Dear Bankless Nation,
Crypto may be recovering from its bear market depths, but things are still looking grim for NFTs. Are there any contrarian opportunities worth seizing on?
This month, our analyst team dug into a number of gaming-related tokens and we're sharing these ratings (and several others) from our Token Hub below! The first full token rating is available for everyone, but the rest are exclusive for paying Bankless Citizens.
- Bankless team
Token Hub | June 2023 Update
Bankless Writer: Ben Giove
In the Bankless Token Hub, our analyst team has amassed coverage of dozens of noteworthy crypto assets, analyzing on-chain and off-chain data to assess whether we're bullish, bearish 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 Bankless premium subscribers get access to coverage initiations and ratings changes in real time.
Without further ado... the Token Ratings! 👇
👾 Ronin (RON)
- Type: Coverage Initiation
- Risk Rating: Medium
- Sector: Gaming
- Current FDV: $1.0B
We are initiating coverage of RON with a rating of bullish.
Catalyst Overview:
RON has been assigned a Bullish rating due to the expected growth of the Ronin ecosystem and the launch of staking.
The Ronin ecosystem began with Axie Infinity but is continuing to expand outside of it. The L1 Ronin chain recently announced that they are going to be partnering with five studios to launch games on their chain. These games span across a variety of different genres including shooters, MMOs, sports, puzzles, and MOBAs. Ronin also released RON staking in March 2023, with tokenholders now able to stake and delegate their tokens to one of the network's 22 validators.
Price Impact:
The onboarding of new partners outside of Axie has the potential to catalyze significant growth in the Ronin ecosystem by onboarding new cohorts of players. Furthermore, should one of the games become a hit, it could help strengthen Ronin’s network effect by spurring even more studios to build on the chain. RON staking should also serve as a positive tailwind for price, as it will encourage long-term oriented holders to buy and stake their tokens in order to earn yields from token emissions and trading fees.
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💧 Lido (LDO)
- Type: Ratings Reiteration
- Risk Rating: Low
- Sector: Liquid Staking
- Current FDV: $1.9B
We are reiterating our bullish rating on LDO.
Catalyst Overview:
LDO remains Bullish due to the successful implementation of Lido V2.
On May 18, Lido launched its highly anticipated V2. The upgrade makes several crucial changes to the protocol including enabling withdrawals and launching the staking router. The staking router brings modularity to Lido and allows more node operators to validate for the protocol by creating their own isolated staking pools. These pools can incorporate new technologies such as DVT and must be approved by LDO tokenholder vote.
Despite allowing stakers to exit, so far just 453,900 ETH has been queued for withdrawal. Of this, 428,100 (94.3%) has been withdrawn by Celsius, with the bankrupt lender likely looking to pull their funds to help make their customers whole. In all, this withdrawn stake accounts for 7.2% of Lido’s total deposits.
Price Impact:
Even after seeing a material amount of deposits queued for withdrawal, Lido still remains far and away the largest staker on the Beacon Chain with 31.3% market-share.
While it is possible more ETH could exit, the lack of significant withdrawals from entities other than Celsius suggests that there is little demand among them to leave Lido. Furthermore, V2 is likely to catalyze growth for stETH, as it reduces the risk of staking with Lido by taking the implementation risk in shipping V2 off the table.
This, coupled with an expected increase in the ETH stake rate, should help contribute to strong growth for Lido over the coming months.
🎮 Treasure DAO (MAGIC)
- Type: Ratings Reiteration
- Risk Rating: Medium
- Sector: Gaming
- Current FDV: $339.6M
We are reiterating our bullish rating on MAGIC.
Catalyst Overview:
MAGIC remains Bullish due to the continued growth of the Treasure ecosystem and the upcoming launch of the Beacon Harvester.
Treasure is continuing to expand. The gaming DAO has onboarded two new games into their ecosystem since March in ZeeVerse, a monster-tamer MMORPG, and Spark Defense, a MOBA tower-defense game. In addition, Treasure will soon be launching a new Bridgeworld harvester where MAGIC holders will be able to stake their tokens to earn emissions in collaboration with The Beacon, another game in their ecosystem.
Price Impact:
Treasure’s continued expansion and onboarding of partner games should help attract new users to their ecosystem, helping strengthen their network effects and in turn attracting further studios and players. In addition, the launch of the Beacon Harvester represents a positive catalyst for MAGIC in the short-run, as it should help create demand to buy and stake the token in order to earn emissions.
🪩 Aptos (APT)
- Type: Ratings Reiteration
- Risk Rating: Medium
- Sector: L1
- Current FDV: $9.0B
We are reiterating our bearish rating on APT.
Catalyst Overview:
APT remains Bearish due to valuation concerns.
Aptos currently trades at an FDV of $9.0B, the 8th highest valuation among Layer-1 and Layer-2 blockchains. This rich valuation comes despite less usage than many of its peers that trade at similar and/or lower valuations. Aptos has just the 31st highest DeFi TVL at $49.6M and places just 19th in daily active addresses at ~11,000.
Price Impact:
Aptos’s lofty valuation does not seem warranted relative to the traction it has seen to date. While the token should benefit from a lack of unlock-related sell pressure, as insider vesting does not begin until October 2023, APT’s poor fundamentals will still likely weigh on its price, particularly in a low-liquidity environment in which most alt-coins are bleeding against benchmarks like ETH.
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🚀 Rocket Pool (RPL)
- Type: Ratings Reiteration
- Risk Rating: Low
- Sector: Liquid Staking
- Current FDV: $945.3M
We are reiterating our Bullish rating on RPL.
Catalyst Overview:
Rocket Pool has seen a surge in deposits over the past month, following the Shapella network upgrade on April 12, which enabled withdrawals from ETH staking, and the Atlas protocol upgrade on April 18, which lowered the bonding requirement for minipool operators from 16 to 8 ETH.
During this period, Rocket Pool has seen its deposits grow 30.1% from 446K ETH to 581K ETH. This is the 2nd fastest growth rate of any LSD with more than 10K in deposits, and the 7th fastest of any staking entity on the Beacon Chain.
Price Impact:
Rocket Pool’s should continue to benefit over the coming months from both the continued increase in the ETH stake rate in the wake of Shapella, as well as its newfound scalability post-Atlas. This in turn should lead to further demand for RPL, which new minipool operators must bond in order to onboard the incoming stake and validate for the network.
🫐 GMX (GMX)
- Type: Ratings Reiteration
- Risk Rating: Medium
- Sector: DeFi - Perpetuals
- Current FDV: $717.1M
We are reiterating our bullish rating on GMX.
Catalyst Overview:
GMX remains Bullish due to the upcoming launch of GMX V2.
GMX V2 will make several key improvements to the perpetuals exchange. Along with the traditional index like GLP, V2 will enable trading of a greater amount of assets through GM pools, which are isolated pools where traders can long/short a particular token. V2 will also bring several other upgrades such as changes to the DEX like introducing funding fees, implementing an auto-deleveraging system (ADL) to protect the solvency of the protocol, and utilizing ChainLink oracles to help enable guaranteed order execution. V2 is currently in public testnet on Avalanche.
Price Impact:
GMX V2 should help re-catalyze the growth of the protocol, as its architectural changes and UX improvements for traders should help lead to greater trading volumes. In turn, this should help drive value to GMX stakers, who will earn higher yields as a result of the increase in activity, and therefore fee revenue from the platform. Furthermore, GMX should continue to benefit from the broader growth of perpetuals DEXs and the broader Arbitrum ecosystem.
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