What's Driving Token Prices? March 1, 2023

Katie Talati
Mar 2, 2023

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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  • OP/COIN (+1%/+0.3%) - Coinbase announced last week it would be launching Base, its Ethereum Layer 2 built using the technology stack developed by Optimism for rollups on Ethereum. The aim, many believe, of the new L2 is to promote the growth of digital asset usage on-chain with Coinbase as the onramp for these users and activity. Optimism will also benefit from the launch as they may likely receive some of the fees that Base collects from user payments. OP initially went up 25% on the announcement but has since retraced and is up just 1% for the week.

  • FXS (+18%) - Last week, decentralized stablecoin issuer, Frax Finance, saw a vote pass to move the project’s stablecoin from partially-dollar backed, to fully dollar-backed. Currently, Frax’s stablecoin FRAX is collateralized with a combination of USDC and the  FXS governance token (FXS contributed to create FRAX would be burned). The move comes as the regulatory environment for stablecoins is murkier and murkier.

  • SNX (+22%) - Decentralized derivative platform, Synthetix, launched its V3 upgrade on mainnet last week. The primary innovation in V3 is differentiated debt pools that allow users to customize their exposure (versus one unified debt pool where stakers assume exposure to all assets). The protocol will also support multi-collateral staking (versus only SNX today) which could increase volumes because other types of collateral are less volatile than SNX but will decrease the utility of the SNX token.

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.

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