Zilliqa (ZIL) is a sharded blockchain network capable of processing transactions very rapidly. The target market for ZIL is B2B, but they’ve come up with some very clever implementations for the technology and are actively pursuing gaming via their Zilliqa Planet program, which allows users from the Ethereum blockchain as well. Let’s do a little analysis and see how Zilliqa fits into the broader cryptocurrency market, and what sort of things will need to happen for it to reach $1B in market capitalization.
ZIL History
ZIL was founded in 2018, and the chart histories reveal that it was a hit out of the gate after it was launched, peaking at an all time high of $.23 on May 10, 2018. This may not sound like a very high peak, but the market capitalization that went with it was over $1.4B. Despite the speed of the network and the low token price, ZIL has fallen from these heights and recently began showing signs that investor interest was increasing.
In October of 2020, ZIL updated its dApp-oriented software to allow staking and yield farming. Like Ethereum, the Zilliqa network accepts its native currency as payment for on-chain transaction fees, which creates a natural value source for the network. Prices are very low, with transactions running under $.50 even at peak volumes in recent months.
ZIL Competitive Analysis
Zilliqa is positioned to improve in the coming months as blockchain adoption really gets off the ground, but it faces risks that come with the territory of the $300M market cap range. In some sense these tokens have plenty of traction and promising futures expressed by their large market caps, but in another sense there is a dense and competitive field packed with the stiffest competition in technology today.
As the select few move up to the next rung of the market cap ladder, it’s always helpful to look at the fundamentals and figure out what a given chain brings to the table. ZIL, in my experience, does process transactions quickly. However it isn’t as fast as ATOM or XRP. Though it is cheap, it is not as cheap as these networks either.
There are some partnerships, and the website boasts of over 20,000 lifetime cumulative users, which sounds impressive until we reread the post and find that it did in fact say cumulative, which means that 20,000 is not altogether the most impressive number it could aspire to. Still, integration with Chainlink was almost certainly a great idea and the low transaction price could provide a crucial advantage over the Ethereum blockchain with respect to DeFi.
Increasing Interest In ZIL
The Wolf of All Streets, in a recent video stream, mentioned ZIL. This was merely the latest in a handful of mentions I’ve noticed in various places online recently, but ever since the token was listed on Atomic Wallet with staking rewards starting at 29% it seems that ZIL’s fan base is growing. The staking reward has already worked its way down to 18% at the time of writing, signaling that many more ZIL have been staked.
ZIL maintains a 2-week lockup before staked ZIL tokens can be traded, so the decline in return is actually a very bullish sign for the ZIL price which may signal substantial resiliency to downward market pressure if the example Cosmos (ATOM) has set is considered to be relevant here. Investors like to pick up PoS tokens to hold onto over time because the rewards come through whether or not the price increases. A higher staking reward is available at lower prices, and then the tokens appreciate as more investors seek to capitalize on the staking rewards. Eventually, the price will grow enough to entice long-term stakers to sell their positions, and when this happens it is likely that staking rewards will increase again.
PoS Token Principles of Profit
Picking up these sorts of tokens when the price is low and the reward is high seems to be one of the best ways to earn a return on your investment in cryptocurrency today. I’ve been accumulating ZIL in hopes of a 10x for a few weeks now, and my position has done quite well. As in other reward-earning positions, my plan here will be to zero-cost this investment by awaiting a price hike that enables me to pull my initial investment back out without gutting the position. I’ll shoot for 2x my average cost or higher.
Tips:
- The best position is one that pays for itself in the short term and then earns significant appreciation over the long term.
- To figure out your cost for a position, you’ll want to add up of all your buys and subtract the total value of all your sells. If you do it right, this number will approach zero as the token appreciates in value.
(token cost - token sales = net cost in the position)
- If you’re confident you have a 5-10x left to go, feel free to wait to zero your cost until you see some more profit.
- Be sure to keep the unbonding period in mind for each token. Some tokens it will be best to keep a few unstaked either to complete transactions on the blockchain or to sell over time to make money.
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