DeFi hype and upcoming mainnet upgrade back Zilliqa’s (ZIL) 69% rally

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In the past month, Bitcoin (BTC) and Ether (ETH) basked in the limelight as each rallied to new yearly highs. Investors tend to focus their energy on the larger cap altcoins, which leads to smaller cap coins that reside outside of the top-10 being ignored. 

For example, Zilliqa (ZIL) has rallied 69% in the last 30-days. Despite this impressive performance, the altcoin has significantly underperformed Ether in the past six months.

Daily cryptocurrency market performance. Source: Coin360

The project was founded in 2017 by National University of Singapore researchers who w looking to bring scalability to smart contracts. Currently, ZIL is ranked 49 on CoinMarketCap, ahead of some well-known names such as Decred (DCR) and Basic Attention Token (BAT).

Decentralized finance (DeFi) may have fueled the recent uptrend, but staking and governance voting by itself does not seem enough for a sustainable price hike.

The project now desperately needs dApps users adoption and total value locked to display strength against the leader Ethereum.

Zilliqa (ZIL) in ETH and USDT terms. Source: Digital Assets Data

The chart above shows how ZIL has underperformed Ether (ETH) price by 42% in the past six months, despite its nominal price gain. Coincidently, Zilliqa’s design is based on sharding, which allows parallel data processing, similar to Eth2 proposal.

As the DeFi sector exploded with a new influx of users seeking high-interest returns from yield farming, it became clear that the industry required additional options to handle surges in transactions and fees.

Zilliqa uses a modified version of the proof-of-work consensus protocol and a proprietary programming language called Scilla. Thus, comparing its performance with the smart contract industry leader makes sense.