What's Driving Token Prices? October 4, 2023

Katie Talati
Oct 5, 2023

Join Katie Talati, Arca’s Head of Research, weekly on Wednesday at 4PM EST / 1PM PST as she shares notable token activity over the past week and her insights on what market events drove these token price movements.

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  • STRD (-3.7%) - Stride, the liquid staking protocol of the Cosmos ecosystem, put forward a proposal earlier today to merge its project with Cosmos, swapping its STRD token for ATOM tokens. The proposal outlines decentralization as its reasoning for this, as the STRD token which currently serves as a governance token would be replaced by the ATOM token for governing the Stride chain. Details around the price of the buyout and the where the ATOM tokens would come from to perform the swap are unknown and initial feedback on the proposal from the Stride community has not been negative. This is still a developing proposal and could present an interesting M&A event in the near future. 
  •  ETH (+3.6%) - Last Thursday, the SEC approved the first Ethereum Futures ETF from Valkyrie Investments, along with a slew of additional ETFs from Van Eck, Proshares, and Bitwise. The ETFs all went live on Monday. Interestingly, VanEck announced it would donate 10% of the proceeds of its ETF to Protocol Guild, a collective of Ethereum core contributors, in order to support continued development on Ethereum. Ethereum initially rallied about 5% on the news of approval but has since retraced and is up 3.6% on the week.
  • GMX (+8.2%) - Last week, we discussed that the activity around Layer-2 protocol, Arbitrum, was heating up with their newest round of ARB grants and are currently accepting proposals from projects in the community. Already, the program has seen requests for a total of 150M ARB tokens but only 50M tokens have been allocated for this round. Notably, decentralized derivatives project, GMX, submitted a proposal for 13M tokens, just under 25% of the available total. GMX has struggled recently following its v2 upgrade and continues to lose its market share lead that it established late last year and early this year. If approved, this ARB grant (which would be used for trading incentives) could help increase volumes on GMX. GMX currently accounts for less than 10% of overall decentralized derivatives volume, down from its high of over 30% back in November 2022.
  • RLB (+41%) - Rollbit, a blockchain-based casino, announced yesterday that it has moved its token buy-and-burn on-chain, giving market participants much more certainty around its revenues and burns. Rollbit launched in 2020 but gained prominence at the beginning of 2023 by signing numerous Twitter personalities as partners. The project offers leveraged crypto trading with up to 1000x leverage, slots, Black Jack and other card games, along with sports betting. Anywhere from 10-30% or revenue (depending on the business line) flows to buying and burning the RLB token. As of today, the buybacks are now verifiable on-chain in a bid to promote transparency. 

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

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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.

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