This week Gnosis (GNO) price notched a swift 50%+ rally after the project took another step forward in its transition to the Coincidence of Wants Procotol, or CoW, an interface that offers traders protection from miner extracted value (MEV).
Data from Cointelegraph Markets Pro and TradingView shows that the price of GNO has gained 86% over the past seven days, rising from a low of $308 on March 21 to an intraday high at $574 on March 28.
GNO/USDT 4-hour chart. Source: TradingView
Three reasons for the rapid price increase for GNO include the release of the CowSwap (COW) token which was airdropped to Gnosis holders, traders’ appreciation of the MEV-protection offered by the protocol and the potential for GNO holders to receive additional airdrops in the future.
The most recent price surge appears primarily connected to the official release of COW, the native token of the CowSwap protocol which offers traders MEV-protection.
$COW token is finally expected to unlock around 3pm UTC today.
This will kick off a 12 week $COW liquidity mining program on @ethereum & @gnosis chain aginst $ETH and $GNO pairs.
On Ethereum $COW pool will be on @BalancerLabs & on gnosis chain it will be on @SwaprEth.
— DeFi Airdrops (@defi_airdrops) March 28, 2022
COW tokens were airdropped to GNO holders based on the number of tokens held or staked during a snapshot that was taken back in early January, with 5% of COW tokens going to GNO holders who could receive an extra 5% if they had locked their GNO tokens on the protocol for a period of one year.
At the time of writing, COW has been listed on Uniswap and is trading at a price of $1.35.
MEV protection features add value to GNO and COW
The main draw of the CowSwap protocol is the MEV-protections offered that can help traders get better terms on swaps and avoid being front run or the victim of a sandwich attack.
What Ethereum people call “Miner Extracted Value” is what Bitcoiners call a game theory fail.
MEV = willfully frontrunning transactions, paying higher fees to do flash loans, sandwich attacks, etc.
It’s a mix between extortion, pickpocketing & perverse free market incentives.
— Brad Mills (@bradmillscan) July 14, 2021
Miner extracted value is a sort of “invisible” tax that occurs on the Ethereum (ETH) network where miners can increase their profitability by including, excluding or re-ordering transactions within the block they produce.
This feature allows miners to conduct certain exploits including front-running, back-running and transaction sandwiching, which help to increase profits at the expense of traders.
Since January 2020, more than $605 million in value has been extracted by miners using this process according to data from flashbots, a figure which CowSwap looks to help mitigate moving forward through its introduction of MEV protection.
Future airdrops could give a long-term boost to GNO price
A third factor helping to boost the demand for GNO is the prospect of additional airdrops coming to GNO holders and stakers.
This includes an allocation of the soon-to-be-released SAFE token for Gnosis Safe, a platform in the Gnosis ecosystem that is designed to securely manage digital assets.
According to data from Dune Analytics, there is currently more than $77 billion worth of value held in Gnosis Safe contracts, a substantial amount that hints at the amount of trust various depositors have in the protocol.
Total USD value of assets stored in Gnosis Safe. Source: Dune Analytics
Documentation released by Gnosis Safe indicates that 20% of SAFE tokens will be distrubed to the GNO community via direct distribution to GNO holders and a substantial deposit into the GnosisDAO treasury.
VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for GNO on March 23, prior to the recent price rise.
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 sentiment, trading volume, recent price movements and Twitter activity.
VORTECS™ Score (green) vs. GNO price. Source: Cointelegraph Markets Pro
As seen in the chart above, the VORTECS™ Score for GNO began to pick up on March 23 and hit a high of 78 around nine hours before the price increased 78% over the next four days.