The $270.5 million market cap Enjin Coin (ENJ) has emerged as the biggest gainer among the top 200 cryptocurrencies. The token's price was at $0.2340 when it shot up nearly 18% early on Wednesday to surpass $0.2755.
The token went down briefly before surging again and is now up 19.3% in the past 24 hours against USD and 19.5% and 19.4% against BTC and ETH, respectively, as it trades at $0.2750 at the time of writing. During this time, ENJ is managing $137.8 million in trading volume, representing a whopping 900% increase from one day ago.
With the latest gains, ENJ's price is now up more than 13% in 2023 so far. If we look at this year, the beginning of 2023 was stellar for ENJ as its price rallied 130% in the first two months, but since then, the broad trend was downwards for it as it hit $0.225 on Sept. 2nd.
Created in 2017, the ERC-20 token has experienced considerable volatility. It is currently down 49% over the past year and a staggering 94.35% from its November 2021 peak of $4.82, according to CoinGecko. Despite this recent downturn, it's important to remember that Enjin reached an all-time high in its valuation two years ago. This peak coincided with a bullish market and the introduction of Enjin's $100 million fund aimed at supporting projects within its ecosystem.
The same year, ENJ became the first gaming cryptocurrency to be approved by the Japan Virtual Currency Exchange Association (JVCEA) for use in Japan. In March 2021, the project started its Efinity network, where ENJ is the currency staked to validate transactions, allowing users to earn a new EFI token. Built on the Polkadot blockchain, the Efinity network was developed to host the trading of NFTs. Enjin actually sold $20 million in EFI tokens through a public sale on CoinList in June 2021.
All of these developments helped ENJ rally in 2021, and now this time, the token is gaining traction due to the launch of the Enjin blockchain finally being here.
The Enjin team first unveiled the Enjin blockchain in June this year. The blockchain is said to be a revolutionary blockchain engineered for NFTs and other digital assets at the protocol level.
Built on the open-source Substrate framework, Enjin Blockchain doesn't rely on smart contracts but rather ensures that critical functions, such as creating, using, and transferring NFTs, are integrated directly into the foundational code. This novel approach allows projects to craft scalable, future-proofed digital assets with advanced capabilities while maintaining interoperability with other ecosystems.
One of its innovative features is Fuel Tanks, which allows developers to subsidize the cost of transaction fees, making those costs invisible to the end-user. Additionally, Discrete Accounts allow users to immediately interact with a project using the blockchain without downloading dedicated wallet software, further simplifying the user experience.
At the time, the team announced that they had also successfully forked the Polkadot parachain Efinity to the Enjin Blockchain, which is operating as the “Efinity Matrixchain,” allowing for a seamless transition for existing Efinity users.
Both the Enjin Blockchain and the upcoming Enjin Matrixchain are secured by Substrate's robust Proof-of-Stake system. The Matrixchain also utilizes ENJ as the native currency and will be the primary platform for end users when creating NFTs and digital items.
The Enjin Matrixchain has been defined as “the spiritual and technical successor to Efinity, embodying Enjin's commitment to innovation, user-centric design, and mass adoption.”
The Enjin Blockchain Launch & ENJ Token Migration
Enjin started as a Singapore-based software company founded in 2009 by Maxim Blagov and Witek Radomski, who authored the widespread ERC-1155 standard for NFTs. The company developed a gaming content management system that attracted more than 21 million users.
In 2017, Enjin entered the blockchain space with the launch of its token, which assisted in the trading of virtual goods across Enjin's gaming platforms and communities. The firm then introduced its second plug-in for Minecraft in 2020, and by incorporating blockchain technology into it, Enjin allowed players to drop tokens into their Minecraft servers and trade those assets through Enjin Marketplace.
In 2020, the company also launched the Enjin Platform, which allows game developers to integrate blockchain tokens into their games without needing to learn blockchain coding. This year, with the crypto market experiencing a broad downtrend, the Enjin team made developments that allowed developers and gamers to manage their NFTs easily.
Now, on the upcoming Tuesday, Sept. 13th, 2023, at 19:00 Singapore time (GMT+8), the Enjin Blockchain will be launched.
