Tectonic price prediction: Trouble for new DeFi platform
Tectonic’s TVL almost doubled in its first two months, but has since plummeted in the crypto crash
Decentralised finance (DeFi) has soared in popularity over the past few years, establishing itself as an integral part of the crypto world. Tectonic is one of the latest platforms to enter the space, and it has its work cut out to compete with industry leaders.
In March 2022, there was more than $200bn in total value locked (TVL) into all DeFi platforms, according to DeFi Llama. Tectonic hit a major milestone that month as its TVL made up $1bn of that figure. However, the recent crypto crash took out over 50% of both the wider DeFi market’s and Tectonic’s TVL.
Its TONIC token has been on a similar trend, depreciating since its last rally in February 2022. But there are some forecasters making an optimistic TONIC price prediction.
What is Tectonic (TONIC)?
Tectonic is a new platform building on the DeFi hype. It allows users to participate as either liquidity suppliers or borrowers. The former provide liquidity and are rewarded with a passive income, while borrowers can withdraw funds.
Tectonic’s platform is aimed at three different types of users: HODLers, who plan on holding cryptocurrency for a while and want to make interest on their funds; traders, who borrow to make the most of short-term trading and farming; and finally users, who want to capitalise on different cryptocurrencies without liquidating their original assets.
Tectonic relies on over-collateralisation for its lending platform. This is where the borrowers lock in more money than they intend to borrow, ensuring users do not run off with the leased funds.
The platform uses a collateral factor for users to determine how much they need to lock in. Every cryptocurrency has a collateral factor, which is a percentage users can borrow that is based on the value of collateral. For example, if wETH has a collateral factor of 75%, then for every $100 you lock in, you can borrow $75.
The collateral factor for every asset can be changed, and this is where Tectonic’s TONIC token comes into play. Tectonic is starting out as a centralised platform, but over time it is shifting the control over to its community. Eventually, anybody holding a certain amount of TONIC will be able to vote on proposals that will change the parameters of the platform. These changes could range from security to development to the collateral factor.
There are plenty of tokens for users to hold and become part of its governance process, as it has a maximum supply of 500 trillion TONIC. The majority of TONIC’s distribution is via rewards, through staking and liquidity mining. The rest is split among the team, security and an ecosystem reserve.
Tectonic is entering a crowded market of DeFi platforms. Will its TONIC token stand out from the crowd?
TONIC’s price history
TONIC is one of the newer tokens on the market, having only launched on 23 December 2021 at $0.000004 (four ten-thousandths of a cent). This was the day after Tectonic’s mainnet went live on the Cronos blockchain. Shortly afterwards, the token was launched on the VVS Finance exchange. The exchange also ran a promotion whereby VVS stakers would be rewarded with TONIC.
Unusually, the Tectonic team warned their users that the price was likely to be volatile at the start, and recommended waiting before buying the token. The team proved to be right, and the following days saw the token crash significantly. By 29 December 2021, TONIC had stooped to $0.0000009 (nine hundred-thousandths of a cent).
It saw a climb at the very beginning of 2022, when it peaked at $0.000001. This came after Tectonic became the largest lending platform on Cronos, with its total supply passing $500m. The cryptocurrency was also listed on the Crypto.com exchange on 4 January.
Later that month, TONIC announced an update to its airdrop promotional event with VVS. The platform took a snapshot on 22 January, which took into consideration everyone who held VVS. The tokens would be distributed in February to those who met the criteria when the snapshot was taken.
This did not stop the price from falling again, and two days after the snapshot TONIC hit what was then an all-time low of $0.0000004.
Soon after, the token started rallying after Crypto.com added TONIC to its Crypto Earn platform, where users can deposit tokens and earn up to 3% per annum. The rally also correlates with the rise in total value locked in, according to the DeFi Llama graph. TONIC reached $0.000001 on 30 January 2022 and then settled over the following days, eventually dropping to $0.0000009 at the beginning of February.
It was only a few days later when TONIC began climbing again, gaining even more this time. The cryptocurrency raced to $0.0000019 on 8 February 2022, the date that Cronos passed $2bn in TVL and Tectonic was declared a leading project within the ecosystem.
TONIC was unable to sustain this high valuation, however. The fall came as the platform revealed it was reducing its collateral factor by 3% every day until it reaches 20%. By 14 March 2022, TONIC was sitting at $0.0000007.
Tectonic launched a staking feature for its platform on 11 March 2022. Those who stake the cryptocurrency will receive rewards, part of which come from the fees paid by borrowers. The purpose of the staking is to have even more utility for TONIC, cementing its long-term future.
Even more positive news was revealed by the Tectonic team: its TVL skyrocketed and surpassed $1bn for the first time. It also launched a pool with the TrueUSD stablecoin that was well received by the community.
TONIC climbed to $0.000001 on 29 March 2022, but it was not able to keep this momentum going. It was vulnerable to the recent crypto crash and its price plummeted to a new all-time low of $0.00000014 on 22 June.
It has managed to gain slightly since then, and at the time of writing on 5 July, it is sitting at $0.00000015.
TONIC price prediction
The TONIC price prediction varies depending on who you ask.
PricePrediction.net is bullish about the future of the DeFi platform’s token. It expects TONIC to climb from $0.00000035 in 2022 to $0.000001 in 2025. Its Tectonic price prediction for 2030 is around the $0.000006 mark.
CryptoPredictions offers a similar estimate regarding TONIC’s future. Its Tectonic price prediction for 2022 similarly expects the coin to reach $0.00000033 in December. However, it does not think the token can surpass $0.000001 in the foreseeable future.
DigitalCoinPrice is along the same lines, as it thinks TONIC will stay below the $0.0000002 mark for most of this year. It expects the Tectonic price prediction for 2028 to reach $0.00000049. By the beginning of the next decade, DigitalCoinPrice’s analysis says TONIC will be at $0.0000007.
TechNewsLeader’s Tectonic coin price prediction only thinks it will get to $0.00000015 in a year’s time. Its Tectonic price prediction for 2025 suggests the token will breach the $0.000001 mark. In 10 years’ time, it predicts, the cryptocurrency will come close to $0.00001.
While there is certainly growing demand for DeFi, as more platforms enter the space it will become increasingly hard to stand out. Tectonic appears to have what it takes, having become one of the leading DeFi platforms on Cronos. However, its token has not yet seen the same success, and is currently stuck in a bearish trend.
How many Tectonic coins are there?
Tectonic has not revealed how many coins are in current circulation. However, there is a total supply of 500 trillion TONIC.
Is Tectonic a good investment?
It might be. TONIC started 2022 on a positive trend, defying a bearish wider crypto market, but the token has since plummeted.
Remember, this is a crowded market so you should always do your own research before investing.
Will Tectonic go up?
The consensus from price predictions expects TONIC to rise over the following years. TechNewsLeader gives one of the most bullish forecasts, expecting it to rocket and come close to $0.00001 in 10 years’ time.
Do remember, however, that cryptocurrencies are volatile, and that you should never invest more than you can afford to lose.
Should I invest in Tectonic?
It depends. In its short history, Tectonic has quickly become one of the leading DeFi platforms on the Cronos blockchain, and has seen a major surge in TVL. But it still has a long way to go to prove its token is capable of taking on the leaders in the DeFi market.
Remember, you should always do your own research before investing.