How Our 40+ Token Hub Ratings Are Performing
This year, we restarted the Bankless Token Hub, where, every weekday, our analyst team digs into a token's potential future price performance and gives it a bullish, bearish or neutral rating with a brief write-up justifying that rating on a three-month investment timeline.
Right now, we have 41 active token ratings in the Citizen-only app. Today, we just added a rating on Polygon's native token.
As we continue to lay out new ratings and adjust to the shifting financial landscape, we wanted to take a look back at our past performance rating tokens, especially during a period when the market was dealt some major shocks. We didn't do too bad!
Today, we’re showing Citizens a few of our most notable token ratings from this summer, and digging into what exactly we got right and what we overlooked. You can check out the Token Hub app right now to see all of our active ratings! 👇
🪙 Ethena
Date of Coverage: June 14, 2024
Performance: -60%
Rating: Bearish 🐻
Why We Gave This Rating:
Ethena deposits surged in the weeks leading up to our rating, made possible by the protocol’s short-sighted decision to reduce its insurance fund take rate to bolster the attractiveness of staked USDe. As expected, outstanding USDe supply resumed its downtrend shortly thereafter in the start of July.
The Bankless Analyst Team correctly anticipated that hedge fund adoption of spot crypto ETFs would increase the competitiveness for Ethena’s once lucrative basis trades, while funding rates on ETH perpetual swaps have persistently slipped into negative territory in recent days.
Ethena’s ETH perpetual shorts are now generating negative returns, and even though the Protocol has upped the percentage of revenues it pays out to stakers, sUSDe is currently paying out a negative spread against sDAI, threatening to abruptly unwind this carry trade as participants flock to the exits and find limited liquidity.
How Our Rating Has Performed:
The price of ENA has collapsed by 60% in dollar terms since Bankless initiated bearish coverage.
The Protocol has placed short-term profits over long-term stability, and the Bankless Analyst Team maintains its bearish coverage on ENA for the months to come, believing the Ethena experimentation could end in disaster as funding rates continue to compress and holders abruptly rush to exit from extremely illiquid synthetic dollar instruments.
💥 Blast
Date of Coverage: June 26, 2024
Performance: -72%
Rating: Bearish 🐻
Why We Gave This Rating:
Many crypto influencers publicized their bull cases for an infinite cycle of BLAST-enabled ponzinomic speculation and announced that they were accumulating more following its airdrop.
The Bankless Analyst Team prudently saw through the unmerited hype and assigned a bearish rating to BLAST. At the time, we identified that there would be little motivation to deposit following an unimpressive token launch, anticipating that the network would be plagued with worsening onchain fundamentals and hefty BLAST sell pressure as a result.
How Our Rating Has Performed:
Like many other L2 networks, with little reason to transact on aside from airdrop promises, BLAST has sharply underperformed alternative crypto assets. Since the initiation of Bankless coverage, BLAST has fallen over 70%; we expect continued underperformance in the months ahead.
💧 Lido
Date of Coverage: June 12, 2024
Performance: -36%
Rating: Bullish 🐂
Why We Gave This Rating:
Lido attempted to get its foot in the restaking sector through a partnership with Mellow Finance, an LRT platform that leverages Symbiotic, a newly launched EigenLayer competitor backed by key Lido employees and investors.
Although the impressive rise in LRT total value locked has made them serious decentralized competitors to Lido, many have already deployed their first round of airdrops, leaving these Lido-associated alternatives with a window to challenge the EigenLayer restaking ecosystem.
A significant portion of the crypto capital deposited into the EigenLayer ecosystem is undoubtedly from airdrop hunters chasing returns, i.e., depositors who could easily be compelled to make the switch to Symbiotic given the promise of airdrops, particularly considering that EigenLayer restaking is not yet live.
Further, through this piecemeal restaking approach, Lido positions itself as the most desirable staking solution by offering both vanilla Ether staking products and the marginally more risky liquid restaked variations, enabling it to serve market participants with a wide array of risk appetites.
How Our Rating Has Performed:
Two weeks after Bankless initiated bullish coverage on LDO, the SEC alleged that Lido’s staking services are unregistered security offerings, rocking token holders with an immediate 25% drawdown that erased all gains made since the inception of coverage.
Although LDO has underperformed both ETH and USD since the initiation of Bankless coverage, it has managed to outperform leading liquid restaking competitors like ETHFI and REZ.
While the Bankless Analyst Team sticks by its assessment that LDO is the leading Ethereum staking token, we recognize that it is destined to slide until L1 activity and ETH price – the two largest drivers of Lido’s profitability – surge.