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CFX Drops 6% After Conflux Network Says DWF Labs Bought $18M of Its Tokens
Conflux token's dour reaction is consistent with the prevailing investor disinterest in alternative cryptocurrencies.
Updated Jun 28, 2023, 1:13 p.m. Published Jun 28, 2023, 10:57 a.m.
Conflux Network, a permissionless Layer 1 blockchain popularly called the Chinese Ethereum, on Wednesday confirmed more investment from the crypto market maker and Web3 investment firm DWF Labs. Still, the blockchain's native token, CFX, traded in the red, falling over 6% to 21 cents.
The self-proclaimed regulatory complaint blockchain in China, said on Twitter that DWF Labs snapped up $18 million worth of CFX tokens, doubling down on its initial purchase of $10 million in coins in March.
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"I am more than happy to increase our CFX holdings and support the guys with everything," Andrei Grachev, head of DWF Labs, said in a tweet, referring to Conflux as a "bright example of how a great team, technology, BD, GR and PR should perform."
DWF's emergence as a large venture capital firm in the crypto industry has been viewed with skepticism, with some alleging the firm functions more like a market maker than a venture firm.
Read more: Crypto Market Maker DWF Labs’ More Than $200M in Deals Blur What ‘Investing’ Means
@Conflux_Network is a bright example how a great team, technology, BD, GR and PR should perform. We know each other since ages and I’m more than happy to increase our $CFX holdings and support the guys with everything.
— Andrei Grachev (@ag_dwf) June 28, 2023
Long East, Long HK, Long Web3
LFG! pic.twitter.com/hSzb3VYjfP
The network, which is focused on Web3 development in Hong Kong and mainland China, has gained notoriety as a high-speed blockchain thanks to its "Tree-Graph" consensus algorithm, which allows the network to achieve a high transaction throughput (tps), with a capacity of up to 6,000 transactions.
CFX tokens facilitate cross-chain transfers, can be used to pay transaction fees within the network and can be staked to participate in the consensus protocol.
Conflux's CFX token traded at $0.214 at press time, representing a 7% decline on the day, according to data from TradingView. The cryptocurrency's market capitalization stood at $368.7 million.
The dour reaction is consistent with the somber mood in the broader market. Bitcoin is taking a bull breather above $30,000 after past week's 16.5% surge, the biggest since March, per CoinDesk data.
Besides, the outlook for alternative cryptocurrencies (altcoins) has deteriorated since the U.S. Securities and Exchange Commission referred to the likes of ADA, MATIC and others as securities in its recent lawsuits against dominant crypto exchanges Binance and Coinbase.
UPDATE (June 28, 11:36 UTC): Rewrites headline to focus on token move.
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