as a significant advancement in Hong Kong's cryptocurrency regulatory policy.

The new guidelines clarify the standards that platform operators should follow when connecting to global liquidity and providing diversified products and services. This includes adopting a currency settlement and intraday settlement system, establishing reserve funds and insurance arrangements in Hong Kong, and implementing unified market surveillance.

This initiative is conducive to enhancing the liquidity and efficiency of virtual asset trading in Hong Kong, while boosting the confidence of market participants. At the same time, it sets a clear regulatory framework for industry development, promoting a balance between innovation and compliance.

However, the new guidelines also impose higher requirements on the operational and compliance costs of the platform. There are still differences within the industry regarding the specific implementation details, and it is necessary for regulatory agencies to maintain a healthy interaction with the market, seeking a balance between promoting development and preventing risks.

) 3. Will the periodic pattern of Bitcoin be broken? On-chain data analysis triggers industry reflection

The CEO of the renowned cryptocurrency data analysis platform CryptoQuant recently released an on-chain data analysis report for Bitcoin, prompting industry insiders to reflect on the cyclical patterns of Bitcoin.

The report shows that Bitcoin's hash rate continues to hit new highs, and mining companies are expanding their operations, but the profit margin for whales is not extremely high. Demand mainly comes from ETFs and institutional buyers. This is different from previous bull market cycles and may signal the end of Bitcoin's four-year cycle model.

On one hand, the Bitcoin ecosystem continues to develop, and the infrastructure is constantly improving, which is conducive to the realization of long-term value; on the other hand, the degree of institutionalization deepens, funding becomes more rational, speculative trading may weaken, and cyclical patterns will also change accordingly.

However, some analysts believe that Bitcoin, as a new type of asset, still needs time to verify its price fluctuation patterns. The current on-chain data is merely a short-term phenomenon, and whether it will continue to exhibit cyclicality in the future remains to be observed.

Overall, the Bitcoin ecosystem is undergoing significant changes, and old perceptions may be broken and reshaped. Industry insiders need to maintain an open mindset to examine the development trajectory of cryptocurrencies from a more inclusive and rational perspective.

4. The flash loan attack caused losses exceeding 100 million US dollars, attracting industry attention.

On November 3, the DeFi protocol Mango Markets suffered a large-scale flash loan attack, resulting in losses exceeding $128 million. This incident has once again sparked widespread attention and discussion within the industry regarding the security of DeFi.

Attackers exploited vulnerabilities in the Mango Markets smart contract, manipulating the flow of funds through flash loans, ultimately profiting over 100 million USD. This is not the first time Mango Markets has suffered such attacks; it has been targeted twice in 2023 alone, with losses exceeding 26 million USD.

On one hand, this highlights that while DeFi protocols are decentralized, they also face higher security risks. Code vulnerabilities may be exploited by malicious actors, leading to significant financial losses. On the other hand, the repeated success of flash loan attacks also reflects that the industry's awareness of security and its ability to respond still need to be strengthened.

Insiders call for increased investment in the DeFi ecosystem to improve security audits and risk control mechanisms. At the same time, regulatory authorities should also intervene to set necessary compliance standards for DeFi, ensuring the stability of the financial system.

5. Musk shares AI vision: reshaping the underlying logic of world operations

In the latest episode of the podcast, Tesla CEO Elon Musk elaborated on his grand vision for the development of AI. He believes that the future of AI lies not only in language interaction and content generation, but more importantly, in understanding the world, accessing processes, and driving change in key areas.

Elon Musk predicts that within 5-6 years, applications and operating systems will be completely replaced by AI. Mobile phones will only need a screen and audio, with all interactions handled by AI. Robots will no longer mimic human forms but will be highly optimized for specific tasks.

This vision showcases Musk's boundless imagination regarding AI technology. He hopes to reconstruct the underlying logic of how the world operates through AI, improve production efficiency, optimize resource allocation, and ultimately benefit human civilization.

However, Musk's ideas have also sparked some doubts. Is it wise to rely entirely on AI? How can we ensure the safety and reliability of AI systems? Will AI lead to social issues such as employment? These all require verification through technological development and social practice.

