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What is behind the restructuring of Cosmos?



ATOM, the original cryptocurrency of the Cosmos blockchain protocol, has accumulated over 100% in the last week.

Analysts attribute ATOM’s collection to two main factors. First, layer 1 blockchain protocols, such as Avalanche (AVAX) and Polkadot (DOT), have undergone a major overhaul.

Second, the use of ATOM, which enables cryptocurrency holders to earn through exchange, gas and transaction fees, can make it more compelling for investors.

ATOM / USDT 1
-day price table (Binance). Source: TradingView.com

Relocation of layer-and-block chains

The term rerating is used in the cryptocurrency market to describe when the value of a cryptocurrency rises rapidly after stagnation for an extended period of time.

Repetition usually occurs when the market finds that a cryptocurrency is undervalued due to underlying causes or that a particular catalyst is bending the potential of the blockchain protocol.

Cosmos is founded for repetition because other layer-a-blockchain protocols, such as Polkadot, have seen huge collections during January and February.

Currently, as of February 13, the valuation of Cosmos is around 5 billion dollars. In comparison, Polkadot’s valuation is around $ 27 billion, more than five times higher.

More importantly, compared to other layers of blockchain protocols, Cosmos has launched large decentralized platforms and blockchain projects on top of it.

Projects on top of Cosmos valued higher than ATOM

Most notably, Terra and Binance Smart Chain are both based on Cosmos blockchain. The value of the two blockchain projects alone is over 22 billion dollars.

Technically, BNB is the original token for both Binance Smart Chain and the Binance ecosystem, but still the valuation of the two projects surpasses that for Cosmos.

A pseudonymous DeFi investor known as “SpiderCrypto” said that ATOM is undervalued compared to other blockchains. Investors said:

“@Cosmos $ ATOM is also underestimated compared to other blockchains. So many great projects that use tendermint / cosmos, and you do not even know anon. $ 10b marketcap and will explode like $ avax. ”

A pseudonymous Cosmos validator, Immasssi, also emphasized that ATOM tokenomics, which allow users to take advantage of the fees generated from the Cosmos ecosystem, make ATOM more attractive.

Similar to DeFi projects that have cash flow and a token that allows users to earn through efforts, the validator said that ATOM holders will earn transaction fees from packages routed through the Cosmos hub. He said:

$ ATOM holders will earn tx fees for packages routed through the hub. This includes all #data. In addition, nuclear holders will earn exchange fees, gas fees and TX fees from the upcoming AMM. Furthermore, you earn from shared security. Once you are aware of what it means for the ATOM. ”

ATOM vs. LUNA long-term sentiment score. Source: TheTie

In addition, the long-term sentiment for ATOM has increased significantly this year with Terra LUNA, suggesting that the restructuring of Cosmos may continue, especially if the DeFi sector continues to grow.