The cryptocurrency market started off the new year on a tepid note. Most top cryptos including bitcoin and ether have been under pressure. However, one token that seems unfazed by the broader market direction is Cosmos’ native token ATOM.
ATOM has gained nearly 790 percent in a year and nearly doubled in the last month. But why has it been defying the market trend? There might be multiple factors for it, 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 space like scalability, cost and environmental impact by offering an ecosystem of connected blockchains.
One of the major concerns is the levels of fragmentation seen in blockchain networks. There are hundreds of blockchains but only a few can efficiently communicate with each other. Cosmos is looking to address this problem by establishing an Interblockchain Communication protocol.
Another contributing factor is Cosmo’s launch of Evmos, an application-agnostic chain linked to the crypto. This protocol allows Ethereum-based assets and projects to move easily within the Cosmos network. This was a big move as there were no interconnections between Ethereum and Cosmos before this.
According to a Cointelegraph telegraph, Gravity Bridge, launched on December 15, is another project dedicated to facilitating the bridging of assets between Ethereum and Cosmos. While the project currently operates as a standalone chain, the migration to the Cosmos Hub is underway and expected to be completed early this year.
The third reason for this price jump could be the network’s expansion to 28 live interconnected chains with a total value of roughly $68 billion. The various interconnections include networks like Binance Smart Chain, Terra (LUNA) and Crypto.com (CRO).
The Theta upgrade scheduled for March 31 has also kept the token strong. The upgrade, according to Cointelegraph, will add a few new features such as meta-transactions. This will allow the submission of transactions by separate accounts that receive tips and the introduction of inter-chain accounts that lets users manage accounts across multiple blockchains. Liquid staking, a system where users utilise the value of staked assets in other parts of the Cosmos ecosystem, will also be introduced with this upgrade.
ATOM is currently trading over 6 percent higher at $39.04 and its total market cap is nearly $9 billion, according to data from Coinmarketcap.
Read More: Cosmos’ ATOM token rises amid weak crypto market; here’s why it’s defying the trend