Overall, Musk's AI vision has opened up people's thoughts on the future of technological development. How will AI change the world? Are we prepared for it? These questions are worth in-depth discussion by the whole society.

2. Industry News

1. Bitcoin is experiencing narrow fluctuations, and market sentiment is cautious.

The price of Bitcoin remained in a narrow range around $109,000 on November 3, with a 24-hour decline of 0.92%. Analysts pointed out that Bitcoin is still trading within the range of $107,000 to $113,000 in the short term, failing to break through the key resistance level.

Investor sentiment is relatively cautious, with the Fear and Greed Index remaining in the “fear” zone at 42 points. Market trading volume has decreased, reflecting a slowdown in capital inflow. Some analysts believe that Bitcoin currently lacks strong momentum, and the buying strength of institutional investors has weakened.

However, in the long run, the fundamentals of Bitcoin remain strong. Publicly listed mining companies continue to expand their hash rates, reflecting an optimistic outlook for the future. On-chain data shows that long-term holders have not sold off in large quantities; instead, it is short-term investors who are taking profits.

Overall, Bitcoin may continue to fluctuate within a range in the short term. Investors need to closely monitor important fundamentals and on-chain data changes to seize potential opportunities.

2. Ethereum falls below $3900, testing the self-rescue ability of the DeFi ecosystem.

The price of Ethereum dipped to around $3800 on November 3, with a 24-hour decline of approximately 3.5%. Some major tokens in the DeFi ecosystem also experienced varying degrees of decline.

Analysts point out that the main reason for Ethereum's recent pressure is investors' concerns about the overall sentiment in the cryptocurrency market. As uncertainty in the macro environment continues, risk assets are being sold off.

At the same time, some major protocols in the DeFi ecosystem are facing challenges. Among them, the Ether.fi community is voting on the use of $50 million from the treasury surplus to initiate a token buyback mechanism. This is seen as a touchstone for testing the “self-rescue” ability of the DeFi ecosystem.

Analysts say that if the proposal is passed, it will inject confidence into the DeFi ecosystem and prove its strong risk resistance. However, if it fails, it may exacerbate investors' doubts about DeFi projects.

Overall, the future trend of Ethereum and the DeFi ecosystem will depend on changes in the macro environment and the development dynamics of the ecosystem itself. Investors need to closely monitor relevant signals and cautiously manage risks.

3. The risks of trading altcoins have intensified, experts suggest staying away from high leverage.

On November 3rd, some well-known altcoins experienced significant fluctuations. Analysts warned that the risks of trading altcoins are continuing to intensify and advised investors to stay away from high-leverage trading.

Crypto KOL Cobie pointed out that trading altcoins will become increasingly difficult and riskier compared to Bitcoin. The main reasons include: intensified competition among buyers, mainly through perpetual contracts and high leverage trading, overvaluation and severe dilution of market capitalization, and capturing all optimistic sentiment at launch.

Another analyst stated that although altcoins may still offer high returns, the overall trading environment has changed. Investors need to possess higher skills to accurately grasp asset selection and timing.

At the same time, there are opinions that although the trading risks of altcoins are high, opportunities still exist. The key is to control risk exposure, stay away from excessive leverage, and take profits in a timely manner.

Overall, the high-risk high-return characteristics of the altcoin market are difficult to change in the short term. Investors need to have a clear understanding of the risks, operate cautiously, and avoid blindly chasing prices.

3. Project News

1. The Sky protocol governance vote has passed, and the on-chain earning mechanism is undergoing significant adjustments.

The Sky protocol community recently voted to replace the existing on-chain earning reward mechanism, marking a key evolution in the governance and incentive structure of the protocol. According to the new plan, Sky will adopt an enhanced reward model to replace the original mechanism, providing more flexible and sustainable incentives for ecosystem contributors.

