What's Driving Token Prices? January 17, 2024

Katie Talati
Jan 18, 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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  • ARB (-1.8%) - Arbitrum, a Layer-2,  voted to create a long-term incentives program via a snapshot vote which would give out 25-45M tokens (about $51M to $92M at current prices) as incentives for long term building on Arbitrum. The vote comes after an incredibly successful incentives program ( Short Term Incentives Program or the STIP), which led to significant rallies for smaller tokens that received a large balance of ARB compared to their market caps. While the proposal passed, it will likely take a few months before we see the distribution of grants since there is a multi-week path for projects to apply and be accepted before the grants will be released.
  • AAVE (-1.7%) - A forum discussion within Aave, a decentralized lending protocol, is garnering some eyeballs as it deals with the potential launch of Aave’s lending marketplace on the Neon EVM. Neon is a middleware provider that allows Ethereum-based apps to work on Solana, since Solana and Ethereum use different coding languages. Deploying the Aave marketplace on Neon would essentially bring Aave to the Solana ecosystem, keeping the project relevant during a time when users are flocking to Solana en masse. The forum post suggests that Aave should launch on Neon with only 3 lending assets (SOL, mSOL, jitoSOL 1) and one borrowable asset (USDC). Although the initial post seemed fairly straightforward, community members from Aave and Neon debated many of the potential technical issues with the migration including oracle feeds/availability and bridging assets safely  which could prolong this proposal progressing.
  • XRP (-0.1%) - Payments provider, Ripple, announced last week that it would initiate a $285M share buyback program valuing the equity of the company at $11B. The purchase will buy out early investors, however, investors are not allowed to sell more than 6% of their holdings. Brad Garlinghouse, CEO of Ripple, stated that the company plans to do more buybacks in the future and has no intention of going public with the current regulatory climate.
  • LINK (+11%) - Chainlink, a decentralized oracle network, announced yesterday that it has integrated with Circle to make USDC more interoperable. Chainlink operates CCIP (cross-chain interoperability protocol) which facilitates communication between blockchains and Circle recently launched CCTP (cross-chain transfer protocol) which allows for native USDC to exist cross-chain without the need for mint/redeem via bridges. The partnership will serve any project that wishes to build a cross-chain application that integrates USDC. With the ever increasing number of L1 and L2 blockchains, interoperability solutions such Chainlink’s and Circle’s are crucial.

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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