What's Driving Token Prices? May 1, 2024

Katie Talati
May 1, 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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  • REZ (-40%) - The second largest liquid restaking protocol, Renzo, launched its token yesterday but flopped right out of the gate. The project released its token supply schedule last week, with a 5% allocation to current users via an airdrop. However, over 60% of the supply was allocated to investors and team members. A pie chart of the token allocation on Renzo’s blog was misleading, with the 60% slice displayed as only half of the pie and the 5% and 2.5% slices displayed as much larger. Crypto Twitter was indignant, with many retweeting the offensive pie chart. To add insult to injury, Renzo also announced that those who purchased tokens through Binance Launchpad would receive them on April 30, but airdrop claimants could not claim theirs until May 2. Following the public outcry, Renzo quickly replaced its pie chart with a more accurate illustration and announced that the Binance Launchpad and airdrop claim would happen on the same day (April 30) and increased the airdrop allocation to 7%. The token has not fared well despite the tweaks and is down over -40% since the launch yesterday.
  • PENDLE (-31%) - DeFi protocol, Pendle, saw its token crash this week after a highly anticipated airdrop that, once again, disappointed the market’s expectations. On Monday, EigenLayer, the restaking protocol on Ethereum, announced an airdrop with allocations for current users. Users deposited assets into Pendle’s yield-trading protocol to maximize the potential airdrop they could earn from EigenLayer’s protocol. The airdrop announcement from EigenLayer was very disappointing since the airdropped tokens would not immediately be transferable and, therefore, not sellable once live. The project also barred U.S. users from claiming the airdrop, although the project itself did not geofence users from depositing assets. A set of confusing wording in the documents also made many users believe that “more complex DFfi protocols” (which includes Pendle) would be excluded from this airdrop round. In response, the PENDLE token subsequently dropped -17% in price. 
  • BNB (-8%) - Last week, BNB Chain announced it would enable liquid staking on its platform in April or May. Yesterday, Binance’s Founder, CZ, was sentenced to four months in prison. CZ was arrested late last year by the U.S. Department of Justice. He pled guilty to the charges and paid a $50M fine alongside the $4.3B fine levied against the Binance exchange. He also has agreed to step down from the exchange’s day-to-day operations. 

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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