What's Driving Token Prices? June 20, 2024

Katie Talati
Jun 20, 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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  • ZK (-21%) - Early Monday, the long-anticipated token airdrop of Layer-2 zkSync finally arrived, only to disappoint users as the network suffered strain and degraded performance while trying to handle the load. zkSync, launched in 2020, has been at the forefront of zero-knowledge proof scaling solutions. Zero-knowledge proofs are cryptographic proofs that communicate messages between parties without publicly sharing the contents, a feature that existing blockchain networks such as Ethereum have. Zero-knowledge proofs create privacy for users and speed up transaction processing. zkSync’s airdrop was designed to widely distribute tokens, with 17.5% of the supply allocated to the airdrop which went to over 695,000 wallets. However, ZK was not immune from the market malaise that most new token issues have suffered in the past few months. The token initially traded up to $0.30 but has since declined and now sits at $0.22. 
  • PRISMA (-13%) -Algorithmic stablecoin project Prisma Finance announced this week it would acquire Moebius Finance, a liquid restaking protocol on Eigenlayer. The acquisition will cost $180K and will be funded through Prisma’s grants program. At one point, Prisma was a promising up-and-coming DeFi project, but it suffered a number of setbacks in recent months, including being victim to an exploit protocol and losing over $11M for the protocol. 
  • DRIFT / ONDO (-6.6%/9.5%) - Perpetual future protocol, Drift, announced this week that it would accept Ondo’s USDY as collateral for trading.  Ondo, which focuses on bringing real-world assets on-chain, has issued its U.S. Treasury stablecoin (USDY) across multiple chains, including Ethereum, Solana, and Polygon. Drift’s addition of USDY as collateral provides more usability for the USDY stablecoin and could further its growth on the Solana blockchain. As of today, USDY has $156M of AUM. 

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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