What's Driving Token Prices? April 10, 2024

Katie Talati
Apr 10, 2024

Join Katie Talati, Arca’s Head of Research, weekly on Wednesday at 4PM EST / 1PM PST as she shares notable token activity over the past week and her insights on what market events drove these token price movements.

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  • TNSR (-11%) -  Tensor, was the newest airdrop to hit the market this week, dropping its governance token, TNSR. Tensor, which launched in late 2022,  is one of the largest NFT marketplaces on Solana and has frequently been labeled the “Blur of Solana”. Despite this, Solana only makes up about 20%-25% of total NFT trading volume. The TNSR token debuted on Monday at a $1.8B fully diluted valuation, which was higher than competitor BLUR’s valuation at the time. The market has since repriced TNSR, and both tokens sit about equal at $1.57B. However, BLUR, on a fundamental level, outperforms Tensor as it saw $1.35B in volume in March vs Tensor’s $140M. 
  • WHALES (-1.5%) - Whales Market, a pre-launch marketplace for trading tokens, faced a major setback this week as it canceled one of the largest airdrops of the year. The bridging project, Wormhole, issued its $W token last week via Solana only which, unfortunately, caused Whales Market to cancel all open orders that existed on Ethereum for the $W airdrop. However, orders placed on Solana were still able to be settled. It is unclear how many users were impacted by the decision to cancel all Ethereum-based orders, but the move was a blow to Whales, which is still in its infancy. 
  • LDO (+5.1%) - A vote to institute a fee switch for liquid staking protocol Lido, failed this weekend in a close vote of 56% vs 44%. Discussions to distribute fees earned by Lido to tokenholders have been circulating for several months, but this was the first time such a discussion had progressed to a vote. The forum discussions themselves were quite heated, with many arguing that turning on fees was necessary to keep Lido relevant. The opposing side insisted that the DAO retain all earnings and focus on growth instead. 30-day annualized earnings to Lido currently sit at $130M.
  • XRP (+6.9%) - Last week, payments project Ripple announced it would launch a stablecoin that would “rival USDT and USDC”. While it is unclear how Ripple’s stablecoin would differ from existing solutions (as the design describes a U.S.-denominated token backed 1:1 with cash and cash equivalents), Ripple’s CEO Brad Garlinghouse stated that a stablecoin is the number one thing requested by its user base. If they did launch a stablecoin, Ripple would be up against some fairly stiff competition, such as Tether’s USDT (AUM $107B), Circle’s USDC (AUM $32B), PayPal’s PYUSD (AUM $192M ), and Paxos’s USDP (AUM $147M).

DISCLAIMER: This commentary is not intended to be investment advice, investment research, or a recommendation. Please consult your investment professional for your own circumstances."

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Disclaimer: This commentary is provided as general information only and is in no way intended as investment advice, investment research, legal advice, tax advice, a research report, or a recommendation. Any decision to invest or take any other action with respect to any investments discussed in this commentary may involve risks not discussed, and therefore, such decisions should not be based solely on the information contained in this document. Please consult your own financial/legal/tax professional.

Statements in this communication may include forward-looking information and/or may be based on various assumptions. The forward-looking statements and other views or opinions expressed are those of the author, and are made as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated and there is no guarantee that any particular outcome will come to pass. The statements made herein are subject to change at any time. Arca disclaims any obligation to update or revise any statements or views expressed herein. Past performance is not a guarantee of future results and there can be no assurance that any future results will be realized. Some or all of the information provided herein may be or be based on statements of opinion. In addition, certain information provided herein may be based on third-party sources, which is believed to be accurate, but has not been independently verified. Arca and/or certain of its affiliates and/or clients may now, or in the future, hold a financial interest in investments that are the same as or substantially similar to the investments discussed in this commentary. No claims are made as to the profitability of such financial interests, now, in the past or in the future and Arca and/or its clients may sell such financial interests at any time. The information provided herein is not intended to be, nor should it be construed as an offer to sell or a solicitation of any offer to buy any securities, or a solicitation to provide investment advisory services.

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