Investors look for Ethereum alternatives
Alcor, a decentralized exchange running on the WAX blockchain has seen its transaction volume increase 176.4% to $62,200 in the last 24 hours. Furthermore, transactions through the dapps smart contracts have increased almost 70% to 183,000, users are up by over 50% to almost 12,000 and volume increased to over $224,000 in the last 7-days.
Interestingly, almost one-quarter of the total volume accumulated over the last 7-days for Alcor has been created within the last 24-hours. It is vital to investigate and understand the causes behind such surges.
What is Alcor Exchange
The Alcor platform has been active since April 2020 as a currency swap platform similar to Ethereum alternatives Uniswap and Sushiswap. The difference is that the platform operates on several blockchains, including EOS, Telos, and the WAX blockchain. As such, token swaps on Alcor are between non-ERC20 tokens such as WAX and EOS, etc. We can see that until the start of 2021 much of the activity on Alcor has been low-level and arguably unsuccessful as Ethereum DeFi apps stole all the headlines throughout 2020.
Why the Surge?
Several events have directly stimulated the metrics we observe. Firstly, Alcor offers zero-fee NFT trading on their exchange and the creation of NFT tokens. A service now gaining popularity amidst the current NFT hype and one being marketed more heavily by Alcor as a result. Artists can list themselves for free and sell their artwork directly on the portal. Secondly, on the 15th March 2021, they also announced the release of a new DeFI liquidity pool protocol, which is the moment we see the real surge in the activity starting for the exchange.
Another reason for increased activity on Alcor is the availability of game-related token trading pairs with WAX. Tokens such as Alien Worlds TLM, R-Planets AETHER, and Hodl God’s VOID token. Alien Worlds has had a meteoric rise to prominence in 2021 so demand for token swaps from TLM has also increased. Offering users trading pairs they can’t find elsewhere and at good rates when trading native WAX tokens has also served to increase the platform users.
Alien Worlds recently got a $2 million dollar investment from blockchain gaming behemoth Animoca Brands, while the project is now also coming to Binance Smart Chain. The TLM token will therefore also move into the BSC DeFi ecosystem.
High gas fees are crippling Ethereum. This is fundamentally the fourth reason we are observing surges on non-Ethereum exchanges recently. As smaller investors look to move their hard-earned hundreds into the next speculative cryptocurrency they are being put off by fees. Fees, which at times can exceed $100 for a single transaction. Fine, when you’re moving $10,000, a hard pill to swallow when moving just $200.
As retail investors flood into the cryptocurrency space looking for the sort of value and speed they have enjoyed outside the blockchain until now. Ethereum based decentralized finance apps can simply no longer service small investors. Of course, the impending release of Ethereum 2.0 will look to rectify this but as Ethereum stalls, others are catching up.