What's Driving Token Prices? November 13, 2024

BNB (+4.4%)- On Monday, FTX filed a $1.7B lawsuit against the Binance cryptocurrency exchange and its founder Changpeng Zhao. The lawsuit is one of many that the FTX estate has filed in an attempt to claw back assets for creditors. At the end of 2019, Binance invested in FTX with its native BNB tokens and invested again in 2020. In mid-2021, the two parties agreed to a share repurchase as they increasingly became direct competitors. The lawsuit alleges that the $1.76B that FTX paid to Binance was fraudulent as FTX/Alameda was already insolvent and took assets from depositors to complete the transaction. Binance has so far called the lawsuit “meritless”.
BLUR (+9.5%) - On Monday, a proposal was released to enable a fee switch on the NFT trading platform Blur. Blur, which launched in 2022, is the leading NFT marketplace by volume. Unfortunately, as NFT trading volumes have trended down -77% over the past year, so has Blur’s revenue which went from $144M annualized in early 2023 to only $4M annualized as of today. The proposal suggests instituting a vote-escrow or “ve” model on BLUR. The ve model essentially forces users to lock up their tokens to participate in governance. The longer someone chooses to lock their tokens for (4 years maximum), the more voting weight that individual has. Those who choose to lock their tokens earn 100% of the trading fees generated by Blur, allocated to locked BLUR with heavier weights assigned to those with longer lock-up periods. Although this fee switch is a positive for the BLUR token, the current fees generated don’t really provide enough incentives for users to lock their tokens to earn those fees.
NEAR (+22%) - Layer-1 protocol Near held its annual conference, “Redacted”, over the weekend, culminating with the announcement that Near plans to build the largest open-source AI model with 1.4 trillion parameters. If achieved, this model would be 3.5 times bigger than Meta’s Open Llama model and involve crowdsource research— Near plans to fund this ambitious project via a series of token sales to raise $160M. The NEAR token has been up 9% since the announcement and up 22% for the week.
ENA (32%) - Last week, market-making firm Wintermute published a proposal to turn on the fee switch for Ethena’s ENA token. Launched earlier this year, Ethena is the creator of the pseudo-decentralized USDe stablecoin backed by staked Ethereum and short Ethereum futures positions. Since launch, USDe has grown to just over 3B and has netted $131M in revenue. The proposal recommends allocating some portion of this revenue towards ENA stakers but does not provide a specific amount. So far, the Ethena Foundation has agreed to discuss this fee switch and the community has been very supportive of such a change.

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