With its future prospects looking bright, can Tezos upset Ethereum’s DeFi dominance

Ever since August, the market has been witnessing uptrends and downtrends in phases. However, during each phase there have been exceptions defying the larger trend. Cardano, Solana, Avalanche, Fantom and Cosmos have been a few of those resistant coins. As the market continues to consolidate, another alternative has caught the attention of traders and investors.

Tezos has been fetching market participants lofty returns of late. This is possibly the only “top” alt that trades in green for 4 consecutive days. In effect, its price has appreciated by over 25% in just the past 24-hours. For context, the earnings of the other top alts were mostly hovering in the 1% to 2% range at the time of publication.

What sustained XTZ’s surge

Network related upgrades and novel launches on the network have, by and large, acted like catalysts. Tezos, as such, is a self-modifying blockchain. In essence, it is possible to upgrade the network without hardforks.

The last Grenade the upgrade was implemented last month and the aforementioned upgrade improvements include reduced blocking time and gas consumption.

The reduction in transaction costs managed to attract new users on the network and in retrospect, positively impacted the price. Additionally, earlier this month Homebase – a protocol for creating DAOs, was launched on the Tezos blockchain.

Now, this would allow users and developers to form several other entities using the network’s smart contract feature. Not to mention that asset lending services were also recently launched on the Tezos network through its partnership with the DeFi EQIFI platform.

Additionally, at press time, Tezos’ official data showed 76.16% of the total supply was staked on the network. Staking essentially limited the number of tokens available in the market and helped to put upward pressure on prices.

Is the rally too good to last

Well, at the time of writing, the state of most of Tezos’ on-chain metrics seemed to be withering. As the price of the alt tried to climb towards its May ATH of $ 8.4, network usage was quite insufficient.

Consider the network-value-to-transaction value. This ratio explicitly designates the relationship between market capitalization and transfer volumes. Whenever the NVT is high, it indicates that the network value is outpacing the value being transferred on the network.

Such trends tend to rub off quite positively on the valuation of any alt. During the alt’s May rally, the same had been in revolving in the 100-200 range, but has been under 40 since the second week of September.

Alt dominance has also seen a drop from 0.3% to 0.27% recently, indicating that it has lost its say in the total crypto market cap. Quite similarly, the state of the transfer value has also been quite undernourished.

Future prospects

Keeping in mind the state of the aforementioned metrics, it can be said that the next few days could end up being a bit difficult for the alt. However, it should be noted that its development activity has been going on at a pretty decent pace of late.

In fact, Tezos is catching up with Ethereum’s dominance in the DeFi space and has around 135 projects and dApps in development on its network.

What’s more, cryptocurrency firms in Switzerland have been working with Tezos to launch tokenized assets like popular stocks on its blockchain. The same would act as a respite from the future amid the changing and competitive environment. Thus, the short-term setbacks would eventually be overshadowed by the favorable long-term prospects.

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