The cryptocurrency market has been going through major changes in 2022. At the beginning of May, the US Federal Reserve announced a 50 basis point increase in interest rates. The interest rate hike is designed to combat inflation without risking a rising likelihood of recession. After the announcement, major cryptocurrencies started to crash. According to CoinGecko, Bitcoin lost 24.8 per cent in the last 30 days, reaching $29,700. Ethereum reached a price level of $1,950, losing 33 per cent. Both traditional and crypto markets are experiencing a bearish run.
UST and LUNA crash
Another reason for panic selling this May was the now infamous crash of Luna, which led to the launch of a new blockchain and native token. Developed by Terraform Labs, the Terra token (LUNA – now LUNC) and the TerraUSD stablecoin (UST) are used to power the original Terra blockchain. To receive UST, traders were asked to burn LUNA tokens in exchange for a whopping 20 per cent yield on staking. This deflationary protocol was designed to support LUNA’s long-term growth by burning tokens and raising the value of the remaining supply. To keep the price of 1 UST equal to $1 in LUNA, Do Kwon, the founder and CEO of Terraform Labs, created the Luna Foundation Guard (LFG). It would reserve about $2.3 billion in BTC to support the stablecoin if it went below or above $1 by buying or selling UST.
At the time of writing, UST’s price is below 9 cents. The dramatic drop that couldn’t be sustained by the Terra blockchain was likely triggered by the Federal Open Market Committee (FOMC) announcement regarding the interest hike. Over $2 billion worth of UST was unstaked and hundreds of millions of that amount was immediately sold.
The massive sell-off brought the price of UST down to $0.985. LFG then committed to loaning $750 million in BTC to market makers to defend the peg. Just a day later, UST lost its $1 peg for the second time and fell to as low as 35 cents. As mentioned above, at the time of writing, its value is less than 9 cents. As a result of this panic selling, over $17 billion in crypto value was wiped out.
Another unpleasant surprise for crypto traders happened due to non-fungible token (NFT) minting bots invading the Solana network. When the number of transactions per second reached over 4 million, the network experienced a seven-hour outage. This caused the price of SOL, the blockchain’s native coin, to plunge 50 per cent in the last 30 days.
These and other similar setbacks demonstrate that a lot of current blockchain networks are not yet ready to carry the weight of capital markets. The turmoil in the market will likely wipe out the flawed blockchain projects, and only those that strive to combine scalability and stability will remain. An example of a blockchain network that not only preserved its functional stability but managed to make a quiet, yet important move to wider adoption during this period is Everscale.
The price of the native Everscale token, EVER, dropped during May 2022, similarly to all of the other crypto tokens discussed. However, with Everscale’s advanced technological backbone, the project is able to prosper in the current challenging market context.
Everscale successfully implemented multiple important developments in Q1, including a lending/borrowing protocol for decentralized loans and derivatives, integration with the Cardano network, and the Reliable External Messaging Protocol (REMP) which has been implemented to make the Everscale network faster and more reliable. The advantages of implementing the REMP protocol include a better user experience, frontrunning protection, and DDoS protection. The upgrade makes Everscale not only the fastest blockchain in terms of TPS, but also the most interactive, blurring the lines between regular applications and dApps.
Everscale Technology’s Integration with Docker: the GOSH extension
Docker is a technology company that develops productivity tools to automate the deployment of code inside software containers. These containers are a standardized software unit that allows developers to isolate an application from its environment and eliminate the “it works on my machine” issue.
At DockerCon, which took place on May 9 and 10, the company announced the beta release of Docker Extensions. These include one-click plug-ins from JFrog, Red Hat, and VMware, and allow developers to integrate additional tools and simplify workflows. Everscale technology’s integration into these extensions makes coding with Docker more secure and stable for millions of developers worldwide.
For the launch, Docker has worked with different partners to integrate a total of 16 extensions covering different features that are greatly sought after by developers. The security block of Docker Extensions includes an innovative application of blockchain technology – the decentralized on-chain Git Open Source Hodler (GOSH). The extension helps to verify that Docker containers remain secure and unchanged so developers can be sure that the container itself was built using only the components they indicated in their smart contracts. GOSH is a new blockchain developed by EverX, Pruvendo, KWPC, and Blockchain Family.
GOSH is based on Everscale technology. It’s a scalable solution that reduces the risks and resources spent on protecting code and moving open-source up the value chain. Instead of saving code on platforms like GitHub that are owned by large corporations, blockchain developers have the option to work with a decentralized solution.
Given the core characteristics of Everscale, such as high speed and secure data processing, the choice of Docker to include Everscale technology into their ecosystem seems quite reasonable. Other potential networks that could be used might have led them to a compromise between performance and stability.
The Everscale network, in turn, will definitely benefit from
GOSH’s collaboration with Docker, as it will drive interest of large IT companies and bring other IT partners to the network.
The Future of Blockchain
As can be seen from the example of Everscale, the future of the blockchain industry is in utilizing technology to create something people can use to improve their lives and work. Even when the market is trading downward, projects with a purpose at their core will survive and prosper. For anyone involved in crypto and trading, last month should be an important lesson, showing that projects which are built solely for money-making goals are destined to fail. It’s important for a project to have well-defined technology and utility in order to gain investors’ trust.Note: Investment in cryptocurrency and crypto assets is subject to financial risk and readers should do their own due diligence. Entrepreneur Media does not endorse any such investment.