This week the price of Gnosis (GNO) A quick rally of more than 50% was noted after the project took another step forward in its transition to the Coincidence of Wants Procotol, or CoW, an interface that offers traders protection against miner extracted value (MEV).
Data from Cointelegraph Markets Pro and TradingView shows that the price of GNO has gained 86% over the past seven days, rising from a low of $308 on March 21 to an intraday high of $574 on March 28.
Among the three reasons that explain the rapid increase in the price of GNO are the launch of the CowSwap (COW) token, which was airdropped to Gnosis holders, traders’ appreciation of the MEV protection offered by the protocol, and the possibility of GNO holders receiving more airdrops in the future.
COW Airdrop
The most recent price rise seems to be mainly related to the official launch of COW, the native token of the CowSwap protocol, which offers traders a protection against the MEV.
$COW token is finally expected to unlock around 3pm UTC today.
This will kick off a 12 week $COW liquidity mining program on @ethereum & @gnosis chain aginst $ETH and $GNO pairs.
On Ethereum $COW pool will be on @BalancerLabs & on gnosis chain it will be on @SwaprEth.
— DeFi Airdrops (@defi_airdrops) March 28, 2022
COW tokens were airdropped to GNO holders based on the number of tokens held or locked during a snapshot taken in early January. AND5% of the COW tokens went to GNO holders, who could receive an additional 5% if they had locked their GNO tokens in the protocol for a period of one year.
At the time of writing, COW is listed on Uniswap at a price of USD 1.35.
MEV protection features add value to GNO and COW
The main attraction of the CowSwap protocol are the MEV protections offered and that they can help traders get better terms on their trades and avoid falling victim to front running or a sandwich attack.
What Ethereum people call “Miner Extracted Value” is what Bitcoiners call a game theory fail.
MEV = willfully frontrunning transactions, paying higher fees to do flash loans, sandwich attacks, etc.
It’s a mix between extortion, pickpocketing & perverse free market incentives.
— Brad Mills (@bradmillscan) July 14, 2021
The value extracted by miners is a kind of “invisible” tax that occurs on the Ethereum (ETH) network where miners can increase their profitability by including, excluding or reordering transactions within the block they produce.
This feature allows miners to carry out certain exploits, such as front-running, back-running, and transaction sandwiching, which help increase profits at the expense of traders.
Since January 2020, more than $605 million in value has been extracted by miners using this process, according to data from flashbots, a figure that CowSwap seeks to help mitigate going forward through its introduction of MEV protection.
Future airdrops could give GNO price a long-term boost
A third factor helping to drive demand for GNO is the prospect of more airdrops for GNO holders and stakers.
This includes a soon-to-be-launched SAFE token allocation for Gnosis Safe, a Gnosis ecosystem platform designed to securely manage digital assets.
According to data from Dune Analytics, there are currently over $77 billion worth of Gnosis Safe contracts, a considerable amount that gives an idea of the degree of confidence that the different depositors have in the protocol.
Documentation published by Gnosis Safe indicates what 20% of SAFE tokens will be distributed to the GNO community through direct distribution to GNO holders and a substantial deposit in the GnosisDAO treasury.
VORTECS™ data from Cointelegraph Markets Pro began spotting a bullish outlook for GNO on March 23, prior to the recent price rally.
Exclusive to Cointelegraph, the VORTECS™ Score is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trade volume, recent price movements, and trading activity. Twitter.
As seen in the graph above, GNO’s VORTECS™ Score started to rally on March 23 and reached a high of 78 around nine hours before the price surged 78% over the next four days.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
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