- BitDAO has launched a proposal to launch a new ecosystem fund.
- The fund will aim to provide funding for Mantle, a new layer 2 network.
BIT price held relatively well during the weekend and on Monday as investors cheer a major proposal in the ecosystem. BitDAO’s token spiked to a high of $0.6188, which was a few points below the year-to-date high of $0.6432. It has surged by more than 131% from its lowest point this year.
Why did BitDAO jump?
BitDAO, one of the biggest decentralized autonomous organizations (DAO), has made headlines in the past few weeks. It recently built Mantle, a high-performance Ethereum layer-2 network that seeks to compete with the likes of Polygon, Arbitrum, and Optimism. It uses roll-up technology to deliver hyper-scale performance and unparalleled security.
BitDAO price also jumped after a new proposal for an ecosystem fund. The fund will invest in hundreds of projects building on Mantle. The fund, known as Mantle EcoFund 1, will have $100 million in assets. According to the document, the first of these funds will be in the form of $10 million USDC, which will come from the BitDAO Treasury. The fund will then grow to $200 million.
Ecosystem funds are popular ways for incentivize developers to build in the ecosystem. They are important because of the vast competition that exists in the industry. In the case of Mantle, it is competing with layer 1 networks like Avalanche and Solana. Also, it is competing with the likes of Polygon, Arbitrum, Immutable X, and Loopring.
BitDAO’s ecosystem fund will be larger than others but smaller than those offered by leading blockchains. For example, Avalanche launched Avalanche Rush which had $180 million while Immutable X has a $500 million fund. Cosmos launched a $150 million ecosystem fund.
The main challenge that BitDAO faces is competition considering that the layer 2 network is maturing. It is also taking a different route as companies start creating their independent chains. Last week, Coinbase said that it will create its own chain on Optimism.
BIT price prediction
The daily chart shows that the BIT price has been in a strong bullish trend in the past few weeks. During this climb, it moved to the 61.8% Fibonacci Retracement level. The coin has moved above the 50-day and 100-day moving averages. It has also formed an ascending channel pattern that is shown in black. This price is slightly above the lower side of the channel.
However, the coin has formed a bearish divergence pattern based on the Relative Strength Index (RSI). Therefore, BitDAO price will likely have a bearish breakout as sellers target the next key support level at $0.50.
