What's Driving Token Prices? (Feb 2, 2022)

FTT (+20%) - FTX US, the U.S. branch of crypto exchange FTX, announced a $400 M Series C at a $32 B valuation. Investors in the round include Temasek, SoftBank, Paradigm, Tiger Global, and Ontario Teachers’ Pension Plan. FTX US partnered with Coachella, the California-based music festival, to auction off NFTs that represent art and lifetime passes to the music festival on the FTX US NFT platform in a big bet on mainstream NFT adoption.
AAVE (+0.2%) - Aave, a decentralized lending protocol, launched its v3 testnet. V3 includes features to seamlessly flow between Aave across different chains (this is important because it is deployed on 7 different chains) and allows users to adjust their capital to attain the best yield across the protocol. Hopefully, the release of v3 will help reinvigorate AAVE, which is down 6.5% in TVL over the last month and has seen a decline of 80% in token holder revenues on a MoM basis.
LUNA (-20%) - LUNA, the base asset for the Terra stablecoin ecosystem, suffered last week after widespread fear that its largest stablecoin, UST (Market cap of $11b), would depeg from $1. The depeg fear stemmed from another stablecoin, MIM, briefly breaking its peg. MIM is used along with UST in a DeFi leveraged yield strategy, and users feared that liquidations in MIM would cause pressure on UST. Ultimately, the peg held under this stress test. However, the LUNA token saw poor performance as a result.
RON (-46%) - Ronin, the Layer 2 scaling solution for the Axie Infinity ecosystem, launched its RON token last week to a muted reception. Although the token was just released, the Ronin sidechain has been live since May 2021 and ranks as a top L2 with $3.5 B in TVL and has done $4 B in NFT sales to date. For more information on our thoughts on Ronin, see my colleague. Hassan Bassiri’s tweet thread.

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

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.