Follow the Narratives to Make the Gains: Interoperability in 2022 | Crypto Market Update 2.7
Interoperability | Market Update | Major Crypto News | Newbies: Interoperability in crypto
Follow the Narrative: Interoperability
The crypto market showed an early hand with the recent breakout and gifted investors insight to potentially strong breakout candidates if market sentiment remains strong.
We must follow current narratives in the market to find hot projects. Just like 2021 was for alternative Layer-1s (Solana, Avalanche, Fantom, Terra) and NFTs, 2022 has begun with the following narratives:
Interoperability
Layer 2s
Decentralized Infrastructure
Metaverses
Today’s report will focus on interoperability projects. This week’s proceeding reports will showcase decentralized infrastructures, layer 2s followed by metaverses.
Interoperability Standouts
Various reports and theses for 2022 highlight interoperability. Platforms need to interact efficiently through bridges, cross-chain platforms, and multi-chain liquidity providers in the multi-chain world.
I chose the projects below with respect to recent price action, market narratives, sentiment, intuitional reports, and opinions. The number one focus of the list is risk/reward. Strong projects that have active participants, strong TVL, and strong backing. Smaller projects can outperform competitors during bullish sentiment but suffer significantly during selloffs; those projects will be avoided.
The Top Interoperability Projects
Cosmos (ATOM) was one of the top performers during the market selloff. The developers of Cosmos are quickly developing the ecosystem of Cosmos highlighted by an aggressive roadmap that includes significant strides in terms of interoperability. Interchain staking, interchain accounts, liquid staking, and advanced bridges are upgrades slated for this year. Chains built atop Cosmos SDK include Terra (LUNA), Vega (VEGA), Osmosis (OSMO), and RUNE (Thorchain).
Polkadot (DOT) represents the quiet steamroller in crypto. Price action isn’t sexy in the DOT token but, on the other hand, isn’t susceptible to large selloffs. The multi-chain ecosystem is just taking shape with the rollout of MoonBeam (GLMR), Acala (ACA), and Astar (ASTAR). Incredibly, TVL in Polkadot is about to break into the top 10 after launching live networks after a month and a half ago. In Gavin Wood’s platform, growth and price action takes a slow and steady approach.
Osmosis (OSMO) — The DeFi focused arm on Cosmos. Like ATOM, OSMO has fared well during the market selloffs and is one of the front runners during recovery.
ThorChain (RUNE) — Every report that covers interoperability mentions Thorchain. Thorchain developers are building connected portals to provide liquidity and DeFi for every significant chain in crypto.
AnySwap (ANY). The recent selloffs had little effect on the ANY token. Instead, the easy-to-use, fully decentralized cross-chain swap has garnered a whopping 62% gain during the previous three months.
Other Notable Interoperability projects:
Vega protocol (VEGA)
GMX (GMX)
Juno (JUNO)
Market Update
Bitcoin (BTC) continues its upward trajectory and climbed 25% in the previous 15 days and ended the US session at 44k. Optimism and sentiment are running high. I would expect a correction in the coming days. RSI on the 4-hour chart has reached an oversold zone. 40k Resistance is an excellent area to keep an eye on. Thursday, Feb 10, will see the release of Core Inflation Rates. A lower number than expected reading could spark a more vigorous run in ‘risk-on’ assets, but a higher than anticipated value could sour the recent strength. Inflation rates hold strong influence over Federal Reserve policies to raise rates.
Bitcoin Dominance (BTC.D) and Ethereum Dominance (ETH.D) continue to flatten as investors seek high-yielding assets during the positive sentiment in the markets.
Notable Gainers (7d)
JUNO $31 +99%
GALA $0.36 +88%
QNT $158 +67%
Smart Contract Platforms (7d)
NEAR $13.69 +32%
SCRT $6.76 +27%
ETH $3142 +20%
SOL $117 +25%
LUNA $59 +28%
TLOS $1.40 +98%
Metaverse (7d)
MANA $3.32 +31%
SAND $4.70 +20%
SOUL $12.32 +46%
Bitcoin Fear and Greed Index: 45 Fear
“Bitcoin” Google Trends: 32
Bitcoin Options Max Pain (Mar 26): 42K
How to use The Fear and Greed Index for investing
Major Crypto News
AssangeDAO raises $38M in donations to help free WikiLeaks founder. The US government won its appeal of a UK court ruling that barred Assange’s Extradition. Assange faces 175 years in prison for publishing “truthful information.”
A report released by Wells Fargo refers to cryptocurrencies as a “viable investment today, even though they remain in the early stages” and that crypto is following an adoption path similar to the internet in the early 1990s.
Polygon Raises $450M in Sequoia-led funding round. Polygon offers scaling and infrastructure support to Ethereum. Polygon (MATIC) climbed 19.6% today to $2.03 and remains one of the hottest and viable crypto investments.
NEWBIES lesson of the day:
Interoperability in Crypto
One of the best models for understanding the crypto landscape is comparing blockchains to cities. It’s precisely what Haseeb Qureshi did in a recent Bankless podcast. Qureshi highlights that each blockchain contains beneficial characteristics that others may lack.
There exists an extensive array of chains built for different purposes. For example, one chain offers faster speeds (Solana). Another, true decentralization (Ethereum). And others possess significant amounts of liquidity (Bitcoin).
There are chains built specifically for DeFi, gaming, NFTs, metaverses, and the list goes on.
So, if chains are cities, interoperability represents the highways, and the goal is connecting all the players. Connecting blockchains allows for the transfer of value and information throughout. Without interoperability, chains will fall victim to the detriments of isolation. (Think North Korea here)
Recent trends in interoperability advanced quickly through various means but remain in early stages. As a result, projects have taken different approaches to tackle the challenges.
Different Approaches:
Wormholes
Cross-chain swaps
Wrapped Tokens
And a few are creating the infrastructure first, then building the blockchains (Polkadot, Cosmos).
It’s essential to understand the interoperability narrative as the highways of blockchains develop. Of course, no one knows the end-game, but one thing is for sure, the near future of crypto is a multi-chain landscape where all chains can communicate in a secure, decentralized, and seamless way.
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Thanks for reading fam!
Gabi
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