Terra and Osmosis create a highlight for the L1 ecosystem
The Layer 1 (L1) ecosystem has been attracting more and more attention in recent months as users look for new investment opportunities with Cosmos (ATOM), Fantom (FTM) and Near Protocol (NEAR). Much of the L1 sector has struggled to regain momentum following January’s market-wide sell-off and Bitcoin’s price falling below the $34,000 low.
The price performance of character L1 from 24/1 | Source: Delphi Digital
According to data from Delphi Digital, only L1 Terra (LUNA), Avalanche (AVAX), and Ethereum (ETH) have seen notable price gains since BTC bottomed on Jan. 24.
The Terra ecosystem is growing
The LUNA price jump was largely due to the Luna Foundation Guard’s announcement that it would raise $1 billion to form a bitcoin reserve for the ecosystem’s stablecoin Terra USD (UST).
Terra also saw its second lockdrop and the Mars protocol, which helped boost demand for the LUNA token.
The $1 billion reserve for UST also helps fuel the Anchor Protocol (ANC) platform operating on Terra. This protocol is the primary way to mint UST via LUNA or ETH pledges. Anchor also rose in price after announcing that developers were in the process of integrating AVAX as an additional option for creating USTs.
Alongside the integration with Anchor, Avalanche has had a number of notable developments that have fueled growth since late January, including the integration with Wirex and the announcement of the launch of DeFi Kingdoms on the Avalanche network.
According to Delphi Digital, based on recent price action, AVAX “appears to be moving with a higher BTC correlation compared to other L1s.”
Osmosis and the ecosystem of the cosmos
According to data from Delphi Digital, the decentralized exchange Osmosis (DEX) in the Cosmos ecosystem has “performed significantly better than other major exchanges over the past few months.”
OSMO/USDT performance compared to other cryptocurrencies | Source: Delphi Digital
The power that OSMO owes in part to the success of Cosmos. The platform ended well in 2021 as its “interoperable app chain thesis finally came to fruition in recent months.”
Osmosis is currently the largest decentralized exchange in the Cosmos ecosystem, supporting 37 separate IBC chains with a combined value of $1.75 billion Data by Defi Llama.
total locked osmosis | Source: Defi Llama
Osmosis also resulted in an increase in price and trading volume following the release of the linked Superfluid chain and staking on March 1st, allowing Liquidity Providers (LPs) on the Osmosis DEX to earn staking rewards from assets for which they had provided liquidity . Thus, for the first time, users can both carry out staking and provide liquidity at the same time.
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According to Cointelegraph