What's Driving Token Prices? October 25, 2023

ATOM (+12%) - Zaki Manian, one of the original ATOM 2.0 creators, posted a proposal this week to cut ATOM emissions to a maximum of 10% from ~20%. The proposal is generating a lot of discussion and it is currently unclear what the general consensus will be. A reduction in inflation would be incrementally positive since ATOM inflation is among the highest of all L1s. Research provider Blockworks has also put forward a tokenomics proposal in the last few weeks that seeks to implement a validator and community tax. It also introduces quadratic voting though this move is unlikely to create much demand for ATOM. ATOM has failed to keep up with the broad-based crypto rally the last few days and is up 12%.
BTC (+23%) - We would be remiss if we didn’t talk about Bitcoin as it has led the rally this week. The move higher was spurred by a number of smaller events which helped propel BTC forward. Bitcoin has already had positive tailwinds following ETF filings from Blackrock and others. This news coupled with pressure on the SEC to approve an ETF has bolstered the belief that a Bitcoin ETF could be approved very soon. Over the weekend, a move higher in Bitcoin caught dealers in the derivatives markets offsides as those who short, needed to purchase spot BTC to cover their positions resulting in pushing the price of BTC above $30K. On Monday, Blackrock refiled their ETF application and the DTCC added the ticker symbol for the ETF product (IBTC). The market interpreted this as a sign that launch is imminent and BTC saw another 9% gain. The rally in BTC has pulled the whole market up with some tokens rallying over 50% while inflows to BTC-related products jumped over $120M in the last week, equal one third of inflows YTD.
DYDX (+26%) - Yesterday, dYdX announced the long awaited v4 launch that starts with the launch of DYDX Chain, an app-chain built using the Cosmos framework. While the chain is live, the front-end for the perpetual exchange is not yet available. The dYdX initially expects a migration period between Starknet, an Ethereum Layer-2 on which DYDX currently runs, to the new Cosmos-based app chain. The launch will also introduce the dYdX Operations SubDAO, which will govern and guide the new chain. Just over a week ago, dYdX Trading announced it would transition their charter from a for profit company to a public benefit charter. The genesis event when the chain begins producing blocks will start tomorrow, followed by a staged release and migration to the chain activated via a governance vote.

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