Once national reserves sunk, governments had to raise taxes or sell bonds to continue fighting. But in WWI, as the initially localized conflict spread, fiscal discipline failed. As Ammous explains, within the first month “all major belligerents had suspended gold convertibility, effectively going off the gold standard and putting their population on a fiat standard.”
Non-fungible token (NFT) projects have been hard hit by the price decline across the cryptocurrency ecosystem and the current bearish conditions have spared few tokens from a price collapse.
One project that is attempting to get back on solid footing is Immutable X (IMX), an NFT-focused layer-2 (L2) scaling solution for the Ethereum (ETH) network designed to offer near-instant transactions and zero gas fees for minting and trading.
Data from Cointelegraph Markets Pro and TradingView shows that the price of IMX has climbed 69.6% since hitting a low of $1.09 on March 7 to hit a daily high of $1.86 on March 11.
Three reasons for the reversal in IMX include the completion of a $200 million Series C funding round, the launch of new projects on the platform and the overall sustained interest in NFTs despite the recent decline in prices.
The most impactful development to bring a boost to IMX in March was the successful completion of a Series C funding round that saw the project raise $200 million to invest in blockchain gaming.
1/ Major news: we’re thrilled to announce @Immutable has raised $200M in Series C funding @ $2.5B val.
We’re supercharging our mission to make NFTs mainstream through high-quality blockchain games (and more).https://t.co/mZkrK2PnEj pic.twitter.com/69zbECxlIw
— Immutable | $IMX (@Immutable) March 7, 2022
The fundraising round was led by the Singaporean state-owned investment firm Temasek and also included participation from Animoca Brands, Tencent, Arrington Capital and Princeville Capital.
IMX intends to utilize the funds raised to develop out its L2 scaling solution on Ethereum and scale the Immutable Gaming Studio, which hosts popular games like Gods Unchained and Guild of Guardians.
Following this most recent funding round, the total valuation of the Immutable X protocol stands at $2.5 billion.
The second factor bringing added value to IMX is the addition of new projects to the protocol which has helped to attract new users to the ecosystem.
Some of the recent additions include Vy Worlds and Habbo NFT, both of which have conducted airdrops to early adopters as a way to help attract more users.
One of the world’s oldest online gaming communities @Habbo will be powering @HabboNFT’s future L2 NFT furniture collection w/ @Immutable X
Habbo users will easily access gas-free & fully carbon-neutral NFTs
+ MASSIVE scalability w/ Ethereum’s unparalleled security included. pic.twitter.com/6GxlXjjEHA
— Immutable | $IMX (@Immutable) February 16, 2022
Offering gasless NFT transactions and a carbon-neutral environment while still being able to operate on the Ethereum network is an attractive proposition to emerging projects and it will likely continue to attract new projects to IMX in the future.
Related: Immutable X (IMX) price soars after GameStop partnership and new project launches
A third factor putting the wind at the back of IMX is the ongoing popularity of the NFT sector.
The cryptocurrency ecosystem as a whole has been bearish since the start of 2022, leading to falling token prices and reduced interest in big-ticket NFTs, but data from Dune Analytics shows that the volume of sales on OpenSea is still near all time-highs.
January and February of 2022 saw the highest volumes ever traded on OpenSea despite the drawdown in the wider market, suggesting that interest and demand for NFTs remains elevated.
VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for IMX on March 9, prior to the recent price rise.
The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.
As seen in the chart above, the VORTECS™ Score for IMX spiked into the green zone on March 9 and hit a high of 81 around 19 hours before the price increased 29% over the next day.
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 involves risk, you should conduct your own research when making a decision.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
@2022 CoinDesk
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
@2022 CoinDesk
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
@2022 CoinDesk
On Friday, Do Kwon, founder and CEO of Terraform Labs (TFL), which develops the blockchain ecosystem consisting of Terra Luna (LUNA) and the TerraUSD stablecoin (UST), announced that TFL had donated 12 million LUNA ($1.1 billion at the time of publication) to the Luna Foundation Guard (LFG). LFG launched in January to grow the Terra ecosystem and improve the sustainability of its stablecoins. Kwon noted the funds, denominated in LUNA, will be burned to mint UST to grow the LFG’s reserves:
“We will keep growing reserves until it becomes mathematically impossible for idiots to claim de-peg risk for UST.”
UST is an algorithmic stablecoin with a theoretical exchange rate of 1:1 with the U.S. dollar, and is in part maintained by swapping of/for LUNA tokens when its market value deviates from its peg. The burning of $1 in UST results in the minting of $1 in LUNA and vice versa.
