ATOM, the native cryptocurrency of the Cosmos blockchain protocol, is up more than 100% in the past week.
Analysts attribute ATOM’s rally to two key fundamentals. First, layer one blockchain protocols such as Avalanche (AVAX) and Polkadot (DOT) have undergone a major revaluation in recent weeks.
Second, the utility of ATOM allowing holders of the cryptocurrency to earn through swap, gas and transaction fees would make it more attractive to investors.
Repeating layer-one blockchains
The term recalculate is used in the cryptocurrency market to describe when the value of a cryptocurrency is rising rapidly after a prolonged stagnation.
Typically, revaluation occurs when the market finds that a cryptocurrency is undervalued for fundamental reasons or a particular catalyst supports the blockchain protocol’s potential.
Cosmos is poised for a revaluation as other layer-one blockchain protocols, such as Polkadot, have seen massive gatherings in January and February.
Currently, as of Feb. 13, Cosmos’s valuation is hovering around $ 5 billion. In comparison, Polkadot’s valuation is about $ 27 billion, more than five times higher.
More importantly, compared to other blockchain protocols on the first tier, Cosmos has launched large decentralized platforms and blockchain projects.
Projects on top of Cosmos are valued higher than ATOM
Terra and Binance Smart Chain in particular are both based on the Cosmos blockchain. The valuation of the two blockchain projects alone is more than $ 22 billion.
Technically, BNB is the native token of both Binance Smart Chain and the Binance ecosystem, but nonetheless, the valuation of the two projects only exceeds Cosmos.
A pseudonymous DeFi investor known as “SpiderCrypto” said ATOM is undervalued compared to other blockchains. The investor said
“@Cosmos $ ATOM is also undervalued compared to other blockchains. So many great projects with tender mint / cosmos and you don’t even remember. $ 10 billion market cap and will explode like $ avax. “
A pseudonymous Cosmos validator Immasssi also highlighted that ATOM’s tokenomics, which allow users to take advantage of the fees generated by the Cosmos ecosystem, make ATOM more attractive.
Similar to DeFi projects with cash flow and a token that allows users to earn through stakeout, the validator said ATOM holders will earn transaction fees with packages routed through the Cosmos hub. He said
$ ATOM holders will earn tx fees for packages routed through the hub. This includes all #data. In addition, nuclear owners earn swap fees, gas fees and tx fees from the upcoming SMP. Earning further money from shared security. Once you realize what that means for ATOM. “
In addition, the long-term sentiment score for ATOM has risen significantly this year alongside that of Terra LUNA, suggesting that Cosmos’s revaluation could continue, especially if the DeFi sector continues to grow.