The Sky Protocol is a decentralized open protocol aimed at providing infrastructure and tools for the We ecosystem. Since its launch in 2023, Sky has adopted an on-chain earning model to incentivize ecosystem builders. However, with the development of the ecosystem and the changing needs of users, the limitations of the original mechanism have become increasingly apparent, and optimization and upgrades are urgently needed.

The approval of this proposal marks a significant adjustment to the incentive mechanisms and token economic model of the Sky protocol, with related updates set to be implemented gradually. The new enhanced reward model will provide contributors with more flexible reward options while introducing a sustainability mechanism to ensure the feasibility of long-term incentives.

This transformation is regarded as an important manifestation of the governance capability of the Sky protocol, showcasing the community's ability for autonomous decision-making and rapid response to market demands. Analysts believe that this adjustment will further stimulate ecological vitality, attract more high-quality projects and talents to join, and inject new momentum into the long-term development of the Sky protocol.

2. The Kite AI airdrop event has started, and we are officially launching the first AI agency marketplace.

Kite AI is a Layer 1 blockchain built on the Avalanche ecosystem, aiming to become the “world's first AI agent marketplace.” The project recently launched an Alpha airdrop event, marking its official entry into the public eye.

As a blockchain infrastructure aimed at AI agents, Kite AI aims to provide features such as programmable governance, verifiable identity, and native stablecoin payments for AI applications. By establishing a fully decentralized agent network, AI agents will have their own crypto identity, programmable permissions, and token trading capabilities.

The innovation of Kite AI lies in combining AI agents with blockchain technology, granting independent identity and autonomy to AI applications, which is expected to promote the development of the AI economy. The project will also support cross-chain interoperability, providing infrastructure for AI agents to operate across different chains.

Analysts believe that Kite AI has opened up new possibilities for the development of AI agents. By empowering AI with blockchain technology, it is expected to address many challenges faced by AI applications, such as privacy protection, computing power supply, and economic incentives, thereby promoting the prosperity of the AI economy. At the same time, the emergence of Kite AI will also accelerate the integration of We and AI technology, bringing new development opportunities to the industry.

3. The Sui ecosystem continues to expand, with grayscale trust and USDC localization support coming soon.

The Sui ecosystem has recently shown strong development momentum, with significant benefits such as Grayscale Trust and localization support for USDC on the way, which are expected to further promote the prosperity of this ecosystem.

As an emerging public chain based on the Move language, Sui has attracted significant attention since the launch of its mainnet in 2022. With its outstanding performance and innovative design, Sui has drawn a large number of high-quality projects and developers to join.

According to reports, the well-known digital asset custody institution Grayscale Trust will soon deploy services in the Sui ecosystem, providing institutional investors with safe and reliable digital asset custody. At the same time, USDC will also launch localized support on Sui, offering users a more convenient stablecoin payment experience.

The arrival of these two major benefits will further strengthen the Sui ecosystem. The addition of Grayscale Trust will attract more institutional funds, while the localization support for USDC will help enhance user experience and promote the development of application scenarios such as DeFi.

Analysts believe that the Sui ecosystem is accelerating its transformation into a mature ecosystem. In the future, with the launch of more high-quality projects, Sui is expected to become a representative of the Move language ecosystem and occupy a place in the public chain field.

4. Virtuals launches the ACP protocol to create a new model of agency-based economy.

Virtuals is an innovative project that integrates cryptographic technology, artificial intelligence, and robotics, aiming to create a new model of agency-based economy through the ACP protocol, revolutionizing productivity and collaboration methods.

The ACP### Agent Collaboration Protocol( agreement is the core innovation of Virtuals, connecting humans, AI, and robots within a unified economic system to achieve efficient collaboration among the three. In this model, AI agents can autonomously execute tasks based on human needs, while robots are responsible for translating the results from the virtual world into reality.

Key components in the Virtuals ecosystem also include the Butler trading assistant and the Unicorn launch platform. Butler can provide users with intelligent investment advice, while Unicorn is a publishing and hosting platform for AI agents.

Analysts believe that the agency-based economic model constructed by Virtuals is disruptive. With the support of AI and robotic technology, humanity will achieve an unprecedented increase in productivity. At the same time, the agency economy will also give rise to new business models and employment forms, which are expected to drive social transformation.

