Why does GateToken (GT) have more activity than some leading blockchains?
Many major cryptocurrency exchanges such as Binance, Coinbase, OKX, and others are looking to increasingly embrace the Web3 space by developing their solutions for it, such as non-custodial wallets, tokens, and even blockchains, to attract as many users to their ecosystem as possible, as well as to scale.
What is GateToken?
GateToken, or GT, is a native token of the GateChain blockchain. In addition to its network, the GT token exists on the Ethereum (ERC-20) and Solana (SPL) blockchains. Although the GateChain network was launched in 2018, the GT token did not appear until August 2019.
The GateChain network, which powers the GT token, is compatible with the Ethereum Virtual Machine (EVM) and allows developers to create decentralized applications (DApps) in the popular Solidity programming language. In addition, EVM support also seamlessly enables developers to migrate their applications from the Ethereum network to GateChain.
The total number (issuance) of GT tokens is 300 million, but as of July 2024, only 93.23 million are traded on the market. According to CoinMarketCap, GateToken has no maximum issuance, which means that GT is an inflationary token. In other words, the token's developers must maintain an ever-increasing demand for GateToken to ensure its price rises.
In addition, the project team regularly redeems and burns GT tokens to reduce their issuance and thus increase the asset's value. As of the end of 2023, a cumulative 163.7 million GT tokens have been burned. This model of reducing issuance is not original for such assets: for example, the team of the largest crypto exchange on the crypto market also regularly burns Binance Coin tokens. In addition, the GateToken team uses a system of incentives for token holders, offering them various bonuses and privileges on their platforms.
GT token is among the top 100 cryptocurrencies in capitalization, which is $720 million as of July 2024.
What is the GateToken used for?
The GT token acts as a native asset in GateChain's blockchain and is used to pay transaction fees on the network. In addition, GateToken is the primary payment medium in the GateChain ecosystem, which is focused on the Decentralized Finance Marketplace (DeFi) and NFT, as well as infrastructure products.
The GateChain blockchain operates on a Proof-of-Stake (PoS) consensus mechanism, so GateToken holders can stake and delegate an asset and are rewarded with newly generated GT tokens.
In addition, the GT token is a core asset in the GateChain ecosystem's projects:
- HipoDeFi is a universal DeFi hub that combines the functionality of a DEX aggregator that receives liquidity from several decentralized exchanges, as well as a GateBridge cross-chain bridge for transferring assets between blockchain networks;
- NFT Box is a marketplace for trading non-mutually exchangeable tokens, launching in 2021. NFT Box users can buy and sell tokens and collections and minute (release) them without commissions.
GateToken's prospects
The project team has thought through GateToken's model and use cases to keep demand for its tokens high. If we look at the market data, we can see that over the past year, GateToken's capitalization has almost doubled, and as of July 2024, it is $720 million. At the same time, the indicator shows steady growth since the launch of the GT token, even despite the long correction in the crypto market in 2022-2023, which indicates a high demand for GateToken.
The main risk factor for the GT token is the close connection with the issuer — the well-known Gate.io exchange. The fact is that exchange assets such as Binance Coin (BNB) or Bitget Token (BGB) are directly dependent on the financial performance of the platforms. If something happens to the exchange that issued the token, it is likely to significantly affect the rate and further prospects of the GT token.
However, it should be noted that the situation can be saved because GateToken has a separate GateChain ecosystem already in a decentralized environment where the token is actively used. On average, the GateChain network has about 100,000 transactions daily as of July 2024, which is quite good and demonstrates the high demand for the asset. For example, even Cardano, among the ten largest cryptocurrencies in capitalization, has more than half the number of daily transactions and reaches only 45,000.
