ATOM price booked triple-digit gains after the network built out its DeFi ecosystem and works on cross-chain bridges for ETH and BTC.
Momentum for the top layer-one protocols has been on the rise throughout August as the highly anticipated rollout of the London hard fork on the Ethereum (ETH) network has done little to address the network’s high transaction fees and delayed confirmations.
One of the biggest beneficiaries of the quest to find a more welcoming smart contract environment has been Cosmos (ATOM), a project focused on interoperability that has set out to become the “internet of blockchains” thanks to its Inter-Blockchain Communication (IBC) protocol.
Data from Markets Pro and TradingView shows that the price of ATOM rallied 180% from a low of $8.87 on July 20 to a high of $24.77 on Aug. 22 as its 24-hour trading volume surged from an average of $250 million to $1.87 billion.
Three reasons for the strong showing from ATOM over the past month include the release of decentralized finance protocols on the network, the launch of a sidechain that enables the exchange of assets between Cosmos and Ethereum and the announcement of plans to bring Bitcoin (BTC) to the Cosmos ecosystem.
Expanding DeFi capabilities
Decentralized finance (DeFi) has been one of the biggest developments to emerge from the blockchain ecosystem over the past couple of years and is set to revolutionize the traditional financial sector.
The recent launch of the first functioning user interface for DeFi on Cosmos, known as Emeris, has been one of the biggest movers of ATOM price of late because the introduction of cross-chain exchange capabilities excited members of the Cosmos community and led to a spike in demand for the token.
Through the new interface, users can access a number of cross-chain DeFi protocols on the Cosmos network and trade assets on blockchains like IRISnet (IRIS), Persistence (XPRT) and the Akash Network (AKT).
Ethereum bridge opens up opportunitie
A second reason for the ATOM rally is the integration of Sifchain with the IBC, which made the project the first decentralized exchange to enable trades between the Cosmos ecosystem and the Ethereum network.
Ethereum currently hosts most of the top smart-contract protocols for DeFi and NFTs and this integration allows users of both ecosystems to easily trade assets between the two networks.
Wrapped Bitcoin comes to Cosmos
A third reason for the current bullish momentum comes from an Aug. 23 announcement that the Interchain Foundation (IFC), an organization that funds development grants in the Cosmos ecosystem, had granted funding to the Interlay development fund for bringing Bitcoin to the Cosmos network.
Bitcoin is the undeniable leader of the crypto market and it holds a vast majority of the accumulated wealth of the ecosystem, so the ability to operate on Cosmos has the potential to bring new users to the network.
Interlay utilizes a lock-up and vault technology that lets users secure their Bitcoin and mint fully collateralized interBTC that can be used in many DeFi projects and the feature is already available as a Polkadot parachain.
This integration will allow BTC to be used in the Cosmos DeFi ecosystem and it will bring deep liquidity and an increase in utility to the network.