What's Driving Token Prices? (June 22, 2022)

Katie Talati
Jun 22, 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.

  • SLND (-10.5%) - Over the weekend, Solana-based borrow/lend protocol, Solend, created a DAO and pushed through a vote to take control of a single user’s position on the platform that was at risk of getting liquidated. The user, or whale, borrowed $108M in stables in return for $170M of SOL with a liquidation price of SOL at $22.27 (price at the time was ~$27). Solend’s team was concerned that the whale would fail to top up their collateral, which would lead to massive liquidation on Solend and other Solana DeFi protocols. As a result, Solend released a proposal to "grant emergency power to temporarily take over the whale's account so the liquidation can be executed OTC." The proposal led many to question if this is what decentralization and censorship-resistant products look like. Even so, the proposal passed with 97.5% of the vote; 90% of votes came from a single user. Following public backlash, a second proposal was submitted to invalidate the first proposal and increase voting periods to 1 day.
  • IMX (+3.7%) - Immutable-X, the Ethereum layer 2 scaling solution servicing GameFi products, partnered with Mastercard to allow NFT purchases with fiat, which should be a massive driver of adoption for non-crypto native users. They also announced Arch, an NFT bridge between L1 Ethereum and L2 StarkNet. Finally, they launched a $500M gaming and NFT fund backed by Immutable venture partners and Immutable’s own balance sheet. Volumes on Immutable X are down 42% MoM.
  • FTT (+5%) - FTX had a busy week, which began by bailing out BlockFi with a revolving credit facility of $250M. Then FTX US acquired clearing firm Embed. The acquisition will allow FTX US to provide white-label brokerage services. Today, Alameda (the trading firm that is part of FTX) agreed to provide the exchange, Voyager, with a revolving credit line of $200M in USDC and 15,000 BTC. However, these outlays may not be without cost: according to a report, FTX dropped out of talks with the Los Angeles Angels MLB team to adorn their jerseys with the FTX logo.
  • UNI (+22%) - Decentralized exchange Uniswap acquired Genie.xyz, an NFT aggregator. The acquisition is designed to pave the way for Uniswap to enter the NFT space with plans to offer trading on ERC-721 assets by the fall.
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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