What's Driving Token Prices? January 3, 2024

Katie Talati
Jan 3, 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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  • ORC (-33%) - Orbit Chain, cross-chain communication and transactions project, suffered an exploit this past Sunday that drained $81M of TVL from its bridge. The hackers have been linked to the Lazarus group out of North Korea, who were also responsible for other high profile hacks such as the 2022 hack on Ronin. The stolen funds have not yet been moved by the hacker and Orbit has started working with exchanges and law enforcement agencies to recover the assets.
  • INJ (-12.9%) - Layer-1 project, Injective Protocol, agreed to change to its tokenomics last week. The project, which uses the Cosmos SDK and focuses on DeFi applications, passed a vote to burn any INJ tokens used to purchase Injective domain names (similar to Ethereum’s ENS). The change follows a rollout of the “INJ Burn 2.0” released last October which enables any dApp on Injective to contribute INJ fees collected to a weekly burn auction. Injective was a big outperformer in 2023, up over 2700%, and boasting a market cap of $3.1B. Despite this, the protocol only has about $17M in TVL.
  • CAKE (-8.6%) - Decentralized exchange, Pancakeswap, voted to reduce the max supply of its token from 750M to 450M via a governance proposal. The circulating supply of CAKE is currently about 388M tokens indicating that approximately 86% of the new max supply has already been issued. These updates are a sharp change from CAKE’s initial token design which featured an infinite supply of tokens that were constantly being emitted. Pancakeswap is currently the second largest DEX by volume overall and is the largest DEX by volume on BNB Chain trading $110B worth of tokens in 2023. 
  • RDNT (+1.3%) - Money market protocol, Radiant Capital, suffered an exploit yesterday for $4.5M. The multichain lend/borrow project paused its markets on Arbitrum in response to the exploit. While the project also has markets on BNB Chain and Ethereum mainnet, Arbitrum currently makes up over 50% of Radiant’s $556M in TVL. According to the team, none of the funds are at risk but further details around the exploit have not been shared. According to a report from audit firm Peckshield, the exploit was related to the creation of a USDC market on Arbitrum with the attack occurring within 6 seconds after the new market deployment. The RDNT token has managed to buck news of the hack and is up 6.7% in the last 24 hours and is up 1.3% in the last week.

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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