What's Driving Token Prices? May 17, 2023

Katie Talati
May 17, 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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  • AXS (+4.9%) - This morning, play-to-earn blockchain game Axie Infinity announced that an iOS version of its game is now available in select countries across Latin America and Asia. Notably, users can utilize an externally purchased NFT within the App Store and within the app, which Axie believes is the first time Apple has allowed this. At its peak at the end of 2021, Axie had over 2.5M DAU but is no longer self-reported by the company after DAUs fell to ~250K a day last summer.

  • KAVA (+7.5%) - KAVA, a Cosmos-based EVM Layer-1 chain, rose 16% in anticipation of KAVA 13—an upgrade that will improve developer and user experience on the chain. The upgrade generally improves the execution capability of the chain and sets the stage for data sharding to improve scalability even further. Additionally, a proposal to sunset all KAVA emissions at the end of the year was well received and seems set to pass governance at the end of the week.

  • GNS (+11%) - Decentralized derivative platform Gains Network announced earlier this week that it would shift its fee model from a funding rate model to a “borrowing” model. The team explained that the funding rate model was inefficient at balancing longs and shorts on its platform, gTrade. The decision to move to a borrowing model was spurred by the need for a higher max funding rate and, therefore, a higher take rate that would hurt traders. The borrowing model fixes this by allowing more Open Interest with the same TVL. Gains Network currently boasts over $58M in TVL—up 3x since the beginning of 2023.

  • LDO (+34%) - Decentralized liquid staking provider Lido activated its v2 upgrade on Monday, allowing Ethereum withdrawals and a new staking router. The upgrade lagged Ethereum’s Shapella upgrade due to necessary security audits and has been highly anticipated. As withdrawals are now enabled, larger stETH holders can exit, whereas before, they were prevented based on stETH liquidity. Specifically, bankrupt crypto lender Celsius held ~480K stETH; as of yesterday, Celsius submitted a request to redeem the entire amount. So far, despite the potentially negative event, Lido has outperformed the market, up 34%.

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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