What's Driving Token Prices? July 3, 2024

PENDLE (-28%) - DeFi yield management protocol Pendle saw its token tank over the past few days as $3B (about 50%) of TVL left the protocol. Pendle saw massive growth in 2024 due to the rise of EigenLayer, Liquid Restaking Protocols and their Liquid Restaking Tokens (LRTs). Many of these protocols offered token incentives to users for depositing assets and minting LRTs, which has driven TVL inflows to Pendle. Pendle offers opportunities to maximize yield for users. The outflow in TVL came as many of the markets on Pendle expired last week and many token incentive programs for LRT products are yielding far less with depressed token prices and more participants in the market.
BLUR/BLAST (-11%/-21%) - Last week, the long awaited airdrop for Blast initially disappointed the community. Blast, a layer-2 project created by leading NFT marketplace Blur, was originally considered one of the top up-and-coming ecosystems when it was announced at the end of last year. At the time, the team hinted that Blast would deliver a large number of future tokens to BLUR token stakers. Upon launch, Blast only ended up allocating 0.5% of the overall supply to BLUR stakers, a big disappointment to those who had been staking for 6+ months. The BLAST token has suffered since launch as has BLUR with both tokens down -21% and -11% respectively in the past week.
AAVE (-2.5%) - Decentralized money market protocol Aave has been expanding its reach this past week. First, the protocol announced an initial governance vote to deploy the protocol on Aptos, its first non-EVM chain. The protocol also officially launched its GHO stablecoin cross-chain, launching on layer-2 protocol Arbitrum. Both of these initiatives are part of Aave’s cross chain expansion strategy. This will prepare it for its v4 launch later this year which promises to create a cross-chain liquidity marketplace.
DOT (+6%) - Polkadot's Layer-1 protocol made headlines this week following reports that its on-chain treasury has spent $87M in the last 6 months. Additionally, on-chain treasury wallets show the project only has 2 years of runway left at its current burn rate and the entire treasury is held in DOT. Some eyebrow raising expenses included spending $50K on an animated logo for the CoinMarketCap website, $6.8M sponsoring a prestigious soccer club, $1.9M sponsoring race car driver Conor Daly and $1.3M to sponsor e-sports organization HEROIC. While a dwindling treasury might give cause for concern, the DOT token has outperformed with this is the first time the protocol is in the spotlight in well over a year.

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