What's Driving Token Prices? November 6, 2024

IMX (-14%) - Gaming-focused Layer-2 scaling solution Immutable announced last week that it had received a Wells Notice from the Securities and Exchange Commission. Although the notice claimed Immutable had violated securities laws, it did not detail what the company had done. Immutable does believe that the notice relates to its listing and private sales of IMX tokens in 2021. Immutable now joins a vast number of other crypto projects that have received a Wells Notice in the past year, including Coinbase, Uniswap, and Opensea. The IMX token initially dropped almost -30% following the news but is now only down -14% for the week.
CRV (-2.3%) - This week, decentralized exchange Curve proposed giving back 10% of the revenue from its crvUSD stablecoin to stakers of the stablecoin. The stablecoin launched just over a year ago, has a $50M market cap, and has had trouble maintaining its peg. Introducing scrvUSD (staked crvUSD) would create a supply sink for the stablecoin and bring it back to its peg, similar to the mechanism that MakerDAO uses on its DAI stablecoin. crvUSD currently makes about $7M annually, which would allocate roughly $700K to the scrvUSD stakers going forward.
1INCH (+0.4%)—Decentralized exchange aggregator 1inch suffered an exploit of its front-end last week as a batch of malicious code was inserted into a content library used by several firms called Lottie Player. Within a few hours, the Lottie Player team resolved the issue, and the 1inch team promised refunds to users whose wallets were affected. The 1inch team has not disclosed how much was lost during the attack.
TIA (+5.9%) - Decentralized infrastructure protocol Celestia saw its first large token unlock this past week as the supply of its TIA token increased from 267M to 462M, a 73% increase. The unlocked tokens belong to early team members and early investors. The early investor group, which invested in 2021 and 2022, is presumably up massively on their early-stage investments in Celestia, and the TIA token, despite its recent decline, is up almost 2x since it launched last October. While the data on whether token unlocks impact price are murky, TIA has been on quite a downtrend since mid-October. It is now down -76% from its all-time high and +5.9% for the week.

DISCLAIMER: This commentary is not intended to be investment advice, investment research, or a recommendation. Please consult your investment professional for your own circumstances."

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.