What's Driving Token Prices? February 15, 2023

UMAMI (-53%) - Umami Finance, a DeFi yield product built on Layer-2 Arbitrum, saw quite a bit of volatility last week as the CEO and founder of the project “rugged” the projects, dumping all his tokens (worth ~$500K) on the market and resigned from his post. Umami Finance, which aims to offer “real yield” (crypto speak for yield not from yield farming/token emissions) vault strategies on Arbitrum and paid out stakers on the protocol from the treasury, had to suddenly pause payouts to stakers a couple of weeks ago, citing regulatory concerns. A week later, the CEO dumped $500K of UMAMI tokens across the market, pushing the token price down 85%. Subsequently, team members of Umami Labs came out in opposition to the CEO, claiming he had taken drastic actions in the preceding weeks, such as firing the Chief Legal Officer and halting the staking emissions. The remaining team members of Umami Labs officially resigned and announced they would move the project to a DAO structure with treasury assets in the community’s control. There is currently a proposal to effect these changes and reinstate the staking emissions. However, the token has lost 53% of its value.
CHZ (-9.6%) - Sports and entertainment platform Chiliz officially launched the Genesis block of its Chiliz Chain 2.0 (CC2) last week. CC2 is an upgrade to Chiliz’s current Ethereum sidechain and will evolve the CHZ token into the gas token for the new Layer-1. However, the blockchain launch is not the full mainnet launch. The network is currently closed to the public, and validators are simply running empty blocks for now. A full launch is expected toward the end of March. The launch was also accompanied by a rebrand of the logo, website, and a new brand ambassador— Min-Jae Kim of SSC Napoli.
OP (+3.4%) - Layer-2 scaling solution Optimism announced last week it was completing a second round of airdrops for its OP token. The OP token, designed as a governance token for the Optimism network, was originally airdropped at 5% of the OP supply in 2022 to over 248,000 addresses. The new airdrop went to over 300,000 users, representing 0.27% of the total supply. The move comes before competitor Arbitrum launches its long-anticipated token, initially planned for the fall of 2022.
BLUR (+36%) - Didn’t get a Valentine’s gift this year? Well, many NFT traders got their gifts yesterday when the BLUR token airdrop came to market. Blur is an NFT marketplace that has amassed over $1.2B in trading volume since launching last fall. The marketplace saw more volume than Opensea at times, primarily as they offered zero-fee trading. As many speculated over an airdrop, users switched from other NFT trading platforms to Blur to increase their chances and amount of airdrop. The airdrop was released yesterday morning but lacked critical details like the project’s tokenomics. Tokenomics have since been released, showing that 12% of the supply was airdropped yesterday, with more supply coming to market over the next 3 years. According to Blur’s docs, the token’s use is “governance.” We will see if a governance token is enough to keep the platform sticky for users who tend to drift to whatever marketplace is hottest. Despite the mixed reviews on the airdrop, people are flocking to the platform today. Further, the bidding pool is at an all-time high, and NFT floor prices have seemed to increase in some cases.

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