Serum (SRM) price analysis: is now a good time to buy this cryptocurrency?

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Jul 30, 2021
  • Serum's infrastructure is not made only for financial applications but also for industries like gaming
  • SRM token collects value for holders through protocol fees that go to regular token burns
  • 90% of the remaining tokens will unlock in the next six years, starting from August 11

Serum SRM/USD has advanced from $2.4 above $3.8 since July 21, and the current price stands around $3.5.

Fundamental analysis: 90% of the remaining tokens will unlock in the next six years

Serum is a decentralized exchange (DEX) and ecosystem that brings unprecedented speed and low transaction costs to DeFi while remaining fully trustless and transparent. Serum is built on Solana and has full limit order books, while the governance token of this decentralized exchange is SRM.

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SRM token collects value for holders through protocol fees that go to regular token burns, and it is important to say that the “Lockup Agreement” continues to play an important role in SRM’s strategic direction and value capture. The lockup agreement is a deal between a team of Serum and investors that have agreed to furthering the lockups and reducing the sale of team SRM tokens beyond the scope of the simple 7-year schedule.

For now, just 10% of all SRM were unlocked, and over the next six years, 90% of the remaining tokens will unlock linearly in equal proportions. Serum team estimates that a very small percentage of these tokens would enter the circulating supply, which the foundation closely manages.

So even though 90% of the remaining tokens will unlock in the next six years starting from August 11, 2021, at 12:00 AM UTC, circulating supply may not necessarily change in a meaningful way. The initial circulating supply was 175 million tokens, primarily for providing liquidity, and SRM token has generated more than $5 billion in trading volume since its inception in September 2020.

Serum’s on-chain infrastructure is not made only for financial applications but also for growing industries like gaming. There’s been a number of games that are plugging into Serum, and with the help of its various partners and its advanced technology, it will not be long time to see Serum becoming the standard for DeFi.

“Our ultimate vision for Serum hasn’t changed: we want to gear DeFi up for mainstream adoption by building the infrastructure needed to support trillion-dollar industries with billions of users. We still have a ways to go, but for reasons you are probably well aware of: Serum remains a primary contender for the ecosystem most likely to achieve this,” Serum team reported.

Serum is a truly unique project with big potential, and the price of this cryptocurrency could advance again at levels that we saw in May 2021, but this will certainly not happen in the upcoming weeks or even months.

Technical analysis: $3 represents a strong support level

Data source: tradingview.com

The strong support level stands at $3; $5 and $6 represent the important resistance levels. If the price falls below $3, it would be a firm “sell” signal, and we have the open way to $2.5 or even below.

On the other side, if the price jumps above $5, the next price target could be around $6.

Summary

Serum is a decentralized exchange (DEX) and ecosystem that is built on Solana, and according to estimates, it will not be long time to see Serum becoming the standard for DeFi. SRM is responsible for setting some important parameters like reducing fees on Serum exchange and allows you to earn rewards based on your node’s performance.

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