What's Driving Token Prices? (August 17, 2022)

Katie Talati
Aug 17, 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.

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  • VELO (-36%) - Last week, Velodrome Finance, a decentralized exchange on Layer-2 Optimism, released a post-mortem on a possible hack that occurred a few weeks ago. An investigation revealed that the $350K stolen (and since recovered) from team wallets was stolen by an employee—Gabagool. The pseudonymous developer announced via Twitter that he stole the funds to recoup the losses he suffered during the market crash earlier this year. This specific wallet was not part of the treasury’s multisig—which has much higher levels of security—but was a team wallet for paying salaries to which 5 team members, including Gabagool, had access. 

  • ACA (-20%) - Acala, the largest DeFi project on Polkadot, suffered an attack over the weekend in which exploiters minted $1.28B of Acala’s stablecoin, aUSD. Several individuals were able to exploit a newly launched liquidity pool for Bitcoin and aUSD on Acala, minting additional aUSD. The exploit caused the price of aUSD (which had roughly held its peg since launching earlier this year) to shoot down to $0.009.  However, a community vote elected to burn the newly minted stablecoins to restore aUSD to its peg. Online estimates believe the hacker got away with anywhere from $0-$10M in value.

  • SPS (-10%) - Blockchain-based trading card game Splinterlands announced a horizontal expansion into sports last week with a new blockchain-based soccer game called Genesis League Soccer. The expansion also involves a partnership with the Major League Soccer Players Association (MLSPA). The partnership should increase the market opportunity for Splinterlands as the SPS token will be the governance token for both Splinterlands (fantasy-themed card game) and Genesis League Soccer (sports-themed card game).
  • INJ (+4.6%) - DeFi protocol Injective announced a fresh $40M round of funding led by Jump Crypto and BH Digital (Brevan Howard’s crypto arm). The raise is designed to help expand the ecosystem for the decentralized finance protocol and attract Web3 DeFi developers. The token traded up on the news, as many speculate that the funding round was completed earlier this year when INJ's market cap was much higher (the token was up over 30% at one point).
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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