- The integration of two DeFi giants, Osmosis and UX Chain, promises to revolutionize the ecosystem with a community and collaborative approach.
- Technical analysis of ATOM suggests post-merger uptrend, with potential to reach new all-time highs.
In a move that could redefine the landscape of decentralized finance (DeFi), the Cosmos Network stands on the threshold of a significant transformation with the proposed merger of Osmosis [OSMO] and UX Chain [UX]. This initiative not only represents a strategic consolidation within the Cosmos ecosystem, but also portends a promising future for its native token, ATOM, especially in terms of market valuation and infrastructure strengthening.
A Mixed Hit of Innovation and Strategy
The merger announcement, unveiled on Dec. 3, is a testament to the ongoing evolution in the DeFi space. UX Chain, formerly known as Umea, has evolved into a central hub of cross-chain interaction within the Cosmos ecosystem, focusing primarily on lending services and strengthening its position in the DeFi market.
On the other hand, Osmosis is distinguished by its innovative inter-blockchain communication protocol, enabling seamless interactions between large networks such as Ethereum [ETH] and Polkadot [DOT]. This capability establishes it as an essential decentralized exchange (DEX) in Cosmos.
This merger, led by Osmosis, is not only a consolidation of leadership within Cosmos, but also a move towards the implementation of mesh security, a vital element for the evolution and protection of blockchain networks. The union of Osmosis and UX Chain capabilities anticipates the creation of a more resilient, secure and robust infrastructure, elevating user asset protection and improving ecosystem stability.
Sunny Aggarwal, co-founder of Osmosis, has expressed enthusiasm regarding the potential for novel features and functionality as a result of the merger. He has underlined the commitment to collaborate with UX Chain, basing decisions on community choices. This statement reflects a community-centric approach vital to the success and adoption of the initiative.
On the other hand, Brent Xu, co-founder of UX Chain, has emphasized that each chain will conduct an independent governance vote, overseen by the community. This process ensures that while each project retains autonomy in decision-making, both share the common goal of establishing a unified and efficient DeFi hub.
ATOM Technical Price Analysis
Following its recovery from $6.20 on October 19, ATOM evidenced an uptrend, reaching almost $11 on November 12. This momentum, however, found a halt after overcoming a descending resistance level.
Tradingview: atom-price- Breakout seen, but consolidation followed
The breakout of this descending structure suggests the potential start of a new bullish phase for ATOM, although further confirmation is required. The low observed on October 19 was marginally higher than the low observed on June 16 of the previous year, which could be interpreted as the culmination of a correction in a developing bull market.
Source: atom-dev-inline – Santiment
If this hypothesis is confirmed, the uptrend initiated on October 19 would be expected to break above the previous high of $17, signaling the end of a lower grade uptrend and the start of a retracement, ideally above $7.50. Subsequently, a larger upward move would be anticipated, possibly ‘wave 3’, which could establish new highs, hovering around $35.
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Subsequent Phases: Unification and Collaboration
One of the most critical subsequent phases of this merger contemplates exploring options for merging the two tokens, through a token exchange or migration. The highlight of this process is that the specific details of the token exchange will be determined through community governance. This approach ensures the creation of a unified token representing both networks, thereby consolidating the vision and value of both projects into a single entity.
Funding History and Financial Support
Notably, both projects have secured notable funding in the past. UX Chain raised $32 million through a coin offering on CoinList in 2021, while Osmosis secured $21 million in a token sale round led by Paradigm. These funds not only demonstrate the market’s confidence and support for these projects, but also reflect their strength and potential for future developments in the DeFi space.
A Promising Vision for ATOM and the Cosmos Network
The proposed merger of Osmosis and UX Chain is a clear indicator of innovativeness and adaptability in the cryptocurrency world. For ATOM and the Cosmos Network, this development not only implies a potential increase in their market valuation, but also represents a step forward in terms of security, functionality and network stability.
With these encouraging developments, the Cosmos Network and ATOM position themselves as emerging leaders in the advancement of decentralized finance. For both the Cosmos community and its investors, these developments offer solid reasons to remain vigilant and optimistic about the future.
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