What's Driving Token Prices? December 13, 2023

SNX (+18%) - Last week, decentralized futures product Synthetix, officially voted through changes that stopped emissions from new SNX tokens from going to stakers. In place of inflation, Synthetix plans to adopt new strategies, including a token buyback and burn program that uses 50% of its earned protocol fees. Note that token buybacks will apply to the version of Synthetix on Base. Other disinflation strategies will be part of Synthetix’s upcoming Andromeda release, including deploying v4 of Synthetix’s core and perps on Base, enabling USDC transactions on Base, and various other changes that will make Synthetix a truly multichain project. The move away from inflationary rewards will be interesting to watch as Syntehtix was the first project to successfully pioneer liquidity mining/yield farming strategies in late 2019 as part of its pivot from being a payments project to becoming a synthetic asset trading platform.
KCS (+47%) - Yesterday, the KuCoin Exchange agreed to ban New York customers and pay $22M as part of a settlement for a lawsuit brought by the NYAG this past March. The suit accused KuCoin of operating as an unregistered exchange. Most of the settlement money will go towards refunding New York customers, while the remaining $5M be paid as a fine. KuCoin, organized as an offshore in Seychelles, will now be required to cooperate with U.S. law enforcement moving forward by providing information or freezing assets.
IMX (+51%) - Gaming-focused layer-2 scaling solution IMX, released a slew of announcements over the past week. The first announcement was related to Beam (fka Merit Circle), launching Sphere, an NFT marketplace, as the initial product for Immutable’s zkEVM product. Immutable also announced its zkEVM testnet launch, indicating that the mainnet launch could be coming to the market soon. Finally, IMX announced a partnership with web3 payment provider Transak, who will be the primary payment solution provider for Immutable's zkEVM.
JTO (+73%) - Last week, Jito, a liquid staking protocol on Solana, launched its token to much fanfare. The token was airdropped to about 10,000 early users, with users earning an average of $15K worth of tokens. Jito is very similar in design to Lido, the largest liquid staking protocol on Ethereum, whereby users can stake their asset (ETH or SOL) to earn a liquid staking token (LST) in return. The LST rebases daily to account for newly accrued staking rewards. Additionally, the Jito protocol developed node software that allows its nodes to use MEV strategies to maximize the yield earned, serving as a differentiator over other liquid staking protocols in the market. The token airdrop was highly anticipated and has traded up since its release, up over 70%. Despite its successful release, the JTO token is likely trading more around hype than hard numbers: Jito’s TVL is $444M with an FDV of $2.8B vs Lido’s TVL of $20B+ and an FDV of $2.1B.

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.