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Gnosis (GNO) price surges more than 50% after CowSwap users claim COW airdrop

This week, Gnosis (GNO) price saw a rapid rally of over 50% after the project took another step forward in its transition to the Coincidence of Wants Procotol or CoW, an interface offering traders protection from miner extracted value (MEV) offers.

Data from Cointelegraph Markets Pro and trading view shows that the price of GNO is up 86% in the past seven days, rising from a low of $308 on March 21 to an intraday high of $574 on March 28.

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GNO/USDT 4 hour chart. Source: TradingView

Three reasons for the rapid price increase for GNO are the release of the CowSwap (COW) token airdropped to Gnosis holders, traders appreciation for the MEV protection the protocol offers, and the potential for GNO -Holders to get additional airdrops in the future.

COW Drop!

The recent price spike appears to be primarily linked to the official release of COW, the CowSwap protocol’s native token that offers traders MEV protection.

COW tokens were air-dropped to GNO holders based on the number of tokens held or staked during a snapshot taken in early January, with 5% of COW tokens going to GNO holders, who receive an additional 5% could if they had locked their GNO tokens on the log for a period of one year.

At the time of writing, COW is listed on Uniswap and is trading at $1.35.

MEV protection functions increase the value of GNO and COW

The main attraction of the CowSwap protocol is the MEV protections it offers, which can help traders get better terms on swaps and avoid being on top or falling victim to a sandwich attack.

The value extracted by miners is a type of “invisible” tax that occurs on the Ethereum (ETH) network, where miners can increase their profitability by including, excluding, or rearranging transactions within the block they produce.

This feature allows miners to perform certain exploits, including front-running, back-running, and transaction sandwiching, that help increase profits at the expense of traders.

Since January 2020, more than $605 million in value has been mined by miners using this process Data by Flashbots, a number CowSwap hopes to mitigate by introducing MEV protection.

Related: Gnosis (GNO) continues uptrend after vCOW airdrop and renaming to CoW Protocol

Future airdrops could push up the GNO price in the long term

A third factor driving demand for GNO is the prospect of additional airdrops for GNO holders and stakers.

This includes an allocation of the upcoming SAFE token to Gnosis Safe, a platform in the Gnosis ecosystem built for secure digital asset management.

More than $77 billion worth of Gnosis Safe contracts is currently held in Gnosis Safe contracts, according to data from Dune Analytics, a significant amount that indicates the trust various depositors have in the protocol.

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Total value of assets stored in Gnosis Safe in USD. Source: Dune Analytics

Documentation published by Gnosis Safe shows that 20% of the SAFE tokens will be distributed to the GNO community, via a direct distribution to GNO holders and a sizeable deposit into the GnosisDAO treasury.

VORTECS™ data from Cointelegraph Markets Pro began to see a bullish outlook for GNO on March 23, ahead of the recent price spike.

Exclusive to Cointelegraph, the VORTECS™ Score is an algorithmic comparison of historical and current market conditions derived from a combination of data points such as market sentiment, trading volume, recent price movements, and Twitter activity.

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VORTECS™ Score (green) vs. GNO price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ score for GNO started rising on March 23rd, peaking at 78 for about nine hours before the price surged 78% over the next four days.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.