Last month, Bitcoin (BTC) and Ether (ETH) were in the spotlight as they each hit new annual highs. Investors tend to focus their energies on higher cap altcoins, which leads to smaller cap coins that are outside the top 10 being ignored.
For example, Zilliqa (ZIL) has grown 69% in the last 30 days. Despite this impressive performance, the altcoin has underperformed ether significantly over the past six months.
The project was founded in 2017 by researchers at the National University of Singapore looking to improve the scalability of smart contracts. Currently, ZIL ranks 49th on CoinMarketCap, ahead of some well-known names such as Decred (DCR) and Basic Attention Token (BAT).
Decentralized Finance (DeFi) may have fueled the recent uptrend, but staking and voting on corporate governance alone does not seem enough for a sustainable price hike.
The project now urgently needs the acceptance of dApps users and a locked total to show strength against the leading Ethereum.
The graph above shows how ZIL has undercut the Ether Price (ETH) by 42% over the past six months, despite its nominal price increase. Coincidentally, Zilliqa’s design is based on sharding, which enables parallel data processing, similar to Eth2.
As the DeFi sector exploded with a new influx of users seeking high-yielding returns from income farming, it became clear that the industry needed additional options to handle the rising transactions and fees.
Zilliqa uses a modified version of the proof-of-work consensus protocol and a proprietary programming language called Scilla. Hence, it makes sense to compare performance with the industry leader in smart contracts.
Stakes and partnerships are behind the recent price increase
In April, Zilliqas version 6.2 was released, which focused on usability, memory and performance optimization, as well as on supporting the deployment. This version also changed the number of Zilliqa-owned shard nodes from 520 to 250, which means a significant increase in community participation.
After several months of anticipation, the project finally announced its involvement in mid-June, including partnerships with KuCoin and Binance. The announcements were followed by a rally that brought Zilliqa’s highest price in terms of Ether since April 2019.
The latest developments bode well for the Zilliqa Prize
On October 5th, Zilswap, the first decentralized exchange in Zilliqa, was launched. Interestingly, the DEX runs on a NEO blockchain.
The introduction of Zilliqa’s non-custodial mission took longer than expected and was finally launched on October 14th. Still, it was an instant success for the community and investors, who put in more than a billion ZIL shares in the first few hours. By October 15, over 25% of the circulation offer had been staked out.
The team also revealed governance votes, another promising feature that the community has been looking forward to. The positive momentum of the announcements and price rally continued in October with the launch of the Pillar Protocol, an algorithmic stablecoin dApp.
The mainnet update for version 7.0 of Zilliqa is planned for December 21st. The upgrade will reduce memory usage and make it possible to attach miners’ votes to PoW submissions.
Data from TheTie also shows that price spikes were associated with increases and decreases in the daily sentiment score of ZIL. In the past, these were moments of ZIL price stagnation.
Fortunately, token price could continue its recent uptrend if there’s enough substance behind the upcoming version 7.0 mainnet launch.
Nonetheless, Zilliqa investors are enthusiastic about monthly updates and partnerships. Hence, it is only natural for the price to stagnate if there are no breakthrough announcements in the past 30 days.
So far, there hasn’t been much traction in the Zilliqa dApps ecosystem, which could limit the price hike. The fact that another network is running Zilliqa’s DEX could also be a potential problem for investors as it doesn’t instill confidence from newcomers.
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