ATOM is currently one of the biggest gainers in the list of the top 50 cryptocurrencies thanks to multiple factors, including a proposal seeking to increase the validators active set.

ATOM is currently trading at $25.05 after achieving a 23.59% gain in the last 24 hours at the time of this press, while its weekly price movements show that it is up by 18.79% in the last 7 days. The cryptocurrency has so far managed to recover from a recent dip that saw it cool down for the first time since it went parabolic towards the end of July.

Source: Binance

There is a significant probability that ATOM might set a new all-time high within the next few days if it maintains its current trajectory. The cryptocurrency peaked at $32.32 during the previous major bull run in May. Its gains are supported by a substantial increase in buying volume especially now that it is recovering from the oversold zone.

Why is ATOM rallying?

One of the major catalysts for ATOM’s rally today is the commencement of the voting period for a proposal to increase the size of the validator active set to 150. It is currently not clear if the proposal may have a significant impact on the network such as potentially increasing the network’s security and its speed. However, voting on the Cosmos blockchain requires validators to stake their ATOM tokens and anyone looking to contribute can also stake their tokens with their preferred validator. Voting might therefore have a significant impact on ATOM’s demand and subsequently its value.

ATOM has also enjoyed strong gains in August thanks to the launch of multiple decentralized protocols on its network, highlighting robust demand for cross-chain interoperability. Note that Cosmos acts as a hub on which blockchain networks can connect to access other blockchains that are also connected to the hub. A more efficient approach compared to creating bridges that connect one network to another.

The upgrades on the Cosmos blockchain are meant to improve its capacity to support DeFi platforms especially now that rapid development is taking place in the decentralized finance landscape. Cosmos is turning out to be one of the protocols growing quickly with value but it has so far managed to keep up with the rapid network adoption.

Cosmos also rolled out sidechains designed to facilitate easy transfer of assets between its network and Ethereum, a noteworthy step considering the expensive nature of transactions on Ethereum. The latter is still facing high fees as a major challenge even after its recent major upgrade in August. Cosmos has also received positive feedback from the recently launched beta version of a DEX called Emeris which reported that $3 million worth of tokens were swapped in the first 7 days after the beta launch.

The announcement further confirmed that there is strong demand for such platforms and it also means more value for the Cosmos network. It is rapidly becoming one of the most popular blockchains and this should play out well for ATOM’s value which is further aided by relatively low supply at just 220.6 million coins.