Why are We Holding These Coins: Arbitrum, Optimism, Uniswap, Pancake, Polygon
Changes Happening that will Blow Your Mind
In the cryptocurrency market, we all have 2–3 favorite coins that we prefer to hold for the long term. Your and my favorite coin’s project has undergone some changes. It is very important for you to know about this.
Some changes are going to happen in Top DEX.
Uniswap is used by everyone for liquid farming and token swapping. Its UNI token is held by a large number of users.
Uniswap’s V3 version is going to be unlocked. This feature will be available on April 30th. Let’s have a look at what’s new in this V3 version of Uniswap.
Uniswap has played the biggest role in bringing the trend of DEX. All of the DEXs that are now available in the crypto market are copies of Uniswap.
Uniswap is an open-source program that allows anyone to launch their DEX by simply changing their name in their application. The V3 version of Uniswap was released only last year, however, it was not open source at the time. This open-source feature was kept locked, however, it will be unlocked on April 30th.
All of the DEXs on the market that copy uniswap will have to decide whether to add the feature of concentrated liquidity to their DEX or not when this new feature is unlocked. People use Uniswap V3 because of the concentrated liquidity feature. There are two possible outcomes from this.
First Possibility
Users will withdraw their funds and go to another DEX as soon as Uniswap becomes open source. If more users begin to switch to other DEXs, TVL will begin to decline owing to low demand for Uniswap, and UNI token prices will begin to fall due to low demand.
Second Possibility
If users start liking the feature of open source, then the whole game will change. When more people join this DEX, TVL will rise and the price of the UNI token may rise as well.
Keep an eye on this one.
Uniswap’s opponent is Pancakeswap. Pancakeswap’s new V3 feature will be available in the first week of April. Cake token prices may rise as a result of the V3 version.
If the V3 version of pankswap becomes more liked by the users, then Uniswap can be left behind.
There are numerous Layer2 solution projects on the market, but each popular project has something unique.
Polygon provides customers with a variety of options. The mainnet of the Zero-knowledge EVM rollup was launched a few days ago. Polygon Alternative Blockchain, also known as Sidechain, is mostly utilized in Dapps and also supports channels.
Polygon’s Layer 2 solution uses Polygon’s Matic token for gas fees for any activity performed on their ecosystem. The main difference between Polygon’s Matic Token and its Layer 2 rivals is that Polygon’s Matic Token is utilized for gas fees. The other layer 2 rivals, Optimusum, Arbitrum, and zkSYNC, do not use their primary tokens for gas fees.
Tokens of layer 2 projects like Optimisum, Arbitrum, and zkSYNC are used for governance. Buying these coins means participating in their technology. We are only acquiring tokens because we believe in their technology since their tokens have no use case.
After seeing this, you might be wondering whether or not you should hold Arbitrum’s ARB token for a long period.
According to the information I provided above, the ARB token of Arbitrum is not utilized for gas fees. Only purchase their token if you wish to participate in token governance. If you believe that this technology will develop in the future, you may acquire their tokens.
Pokémon
Assume you founded the POKEMON company and developed the company’s governance token. Those who purchased the POKEMON token will only be able to vote on specific important company decisions. The price of the token will rise in sync with the price of the shares as the firm expands over time.
I’m sorry to say, but it’s risky to hold tokens like Arbitrum’s ARB, Optimism’s OP, and zkSync for a long time as they are not utilized for blockchain gas fees.
In the Layer2 solution project, we have to bridge Ethereum in their chain and use Ethereum in gas fees.
Gap
Similarly, Arbitrum, which has a market cap of $1.7 billion and a fully diluted market cap of $13.6 billion, is in this situation. The market cap of these two companies is totally different.
Optimism has a $718 million market cap and a fully diluted market cap of $9.7 billion. There is also a significant difference in market capitalization between these two, which is not good for the token.
It is better to acquire such tokens for the purpose of swing trading. Purchase low and sell for a 20%-30% profit when the pump comes.
The USDT reserves are kept on the Tron chain. We pay TRX tokens worth $1 whenever we withdraw USDT. Formerly, when Ethereum’s Layer 2 solution was not available, the use case for TRX was good since the cheapest chain at the time was the TRC20 network.
People are now exchanging USDT using the new layer 2 projects, and the network charge is less than $1. As a result, the market’s utilization of TRX is progressively declining. With all of this, the future of the TRX token does not look well. Things may change in the future if a big use case or development happens.
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Disclaimer
This is not Financial Advice. This article is meant only for educational purposes. I am just sharing my thoughts and analysis based on my many years of experience.
