3 reasons why Kusama (KSM) “spreads” despite the red market

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2021-05-15 08:39:25

KSM surged to an all-time high as investors flocked to invest around the upcoming parachain auctions.

Kusama (KSM) hits new high as parachain auctions begin to take shape

Protocol upgrades are one of the reasons for the strongest price movement of crypto projects as community members and investors get excited about new features and traders dive in. “Buy the rumor and sell the news”.

One protocol that has seen an increase in price this week despite the entire market correction is Kusama (KSM), an experimental blockchain platform and a “sister” chain to Polkadot’s platform. Kusama is designed to provide an interoperable and extensible framework for developers.

Data from Cointelegraph Markets Pro and TradingView shows that after dropping to a low of $378 on May 10, Kusama price surged 55% to a new all-time high of $591.55 today thanks to volume record 24-hour trade of $1.568 billion.

The three reasons for the recent KSM price increase include the upcoming launch of parachain auctions, recent integrations that have enhanced Kusama’s interoperability with other networks, and increased chances of staking or locking. KSM to make profit.

Parachains is on track to launch

The most significant development for Kusama at the end of May occurred on May 12, when the project announced that the most recent upgrade proposal had been approved by the council and is currently in a public referendum. declare.

This development has given token holders a three-day window from May 12 to May 14 to vote on the various parachains, community loans, and auctions they want to see on the network. Kusama.

As KSM tokens were required to be able to participate in voting, the demand for the token immediately increased after the announcement and it continued to increase on May 14 despite the overall downturn of the crypto market.

VORTECS™ data from Cointelegraph Markets Pro started spotting a bullish outlook for KSM on 11/05, before the recent price increase and before the announcement of the v0.9.1 upgrade.

As seen in the chart above, the VORTECS™ Score fluctuated in and out of the green zone last week before climbing to a high of 70 on 11/05 at the same time KSM price started breaking out to new all-time highs. over the next 32 hours.

Interoperability integration made the breakthrough

The second reason for KSM’s price growth over the past month is the April 23 announcement that Chainlink has awarded a grant to ChainSafe Systems to help expand support for Kusama on the Chainlink Oracle Pallet.

As seen in the tweet, extended support allows developers to build hybrid smart contracts on the DOT and KSM parachains along with other substrate chains, greatly enhancing their interoperability.

With one of the original stated goals of the Polkadot network being to increase interoperability across all blockchain networks, this development has helped reassure community members that meaningful steps are being taken in relation to each other. related to this goal by mining the most popular and trusted platform in the cryptocurrency ecosystem.

New Staking System and Opportunity for Greater Profit

The third driver behind the demand for KSM is the attractive profit opportunities offered to token holders willing to stake their KSM tokens on the network or with new parachains.

Data from staking rewards shows that the average rate of return for KSM staking and delegation on the network is 13.72% while running a validator node earns 14.72%.

As part of the parachain auction process, projects like Karura have chosen to conduct a community loan consisting of community backers linking their KSM to that protocol for the duration of the parachain lease in exchange. get parachain’s native token.

The community loan allows the project to meet the requirements to obtain a parachain lease for a specific period of time, and all KSM tokens will be returned to the contributors after the lease ends.

In return for locking up their tokens for an extended period of time, community members are rewarded with native tokens of the parachain in question but lose the ability to earn KSM staking rewards.

Crowd Lending Model is an innovative new fundraising design for crypto projects to stimulate community members wanting to acquire their favorite KSM-based tokens while keeping ownership. their KSM.

CHK aggregated

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