What's Driving Token Prices? January 8, 2025

USUAL (-24%) - Decentralized stablecoin project Usual Money, announced yesterday that it would activate a revenue switch. This would redirect revenues to stakers of its USUAL token and will happen either when more than 50% of the USUAL token supply is staked or by February 1st of this year. Once this happens, the protocol promises to distribute up to $5M of protocol revenues per month in the form of USD0 (Usual’s stablecoin). Stakers of the USUAL token already earn more USUAL tokens (currently at a 216% APY rate) and will earn an additional 49% yield in USD0 tokens at the current amount of USUAL staked.
VIRTUAL/ILV (-20%/-4.9%) - Yesterday, gaming studio Illuvium announced it has partnered with Virtuals Protocol to bring AI innovations into its games. Specifically, Illuvium will be using Virtual’s G.A.M.E. framework for building AI agents that can become “non-player characters” (NPCs for short) within the game that can interact with real players and continually change gameplay. The result means that games can be engaging and more interesting for much longer than those with linear storylines. Echelon Prime has also been working on similar technology for its games which will be fully released soon.
FXS (-10%) - Over the weekend, decentralized finance project Frax relaunched its website dubbing it the “Universal Interface”. The purpose of the new product is to package its many product lines into a simple and clean user interface for swapping, bridging and staking assets in the Frax ecosystem. Frax, which started out as a decentralized stablecoin issuer, has since expanded its ecosystem to include a Layer-2 protocol, Ethereum liquid staking, US-Treasury backed products and more. As a very grassroots, community-based project, however, it has struggled to achieve mainstream adoption, particularly due to a complex model and even more complicated user interface. The new interface, which also includes a fiat on-ramp option for users, could potentially lead to inflow to Frax’s product and greater usage. Currently the TVL of Frax is $504M and is basically flat in the last 6 months.
AAVE/APT (-9.4%/-0.4%) - Yesterday, money market protocol Aave launched on the Aptos testnet, marking its first non-EVM deployment of the protocol. Aptos is a layer-1 protocol that utilizes the MOVE programming language and was developed by the team that created Facebook’s shelved stablecoin project Diem. Aptos has seen quite a bit of growth over the past year with TVL of $1.62B, which is more than 10x growth in the past year. This growth has attracted projects like Aave to rewrite its entire codebase to launch on the Aptos blockchain. Aptos also made headlines at the end of December when its founder, Mo Shaikh, abruptly resigned from his role as CEO of Aptos Labs.
DISCLAIMER: This commentary is not intended to be investment advice, investment research, or a recommendation. Please consult your investment professional for your own circumstances."

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.