What's Driving Token Prices? (July 27, 2022)

Katie Talati
Jul 27, 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.
 

  • COIN (-17%) - Coinbase, the most well-known centralized exchange, faced regulatory trouble this week. First, the SEC announced it was charging an ex-employee with insider trading for purchasing tokens before Coinbase announced it would potentially list them. Subsequently, the SEC announced it was investigating Coinbase and its token listings, which could be considered securities.
  • AUDIO (-16%) - Decentralized music streaming platform Audius suffered a governance attack last week that saw 18 million tokens stolen from the Audius treasury. The hacker created and approved a proposal to send tokens from the treasury fund to the hacker’s address. Although the tokens were worth $6M at the time, the hacker faced a high amount of slippage and only netted themself $1.1M in profit. The Audius team quickly patched the vulnerability in the governance contracts; however, it brought the token price down -16%.
  • DYDX (-6.5%) - A proposal went live last week on the forum for decentralized derivatives protocol dYdX that proposes cutting token incentive rewards by 25% to counteract inflation. dYdX has become the leading decentralized derivatives platform, mainly due to its generous token incentive platform that initially rewarded users with an airdrop and now rewards for every trade performed on the platform. As a result, it has seen $466M in annual revenue; however, they have also released $378M in token rewards. The proposal is still in the discussion phase, but if it passes and emissions are reduced, this should be bullish for the DYDX token.
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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