However, due to a high demand for UST on decentralized finance, or DeFi, platforms like Curve Finance, this results in unbalanced pools for swapping stablecoins. For example, as more and more crypto enthusiasts swap their USD Coin and Tether (USDT) for UST, the pool’s reserves will deplete, thereby causing price volatility as supply lags behind demand. Two days prior, TFG had already voted on burning the 4.2 million LUNA left in its treasury to protect UST’s peg. According to TFG:
“LFG will swap the [new] LUNA to UST (swap=burn) and sell the UST to the Curve pool. The proceeds will go back to LFG reserves to purchase BTC.”
Thanks to Terra’s flagship Anchor Protocol, UST is a very popular coin among crypto enthusiasts, which promises up to 20% annual yield on UST savings deposits. However, due to an imbalance of depositors and lenders paying interest, the Anchor Protocol’s reserve (for paying the promised yield) is still on the decline at time of publication, although it recently experienced a massive capital infusion.
If there is any confusion left at this point, we will keep growing reserves until it becomes mathematically impossible for idiots to claim depeg risk for $UST $UST is mighty https://t.co/6xCDPWJUTX
— Do Kwon (@stablekwon) March 11, 2022
The decentralized finance (DeFi) sector has been sitting in the backseat since whipping up a frenzy in the summer of 2020 through the first quarter of 2021. Currently, investors are debating whether the crypto sector is in a bull or bear market, meaning, it’s a good time to check in on the state of DeFi and identify which protocols might be setting new trends.
Here’s a look at the top-ranking DeFi protocols and a review of the strategies used by users of these protocols.
Stablecoin-related DeFi protocols are the cornerstone of the DeFi ecosystem and Curve is till the go-to protocol when it comes to staking stalbecoins.
Data from Defi Llama shows four out of the top five protocols in terms of total value locked (TVL) are connected to the creation and management of stablecoins.
It’s important to note that while these protocols have emerged on top when it comes to TVL, the value of their native tokens for the most part are significantly down from their 2021 all-time highs.
The main takeaway is that engaging with the stablecoin aspect of the DeFi market through staking and farming has offered steady yields while also earning the governance tokens for these platforms as an added bonus to help mitigate the drop in token values.
As it stands now, stablecoins play an integral role in the overall healthy functioning of DeFi which continues to expand as newer protocols like Frax Share and Neutrino climb the TVL ranks amidst the increasing number of interconnected blockchain networks.
Lending platforms are another key component of the DeFi ecosystem and one of the key features that investors can interact with even during a bear market. AAVE and Compound are the current leaders with respective TVLs at $12.09 billion and $6.65 billion.
Like other stablecoin protocols, AAVE and Compound saw the value of their native tokens peak in 2021 and both have been in a prolonged downturn for months.
AAVE’s TVL growth outpaced Compound largely due to its cross-chain integration of Polygon and Avalanche, which increased the number of supported assets and allowed users to avoid the high gas fees on the Ethereum network.
Long-term crypto hodlers who are risk averse can benefit from simply lending their tokens for a modest yield.
Related: Altcoin Roundup: JunoSwap, Solidly and VVS Finance give DeFi a much-needed refresh
The growing popularity of liquid staking is also adding new utility to decentralized finance. Liquid staking protocols like Lido Finance, which originally launched as an Ethereum staking solution but has since expanded support to Terra (LUNA), Solana (SOL), Kusama (KSM) and Polygon (MATIC).
Data from Defi Llama shows the TVL on Lido reaching a new all-time high of $14.96 billion on March 10 as the addition of new assets continues to attract more value to the protocol.
On Lido, users can stake Ether and Solana and receive stETH or stSOL, which can then be used as collateral on AAVE to borrow stablecoins. Those assets can then be used for trading or yield farming purposes, thus increasing the overall yield earned from the original staked asset.
Other notable liquid staking protocols include the Eth2 staking provider StakeWise, the Cosmos-based pStake protocol and Stader Labs.
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 involves risk, you should conduct your own research when making a decision.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
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Backed by industry heavyweights, a governance proposal for Anchor aims to make the largest DeFi protocol on Terra more sustainable.
Ether (ETH), the world’s second-largest cryptocurrency by market capitalization, is down 20% over the past 30 days, compared with a 12% drop in BTC over the same period. The underperformance of ETH and several other alternative cryptocurrencies (altcoins), which are more volatile than BTC, indicates a lower appetite for risk among crypto investors.