Saturday, October 1

3 reasons why the Tezos (XTZ) price has gained 85% this month


The Ethereum (ETH) network is currently the dominant layer one protocol in terms of smart contract implementation and active users, but the race to become the ‘world computer’ is far from settled because competing protocols are gaining ground by offering high transaction solutions. costs and slow confirmation times, the biggest problems facing the network.

One project that has been on the rise over the past month is Tezos, a proof-of-stake blockchain network that is designed to evolve over time without the need to undergo a hard fork.

Cointelegraph Markets Pro data and TradingView shows that since hitting a low of $ 2.09 on July 20, XTZ’s price is up 165% to a high of $ 5.53 on August 27 as its 24-hour trading volume surged above $ 1 billion.

XTZ / USDT 4-hour chart. Source: TradingView

Three reasons for the strong growth seen in XTZ over the past month include network improvements through the recent ‘Granada’ update, adoption of the Tezos network by several large banking institutions, and attractive rewards that attract customers. token holders to stake their coins. In the net.

Protocol update reduces transaction costs

As mentioned above, the Tezos network is a self-modifying blockchain that is capable of updating over time without the need to undergo a fork.

In total, the Tezos network has experienced seven successful updates since its launch, with three of them occurring in 2021. The most recent ‘Granada’ update was rolled out on August 6.

According to the Tezos team, some of the improvements in this recent update include a reduction in lockout time from 60 seconds to 30 seconds and a reduction in gas consumption by smart contracts by an average factor of 3 to 6 times.

The new update also introduced liquidity baking which “It incentivizes large amounts of decentralized liquidity provision between XTZ and tzBTC by minting a small amount of XTZ in each block and depositing it within a constant product market-making smart contract.”

Real-world adoption driven by big banks

A second development that helped boost price and awareness was the adoption of Tezos by digital asset firm Crypto Finance AG and Swiss business-to-business bank InCore. They both plan launch a new tokenization tool In the net.

The two companies also developed a new Tezos token standard for asset tokenization called the DAR-1 token standard, which will enable the unlocking of new smart contract-enabled features that support financial markets, including anti-money laundering capabilities. of money (AML) and asset governance. .

InCore has also revealed that it will launch institutional-grade storage, participation and trading services for XTZ, which will allow financial institutions to offer participation services for their clients’ assets.

Related: Turns On … Broker Disintermediation and Unregulated Crypto Exchanges Cause Big Concerns

Attractive participation rewards reduce circulating supply

XTZ also appears to be benefiting from attractive participation opportunities that have resulted in the majority of tokens being withdrawn from circulation to help achieve consensus in exchange for participation rewards.

According to data from StakingRewards, the current annualized rate for token holders who delegate their XTZ is 7.85%, while those who are more tech-savvy can start their own Tezos bakery and earn 8.73%.

The XTZ delegation process is simple for the average user and can be done from any of the wallet interfaces suggested by the project, and multiple exchanges also offer participation services for a small fee, including Coinbase, Kraken, and Binance.

Tezos supply statistics. Source: TZStats

At the time of this writing, data from TZStats indicates that 77.65% of the total supply of XTZ is actively betting on the network, significantly limiting the number of tokens available in the market and is a potential source of positive price pressure.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade move involves risk, you should do your own research when making a decision.