The cryptocurrency market has started the new year on a lukewarm note. Most of the major cryptocurrencies including bitcoin and ether have come under pressure. However, one token that seems unfazed by the broader market trend is Cosmos’s original token ATOM.
ATOM gained nearly 790 percent in a year and nearly doubled in the last month. But why was she defying the trend of the market? There could be several factors to this, starting with the nature of the Cosmos network itself.
The Cosmos project claims to solve one of the biggest problems in the blockchain industry, interoperability, or the process of operations between two or more blockchains. It aims to address issues in the blockchain field such as scalability, cost, and environmental impact by offering an ecosystem of connected blockchains.
One of the main concerns is the levels of fragmentation observed in blockchain networks. There are hundreds of block chains but only a few can communicate efficiently with each other. Cosmos is looking to address this issue by creating an Interblockchain communication protocol.
Another factor contributing to the launch of Cosmo is Evmos, a non-application-related chain linked to cryptocurrencies. This protocol allows Ethereum-based assets and projects to move seamlessly within the Cosmos Network. This was a huge step as there was no correlation between Ethereum and Cosmos before that.
According to the Cointelegraph Telegraph, the Gravity Bridge, which was launched on December 15, is another project dedicated to facilitating the linkage of assets between Ethereum and Cosmos. While the project is currently operating as a standalone series, a migration to the Cosmos Hub is underway and is expected to be completed early this year.
The third reason for this price jump could be the expansion of the network into 28 interconnected chains with a total value of nearly $68 billion. Various interconnections include networks such as Binance Smart Chain, Terra (LUNA), and Crypto.com (CRO).
The Theta upgrade scheduled for March 31 also maintained the token’s strength. The upgrade, according to Cointelegraph, will add some new features such as meta-transactions. This will allow transactions to be sent by separate accounts receiving tips and inter-chain account entry allowing users to manage accounts across multiple blockchains. Liquid staking, a system in which users use the value of assets stacked in other parts of the Cosmos ecosystem, will also be offered with this upgrade.
ATOM is currently trading 6 percent higher at $39.04 and has a total market capitalization of around $9 billion, according to data from Coinmarketcap.