What's Driving Token Prices? November 8, 2023

ARB (+5.7%) - On Monday, the Arbitrum community voted to implement a trial staking program that allocates 1% of the total token supply to staking over the next 12 months. To date, the Layer-2 project’s token has only been used for governance initiatives but this new program will create a single-sided staking option for token holders likely leading to significant yields denominated in ARB. This comes following a highly publicized grants program that distributed ~74M ARB to community projects built on the L2.
APE (+8.3%) - Solana based NFT marketplace, Magic Eden, and Bored Apes Yacht Club creator, Yuga Labs, announced a partnership this week to create an Ethereum based marketplace that enforces creator royalties. The NFT royalty debate has been raging for quite some time with many NFT marketplaces opting to drop creator royalties enforcement and offering zero fee trading in a race to the bottom. Notably, Blur only enforces a 0.5% creator royalty on new collections and charges zero trading fees. Opensea recently got rid of their mandatory 0.5% creator royalty fee in favor of a 0.5% trading fee. While this might set a good precedent for the market to move back to royalties, there are still many other venues that do not enforce royalties or make them optional. More interestingly, Yuga is not choosing to create their own marketplace but are partnering with another company even after raising $450M.
AAVE (+9.2%) - Over the weekend, decentralized lending protocol, Aave, discovered a potential vulnerability in a select number of its v2 contract on Ethereum and its v3 contracts on Polygon, Arbitrum, and Optimism. The protocol paused its markets on these chains while the issue was investigated. Because the vulnerability could impact other projects that are forks of Aave, specifics of the vulnerability were not revealed, only that it was related to “stable rate borrowing mode”. Radiant and Spark, two of the largest forks of Aave, announced that they are not impacted by vulnerability. Today Aave passed a vote to pause all stable borrowing and issue a patch for the vulnerability which should be executed in the next several days.
GRT (+18%) - The Graph, a Web3 infrastructure project for developers, announced their New Era roadmap yesterday, which includes the release of new blockchain data services. These services will include AI-assisted querying, verifiable data, and improved tooling. The Graph’s conference, Datapalooza, is also on track to start next week, promising more potential announcements from the project.

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