The Theta project has been causing a stir along with many other altcoins that are riding this year’s bullish wave towards new all-time highs.
While the main token of the Theta network has been receiving most of the attention, the protocol’s’ “gas” token, TFUEL, has been going up without causing much fuss along with THETA, as its importance to the network becomes apparent to more experienced cryptocurrency investors.
Data from Cointelegraph Markets and TradingView show that TFUEL price has increased 775% in the last five weeks, going from USD 0.026 on February 1 to a new all-time high of USD 0.22 on March 10 when the network submitted to a hard fork at 12 pm PST.
Fundamentals show TFUEL is more than just a gas token
The two-token model rose to prominence in 2017 with the emergence of Neo (NEO) and Gas (GAS) as an alternative to the single token model that continues to be plagued by high transaction costs like those of Ethereum (ETH) and Bitcoin (BTC).
Theta Fuel was created when Theta’s mainnet launched in 2019 and is designed to be the protocol’s operational token, powering on-chain operations such as sending payments and launch of smart contracts.
A significant difference between Theta and other dual token models is that the holders who block THETA in the validation and protection nodes help to secure the network and get TFUEL as a reward.
According to data from the Theta explorer, as of March 10, 57.96% of the available 1 billion THETA are blocked on the network, a figure that has been slowly increasing along with the attention surrounding the project.
The more THETA is blocked on the network, the role TFUEL plays in the ecosystem becomes more relevant, as the token begins to be used more to interact with community members and transfer value.
Following the release of version 3 of Theta on April 21, Token holders will be able to block TFUEL as another way to earn passive income and help secure the network. The update will also introduce a new burning mechanism that is essentially a “network fee” for using Theta Edge. Eventually, this could lead to further reductions in the supply of TFUEL and further increase its price.
VORTECS ™ data from Cointelegraph Markets Pro began to detect a bullish outlook for TFUEL on March 6, ahead of the recent price surge.
The VORTECS ™ score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market, trade volume, recent price movements, and Twitter activity.
As we can see the previous graph, TFUEL’s VORTECS ™ score peaked at 70 on March 6 and was followed by another peak at 67 on March 7, which was less than 6 hours before the price rose 56% over the next 48 hours.
Due to the network fork on March 10, Some may see the recent price spike for THETA and TFUEL as a kind of “buy on the buzz, sell on the news” event, but upcoming developments for the protocol, including the mainnet release of version 3 Theta’s tell us that the rally for this dual token system may just be beginning.
As smart contract features kick in and enable the creation of NFTs and decentralized financial applications, the Theta ecosystem appears to be well positioned to attract new users and support greater engagement from its community, which has the potential to push THETA and TFUEL to higher levels.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Each investment and commercial movement involves risks, you must do your own research when making a decision.
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