Journalist
Posted:
- The update will improve network liquidity and unlock millions of dollars worth of ATOM tokens.
- ATOM’s open interest fell along with the price, which was bullish.
While the crypto market posted losses, Cosmos [ATOM] was preparing for another update that could benefit the blockchain if the wind changes. Recently, Cosmos’ proposal 821 was approved, paving the way for the new network upgrade, which will enable the Liquid Staking Module (LSM). Although the update will add important new features, ATOM’s immediate response to the approval was not good enough.
Read Cosmos’ [ATOM] Price prediction 2023-24
Cosmos approves Proposition 821
Cosmos recently announced the passage of its Proposition 821, which aimed to introduce the Liquid Staking Module (LSM). According to the update, v12 will replace the existing strike, distribution and penalty modules.
This will improve and unlock the liquidity of the network ATOM tokens worth millions of dollars to enable multi-chain DeFi activity within the Cosmos ecosystem.
1/ Prop #821 is approved ✅
Get ready for the v12 upgrade and unleash the Liquid Staking module!
The Cosmos Hub is being upgraded at block 16985500 (expected on Wednesday, September 13).
v12 brings the LSM – adds security measures to liquid staking and unlocks instant liquid staking 🌊 pic.twitter.com/u27cJNFfGl
— Cosmos Hub ⚛️ (@cosmoshub) September 9, 2023
According to the official proposal, the v12 release has undergone rigorous testing, including e2e testing, integration testing and differential testing. The proposal was initially submitted in August and after it was approved, the new v12 upgrade will be pushed on September 13 in block 16985500.
The update could have a positive impact on the blockchain staking ecosystem, which has witnessed a demise in the recent past. Deploy rewards’ facts pointed out that the total amount of ATOM deployed has fallen sharply since August 2023, which seemed worrying.
At the time of writing, ATOM had a staking ratio of over 68%, a staking market cap of $1.65 billion, and over 905,000 staking wallets.
Source: Staking Rewards
ATOM is in a terrible condition
While the blockchain awaits the next network update, the native token’s price action has been in favor of the sellers. CoinMarketCaps facts revealed that ATOM is down more than 3.5% over the past seven days. At the time of writing, it was trading at $6.61 with a market cap of over $2.4 billion.
Interestingly enough, yes ATOM‘s social volume remained relatively high, a decline was noted in weighted sentiment, which was a negative signal. However, thanks to the upcoming update, ATOM’s development activity has skyrocketed over the past week.
Source: Santiment
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While the price action has been bearish, things may take a turn for the worse in the coming days. From Mint glassATOM’s open interest fell along with the price. A drop in the metric increases the possibilities of a trend reversal.
Moreover, the financing rate was also low. Typically, prices tend to move in the opposite direction to the financing rate. This increases the chance of a price increase in the coming days.
Source: Coinglass