Glimmer (GLMR), the native token of the Moonbeam ecosystem, is down 98% since its peak in January. Despite its steep decline, the Moonbeam Network itself continues to gain traction.
Over the past week, the GLMR token has been trending on CoinGecko, with more than 56,000 users monitoring its performance. We take a look at this emerging ecosystem.
What is Moonbeam Coin?
Moon state itself as a “smart contract platform for cross-chain applications that integrates the functions of Ethereum, Polkadot and more.” That means developers can create their own decentralized applications, or dApps, on Moonbeam, which are compatible with Ethereum.
They can use The Ethereum Virtual Machine (EVM), the heartbeat of the Ethereum network, which allows developers to create smart contracts and dApps in a computer language known as Solidity. Users don’t need to rearrange or rewrite code to achieve this.
Founded in 2019 by Derek Yoo, CEO of crypto infrastructure platform PureStake, and Stefan Mehlhorn, Moonbeam launched as a parachain on Polkadot last year. The network operates in delegated proof-of-stake (DPoS) consensus mechanism.
Parachain is an independent blockchain on Polkadot, which is called blockchain. It is connected to the Polkadot relay chain and may be connected to other chains inside and outside of Polkadot. They have the same security and scalability as Polkadot.
Blockchain networks are usually developed with exclusive attributes. Moonbeam comes to ensure that transactions can be done over the network. It is a bridge that allows users to work with the Ethereum and Polkadot blockchains.
The creators of Moonbeam hope this will attract developers and other users who want to use the various features available on the two networks. There is also a parachain related to the Moonbeam network called “Moonriver”.
Built on the Kusama blockchain, Moonriver allows developers to refine their products before distributing them on the main chain on Moonbeam.
While Moonbeam is considered the “first fully functional parachain,” not everyone agrees that it has been developed at the desired scale.
“As for the Moonbeam project itself, the most notable event since the beginning of October is the first election on the government,” Lena Bondarenko, a research analyst at the UK-based EXMO crypto exchange, told Be[In]Crypto.
“In addition, the integration with the Ren Protocol was only yesterday (October 12). Perhaps the event may have caused some of the number of search queries. However, I think there may be people who are interested in seeing Moonbeam as one of the Polkadot parachains amid the positive news from the latter.
Continuing, Bondarenko said: “The Polkadot team presented an updated roadmap at the end of September. At the beginning of 2023, they plan to upgrade the main network, which should increase the transaction throughput to one million transfers per second.
“The media finally paid attention to Moonbeam at the end of August when it integrated the LayerZero cross-chain messaging protocol to facilitate Web3 interoperability. There was also an increase in searches on GLMR on crypto aggregators at that time. However, the price of GLMR did not increase at that time.
However, Coinmarketcap report that “the Moonbeam platform extends the basic Ethereum features with additional features such as on-chain governance, staking, and cross-chain integration.” It says the network’s compatibility with Ethereum is “unmatched”.
Moonbeam coin (GLMR) explained
Glimmer, or GLMR, is the original signature of the Moonbeam ecosystem. Users need GLMR to pay transaction fees through the network as well as to execute smart contracts. Moonbeam says the token can be used for staking.
GLMR is also used for governance, allowing owners to vote on important network proposals, including the election of board members. As a tool to incentivize so-called collators to maintain full nodes, these tokens are essential to keeping the Moonbeam network secure.
“The main purpose of the collator is to generate blocks and support the liveness of the block in the network. From there, the collator offers the block to validators in the relay chain for finalization,” said Moonbeam in a website.
As of writing, there is around 93 collators in the active pool that receive one-fifth of the annual inflation as a reward. Holders of Moonbeam tokens, also known as delegates, receive rewards for supporting collators with a minimum stake of 50 GLMR. Only the top 300 get the staking prize.
Glimmer has a total uncapped supply. However, the Moonbeam foundation was launched with a supply of one billion, with an annual inflation rate of 5%. Currently, more than 422 million tokens are in circulation, according to CoinGecko.
Moonbeam said that every time GLMR is used to pay transaction fees in smart contracts, 80% of certain tokens are destroyed through “burning”. The remaining 20% goes to the on-chain treasury. The whole process is designed to boost the price of GLMR tokens.
Moonbeam GLMR price action and forecast
Moon GLMR rose to $19.50 on January 11 when it started trading on the exchange. It proved to be the highest token. Moonbeam GLMR’s price has fallen 98% since its peak. At press time, the token was trading at $0.44, down 1% on the day. This still up over 75% of initial coin offering (ICO) cost $0.25 per GLMR last year.
In terms of capitalization, Moonbeam’s total market value down more than $70 million since January to $188 million today. Analysts at Crypto Predictions, CoinArbitrageBot, and Digital Coin Price forecast GLMR price predictions to close the year between $1.02 and $3.40.
Lena Bondarenko, EXMO research analyst, is not as optimistic.
“In the past month, the price of GLMR has followed the price of bitcoin. The 30-day correlation coefficient has exceeded 0.9 almost all of the past month, indicating a very strong correlation between the rate of GLMR and BTC,” Bondarenko told Be[In]Crypto, added:
“On October 12, the correlation dropped significantly to 0.68 from 0.94 the previous day. But the chart of the past few days shows that despite the efforts to start an independent movement, now the coin is falling together with the whole market. Thus, I do not recommend considering the trend indicator as a strong growth signal.
However, Moonbeam has the first advantage, showing the potential to become one of the leading cryptocurrency platforms, according to a report on the analyst platform. Finder.com.
“Launching as the first parachain in the Polkadot ecosystem has enabled Moonbeam to integrate with a large number of decentralized applications,” the report said.
“While this does not guarantee the project’s success, the first-mover advantage puts the project ahead of its younger competitors – for now.”
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