ATOM, the native cryptocurrency of the Cosmos blockchain protocol, has rallied by over 100% previously week. Analysts are attributing the rally of
ATOM, the native cryptocurrency of the Cosmos blockchain protocol, has rallied by over 100% previously week.
Analysts are attributing the rally of ATOM to 2 main basic components. First, in latest weeks, layer one blockchain protocols, like Avalanche (AVAX) and Polkadot (DOT) have gone by a serious rerating.
Second, the utility of ATOM that permits holders of the cryptocurrency to earn by swap, gasoline, and transaction charges may make it extra compelling for buyers.
The rerating of layer-one blockchains
The time period rerating is used within the cryptocurrency market to explain when the worth of a cryptocurrency rises quickly after stagnating for a protracted interval.
Usually, rerating happens when the market finds {that a} cryptocurrency is undervalued as a result of basic causes or a sure catalyst buoys the potential of the blockchain protocol.
Cosmos is primed for a rerating as a result of different layer-one blockchain protocols, like Polkadot, have seen huge rallies all through January and February.
Presently, as of Feb. 13, the valuation of Cosmos hovers at round $5 billion. Compared, Polkadot’s valuation is at round $27 billion, greater than 5 instances greater.
Extra importantly, in comparison with different layer one blockchain protocols, Cosmos has main decentralized platforms and blockchain tasks launched on prime of it.
Tasks on prime of Cosmos valued greater than ATOM
Most notably, Terra and Binance Sensible Chain are each primarily based on the Cosmos blockchain. The valuation of the 2 blockchain tasks alone are above $22 billion.
Technically, BNB is the native token of each Binance Sensible Chain and the Binance ecosystem, however nonetheless, the valuation of the 2 tasks alone surpass that of Cosmos.
A pseudonymous DeFi investor generally known as “SpiderCrypto” mentioned ATOM is undervalued in comparison with different blockchains. The investor mentioned:
“Additionally @cosmos $ATOM is undervalued relative to different blockchains. So many nice tasks utilizing tendermint / cosmos and you do not even know anon. $10b marketcap and can explode like $avax.”
A pseudonymous Cosmos validator Immasssi additionally emphasised that the tokenomics of ATOM, which permits customers to learn from the charges generated from the Cosmos ecosystem, makes ATOM extra engaging.
Just like DeFi tasks which have money circulation and a token that lets customers earn by staking, the validator mentioned ATOM holders will earn transaction charges from packets routed by the Cosmos hub. He mentioned:
“$ATOM holders will earn tx charges for packets which can be routed by the hub. This contains all #knowledge. Moreover atom holders will earn swap charges, gasoline charges & tx charges from the upcoming AMM. Moreover incomes from shared safety. When you understand what which means for ATOM.”
Moreover, the long-term sentiment rating for ATOM has risen considerably this 12 months alongside Terra LUNA’s, suggesting that the rerating of Cosmos might proceed, significantly if the DeFi sector continues to develop.