• Tezos’s future prospects appear promising, but will it be able to dethrone Ethereum’s DeFi dominance?

  • Since August, the market has experienced uptrends and downtrends in phases. However, there have been exceptions to the general trend at each stage. Among those resistant coins are Cardano, Solana, Avalanche, Fantom, and Cosmos. As the market continues to consolidate, another alt has piqued the interest of both traders and investors.

    Tezos has recently provided market participants with excellent returns. It is possibly the only “top” alt that has traded in the green for four days in a row. In effect, its value has increased by more than 25% in the last 24 hours. At press time, the gains of other top alts were primarily in the 1 percent -2 percent range.

    What fueled XTZ’s rise?

    Upgrades to the network and new network launches have, for the most part, acted as catalysts. As such, Tezos is a self-improving blockchain. In essence, the network can be upgraded without hardforks.

    The most recent Granada upgrade was implemented last month, and the benefits of the upgrade include a reduction in block time and gas consumption.

    The reduction in transaction costs was successful in attracting new users to the network and, in retrospect, had a positive impact on the price. Furthermore, earlier this month, the Tezos blockchain saw the launch of Homebase, a protocol for creating DAOs.

    This would now allow users and developers to create a variety of other entities by utilizing the network’s smart contract feature. Not to mention, asset loan services were recently launched on the Tezos network through a partnership with DeFi platform EQIFI.

    Furthermore, at the time of publication, Tezos’ official data showed that 76.16 percent of the total supply was staked on the network. Staking has effectively limited the number of tokens available in the market, thereby assisting in the induction of price-uptrend pressure.

    Is the rally going to be too good to last?

    At the time of writing, the state of most Tezos on-chain metrics appeared to be deteriorating. The network usage was quite low as the alt’s price attempted to climb towards its May ATH of $8.4.

    Consider the network-to-transaction value ratio. This ratio expresses the relationship between market capitalization and transfer volumes. When the NVT is high, it means that the network value is outpacing the amount of data being transferred over the network.

    Such trends tend to have a positive impact on the valuation of any alt. The alt had been revolving in the 100-200 range during the alt’s May rally, but has been under 40 since the second week of September.

    The alt’s dominance has recently dropped from 0.3 percent to 0.27 percent, indicating that it is losing its share of the total crypto circulating market cap. Similarly, the state of the transfer value has been grossly underestimated.

    Prospects for the Future

    Given the current state of the aforementioned metrics, it is possible that the next few days will be difficult for the alt. It should be noted, however, that its development activity has been picking up recently.

    In fact, Tezos is catching up to Ethereum’s dominance in the DeFi space, with approximately 135 projects and dApps in development on its network.

    Furthermore, Swiss cryptocurrency firms have been collaborating with Tezos to launch tokenized assets such as popular stocks on its blockchain. In the future, in the midst of an evolving and competitive environment, the same would act as a breather. As a result, the short-term setbacks would be overshadowed by the favorable long-term prospects.

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