BIT, the governance token of BitDAO, one of the world’s largest decentralized autonomous organizations (DAO), saw a surge in price over the weekend following a proposal from Mantle, a layer 2 network compatible with the Ethereum Virtual Machine (EVM). The proposal called for the introduction of a $200 million ecosystem fund to the BitDAO community. As a result, the token jumped from about 55 cents on Saturday to approximately 60 cents on Sunday, a gain of roughly 5%, outperforming both Bitcoin (BTC) and Ethereum (ETH).
BIT’s price has continued to rise, reaching $0.6120 at the time of publication, its highest price in a week. The fund aims to invest in over 100 early-stage projects building on the Mantle Network over the next three years, incentivizing developers to build on the modulated layer 2 network and drive its wider adoption.
The $200 million fund is larger than prolific decentralized exchange Polygon’s $100 million fund announced last spring and Injective’s DeFi adoption fund launched in January. This announcement represents a significant investment in the development and adoption of layer 2 networks and DeFi protocols.
The rise in BIT’s price is a welcome development for BitDAO, which experienced a 20% plunge in November after the unraveling of centralized cryptocurrency exchange FTX. Concerns were raised that Sam Bankman-Fried’s now-defunct Alameda Research was quietly liquidating its BIT supply in violation of BitDAO’s agreement with the quant crypto trading firm.
The proposal from Mantle and the subsequent rise in BIT’s price demonstrates the continued growth and interest in the DeFi space. The potential for decentralized finance to revolutionize traditional financial systems and provide greater accessibility and inclusivity continues to attract investors and developers alike.
The surge in BIT’s price also underscores the importance of layer 2 networks in scaling blockchain technology. Layer 2 solutions, such as Mantle, allow for faster and cheaper transactions while maintaining the security and decentralization of the underlying blockchain network.
The introduction of a $200 million ecosystem fund represents a significant investment in the future of DeFi and layer 2 networks, providing a boost for developers and entrepreneurs looking to build innovative solutions in the space.