What's Driving Token Prices? February 21, 2024

Katie Talati
Feb 21, 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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  • STRK (-50%) - Yesterday, claims opened for the Starknet airdrop, which distributed 9% of the token supply to an estimated 1.3M wallets. Starknet is a Layer-2 protocol that utilizes zero knowledge (zk) proofs and has been live for quite a while and previously served as the home to dYdX, a decentralized perpetual futures exchange. The airdrop was only given to those who had used apps on the L2 prior to 2022, Github contributors, members of the Ethereum Protocol Guild, early ETH stakers, and non-blockchain developers who contributed to open-source projects in the past. This caused the airdrop to receive a lot of backlash since many users were ineligible for the airdrop and the subsequent unlock schedule for the token occurs 2 months post-launch date for the team and investor portion of the tokens. While the token opened at $3.55, it has since traded down to $1.81 representing a $1.3B circulating market cap and a $18B FDV.
  • KLAY/FNSA (-8.9%/-10.4%) - Last week, a proposal was passed to merge the Klaytn blockchain with the Fincshia blockchain (fka Line blockchain) in order to create “Asia’s largest Web3 ecosystem”. The newly formed blockchain will combine the projects’ ecosystems, which include a combined 420 dApps and 45 governance members. There is also a plan to reveal all-new tokenomics in the near future, including a plan to “eliminate” uncirculated tokens. While we have seen a handful of mergers in the past between crypto projects, this is becoming more of a trend with increased competition and new entrants into the blockchain ecosystem. 
  • APE (+6.6%) - The APE community announced last week that Arbitrum will be the home for Apechain, the previously announced chain that will host the Otherside metaverse and associated marketplace for Yuga Labs’ NFT projects. Apechain stated it chose Arbitrum for its gaming capabilities and will be a "Layer-3" project on Arbitrum. Interestingly, at the same time, Yuga Labs announced that BAYC and other IPs in the Yuga portfolio would be available to trade on the Magic Eden NFT marketplace, and transactions could be done using Apecoin. Yuga Labs also purchased Proof.xyz, a company that owns the Moonbirds NFT project, to add to its collection. Yuga Labs received a lot of criticism for purchasing yet another IP for its portfolio as it has struggled to adequately support its existing IPs such as BAYC. Just this morning, the Yuga Labs CEO, Daniel Alegre, announced he is stepping down and Greg Solano, the co-founder of Yuga is stepping back into the CEO role.

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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