What's Driving Token Prices? February 14, 2024

Katie Talati
Feb 14, 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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  • PLA (-18%) - PlayDapp, a web3 gaming project, suffered an exploit this past week causing a loss of $290M worth of its PLA token. The exploiter gained access to PlayDapp’s minting contract and was able to create 200M PLA tokens. The PlayDapp team messaged the hacker, offering a bounty of $1M for the return of the tokens. Instead of responding, the hacker minted an additional 240M tokens (valued then at $1.59B) and began sending these tokens to crypto exchanges in order to liquidate the assets. For context, the circulating supply of PLA before the exploit was about 570M tokens, therefore liquidating such a large amount of tokens would be pretty impossible. Yesterday, the team announced it was pausing the PLA contract to facilitate a snapshot and token migration to strip the exploiter of their tokens.
  • SUSHI (+8.9%) - Yesterday, DeFi project, Sushi, announced its plan to release a decentralized derivatives exchange on Layer N called Susa. The fast processing speeds on Layer N, a Layer-2 rollup on Ethereum, enable a decentralized DEX to exist with an on-chain orderbook. Susa aims to offer the speed of a centralized exchange although this won’t be proven until Layer N and Susa launch. 
  • RNDR (+12%) - Render, a DePIN project focused on offering decentralized GPUs, was up 12% last week after an improvement proposal passed via a governance vote to onboard Nosana, a Solana DePIN focused on streamlining building, deploying, and monetizing AI applications. While Render has historically been more focused on graphical rendering and other consumer use cases, the partnership should further Render's ability to service AI apps and services.
  • ETH (+13.6%) - Last week, Ethereum developers announced that its next hard fork upgrade, dubbed “Dencun” will occur on March 13. The Dencun upgrade introduces “protodanksharding” which will make transactions for Layer-2 protocols about five times cheaper. This should greatly help the value proposition for Layer-2s and assist in their ability to grow/scale. On Monday, asset manager Franklin Templeton filed an application for an Ethereum ETF which has garnered much excitement in the market as many believe an ETH Spot ETF will be the next product to be approved by the SEC.

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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