What's Driving Token Prices? May 10, 2023

CHZ (-14%) - Sports and entertainment platform Chiliz launched the long-anticipated mainnet of its Chiliz Chain 2.0 (CC2) this morning. Previously, Chiliz ran a permissioned sidechain on Ethereum. Now it has launched its own chain (a fork of BNB Chain) to expand its capabilities and growing ecosystem of sports-related projects. The new chain includes features we are used to, such as a decentralized exchange and bridge from Ethereum to CC2. Currently, there are 11 validators live on the network staking over 182M CHZ, which is just over 3% of the circulating supply.
CRV (-12%) - Decentralized stablecoin exchange Curve launched its long-awaited stablecoin crvUSD last week. The stablecoin utilizes a product called LLAMA (Lending-Liquidating AMM Algorithm) which is designed to deter bad debt creation by manipulating illiquid asset prices. Although the contracts for crvUSD are live, no front-end application is currently available. Testing is underway on the live contracts ahead of full deployment.
MKR (-3.4%) - Decentralized stablecoin issuer, MakerDao released its newest product earlier this week, Spark Protocol. Spark, a fork of Aave, is a lend/borrow protocol designed to service DAI (Maker’s decentralized stablecoin) markets. As the lending market is connected to the MarkerDao protocol, Maker can issue more DAI liquidity as demand increases, thereby keeping borrowing rates low. Maker currently boasts over $7.2B in TVL; however, borrowing markets have not seen much activity in many months, with utilization on most protocols averaging about 48%.
PEPE (+71%) - If you haven’t paid much attention to the markets the last few weeks, you might ask, “What is PEPE?” Pepe is the newest meme coin, launched just over 3 weeks ago. The project’s creators harnessed the popularity of Pepe the Frog within online meme culture to grow the token. PEPE’s holder base reached 100K holders on-chain in just 22 days, far outpacing the growth of other meme coins like DOGE and SHIB (however, PEPE is still a fraction of their market caps). Interestingly, while all speculative, the activity related to PEPE has primarily driven Ethereum activity over the past few weeks. Gas fees on Ethereum are double what they were a few weeks ago (and triple at some points last week), pushing ETH’s supply deflation to 2.8% annually over the last week. Although this activity is likely unsustainable, it illustrates how a small amount of activity on Ethereum can reduce ETH supply drastically.

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