What you need to know
Why did investors fear Story and express a bearish outlook?
Story has not responded to a recent audit that revealed vulnerabilities in smart contracts, causing concern.
What has been the impact of negative sentiment on IP’s activity in chain and its liquidity?
All three have dropped significantly, including daily active users, TVL, and transactions. In addition, the volume of DEX and IP traded has also fallen to a new low.
Story [IP] This market is showing signs of a weakening of sentiment.
The reports about the current state of the company have caused fear in investors around the world, causing many to become bearish on it and place bets against its possible recovery.
Vulnerabilities spark investor fear
BitsLab’s recent analysis of Story’s smart contract revealed two weaknesses, with one being of medium severity.
Investors have reacted strongly to the report, even though it is not anticipated that these problems will result in a loss of money immediately. The findings were interpreted by many as red flags, causing concern in the entire market.
Story is yet to respond to BitsLab’s report. Investors are likely to be more anxious at this time due to the silence.
On-chain participation drops
The following is a list of ArtemisActivities on the blockchain have been continuing to decline. As users begin to leave the protocol, their numbers are increasing.
The number of daily active users on the market has fallen by 88% to 1,600. This is the lowest point in three months.
Source: Artemis
The number of transactions has also decreased as the user base decreases. Recent readings indicate that there are about 303,000 transactions. These numbers are significantly lower than the previous protocol levels.
The demand for IP will drop when the sentiment changes in this way, which reduces its use to facilitate transactions using protocol across the entire market.
As liquidity decreases, the value of your money will drop.
Over the last day, the revenue and liquidity of the protocol have been affected by the churning in users.
DeFiLlama reports show TVL, or Total Value Locked which is a measure of the IP staked in different protocols has shown a dramatic decline.
Source: DeFiLlama
Around $810,000 of IP was sold to the market by investors, resulting in an increased supply.
The chain fee dropped to $124 as a result of reduced activity in the network.
Moreover, trading volume across decentralized exchanges (DEXs) also declined. The volume of DEX fell to 303,000 dollars, the lowest since November 2nd, when prices had been significantly lower.
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Source: ambcrypto.com
