First Mover Americas: Layer 2 Tokens Take Lead

The latest price moves in crypto markets in context for Jan. 27, 2023.

AccessTimeIconJan 27, 2023 at 1:05 p.m. UTC

This article originally appeared in First Mover, CoinDesk’s daily newsletter putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

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Ethereum-scaling tool Polygon’s MATIC token has surged 8% over the past 24 hours, continuing its strong momentum this year. MATIC was recently trading at $1.11. It is up 48% since Dec. 31 amid a spike in daily transactions that have made the blockchain the second largest for daily active users, according to data from Token Terminal. Decentralized exchange Gains Network has recorded over $1.5 billion in trading volume on the Arbitrum blockchain nearly a month after being deployed. Gains Network was initially released on Polygon and has contributed to the increase in the number of transactions being conducted on that network. It allows users to trade financial derivatives of various assets, such as tokens, U.S. stocks and indexes by matching user trades using smart contracts.

The price of layer 2 network Optimism’s OP token has also surged over the past week. OP reached an all-time high of over $2.50 on Wednesday amid rising adoption of layer 2 networks. “People want layer 2 tokens, and they see layer 2 adoptions happening,” said Nick Hotz, vice president of research at the digital asset-management firm Arca, referring to the tokens associated with companion blockchain systems. “Optimism is the only way to get good exposure to that theme currently.” The OP token’s jump has outpaced the top two digital assets by market capitalization, bitcoin and ether, which have risen 39% and 33%, respectively, in 2023.

Developers behind the shuttered decentralized crypto exchange Mango Markets say they are pushing forward with a relaunch of the project – even as the U.S. Securities and Exchange Commission alleges the project’s native token, MNGO, is a security. The SEC’s labeling of the token raises knotty problems about whether Mango Markets’ “version 4” can proceed without facing regulators’ wrath. The SEC hasn’t alleged wrongdoing by Mango. But the agency last week accused MNGO trader Avraham Eisenberg, who drained $116 million from the exchange in October, of securities market manipulation. Securities lawyers who aren’t involved in the case told CoinDesk the SEC might be laying the groundwork to bring a case against the exchange that issued MNGO to its investors when it launched in 2021.

Chart of the Day

CoinDesk - Unknown
  • The chart shows changes in bitcoin's price three hours before and after the monthly releases of the U.S. Consumer Price Index since January 2021.
  • Volatility around CPI releases has increased over the past 12 months, indicating that macroeconomic data has more influence on the cryptocurrency than ever.
  • The next CPI release is scheduled for Feb. 14.

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Lyllah Ledesma is a CoinDesk Markets reporter currently based in Europe. She holds bitcoin, ether and small amounts of other crypto assets.

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Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.

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