What's Driving Token Prices? (June 15, 2022)

Katie Talati
Jun 15, 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.

  • OSMO (-23%) - Cosmos-based DEX Osmosis was exploited last week for $5M, prompting the team to halt the chain entirely. After 5 days of downtime, the chain was relaunched on Sunday night and immediately saw a 40% decline in TVL as users withdrew their assets.
  • CHZ (-21%) - Fan Token platform Socios announced yesterday that they have integrated with PayPal, making them the first blockchain-based platform to allow PayPal fiat deposits in Europe. Fiat on-ramps for non-crypto native users are an essential piece to solve in the effort to increase digital asset adoption.
  • CEL (-16%) - Centralized lend/borrow platform Celsius made waves this weekend as rumors spread that the company became insolvent when they halted withdrawals on Sunday night. Celsius, which promises users high yields on the assets it deposits, has reportedly been generating these yields via DeFi. In this case, Celsius was reportedly staking ETH in Lido in return for stETH, which they were levering up on by depositing this stETH into Aave as collateral to borrow more ETH. They then deposited the ETH back to Lido and repeated these steps. With the fall in market prices, the stETH/ETH peg became destabilized, which meant Celsius suffered margin calls across their positions and have been selling assets to meet liabilities. Many believe that Celsius is insolvent; however, this is just speculation. As a result of the turmoil, CEL is down 16% (although it was down 72% on Monday), stETH is down 36%, and LDO (the issuer of stETH) is down 41%.
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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