New cross-chain bridges launching with Ethereum and the upcoming Theta upgrade are expanding the Cosmos ecosystem and potential catalyst for ATOM’s recent 75% rally.
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Blockchain network interoperability is shaping up to be one of the key themes of the crypto ecosystem in 2022. New users are continuing to join the ever-evolving world of crypto while both new and established projects look for chains that will best serve their protocol and community needs.
One project whose 2022 year is off to a good start with its focus on facilitating communication between discrete networks is Cosmos (ATOM). This project describes itself as the “internet of blockchains” and seeks to facilitate the development of an interconnected decentralized economy.
Data from Cointelegraph Markets Pro and TradingView shows that since hitting a low of $25.06 on December 30, the ATOM price has increased by 75% to hit a daily high of $43.98 on December 4. January when its 24-hour trading volume spiked to $2.54 billion. .
The three reasons for the high price of ATOM include the launch of a cross-chain bridge that is compatible with the Ethereum Virtual Machine (EVM) protocol and the upcoming Theta upgrade that will rapidly expand the ecosystem of chains and applications. connected.
Cosmos is roughly compatible with EVM
The most significant development that has given the ATOM a boost is the implementation of Evmos, an EVM-compatible protocol that will allow assets and projects operating on the Ethereum (ETH) network to migrate to the Cosmos ecosystem. .
@EvmosOrg is an app agnostic @cosmos necklace ️@EvmosOrg will interact with @Ethereum, Environment compatible with EVM and other chains via IBC, making it easy to move values between chains
Learn about @EvmosOrg network architecture https://t.co/VfDiYxVkte pic.twitter.com/20iMai6B3Z
– Figure (@Figment_io) December 7, 2021
Up to this point, there is no way for Ethereum-based projects to interact with the Cosmos ecosystem. This significantly limits the number of projects and tokens that can interact with DeFi and NFT projects in the Cosmos ecosystem.
Gravity Bridge, launched on December 15, is another project dedicated to facilitating the asset connection between Ethereum and Cosmos and it currently operates as an independent chain. Plans to move to the Space Center in early 2022 are currently underway.
Preparing to upgrade Theta
A second development that has brought wind to Cosmos’ sails is the protocol’s upcoming Theta upgrade scheduled for March 31.
Some of the new features included in the upgrade include the addition of meta transactions, where transactions can be sent using separate accounts that receive tips, and the introduction of cross-chain accounts that allow users to manage accounts on multiple blockchains. Another feature is liquid staking, a system where users use the value of assets staking in other parts of the Cosmos ecosystem.
The Theta upgrade also includes NFT modules, allowing for simple management of NFT identifiers, their owners, and related data.
Related: ROSE up 54% in a week as Oasis Community ecosystem expands
Expansive ecosystems often tend to increase
The third reason for ATOM’s bullish momentum is the expansion of the ecosystem to 28 live, interconnected chains totaling more than $68 billion.
Cosmos is the only cross-chain ecosystem in the world that uses an interoperability standard.#CosmosFactshttps://t.co/HwBEUuchyP pic.twitter.com/9b9YRyLfVS
– Cosmos – Internet of Blockchains ️ (@cosmos) December 30, 2021
Some of the older chains that have joined the Cosmos ecosystem include Binance Good Chain, Terra (LUNA) and Crypto.com (CRO), while the largest projects use Cosmos’ software development kit (SDK) including Osmosis (OSMO), Secret (SCRT), Oasis Network (ROSE) and Kava (KAVA).
As bridging protocols linking Cosmos to other EVM-compatible networks are established, the number of chains connecting to the Cosmos Hub is likely to increase. This will increase the total value of the ecosystem along with it.
VORTECS™ data from Cointelegraph Markets Professional began spotting a bullish outlook for ATOM on December 29, prior to the recent price rally.
The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison between current and historical market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and activity on Twitter.
As seen in the chart above, the VORTECS™ Score for ATOM started to rise on December 28 and climbed to a high of 81 as soon as the price started a 67% increase over the next six days.