This Week in DeFi: Global Trade War Concerns Shake Crypto Markets, 0G Foundation Launches $88.88 Million Ecosystem Fund

Global trade war concerns ignited by US President Donald Trump's import tariffs shook the crypto markets this week, amounting to over $10 billion worth

Macroeconomic concerns, such as the global trade war sparked by US President Donald Trump’s import tariffs, continued to influence the crypto markets this week. According to CoinGlass data, over $2.24 billion was liquidated from the crypto markets in 24 hours on Feb. 3.

However, Bybit co-founder and CEO Ben Zhou suggested that the actual figure might be much higher, estimating it to be in the range of $8 billion to $10 billion.

In a Feb. 3 X post, Zhou highlighted that Bybit’s 24-hour liquidation alone amounted to $2.1 billion. Multiplying this figure by five would yield a total liquidation figure of $10.5 billion.

"I am afraid that today’s real total liquidation is a lot more than $2 billion, by my estimation, it should be at least around $8 billion -10 billion,” he wrote.

Despite the downside volatility triggered by macroeconomic concerns, significant investments continued flowing into the crypto industry.

0G Foundation launches $88.88 million fund for AI-powered DeFi agents

The organization overseeing the development of the 0G decentralized AI operating system, 0G Foundation, announced the launch of an $88.88 million ecosystem fund to accelerate projects creating AI-powered decentralized finance (DeFi) applications and autonomous agents, also known as DeFAI agents.

The fund, which will be used to support early-stage projects, received strategic backing from Web3 investment firms including Hack VC, Delphi Ventures, Bankless Ventures and OKX Ventures.

According to Michael Heinrich, co-founder and CEO of 0G Labs, the fund's launch comes at a “pivotal moment” for the convergence of blockchain and AI applications.

“The rapid growth of AI capabilities, coupled with the need for trustless, transparent systems in finance, makes this the ideal time to accelerate the development of autonomous agents,” Heinrich told Cointelegraph.

Solana app revenues up 213% in Q4: Messari

Application revenues on the Solana network increased by 213% in the fourth quarter of 2024, largely driven by memecoin speculation, a report by crypto research firm Messari revealed.

Cumulative app revenues grew from $268 million in Q3 2024 to $840 million in Q4, according to Messari. They peaked in November at $367 million, the report showed.

The gains were primarily driven by increased memecoin trading, which emerged as the driving force of Solana’s decentralized finance (DeFi) ecosystem in 2024.

Memecoin launchpad Pump.fun clocked $235 million in Q4 revenue for a quarter-over-quarter increase of nearly 242%, Messari noted.

THORChain approves plan to restructure $200 million debt

Node operators of decentralized liquidity protocol THORChain approved a proposal to resolve its liquidity issues by converting the platform’s defaulted debt into equity.

On Jan. 23, THORChain suspended its lending and savers programs for Bitcoin (BTC) and Ether (ETH) to prevent an insolvency crisis and restructure the protocol’s debt.

The platform paused ThorFi redemptions for 90 days to allow the community to develop a plan to stabilize its operations.

Following the pause, the THORChain community proposed different restructuring plans to ensure the network’s continued operation while compensating affected users.

On Feb. 2, the platform’s node operators approved a proposal that involves converting its defaulted debt into tokens representing equity in the platform.

Fed’s Waller backs regulated stablecoins to boost US dollar’s global dominance

Federal Reserve Bank Governor Christopher Waller expressed his support for the adoption of stablecoins with clear rules and regulations, suggesting that it will likely cement the US dollar’s status as a reserve currency.

Waller, who chairs the Fed Board’s payments subcommittee, said in a Feb. 6 interview with the Atlantic Council think tank that stablecoins “will broaden the reach of the dollar across the globe and make it even more of a reserve currency than it is now.”

"What I see with stablecoins is they are going to open up possibilities and other ways of doing payments on the rails,” he said.

In Waller’s opinion, good regulation of stablecoins will only strengthen the dollar as a reserve currency and its use in international trade, finance and investments.

DeFi market overview

According to data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market capitalization ended the week in the red.

The Virtuals Protocol (VIRTUAL) token fell over 46% as the biggest loser in the top 100, followed by the Arweave (AR) token, down over 38% during the past week.