Decentral Block Post

The price of Chiliz (CHZ) has surged by approximately 35% week-to-date (WTD) to reach $0.26 per token on Aug. 24. In doing so, the token has outperformed Bitcoin (BTC) and Ether (ETH), which have been wobbling between gains and losses in the same period.

Here are the key catalysts that could be behind Chiliz's breakaway rally.

CHZ 2.0

On Aug. 22, Chiliz founder Alexandre Dreyfus announced their intentions to stop utilizing the Ethereum blockchain to launch their fungible and nonfungible tokens and replace it with its own native chain, CHZ 2.0.

"We don't have to rely forever only on ERC20 or ERC721 equivalent," said Dreyfus, adding:

"At @chiliz we think we can bring some innovation on top of fungible token formats. As we work with 100+ of the biggest brands in the world, it is easier to deploy and scale."

The United States filled in the wide gap in Bitcoin (BTC) mining that was left open by China by the end of June 2021. Despite looming rumors of high power consumption, officials in Texas, one of the fastest growing crypto mining hubs in the US, now believe that mining operations can, in fact, garner a symbiotic relationship with the energy industry. 

A newsletter from the Texas Comptroller’s office revealed the state’s pro-crypto stance with the intent to host long-term miners and operators. Clarifying the general misconception about Bitcoin’s energy usage, the fiscal note highlighted that unlike “manufacturing facilities or industrial chemical plants, which can be expected to be around for decades,” cryptocurrency mining facilities do not place big electrical demands on the grid.

With greater crypto miners moving into Texas, concerns around power demand remain as the sudden surge threatens to disturb the balance between supply and demand. While other power-hungry industries often continue production amid market fluctuations, one of the concerns raised in the newsletter by Texas-based research associate Joshua Rhodes was:

“The difference is that Bitcoin mines (mining facilities) can come in so fast and may be gone so fast depending on the price of Bitcoin.”

Given the unique positioning of the crypto mining market, Texas officials believe miners can participate in demand response programs — which involve turning off miners’ power during peak demand. This process is widely adopted by energy-intensive industries such as petrochemical plants.

Bitcoin (BTC) lost a key bear market trendline last week as it shed almost 12%, but other chart data offers a silver lining for bulls.

As noted by popular Twitter user Dave the wave on Aug. 24, long-term moving averages (MAs) are about to repeat classic bullish behavior.

Analyst: Bulls could be about to "do well"

BTC/USD disappointed over the weekend as it put in lows not seen since the end of July. Since then, $21,000 has offered only weak support, and fears abound that new lows are coming.

One of the casualties of the downturn was the 200-week MA, data from Cointelegraph Markets Pro and TradingView shows, a level which had flipped from resistance to support the month prior.

Now back overhead and unchallenged by rebounds this week, the 200-week MA offers a verdict on the current lack of strength in Bitcoin.

Avalanche-based decentralized finance (DeFi) protocol Trader Joe claims it may have found a way to mitigate one of DeFi’s biggest weaknesses — impermanent loss. 

In a newly released whitepaper on Aug. 23 called the JOE v2 Liquidity Book, authored by Quant developers and researchers Adam Sturges, “TraderWaWa”, “Hanzo” and software engineer “Louis MeMyself”, the developers outlined the use of Liquidity Book (LB) with an additional variable fee swap feature to "provide traders with zero or low slippage trades."

Trader Joe said the new strategy will mitigate impermanent loss "suffered by so many liquidity providers (LPs) on other DEXs during market turbulence."

Impermanent loss, which has been seen as one of DeFi's greatest weaknesses, happens when the price of token changes after one deposits it in a liquidity pool-based automated market maker as part of yield farming — a type of investment in which one lends tokens to earn rewards (not the same as staking).

It’s also one of the reasons that institutional investors have been treading with caution in the DeFi space, according to digital-asset management firm IDEG’s chief investment officer Markus Theilen.