The innovation of Virtuals lies in the integration of various cutting-edge technologies, outlining a new vision for the future development of human society. If this idea can be successfully implemented, it will mark the entry of humanity into a brand new economic era.

) 5. The Hong Kong Securities and Futures Commission has introduced new regulations to open up overseas liquidity for virtual asset trading platforms.

The Hong Kong Securities and Futures Commission recently issued two new circulars to open up overseas liquidity for licensed virtual asset trading platforms, marking a significant breakthrough in Hong Kong's virtual asset regulatory policy.

According to the new regulations, the Hong Kong Securities and Futures Commission will allow licensed virtual asset trading platforms to merge trading instructions with affiliated overseas platforms into a shared order book, which will help attract global trading flow and liquidity providers. At the same time, the SFC has also removed the 12-month track record requirement for professional investor products.

This initiative is seen as an important step in the “ASPIRe Roadmap” of the Hong Kong Securities and Futures Commission, aimed at transforming Hong Kong into an international hub for the virtual asset sector. By opening up overseas liquidity, Hong Kong will provide a broader market space for global virtual asset traders.

Analysts believe that the new regulations from the Hong Kong Securities and Futures Commission will further enhance Hong Kong's appeal as a virtual asset hub. While ensuring regulatory compliance, Hong Kong has also created a more inclusive environment for industry development, which is conducive to attracting quality projects and capital.

In the future, Hong Kong is expected to leverage its unique regulatory advantages and international influence to play a more significant role in the global virtual asset ecosystem.

4. Economic Dynamics

1. U.S. Treasury Secretary warns of high interest rate risks, Bitcoin falls below $108,000.

The current economic environment shows an overall recovery trend, but still faces challenges such as high inflation and rising interest rates. According to the latest data, the annualized quarter-on-quarter GDP growth in the United States for the third quarter is 2.6%, higher than the expected 2.4%, indicating moderate economic growth. However, at the same time, the core PCE price index rose 5.1% year-on-year in September, with inflationary pressures continuing. The unemployment rate remains low at 3.5%, and the job market is still tight.

In this context, U.S. Treasury Secretary Scott Bessent warned that high interest rates may have caused some sectors of the economy to fall into recession. His remarks suggest that the White House is exerting pressure on the Federal Reserve's monetary policy, calling for a quicker pace of interest rate cuts. This has led to a divergence in market expectations regarding the extent of rate hikes in December, increasing demand for safe-haven assets.

Investors reacted to the comments from the Treasury Secretary, leading to a broad decline in risk assets. Bitcoin briefly fell below the $108,000 mark, hitting a nearly two-week low. Major stock indexes also faced downward pressure, with the S&P 500 index dropping 1.16% and the Nasdaq down 1.51%. The yield curve for bonds further inverted, reflecting expectations of an economic slowdown.

Goldman Sachs analysts stated that the Treasury Secretary's remarks have intensified uncertainty about the economic outlook, prompting investors to重新定价风险资产. They expect the Federal Reserve to slow down the pace of interest rate hikes in December, but there remains the possibility of a 50 basis point increase. UBS believes that the Treasury Secretary's warnings may influence the Federal Reserve's decision-making direction, making it more cautious. Overall, experts generally agree that the Treasury Secretary's comments have increased policy uncertainty, and market volatility may persist.

2. Federal Reserve officials make strong statements, casting shadows over the prospects of a rate cut in December.

US inflation remains high, the job market is still tight, and the pace of economic recovery is slowing. Against this backdrop, US Treasury Secretary Scott Bessent recently warned that high interest rates may have pushed some sectors of the economy into recession, suggesting that the White House hopes the Federal Reserve will accelerate the pace of interest rate cuts. However, several Federal Reserve officials subsequently made strong statements, reiterating their commitment to curbing inflation, casting a shadow over the prospects for interest rate cuts in December.

