What's Driving Token Prices? February 8, 2023

RLY (-9%) - Last week, the social token platform Rally announced it was shutting down operations of its sidechain on Ethereum. The project, which allows creators to issue their own social tokens, gave users 1 day’s notice that they would no longer be supporting the sidechain and that any assets on the sidechain were permanently trapped there forever. The company cited macro challenges and headwinds and the high expenses related to running an individual sidechain versus alternative Layer 1 blockchains that exist today. A year ago, SuperLayer, the venture studio backing all RLY-related products, chose to move future products to Solana. The lack of notice and bridging resolutions for creators has left a bad taste in users’ mouths, which has resulted in the down 9% price in RLY over the last week.
MARS (-6%) - Mars Protocol, a lend/borrow protocol based in the Cosmos ecosystem, relaunched itself last week and airdropped its token to early users. Mars Protocol is expected to bring a major DeFi primitive (credit/leveraged borrowing) to Cosmos for the first time and could also support the growth of liquid staking and stablecoins. The token became tradable yesterday, and the project already has a $37M market cap.
ENS (-4.6%) - Ethereum Name Service, the decentralized issuer of named Ethereum addresses, passed a vote through its DAO to liquidate 10,000 ETH (~$16M) to cash in order to fund the project’s expenses for the next two years.
UNI/BNB (-0.8%/+2.9%) - If you recall, I discussed Uniswap’s potential move to BNB Chain a few weeks ago, and I’m back this week with an update on what has turned into quite the governance drama. Following the vote to launch Uniswap on the BNB Chain, another temperature check vote was held to determine which bridge would be used between Ethereum and BNB Chain for this purpose. In the initial vote, users selected Wormhole as the preferred bridge over the other option, LayerZero. However, after the vote was complete, venture fund a16z announced that they supported the use of LayerZero (which is a portfolio company of theirs) as the bridge and would have used its 15M UNI tokens in custody to vote in favor of LayerZero. In the following vote, a16z used these UNI tokens to vote in favor of the LayerZero bridge, although it appeared that the community favored Wormhole. This raised many questions about DAO governance and if it is truly decentralized.

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