Author: Jack Inabinet, Bankless; Translated by: Deng Tong, Golden Finance
Every weekday over the past three months, our team of analysts has written an article about a popular crypto asset and assigned it a bullish, bearish, or neutral rating, aiming to predict the token's price action over the next three-month investment horizon.
With over 60 active token ratings currently in the Bankless Token Hub, our predictions are only beginning to come true!
Today, we’ll present the most noteworthy token ratings from June, analyzing the predictions we made while reflecting on the biggest misses of the month.
Solana
Report date: June 21, 2024
Rating: BEARISH
Performance: +2%
Reasons for this rating:
Despite SOL’s astounding performance between October 2023 and March 2024, culminating in a peak price of $200 per coin, in June the novelty of the ecosystem appeared to be waning as key on-chain metrics remained largely stagnant since April.
Solana’s low fees and unified global state have proven to be a strong differentiator, enabling the chain to capture the lion’s share of the memecoin frenzy this cycle, but there’s no denying that things were already getting worse just before Bankless began covering SOL.
Top crypto-native Solana memes WIF and BONK are down more than 50% in dollar-denominated value from their May highs, a trend mirrored across the industry as celebrity tokens seeking to replace them all aggressively move toward $0.
We speculate that the reduction in profitable opportunities on Solana will force users to exit the ecosystem, leading to deterioration in Solana fundamentals and increased selling pressure on SOL.
How our ratings performed:
SOL was one of only two coins rated by Bankless in June that was positive at the time of review. While Solana has only slightly outperformed the USD, it has consistently outperformed competing L1s over the past three months; in the six weeks since we began covering Solana, the SOL/ETH ratio surged 70% to a new all-time high.
Despite Solana’s outperformance over the three months of the last rating cycle, we reiterate that the rotation into this alternative L1 is largely complete and warn that if SOL decisively breaks below its 2023 high of $120, its wild volatility could result in large losses for ecosystem participants.
Athena
Report date: June 14, 2024
Rating: BEARISH
Performance: -68%
Reasons for this rating:
Ethena deposits surged in the weeks leading up to our rating, helped by the protocol’s short-sighted decision to reduce the interest rate on its insurance fund to make staking USDe more attractive. As expected, outstanding USDe supply resumed its downward trend shortly after early July.
The Bankless analyst team correctly predicted that hedge fund adoption of spot cryptocurrency ETFs would increase competitiveness for Ethena’s once-lucrative underlying trades, while funding rates for ETH perpetual swaps have continued to slide into negative territory in recent days.
Ethena’s ETH perpetual shorts now generate negative yields, and while the protocol has increased the percentage of revenue paid to stakers, sUSDe currently pays a negative spread over sDAI, which has the potential to suddenly unwind this arbitrage trade as participants flock to exit and find liquidity limited.
How did our ratings perform:
Since Bankless began its bearish call, ENA’s price has fallen 68% in USD terms.
The protocol prioritizes short-term profits over long-term stability, and the Bankless analyst team will remain bearish on ENA in the coming months, believing that the Ethena experiment may end in disaster as funding rates continue to compress and holders suddenly rush to exit extremely illiquid synthetic dollar instruments.
Pendle Finance
Report date: June 24, 2024
Rating: Bullish
Performance: -47%
Reasons for this rating:
In the first half of 2024, PENDLE was easily one of the best performing liquid crypto assets with fundamentals (i.e. not being a memecoin), recording impressive year-to-date gains of over 500% at its peak in April and May.
While the arrival of Ethena and EigenLayer airdrops may reduce the appetite for speculative airdrops and have bearish consequences for Pendle, the protocol has continued to forge ahead despite headwinds, with total value locked (TVL) surging more than 50% from its May lows and topping $7 billion multiple times in June.
Crypto users continue to use Pendle to earn market-leading yields and speculate on airdrops, while the mainnet deployment of Symbiotic restaking has spawned a whole new airdrop opportunity that should enable the platform to retain depositors!
How our ratings performed:
PENDLE is arguably one of the most disappointing tokens on Bankless Token Hub, with our analyst team deeply regretting this rating just days after initiating bullish coverage.
On June 26, 2024, $3 billion of Pendle yield swaps expired in a pool created at the height of the airdrop frenzy; many users saw insufficient replacement opportunities, and Pendle’s TVL halved over the next ten days.
Another large quarterly Pendle expiration will occur on September 25th, unlocking over $360M in liquidity across its Arbitrum and Ethereum deployments. Given the significant yield compression since the pool’s inception in September, we expect this event to result in a net depositor exodus, which could negatively impact Pendle’s base case.
Blast
Report date: June 26, 2024
Rating: BEARISH
Performance: -63%
Reasons for this rating:
Many cryptocurrency influencers promoted their bullish view on the infinite cycle of Ponzi economic speculation supported by BLAST and announced that they had accumulated more funds after the airdrop.
The Bankless analyst team discreetly saw through the undeserved hype and gave BLAST a bearish rating. At the time, we found that there was little incentive for deposits after the token launch was disappointing, and the network was expected to be plagued by deteriorating on-chain fundamentals and huge selling pressure on BLAST.
How our ratings performed:
Like many other L2 networks, with little reason to trade besides the promise of an airdrop, BLAST has underperformed other crypto assets by a wide margin. BLAST is down 70% since Bankless began reporting; we expect continued underperformance in the coming months.
Lido
Report date: June 12, 2024
Rating: Bullish
Performance: -46%
Reasons for this rating:
Lido is attempting to enter the restaking space by partnering with Mellow Finance, an LRT platform that leverages Symbiotic, a newly launched EigenLayer competitor backed by key Lido employees and investors.
While LRT’s impressive growth in total locked value makes it a decentralized competitor to Lido, many companies have already deployed the first round of airdrops, providing these Lido-related alternatives with an opportunity to challenge the EigenLayer re-staking ecosystem.
A large portion of the crypto capital deposited into the EigenLayer ecosystem undoubtedly comes from airdrop hunters chasing returns, i.e. depositors could easily be forced to turn to Symbiotic due to the promise of airdrops, especially considering that EigenLayer restaking is not yet live.
Furthermore, through this piecemeal approach to re-staking, Lido positions itself as the most ideal staking solution, offering both a vanilla Ethereum staking product and a slightly riskier liquid re-staking variant, enabling it to serve market participants with a wide range of risk appetites.
How our ratings performed:
Two weeks after Bankless began its bullish call on LDO, the SEC charged that Lido’s staking service was an unregistered security offering, sending token holders down 25% immediately, wiping out all gains since the story began.
While the Bankless analyst team maintains that LDO is the leading Ethereum staking token, we expect the token is destined to decline until L1 activity and ETH price (the two biggest drivers of Lido profitability) are able to surge.
