How will the price of SORA behave after the launch of Polkaswap?

In a current investment thesis on currency Sora (XOR), The Cointelegraph Research team examined the current state of the DeFi industry and highlighted the major challenges the industry is facing today. The two biggest problems are the scalability and separation of multiple blockchains that exist independently of one another and cannot share any information with one another. The Polkadot Project seeks to solve these two bottlenecks by offering transfers of any type of asset between blockchains. They also offer transaction scalability by distributing transactions and validation across multiple parallel blockchains (parachains).

Download the full version of the SORA (XOR) investment thesis here.

Polkadot aims to improve two fundamental elements of the DeFi economy, namely automated market makers and decentralized cryptocurrency exchanges. The connection to Polkadot via the SORA network enables the new decentralized exchange (DEX) Polkaswap to offer much higher transaction throughput compared to its competitors while maintaining reasonable transaction fees. On March 22nd, Ethereum’s largest DEX, Uniswap, hit $ 1.08 billion in daily trading volume, while Binance Smart Chain’s largest DEX, the pancake swap, hit $ 860 million. One of the leading central exchanges, Coinbase, registered $ 1.7 billion. There is no doubt that there is a demand for trade infrastructure, and Polkaswap is likely to gain popularity as Polkadot’s top DEX.

How will the price of SORA behave after the launch of Polkaswap?
How will the price of SORA behave after the launch of Polkaswap?

However, the Sora project is not limited to being just another blockchain of the Polkadot ecosystem. Rather, it sets the ambitious goal of becoming a supranational monetary system that competes with the current state monetary systems. In order for all of this to be possible, Sora will need the massive introduction of its XOR currency as a means of payment. Sora’s price is not a stable coin tied to the value of a fiat currency, but is determined by a flexible supply controlled by a smart contract. This means that when the price of the XOR token rises and reaches a critical level, buyers can buy fresh tokens directly from the “Buy” smart contract and not via the secondary market from the supply that is circulating in the hands of existing holders. Conversely, when the price goes down, users can sell the tokens to the “Sell” smart contract. This algorithm regulates the number of tokens in circulation and therefore reduces price volatility.

Also, the XOR peg curve is different from those used by other DeFi projects as the XOR peg curve is close to 100% instead of overcollateralization like 150%. It is fully backed by the assets that were used to purchase XOR from the smart contract. At the same time, it is not a loan because when you buy XOR, you are giving away the asset that will serve as payment. Therefore, the binding curve of the XOR smart contract does not increase the money supply, nor does the buyer of XOR risk depreciation or liquidation of collateral, as is the case with digital assets locked in positions with secured DAI debt.

To learn more about the SORA network and the other two currencies on that network, PSWAP and VAL, download the report for all the information.

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