What's Driving Token Prices? November 16, 2022

FTT (-50%) - It has been an action-packed week since we last chatted about FTX. In case you missed it, FTX suffered a bank run beginning Sunday, November 6 and continuing until withdrawals were halted on November 8. Following this, CZ and SBF announced Binance was exploring an acquisition of FTX. Since last week’s episode, that acquisition deal officially fell apart after Binance began the due diligence process. Instead, Tron Founder Justin Sun stepped in to see if he, along with Huobi (of which he owns a majority stake and is a board member), could find a way forward for FTX. Unfortunately, nothing transpired. On Thursday last week, FTX officially filed for Chapter 11 bankruptcy. In the meantime, FTX US—which had gone mostly unscathed—suffered a “hack” on Friday as funds were siphoned from the exchange. Many believe it was an internal theft. With the bankruptcy proceedings beginning, SBF has officially been fired from FTX; Alvarez and Marsal, the firm installed to lead the proceedings, have hired John J Ray III (previously the Chairman appointed to unwind Enron).
SRM (-13%) - Serum, the Solana-based liquidity project, voted this weekend to fork its token to wrestle control of its codebase away from FTX. As the original creator of Serum, FTX had the private key that allowed changes to Serum’s codebase versus its DAO. The Serum community also suspects that Serum might have been compromised during the FTX hack on Friday. To date, most projects within the Solana ecosystem have moved over to support the new Serum fork.
ATOM (-2.3%) - Layer 1 protocol Cosmos saw an important vote for “ATOM 2.0” defeated last week. The ATOM 2.0 vote included proposals to change the token issuance schedule for ATOM and add new features to the token that would make it more valuable longer-term. Jae Kwon, the founder of ATOM, led the opposition in this latest vote and garnered enough delegates right as the vote was closing to defeat it. Many see this as a blow to ATOM’s long-term value accrual.
JOE (+6.2%) - Avalanche-based decentralized exchange Trader Joe announced Monday that its NFT marketplace spinoff, Joepegs, raised $5M in a seed round. The round was led by Avalanche and FTX Ventures (likely one of the last checks they wrote). The exchange launched in May and has seen over 12,000 users and $3.4M in volume.

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