Dear Bankless Nation,
A few weeks ago, we launched the Token Hub. We're continuously adding and updating ratings in this powerful new tool. Today, we're sharing our latest analysis for the BLUR, ENS and INDEX tokens.
The first full token rating is available for everyone, but the rest are exclusive for paying Bankless Citizens.
- Bankless team
Token Hub | May 2023 Update
Bankless Writer: Ben Giove
Looking for value in the midst of meme coin season?
In the Bankless Token Hub, our analyst team has amassed coverage of dozens of noteworthy crypto assets, analyzing the on-chain and off-chain data to grade whether we're bearish, bullish or neutral on the token's future performance.
If you dig into Token Hub, you can also see where we're placing our bets via Bankless Bags, our internal investment club that provides skin in the game for our calls by taking long positions in what we feel are the highest upside “Bullish” tokens.
Token Hub is updated throughout the month, meaning that Citizens get access to coverage initiations and ratings changes in real time.
Without further ado... the Token Ratings! 👇👇👇
🟠 Blur (BLUR)
- Type: Coverage Initiation
- Risk Rating: Low
- Sector: NFT-Fi
- Current FDV: $1.7B
We are initiating coverage of BLUR with a rating of bearish.
Catalyst Overview:
BLUR is being assigned a bearish rating due to the upcoming Season 2 airdrop.
Following a successful Season 1 and token launch that saw it overtake OpenSea as the leading NFT marketplace by trading volumes, Blur is now in the midst of Season 2 of incentives. During this campaign, along with traditional bidding and listing points, traders will be rewarded for exclusively listing their NFTs on the marketplace. In total, 300M BLUR ($186M) has been earmarked for Season 2.
Potential Price Impact:
Blur has strong competitive positioning, and yesterday launched Blend, a lending protocol that tokenholders will control the fee-switch for in 180 days. Despite this, its token still faces significant near-term headwinds in the form of the Season 2 airdrop, as it should lead to substantial short-term sell pressure from farmers selling their allocation.
Furthermore, it is also likely that BLUR will be used to incentivize borrowing and lending on Blend, representing another source of potential structural selling. These factors, coupled with a lack of utility, is likely to weigh on the BLUR price until after the Season 2 rewards are distributed and there is more clarity on if or how the token will be used in relation to Blend.
🔵 Ethereum Name Service (ENS)
- Type: Ratings Downgrade
- Risk Rating: Low
- Sector: Identity
- Current FDV: $1.2B
We are downgrading ENS from bullish to bearish.
Catalyst Overview:
ENS is being downgraded due to insider unlocks and a lack of revenue-sharing with tokenholders. Over the next six months, 8.2M ENS (8.2% of the total supply worth $97M) of the total ENS supply will vest to the community treasury and contributing teams respectively.
In addition, despite having generated $8.7M in revenue over the past two quarters, ENS has chosen to not distribute any of these funds to tokenholders.
Potential Price Impact:
These unlocks, coupled with the lack of utility for the token and revenue-share with holders, is likely to contribute to downward pressure on the ETH-denominated price of ENS. While ENS is a category leader and among the most profitable dapps in crypto, the market has repeatedly shown that strong fundamentals will not be validated unless it is complemented by value accrual to tokenholders.
⚫️ Index Coop (INDEX)
- Type: Ratings Downgrade
- Risk Rating: Medium
- Sector: DeFi - Asset Management
- Current FDV: $17.4M
INDEX is being downgraded from bullish to neutral.
Catalyst Overview:
INDEX is being downgraded due to increased competition in the meta-LSD space.
In January 2023, Index Coop released dsETH, a product where investors can get diversified exposure to a variety of different liquid staking derivatives (LSDs) including rETH, stETH, and sETH2. dsETH currently has $1.5M in TVL, and has generated $603 in revenue ($2037 annualized). There are several other meta-LSDs that are live or will be launching soon including unshETH, with $32.9M in TVL, and yETH, an upcoming product from Yearn Finance.
Potential Price Impact:
While the LSD related products as a whole should continue to grow in the wake of Shanghai, the prevalence of competitors may prevent dsETH from becoming a cash cow for Index Coop.
The DAO currently makes money from charging a 0.25% streaming fee, an annual fee based on the AUM of the product. While in theory this revenue stream is of high quality due to being predictable and recurring, a plethora of other meta-LSDs may force Index Coop to cut or even remove the streaming fee in order to remain competitive and grow market-share, hurting the DAO’s top-line as a result.
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