LUNA, AVAX and OSMO have outperformed most altcoins, hinting that a DeFi revival could be in store.
The layer-one (L1) ecosystem has received increased attention in recent months as users search for new investment opportunities in the Cosmos (ATOM), Fantom (FTM) and NEAR.
Following January’s market sell-off, where Bitcoin (BTC) price dropped to bottom below $34,000, much of the L1 field has struggled to regain its momentum.
Price performance of L1 tokens since Jan. 24. Source: Delphi Digital
According to data from Delphi Digital, since the BTC bottom on Jan. 24, the only L1 to experience a notable gain in price include Terra (LUNA), Avalanche (AVAX) and Ethereum (ETH).
Terra ecosystem growth
The price growth seen in LUNA was in large part due to the announcement from the Luna Foundation Guard that it had raised $1 billion to form a Bitcoin reserve for the ecosystem’s Terra USD (UST) stablecoin.
Terra also saw the launch of its second lockdrop event and the Mars Protocol helped drive demand for LUNA token.
The $1 billion in reserves for UST was also a boon for Anchor Protocol (ANC), the Terra-based platform that is the main avenue for minting UST through pledging LUNA or Ether. Anchor also got an added boost to its price after announcing that developers are in the process of integrating AVAX as a collateral option for creating UST.
Data from Cointelegraph Markets Pro and TradingView shows that since hitting a low of $1.18 on Jan. 28, the price of ANC has catapulted 268% to hit a daily high at $4.35 on March 2 where it was halted at a major resistance level.
ANC/USDT 1-day chart. Source: TradingView
Aside from its integration with Anchor, Avalanche has had several notable developments that have helped drive its growth since late January, including an integration with Wirex and the announcement that DeFi Kingdoms will launch on the Avalanche network.
According to Delphi Digital, based on its recent price performance, “AVAX seems to move with a higher correlation to BTC relative to other L1s.”
Related: Which layer-one protocols will outperform in 2022? | Tune in now to The Market Report
Osmosis and the Cosmos ecosystem
Data from Delphi Digital shows that Osmosis, a decentralized exchange in the Cosmos ecosystem, has “outperformed other major peers over the last few months by a substantial margin.”
OSMO/USDT performance vs. other cryptocurrencies. Source: Delphi Digital
The strength shown by OSMO is in part due to the success of Cosmos, which had a strong close to 2021 as its “thesis of interoperable app-chains has finally started to come to fruition in recent months.
Osmosis is now the largest decentralized exchange in the Cosmos ecosystem and supports 37 separate IBC chains with $1.75 billion in total value locked according to data from Defi Llama.
Total value locked on Osmosis. Source: Defi Llama
Osmosis also got a boost to its price and trading volume following the release of interchain and superfluid staking on March 1, which allows liquidity providers (LP) on the Osmosis DEX to also earn staking rewards for the assets they have provided liquidity for, making this the first time users can do both staking and LP at the same time.
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