What's Driving Token Prices? (July 20, 2022)

Katie Talati
Jul 20, 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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  • AXS (+25%) - Last week, play-to-earn blockchain game Axie Infinity announced a new breeding event where users can create "rare" summer skins within a 50-day window. Since the announcement, the breeding of Axie NFTs has increased significantly (~4.8x over the previous week), and weekly revenue is also up 200%. Despite this, AXS still has a long way to recover, with annualized revenues at $4.68M versus $300M six months ago.

  • GNO (+41%) - Gnosis Safe, the multi-sig wallet, announced a $100M raise led by 1kx. The Gnosis Safe was originally created by prediction-market Gnosis but was recently spun out with the intention of launching its own token and DAO. Investors in the round include Tiger Global, A&T Capital, Blockchain Capital, Digital Currency Group, Greenfield One, Rockaway Blockchain Fund, ParaFi, Lightspeed, Polymorphic Capital, Superscrypt, and 50 others. Finally, they announced they would be rebranding to “Safe.”

  • ETH (+44%) - The big market news last week was that the ETH merge will take place roughly around September 19. The merge combines Eth 1.0 (current PoW chain) and Eth 2.0 (PoS Beacon Chain) and will officially transition Ethereum to a proof-of-stake chain. While the PoW and PoS chains will be combined, Ethereum staked on the Beacon Chain will still remain locked up for several more months until the next phase in the ETH 2.0 roadmap occurs. 
  • LDO (+83%) - With the merge date set, Lido is set to potentially see its primary liquid staking asset, stETH, unlocked in the following months. In addition, as the PoW version of Ethereum is phased out, more users may wish to stake their ETH on the new PoS chain to validate the network which will increase TVL on Lido. Following the news of the merge, Lido also announced it would release support for wrapped stETH on L2s and that it was looking to perform a sale of tokens from treasury to raise $29M.
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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