Market conditions in the early months of 2022 have taken a toll on BTC and crypto in general.
Prices for Bitcoin have dropped from a peak of $67,000 seen in November 2021, to $21,000. Other cryptocurrencies have reported similar drops. Ethereum’s price decreased from its all time high of $4878 to below $1000 and is currently trading at around $1500. Most other cryptocurrencies in the space have fared similarly, or worse in regards to returns.
Some large cryptocurrencies have collapsed in recent months and others have shown signs of struggle. This includes Luna and their stablecoin Terra, with a few others showing signs of decline.
This seemingly echoes the crypto winter seen in 2018. Bitcoin sharply declined from its previous all-time high of $20,000 to lows of $7,700 and nearly all other cryptocurrencies followed its lead. Somewhat like Luna and Terra, a project known as Bitconnect which offered very high yields collapsed, leaving investors in a tight spot. Also like the previous “crypto-crash” seen in 2018, pessimism temporarily reigns supreme.
Beyond sharp downwards declines, liquidity is also an issue affecting many different cryptocurrencies.
This may seem dark for cryptocurrency enthusiasts today, and we are in a bear market of sorts, but there are some advantages. Current timing may be ideal for building cryptocurrency projects, products, services, and to position yourself and/or your company for an eventual return of bull markets. ChainPort for example was conceptualized before the peak of the 2021 bull run and that may have been a factor in its success.
More Blockchains - More Exposure?
The biggest problem facing many different tokens and smaller altcoins is low exposure and the difficulty to purchase them. By this, we’re referring to the limited number of exchanges and DEX’s tokens are usually listed.
DEX’s or decentralized exchanges are nothing new to the space. Back in the 2018 era, both EtherDelta and ForkDelta were very popular in the space for Ethereum-based (ERC-20) tokens. Today, Uniswap is the dominant DEX for ERC-20 based tokens, while ERC-721 & ERC-1155 more commonly called Ethereum-based NFTs are traded on different marketplaces.
Since 2018, a lot of other things have changed. One of the biggest changes was the rise of smart-contract compatible blockchains dubbed “Ethereum killers”. This includes Binance’s Smart Chain (BNB), TRON (TRX), Avalanche (AVAX), and Cardano (ADA) to name a few. Even Bitcoin may eventually support smart contracts and tokenization in the future following its Taproot upgrade. While these chains have yet to overcome Ethereum, they have grown sharply in popularity due to their low fees.
Each one of these blockchains tends to have their own DEX associated with their chain. For example, PancakeSwap only supports BNB tokens, While Trader Joe only supports AVAX tokens. Each one of these DEX’s usually has a different user base and trading volume. Typically users that use a specific DEX stick with it and sometimes develop a preference. This is especially true if they had a profitable and fun experience.
The amount of daily trading volume each one of these DEX’s has can be massive. The combined 24 hour trading volume for both V2 and V3 of Uniswap is over $2,378,101,249. That is nearly two and a half billion dollars in daily trading volume while in a bear market. All DEX’s combined have a daily trading volume of five and a half billion dollars.
Why Cross Chain Bridges Matter
In recent years there have been some major technological advances in the world of blockchain technology. This includes the introduction of cross blockchain bridges also called cross chain bridges. Cross chain bridges are aptly named as they allow tokens that are based on a certain blockchain, transfer to another. This can be done for a portion of the token's total allocation or its entirety and usually depends on the token's team's needs and goals. A token can even be split across multiple different blockchains if their team wishes to do so.
There are some major advantages of doing so. One of the key advantages is the potential for lower fees on transferring tokens. Another key benefit is the possibility to list a token on multiple DEX’s. This can potentially increase a token’s exposure to traders and investors by a lot, and even possibly increase the token’s price vastly due to increased demand.
This could be very significant for a token’s community and general standing, especially in a bear market.
Is ChainPort the Bridge For You?
There are a handful of blockchain bridges available currently on the market. They all tend to offer different blockchains fees and ease of use but they all tend to have the same issue: security.
As mentioned by the tech publication, Wired, blockchain bridges have certain vulnerabilities and have been exploited and hacked in the past. In the early Spring of 2022, a bridge was breached causing a loss of over $540 million in Ethereum and the stablecoin USDC. These hacks have occurred more than once.
Due to this, we have developed ChainPort, the only blockchain bridge that places security first. It is the only custodial bridge in the crypto-space with MPC technology, cold storage, and multisig fund segregation. This means that we keep 95% of the TVL in our cold storage vaults at any given time. So even in the event of a hack, only 5% can possibly be at risk. Despite the heavy security, ease of use and functionality has not been sacrificed. ChainPort offers full interoperability between blockchains, with a simple and secure interface.
We support the leading blockchains such as Polygon, Avalanche, BNB Chain, Ethereum, Fuse, Moonriver, and Fantom, with additional blockchains being added constantly. Another key functionality is that tokens can be ported across multiple chains in a permissionless way and without the need to revert to the original chain.
By using the right blockchain bridge, not only can you vastly increase the exposure of your token, you will also potentially reduce fees. When done in a safe and secure environment, this can greatly benefit your token. Check out ChainPort for more and remember that the future is cross chain!