The IOTA staging network Shimmer launched a $1 million liquidity mining airdrop on January 31. The Tangle Ecosystem Association’s Shimmer Growth Committee set it up to bolster its layer-2 ShimmerEVM and its decentralized finance (DeFi) ecosystem.
This initiative, representing over 1.5% of Shimmer’s total supply, aims to enhance the Shimmer Bridge’s usage and foster community-driven development. The airdrop is designed to attract new liquidity to ShimmerEVM, improve liquidity provision, and increase the Total Value Locked (TVL) in decentralized apps (dApps) on ShimmerEVM. People who take part will be rewarded in SMR tokens.
The airdrop process, managed by Web3 incentive protocol Tide Finance, requires participants to bridge a minimum of $1,000 in LayerZero-wrapped assets to ShimmerEVM. Eligible assets include WETH, WBTC, USDT, USDC, MATIC, BNB, AVAX, and FTM. Participants must use these assets to contribute to Shimmer EVM’s TVL.
The Shimmer token (SMR) is a fundamental component of the Shimmer network. It allows users to both engage with and test the network. Initially, SMR is allocated to individuals actively staking IOTA tokens over three months. This means Shimmer is the first Distributed Ledger Technology (DLT) project to distribute its entire token supply on IOTA.
Users can earn one SMR every 10 seconds for each staked MIOTA during the pre-launch staking event. Following the launch of the Shimmer network, users can stake their IOTA to contribute to network security and earn additional SMR tokens.
SMR is critical in incentivizing users to identify potential vulnerabilities in the Shimmer network. The token has several key utilities. These include:
Staking Rewards: Users receive Shimmer tokens and Mana, a reward mechanism within IOTA, for staking on Shimmer. This helps secure the network and allows users to accrue and delegate SMR tokens.
Access to Innovations: Holding SMR tokens provides early access to IOTA’s latest updates, offering advantages in dApp development and ecosystem participation.
New Yield Opportunities: As the Shimmer ecosystem expands, token holders can benefit from applications in DeFi, NFTs, and GameFi, with the token utility growing alongside the ecosystem.
Shimmer could become more than a testing ground for IOTA mainnet innovations. It aims to develop into a distinct ecosystem and community, with SMR playing a pivotal role.
The increased adoption of the Shimmer Network could bolster IOTA’s price. This is because people must stake IOTA if they want to receive SMR rewards. Already, it appears that MIOTA already started a new bull cycle.
From its last bull market high of $2.70 in April 2021, it fell 95%, reaching around $0.15 in December 2022. This was followed by a prolonged sideways movement that formed a range of $0.26. MIOTA could have been in a consolidation phase until finally breaking out above $0.26 on November 30 last year.
IOTA reached a high $0.37 on December 4. After that, the price reversed and fell back to $0.20 on January 24. However, it has increased by 32% since then and is now retesting the $0.26 horizontal level.
If it finds support and the recent bounce sparks a new uptrend, it would increase the likelihood of a new multi-year bull phase. Would that mean that it can make a new all-time high? We don’t know for sure, but its first target will be above $1.
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.