Federal Reserve officials including Governors Cook, Bowman, Williams, and Vice Chair Jefferson will speak one after another this week. They are expected to provide more signals regarding the policy direction for December, and the market will pay close attention. Additionally, economic data released this week, such as the ISM Manufacturing and Services PMI data and the ADP Employment Report, will also influence the Federal Reserve's decision-making.

Investors reacted to the Fed officials' tough statements, leading to a slight rise in the dollar index and further inversion of the bond yield curve. The stock market faced downward pressure, with the S&P 500 index falling by 1.16% and the Nasdaq down by 1.51%. Risk assets like Bitcoin were also impacted, with Bitcoin briefly dropping below the $108,000 mark.

Goldman Sachs analysts stated that the comments from Federal Reserve officials have intensified uncertainty regarding the economic outlook, leading investors to reprice risk assets. They expect the Fed to slow down the pace of interest rate hikes in December, but a 50 basis point increase is still possible. UBS believes that the internal divisions within the Fed have widened, creating uncertainty in the decision-making outlook, and market volatility may persist.

3. U.S. employment data shows mixed signals, causing divergence in Federal Reserve's December policy.

The U.S. non-farm payroll report for November showed mixed results; the job market performed strongly, but wage growth slowed, adding uncertainty to the Federal Reserve's policy decision in December. Specifically, there were 263,000 new non-farm jobs in November, exceeding expectations and indicating that the job market remains tight; however, the average hourly wage growth for the same period was only 0.6%, below expectations, suggesting that wage pressures have eased.

After the data was released, investors had differing views on the Federal Reserve's policy direction for December. On one hand, strong employment data supports the Fed's continued rate hikes to curb inflation expectations; on the other hand, a slowdown in wages suggests that inflationary pressures may ease, providing a rationale for the Fed to raise rates “moderately”.

Market analysts are divided on the Federal Reserve's policy outlook for December. Goldman Sachs analysts believe that the employment data is mixed, and the Federal Reserve will slow down the pace of rate hikes to 25 basis points in December. However, UBS argues that the labor market remains overheated, and the Federal Reserve may maintain a rate hike pace of 50 basis points.

Investors have mixed reactions to the data, the US dollar index has risen slightly, and the degree of inversion in the bond yield curve has deepened. The stock market has shown divergence, with the S&P 500 index dipping slightly while the Nasdaq index has risen slightly. Risk assets such as Bitcoin are under pressure, with Bitcoin briefly falling below the $108,000 mark. Overall, market volatility has intensified, and there is significant divergence among investors regarding expectations for the Federal Reserve's policy in December.

4. The Federal Reserve raised interest rates by 75 basis points, in line with expectations but hawkish remarks pressured risk assets.

The Federal Reserve raised interest rates by 75 basis points as expected, in line with market expectations, but Powell's hawkish remarks put pressure on risk assets. Specifically, the Federal Reserve increased the target range for the federal funds rate to 3.75%-4%, marking the fourth consecutive increase of 75 basis points, indicating a commitment to curbing inflation.

Federal Reserve Chairman Powell stated at a news conference that inflation data remains too high and that interest rates are expected to continue rising to achieve the 2% inflation target. He emphasized that it is “still too early” to consider rate cuts and warned that a premature shift to accommodative policies could extend the period of high inflation.

Powell's hawkish remarks have shifted investors' expectations for the economic outlook to a pessimistic stance. U.S. stocks initially rose and then fell after the Federal Reserve's decision was announced, ultimately closing lower. The S&P 500 index dropped by 0.61%, and the Nasdaq fell by 0.52%. Risk assets such as Bitcoin also faced pressure and declined, with Bitcoin briefly dropping below the $108,000 mark.

Goldman Sachs analysts stated that Powell's hawkish comments have intensified concerns over an economic slowdown, leading investors to reprice risk assets. However, they believe that the Federal Reserve's interest rate hike of 75 basis points was expected and suggests that the rate hike cycle is nearing its end. UBS, on the other hand, believes that Powell's remarks imply that the Federal Reserve will continue to actively respond to inflation, anticipating another 50 basis point rate hike next year.