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The cryptocurrency market underwent major changes in 2022. In early May, the US Federal Reserve announced a 50 basis point hike in interest rates. Rising interest rates are designed to fight inflation without risking an increasing likelihood of recession. After the announcement, the major cryptocurrencies began to collapse. According to CoinGecko, Bitcoin has lost 24.8% in the past 30 days, reaching $ 29,700. Ethereum reached a price level of $ 1,950, losing 33%. Both traditional and cryptocurrency markets are in a bearish race.
UST and LUNA crash
Another cause for panic over the May sale was the now infamous Luna crash, 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 (UST) stablecoin are used to power the original Terra blockchain. To receive UST, traders were asked to burn LUNA tokens in exchange for a whopping 20% return on staking. This deflationary protocol was designed to support LUNA’s long-term growth by burning tokens and increasing the value of the remaining supply. To keep the price of 1 UST equal to $ 1 in LUNA, Do Kwon, founder and CEO of Terraform Labs, created the Luna Foundation Guard (LFG). It would reserve around $ 2.3 billion in BTC to support the stablecoin if it fell below or above $ 1 by buying or selling UST.
At the time of writing, the UST price is less than 9 cents. The dramatic drop that could not be sustained by the Terra blockchain was likely triggered by the announcement by the Federal Open Market Committee (FOMC) regarding the interest hike. Over UST $ 2 billion was not staked and hundreds of millions of that amount were immediately sold.
The massive sell-off took UST’s price down to $ 0.985. LFG then pledged to lend $ 750 million in BTC to market makers to defend the peg. Just a day later, UST lost its $ 1 anchor for the second time and dropped to a low of 35 cents. As mentioned above, at the time of writing, its value is less than 9 cents. As a result of this panic sale, over $ 17 billion in crypto value was wiped out.
Another unfortunate surprise for cryptocurrency traders came from the non-fungible token minting (NFT) bots that invaded the Solana network. When the number of transactions per second exceeded 4 million, the network suffered a seven-hour outage. This has plunged the price of SOL, the blockchain’s native currency, over the past 30 days.
These and other similar setbacks show that many of the current blockchain networks are not yet ready to bear the brunt of capital markets. Market turmoil is likely to wipe out flawed blockchain projects and only those that strive to combine scalability and stability will remain. An example of a blockchain network that has not only preserved its functional stability but has managed to make a quiet but important move towards wider adoption during this period is Everscale.
The price of the native Everscale token, EVER, fell in May 2022, similar to all the other crypto tokens discussed. However, with Everscale’s advanced technological structure, the project is able to thrive in today’s challenging market environment.
Everscale successfully implemented multiple major developments in the first quarter, including a lending / lending protocol for decentralized loans and derivatives, integration with the Cardano network, and Reliable External Messaging Protocol (REMP) which was implemented to make the Everscale network faster and more reliable. Benefits of implementing REMP include improved user experience, front-running protection, and DDoS protection. The update makes Everscale not only the fastest blockchain in terms of TPS, but also the most interactive, blurring the lines between normal applications and dApps.
Integration of Everscale Technology with Docker: the GOSH extension
Docker is a technology company that develops productivity tools to automate the distribution of code within software containers. These containers are a standardized software unit that allows developers to isolate an application from its environment and eliminate the “works on my machine” problem.
At DockerCon, which took place on May 9 and 10, the company announced the beta version of Docker Extensions. These include one-click plug-ins from JFrog, Red Hat, and VMware, and allow developers to integrate additional tools and streamline workflows. The integration of Everscale technology into these extensions makes coding with Docker more secure and stable for millions of developers around the world.
For the launch, Docker worked with several partners to integrate a total of 16 extensions covering various features highly sought after by developers. Docker Extensions security block includes an innovative application of blockchain technology: the decentralized chain Git Open Source Hodler (GOSH). The extension helps verify that Docker containers remain secure and unchanged so that developers can be sure that the container itself was created using only the components they have 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 is a scalable solution that reduces the risks and resources spent on protecting code and moving open source down the value chain. Instead of saving the code on platforms like GitHub which are owned by large companies, blockchain developers have the option of working with a decentralized solution.
Given Everscale’s core features, such as secure, high-speed data processing, Docker’s choice to include Everscale technology in its ecosystem seems reasonable enough. Other potential networks that could be used may have led them to a trade-off between performance and stability.
The Everscale network, in turn, will certainly benefit
GOSH’s collaboration with Docker, as it will pique the interest of large IT companies and bring more IT partners into the network.
The future of the blockchain
As can be seen from Everscale’s example, the future of the blockchain industry lies in using technology to create something that people can use to improve their lives and work. Even when the market is trading bearish, projects with a fundamental purpose will survive and thrive. For anyone involved in cryptocurrencies and trading, last month should be an important lesson, showing that projects built purely for profit goals are doomed to fail. It is important that a project has well-defined technology and utilities to gain investor confidence.
Note: Investments in cryptocurrencies and crypto assets are subject to financial risk and readers should do their own due diligence. Entrepreneur Media does not endorse any such investment.