All about Cosmos’ imminent upgrade and its possible impact
- The update will improve network liquidity and unlock ATOM tokens worth millions of dollars.
- ATOM’s open interest declined along with its price, which was bullish.
While the crypto market registered losses, Cosmos [ATOM] was getting ready for a new update that could benefit the blockchain when the winds turn. Recently, Cosmos’ proposal 821 got approved, paving the way for the new network upgrade, which will enable the Liquid Staking Module (LSM). Though the update will add key new features, ATOM’s immediate response to the approval was not good enough.
Read Cosmos’ [ATOM] Price Prediction 2023-24
Cosmos approves proposal 821
Cosmos recently announced that its proposal 821 got passed, which was aimed at introducing the Liquid Staking Module (LSM). The update said v12 will replace the existing staking, distribution, and penalty modules.
This will enhance network liquidity and unlock ATOM tokens worth millions of dollars to enable DeFi activity on multiple chains within the Cosmos ecosystem.
1/ Prop #821 is approved ✅
Get ready for the v12 Upgrade, unleashing the Liquid Staking Module!
The Cosmos Hub will upgrade at block 16985500 (expected on Wed, Sept. 13th).
v12 brings the LSM – adding safety measures to liquid staking and unlocking instant liquid staking ? pic.twitter.com/u27cJNFfGl
— Cosmos Hub ⚛️ (@cosmoshub) September 9, 2023
As per the official proposal, the v12 release has gone through rigorous testing, including e2e tests, integration tests, and differential tests. The proposal was initially submitted in August, and as it got approved, the new v12 upgrade will be pushed on 13 September at block 16985500.
The update can have a positive impact on the blockchain’s staking ecosystem, which has witnessed a downfall in the recent past. Staking Rewards’ data pointed out that the total amount of staked ATOM plummeted sharply since August 2023, which looked concerning.
At press time, ATOM had a staking ratio of over 68%, a staking market capitalization of $1.65 billion, and more than 905,000 staking wallets.
ATOM is in a dire state
While the blockchain awaits its next network update, the native token’s price action favored the sellers. CoinMarketCap’s data revealed that ATOM was down by more than 3.5% in the last seven days. At the time of writing, it was trading at $6.61 with a market cap of more than $2.4 billion.
Interestingly, though ATOM’s social volume remained relatively high, a drop was noticed in its weighted sentiment, which was a negative signal. However, thanks to the upcoming update, ATOM’s development activity surged last week.
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Though the price action was bearish, things can take a U-turn in the coming days. As per Coinglass, ATOM’s open interest declined along with its price. A drop in the metric increases the possibilities of a trend reversal.
Additionally, its funding rate was also low. Typically, prices tend to move in the opposite direction from the funding rate. This increases the chances of a price uptick in the days to follow.