Major protocol upgrades are one of the most powerful sources of price movement for cryptocurrency projects, as community members and investors are excited about the new features and traders rush to ” buy the rumor and sell the news ”.
One protocol that has seen its price increase to new rights this week despite the generally bearish conditions affecting the market is Kusama (KSM), an experimental blockchain platform and a sister chain to the Polkadot platform. Kusama is designed to provide an interoperable and scalable framework for developers.
Data from TBEN Markets Pro and TradingView shows that after dropping to $ 378 on May 10, Kusama’s price rebounded 55% to a new all-time high at $ 591.55 today thanks to record volume of $ 1.568 billion in 24-hour trading volume.
Three reasons for the recent price appreciation of KSM include the upcoming launch of parachain auctions, recent integrations that have helped improve Kusama’s interoperability with other networks, and increased opportunities for KSM to bid or lockdown. to earn a return.
Parachains are about to launch
The most significant development for Kusama in recent times came on May 12 when the project announced that the most recent upgrade proposal had been approved by the council and was now a public referendum.
BEAKING: The v0.9.1 upgrade has been adopted by the board and is now a public referendum, expedited to end Friday ~ 12 p.m. CEST. This upgrade includes code for parachains, auctions and equity loans, reduced the min. transfer acquired by 100x and reduced fees / deposits by 50x.
– kusama (@kusamanetwork) May 12, 2021
This development provided token holders a three-day window between May 12 and 14 to vote for the various parachaines, equity loans, and auctions they want to see on the Kusama network.
Since KSM tokens are required in order to participate in the vote, demand for tokens immediately increased after the announcement and continues to rise on May 14 despite a general downturn in the cryptocurrency market.
TBEN Markets Pro’s VORTECS ™ data began to detect a bullish outlook for KSM on May 11, ahead of the recent price hike and ahead of the announced move of the v0.9.1 upgrade.
The VORTECS ™ Score, exclusive to TBEN, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trade volume, recent price movements and Twitter activity .
As shown in the graph above, the VORTECS ™ score has fluctuated in and out of the green zone over the past week before climbing to a high of 70 on May 11, around the same time the price of KSM began to escape to a new all-time high over the next 32 hours.
Integrating interoperability provides a spark
A second source of KSM’s price growth over the past month was the April 23 announcement that Chainlink made a grant to ChainSafe Systems to help expand Kusama’s support on the Oracle Chainlink pallet.
We are delighted to award a grant to @ChainSafeth for the expansion, improvement and continued support of the #Chain link Oracle Pallet, allowing developers to easily create hybrid smart contracts on @Spotted & @kusamanetwork parachains as well as @substrate_io Chains. https://t.co/wdXO6SwRKP
– Chainlink – Official channel (@chainlink) April 23, 2021
As seen in the tweet, the extended support allows developers to create hybrid smart contracts on DOT and KSM parachaines with other chains of substrates, greatly improving their ability to interoperate.
As one of the initially stated goals of the Polkadot network being to increase interoperability between all blockchain networks, this development helped reassure community members that significant steps were being taken with respect to this goal. by enlisting the most trusted and widespread Oracle platform in the crypto ecosystem.
New staking and yield opportunities
A third driving force behind the demand for KSM is the attractive return opportunities offered to token holders willing to stake their KSM tokens on the network or with new parachaines.
Data from staking rewards shows that the average rate of return for staking and delegating KSM on the network is 13.72% while running a validator node gains 14.72%.
As part of the parachain auction process, projects like Karura have chosen to proceed with an equity loan which involves community supporters binding their KSM to this protocol for the duration of the parachain lease in exchange for the native token. of the parachain.
Participatory loans and parachain auctions on @KusamaNetwork will start any day now!
We have put together an overview of @KaruraNetwork, Kusama’s DeFi Hub, and the approach we’re taking with the community to win the first parachain location on Kusama https://t.co/r1zrW5KOK9
– Acala – Polkadot DeFi Hub (@AcalaNetwork) May 13, 2021
The equity loan allows the project to meet the requirements to obtain a parachain lease for a specified period of time and all KSM tokens are returned to contributors after the lease ends.
In exchange for locking their tokens for an extended period of time, community members are rewarded with the native token of the parachaine in question but lose the opportunity to earn KSM staking rewards.
The Crowdfunding Model is an innovative new fundraising design for crypto projects that has excited community members who want to get their favorite KSM tokens while still being able to retain ownership of their KSM.
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