What's Driving Token Prices? (August 24, 2022)

Katie Talati
Aug 24, 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.

  • NEAR (-13%) - In some good bridge-related news, Near’s Rainbow Bridge managed to thwart hackers attempting to exploit the bridge by using a block with false information. The Rainbow Bridge, which has $2.8B in assets locked up across Near, Rainbow, and Ethereum, relies on a set of decentralized validators to decide if blocks are valid; in this case, they were able to reject the block and seize a deposit of 5 ETH made by the hacker.
  • MKR (-8.6%) - Decentralized stablecoin issuer and lend/borrow protocol MakerDao announced it would be pioneering the first commercial loan between a U.S.-regulated financial institution and a DeFi project. A governance proposal for the loan was passed a few weeks ago and initiated yesterday. Huntington Valley Bank has initiated a $100M loan via Maker that they will use to fund existing and new loans for the bank’s business. This will be the largest facility in which Real-World Assets (RWA) are used as collateral within MakerDao’s ecosystem and is considered a huge first step to connecting DeFi with traditional markets.
  • JEWEL (-11%) - Blockchain-based game DeFi Kingdoms announced it would be migrating from the Harmony (ONE) blockchain to Klaytn—a metaverse-focused Layer 1. DeFi Kingdoms, which also has a presence on an Avalanche subnet, will leave the Harmony chain completely. The migration comes two months after the Horizon bridge on Harmony was exploited for $100M. In addition, DeFi Kingdoms has faced technical issues for months relating to Harmony’s blockchain and has been searching for a new home for its game with 55,000 MAUs. Following the announcement, ONE declined 19% for the week, while JEWEL has only dropped 11%.
  • TRIBE (+58%) - TribeDAO, the project behind the FEI stablecoin, announced that it would wind down operations and return DAO assets and FEI’s protocol-controlled assets to token holders. TRIBE and FEI have recently faced bad luck as Rari (RGT), a project they acquired, was hacked for $80M earlier this year. Governance first decided and then pulled back on repaying victims of the hack. This, coupled with the uncertain landscape surrounding algorithmic stablecoins, led the Tribe team to decide to shut down operations.
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, a research report or a recommendation. Any decision to invest or take any other action with respect to the securities discussed in this commentary may involve risks not discussed herein and such decisions should not be based solely on the information contained in this document.