Cosmos (ATOM) rallies after launching cross-chain bridge and wrapping Bitcoin

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The momentum for upper-layer protocols increased throughout August, as the much-anticipated London hard fork rollout to the Ethereum (ETH) network did little to alleviate the costs of high transactions and late network confirmations.

One of the biggest beneficiaries of the quest for a more welcoming smart contract environment has been Cosmos (ATOM), an interoperability-focused project that has set itself the goal of becoming “the internet of blockchains” through to its inter-Blockchain communication (IBC). protocol.

Data from Cointelegraph Markets Pro and TradingView shows ATOM’s price rose 180%, from a low of $ 8.87 on July 20 to a high of $ 24.77 on August 22, as its 24-hour trading volume rose from an average of $ 250 million to $ 1.87 billion.

ATOM / USDT 4 hour chart. Source: TradingView

Three reasons for ATOM’s strong performance over the past month include the release of decentralized financial protocols to the network, the launch of a side chain that allows the exchange of assets between Cosmos and Ethereum, and the announcement of plans. to bring Bitcoin (BTC) to the Cosmos ecosystem.

Expansion of DeFi capabilities

Decentralized Finance (DeFi) has been one of the most important developments in the blockchain ecosystem over the past two years and is expected to revolutionize the traditional financial sector.

The recent launch of the first functional user interface for DeFi on Cosmos, known as Emeris, has been one of the biggest drivers of the ATOM award in recent times, as 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 exchange assets over blockchains like IRISnet (IRIS), Persistence (XPRT) and Akash Network (AKT) .

The Ethereum bridge opens up opportunities

A second reason for the ATOM rally is the integration of Sifchain with the IBC, which made the project the first decentralized exchange allowing exchanges between the Cosmos ecosystem and the Ethereum network.

Ethereum currently hosts most of the best smart contract protocols for DeFi and NFT and this integration allows users of both ecosystems to easily swap assets between the two networks.

Packaged bitcoin arrives at Cosmos

A third reason for the current bullish momentum comes from an August 23 announcement that the Interchain Foundation (IFC), an organization that funds development grants in the Cosmos ecosystem, has provided funding to the Interlay Development Fund for bring Bitcoin to the Cosmos network.

Bitcoin is the undeniable leader in the crypto market and it holds a large majority of the ecosystem’s accumulated wealth, so the ability to operate on Cosmos has the potential to bring new users to the network.

Interlay uses lock and vault technology that allows users to secure their fully secured Bitcoin and Mint interBTC which can be used in many DeFi projects and the feature is already available as Parachain Polkadot.

This integration will allow BTC to be used in the Cosmos DeFi ecosystem and will bring deep liquidity and increased utility to the network.

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 trading move comes with risk, you should do your own research before making a decision.



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