What's Driving Token Prices? January 25, 2023

Katie Talati
Jan 25, 2023

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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  • MKR (2.7%) - Decentralized stablecoin issuer MakerDao voted to invest $100M of USDC (or ~3% of PSM or Price Stability Mechanism reserves) into a Yearn vault that earns 2% yield. (Yearn is a yield aggregator that automates the DeFi yield investment process.) This is part of Maker’s plan to generate revenue on its stablecoin assets which previously sat idle on-chain. So far, they have deployed $1.6B in assets to Coinbase and $150M to BlockTower and Centrifuge to manage “real world assets” or non-blockchain related assets, usually U.S. Treasuries. 

  • UNI/BNB (+6.4%/+4.9%) - Uniswap passed a “temperature check” vote to deploy Uniswap on BNB Chain. A full vote will likely follow shortly and would be a net benefit for both BNB and UNI parties as it brings more "blue-chip" DeFi to BNB Chain and opens up new users for Uniswap. Currently, BNB Chain mostly utilizes Pancakeswap, which saw $2.56B of trading volume in the last 30 days versus Uniswap which did $24.92B. 

  • JOE (+12%) - Last week decentralized exchange Trader Joe announced it would revamp its tokenomics to incorporate its recent move to BNB Chain. The changes include bridging sJOE (staked JOE) to BNB Chain and Arbitrum, new utility for veJOE (vote escrowed JOE), and deprecating rJOE, which was part of the IDO platform. The end result is that JOE becomes a multichain asset.

  • OSMO (+24%) - A proposal is currently out on the Cosmos DEX, Osmosis, to enforce automatic staking of OSMO LP rewards, which would subject liquidity providers to a 14 day withdrawal period. OSMO issuance is heavy and selling pressure from LP rewards has dragged the token price down. The hope is that a 14 day  prohibited staking period would discourage LPs from selling the token and stabilize the price of OSMO.

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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