What's Driving Token Prices? (April 6, 2022)

Katie Talati
Apr 6, 2022
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.

  • WAVES (-45%) - Waves, the Layer 1 blockchain founded in 2016, shot up over 100% last week as the market cap of Waves’s stablecoin, USDN, bubbled up. Waves has a similar stablecoin function as the Terra blockchain—to mint USDN, users need to deposit WAVES. Crypto Twitter sleuths hypothesized that WAVES was borrowing against USDN from its treasury to buy more WAVES, which they used to mint more USDN. After this news broke, USDN lost its $1 peg. Contrary to Terra, where anyone can arbitrage UST imbalances, USDN arbitrage has barriers to entry. This led to panic, and subsequent WAVES sell pressure.
  • JUNO (-16%) - Juno Network, a Cosmos IBC chain for creating interoperable apps, suffered a blockchain halt yesterday. The network has not yet resumed, and the root cause of the issue has not been identified. The JUNO token is down 16% on the news.
  • ALPHA (+10%) - Alpha Finance (previously a lend/borrow DeFi platform) rebranded to Alpha Dao Ventures last week, announcing that it would focus full time on its incubator program. Alpha Dao Ventures previously tackled several verticals within the DeFi space, including incubating and supporting early DeFi projects. After several successes in the sector, the team has decided to rebrand and focus on this effort full time. The news initially pushed the token up 45%.
  • CELO (+16%) -Layer 1 blockchain, Celo (that has focused on creating an easy-to-use stablecoin ecosystem), held its conference early this week in Barcelona. During the conference, Celo revealed a $20M "Celo Connect Fund" to incentivize the development of fiat on/off ramps—an important function for the widespread adoption of stablecoins.
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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