Reasons Behind Tezos (XTZ) 36% Overnight Rally, Here’s What Happened

XTZ price broke its downtrend once news that the major video game publisher Ubisoft’s new NFT platform is built on Tezos blockchain made the rounds in various media.

Partnership with Ubisoft

Ubisoft shares are trading 4% higher today. But Tezos, its blockchain partner – a layer-one smart contract protocol that is capable of evolving its network without needing to undergo a hard fork – is the real winner. The price of Tezos’ native XTZ coin spiked on the news, increasing by 36% in the last 24 hours. It traded as high as $5.48 after dipping below $4.00 on Monday.

At the time of writing XTZ is trading at $5.62.

Ubisoft, maker of the games Assassin’s Creed and Prince of Persia, announced its new Ubisoft Quartz platform would enable players to buy and win in-game items that are minted as Tezos NFTs—the digital tokens representing ownership of an asset. The non-fungible tokens will make their first appearance in Tom Clancy’s Ghost Recon Breakpoint.

The integration of NFTs could increase the feeling of investment players have in games while laying the groundwork for interoperability between games and secondary markets to profit off of rare items.

Tezos’ coin price may have been further abetted by an announcement later in the morning contending the blockchain had increased its per-transaction energy efficiency by 70% or more. In short, it costs much less to send and receive XTZ—or make other transactions on the network, such as buying NFTs—than it used to.

Environmental Sustainability

Another reason for the growing strength of Tezos is the protocol’s focus on creating an environmentally friendly and sustainable blockchain network. The network utilizes a proof-of-stake consensus mechanism that is known to offer an energy-efficient alternative to more traditional proof-of-work blockchains such as Bitcoin (BTC).

According to a report released by the project, “the total annual carbon footprint of the Tezos blockchain is equivalent to the average energy footprint of 17 global citizens.” The blockchain had increased its per-transaction energy efficiency by 70% or more. In short, it costs much less to send and receive XTZ – or make other transactions on the network, such as buying NFTs – than it used to.

Transaction Volume And Revenue On The Rise

In just the past few days, the Tezos network has seen an increase in transaction volume and protocol revenue as each spiked to the highest levels seen in 2021.

As seen in the graph above, the transaction volume on Tezos surged to a record-high $369 million on Dec. 3, which could be a hint that some investors had caught wind of the Ubisoft news. 

The jump in activity and revenue came as the project announced the completion of its Hangzhou upgrade, the eighth protocol upgrade for the Tezos network, which demonstrated the project’s ability to self-amend and upgrade without the need to conduct a hard fork.