How the ecosystem of the leading privacy cryptocurrency Monero (XMR) is developing
Monero and regulators
Due to the extreme difficulty of tracking transactions with private cryptocurrencies like Monero, regulators are trying to prohibit centralized exchanges from conducting transactions with them. For example, in February 2024, the largest crypto exchange, Binance, delisted the XMR cryptocurrency and stopped transactions with it on its trading platform. According to the statement of the exchange representatives, the Monero cryptocurrency allegedly did not meet the platform's criteria, for example, "security and transparency standards." However, in early January of the same year, the exchange assigned Monero and other privacy cryptocurrencies, Zcash (ZEC) and Dash (DASH), the status of verifiable digital assets.
Immediately after the Binance exchange announced Monero's delisting, the XMR cryptocurrency rate fell sharply from $165 to $105, that is, by as much as 57%. However, the price of Monero began to recover.
One way or another, users still have the opportunity to exchange the Monero cryptocurrency (XMR) for other digital assets, including stablecoins or fiat currencies, using exchangers.
Monero protocol and ecosystem updates
The Monero ecosystem has undergone significant changes over the past year. The team strives to turn its blockchain into a full-fledged DeFi platform, providing users with decentralized solutions for performing various operations, such as atomic swaps (exchanges on the blockchain).
For this reason, the famous P2P exchange LocalMonero closed in May 2024. In their announcement of the closure, representatives of the P2P platform stated that the Monero ecosystem has matured enough and will continue to thrive without LocalMonero.
For example, in the same month, the first decentralized exchange (DEX), Haveno, was launched in the Monero ecosystem. It allows you to exchange XMR for other cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Bitcoin Cash (BCH), as well as fiat currencies such as the US dollar, euro, and pound sterling. The Haveno DEX operates through its sidechain, directly connected to the leading Monero network.
In addition, the developers plan to launch another decentralized exchange called Serai. The main feature of this DEX will be the ability to make cross-chain swaps, that is, exchange cryptocurrencies between blockchains, such as Monero and Bitcoin.
Another significant milestone in the development of the Monero ecosystem was a solution for increasing the privacy of transactions called Full-Chain Membership Proofs (FCMP++). The proposal to integrate this solution arose as a response to the frequent spam attacks on the Monero network, i.e. many small transactions that lead to a slower blockchain.
On the other hand, "Full-Chain Membership Proofs" will allow the disclosure of individual transaction data to centralized exchanges to satisfy KYC requirements. This will allow Monero to be listed on decentralized exchanges again, which will have a positive impact on the cryptocurrency's liquidity and trading volumes.
The Full-Chain Membership Proofs solution was announced in April 2024, but as of October, it had not yet been implemented on the Monero main net.
Monero market performance
After the February crash, the XMR rate had already increased by 71% by June 2024 from $105 to $180, despite the fact that after March of the same year, the quotes of many cryptocurrencies began to decline. Monero's capitalization grew by 72.5% over the same period, from $1.93 billion to $3.33 billion.
However, the price of the XMR cryptocurrency continued to decline until August 2024, when it reached a local minimum of $145. It then resumed growth and was already $177 in September. After that, the Monero rate fell again, and as of October 2024, it was $147, with a capitalization of $2.72 billion. This happened against the backdrop of a general decline in the crypto market, which could have been caused by uncertainty regarding the Fed's key rate.