Article contributed by Elena Hoo.
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New protocols are launching every day on different networks in the crypto space, and the trend is likely to continue through this year. But does a new protocol launch always add value to the network and simulate user activity and engagement?
My recently published article on Cointelegraph here focuses on Terra chain and discovers that the price of LUNA often increases right after the new protocol’s pre-launch phases start.
LUNA February 2022 price. Source: CoinGecko
LUNA November to December 2021 price. Source: Flipside Crypto
It also finds that a new protocol launch does not necessarily always add value to the network, as shown in the comparison between the recently launched protocol Astroport and Mars, which have very similar pre-launch strategies but very different outcomes post-launch.
The incidents on the launch day for Mars jeopardized the user confidence in the protocol. They have also made it difficult to attract liquidity and maintain user activities since the launch.
Red Bank and Fields have both failed to maintain trading volumes after the airdrop. For more details, read my article “Wonky Mars Protocol launch shows ecosystem expansion may not add to network value” on Cointelegraph.
Mars Red Bank transaction count and volume in USD. Source: Flipside Crypto
Mars Fields transaction count and volume in USD. Source: Flipside Crypto
Article contributed by Elena Hoo.
