ATOM An Outlier In Post-Merge Selloff
After the successful execution of Ethereum’s merge, many altcoins began to drop significantly. It turns out that Ethereum merge was not the bullish event that many thought it would be. As the price of ETH dropped, it dragged down larger altcoins with it, with the exception of the Cosmos ATOM price. Now investors are questioning what makes ATOM stand out.
Cosmos ATOM price
Cosmos ATOM is considered the “internet of blockchains” because of its Inter-Blockchain Communication protocol (IBC). The IBC is a nexus of dApps that comprise an interchain, a new internet of blockchains, a framework that provides much needed interoperability in web3. The
ATOM coin provides investors with remarkably high staking rewards, making it popular among many investors.
During the 24 hours of the 15 September merge date, ATOM rose to a new high of almost $17.00, a push past its previous week’s high of $16.45. It consistently created higher lows and higher highs before a market correction over the following two days. Going into the weekend, ATOM began to rise again, suggesting a strong bullish reset.
Image: courtesy CoinMarketCap.com
Why is the Cosmos ATOM price rising?
Staking rewards
With a 17.75% APY, and a 66.75% staked circulating supply, it is one of the highest earners in the market.
The following factors also contribute to these high staking rewards.
Liquid staking
Cosmos is set to introduce liquid staking, making it easier for bigger blockchains in the Cosmos ecosystem to support smaller blockchains.
By interconnecting blockchains, value is compounded on sovereign chains.
Dapps and AMMs
Decentralized apps (dapps) and automated market makers (AMM) are independent DeFi platforms that generate fees which are shared among stakers.
Multiples ecosystems
Ecosystems built on Cosmos increase Cosmos’ TVL (Total Value Locked), a key indicator of asset allocation that investors look for.
For example, COMDEX is set to launch its own stablecoin. ATOM will be a primary asset used in the stablecoin’s minting phase.
Metcalfe’s law
This law states that the value derived from a network is proportional to the square number of connected users within that network.
Metcalfe’s law is in effect with Cosmos as they have growing ecosystems and networks, liquid staking that multiplies staked asset value and increasing TVL.
Altcoins price
Contrasting Cosmos’ staking, dApp services, TVL, and ecosystems with Ethereum’s merge and it's easy to see why ETH and many altcoins have dropped. Changing how Ethereum simply operates – from Proof-of-Work to Proof-of-Stake – does not provide intrinsic value to that network.
Instilling robust, market-ready tools and platforms for blockchain developers and engineers, as well as users and stakers, is where profit will be made. In sum, Cosmos was ready for the price drop post-merge and others were not as robust.
That is not to say that other altcoins are in a bad position – quite the opposite; what it does say is that project execution, clear roadmaps, and competent teams are the foundations of true value in the crypto markets.