Enjin Blockchain is a new Layer 1 custom-built with NFT functions right at the protocol layer and supported by the Enjin app layer, which consists of Enjin Wallet, the NFT.io marketplace, the Enjin Platform for NFT no-code integration, and the Beam NFT QR code distribution system. As a result, Enjin Blockchain will work seamlessly with the Enjin app layer, and the team encourages developers to expand the app layer.
According to the official announcement, the new chain will “fulfill the original visions” of both Enjin and Efinity, making NFTs accessible to all.
As a result of this launch, the Enjin-Efinity communities will be consolidated, and the ecosystem will run on one unified token, ENJ. As a result, ERC-20 ENJ will be migrated from the Ethereum network to the Substrate-based Enjin Blockchain's Mainnet on a 1:1 basis. Moreover, Efinity Token (EFI) will be merged with ENJ to unite the EFI and ENJ communities. EFI tokens will be swapped to ENJ at a 4:1 ratio.
On top of it, the Efinity Matrixchain will be formally integrated into the Enjin Matrixchain as the pioneer matrixchain on Enjin Blockchain. This will allow users to stake their tokens to participate in Enjin Blockchain's nomination pool processes as well as enjoy certain expanded features for NFTs and NFT transfers.
As a result, core features of the Enjin Blockchain, including governance and staking, fuel tanks, and managed wallets, will also be made live.
Migrating tokens from Ethereum to Substrate-based Enjin will provide users faster transactions, low fees, and advanced NFT capabilities. The blockchain also supports the launch and integration of additional Matrixchains, allowing large-scale enterprises and communities to run their own blockchain, with each Matrixchain having the ability to have its own token.
As for the actual ERC-20 ENJ's migration, once the tokens are migrated to the new blockchain, which is an irreversible process, the existing ERC-20 tokens will be burned through transfer to a burn address. And if one doesn't migrate, while they will continue to exist, they just simply won't be usable with the Enjin Blockchain.
The migration process for mainnet EFI (Substrate) holders will be automated and free, but for EFI (ERC-20) holders, it will require interacting with a smart contract on the Ethereum blockchain, as such fees will vary based on the current gas fees on the Ethereum network. As for migrating Enjin NFTs to Enjin Blockchain, an open-source ERC-1155 migration package will be made available upon integration of Enjin Matrixchain.
The new token will start with a supply of 1.75 billion ENJ tokens, out of which 1 billion is for ENJ migration (1:1 ratio). Of the remaining 750 million ENJ tokens, 500 million will be used for EFI's 4:1 swap and 250 million for “early bird” migration and other incentives, such as contributing ENJ to nomination pools before Jan. 15th, 2024.
There will also be a 5% yearly inflation on the total supply from which rewards for validators and nominator pools will be drawn to promote governance and network security, as per the official announcement.
What is Happening in the Crypto Market?
Now, if we look at the broad crypto market, the sentiment remains bearish, with Bitcoin trading at $25,715 and Ether exchanging hands at $1,632. Meanwhile, the total crypto market cap continues to hold around $1.08 trillion.
The market remains weak despite all the developments being made in the Bitcoin Spot ETF area, which, according to analysts from crypto research firm K33 (formerly Arcane Research), could be the market underestimating its approval potential.
In a market report this week, K33 senior analyst Vetle Lunde and vice president Anders Helseth said the last three months had greatly improved the chances of a spot Bitcoin ETF approval, which would “attract enormous inflows” and significantly increase buying pressure for Bitcoin, and even if it gets rejected, the downside would be “negligible,” and Bitcoin prices would simply maintain business as usual.
“This is, by all accounts, a buyer's market, and it's reckless not to aggressively accumulate BTC at current levels,” they wrote.
Grayscale Investments also told the SEC this week that it has “no grounds” to reject the conversion of its Bitcoin Trust (GBTC) into an ETF. In a letter to the regulator on Tuesday, Grayscale's legal team wrote that once the Commission fully analyzes the court's opinion, it “should conclude that there are no grounds” to not treat its product differently from ETPs investing in bitcoin futures.
Meanwhile, crypto exchange Bitfinex's weekly report reveals that digital asset funds are seeing large outflows as investors lose confidence in the market. Crypto funds have actually experienced the most significant outflows since March, with $179 mln recorded in cumulative outflows between the third and last week of August. This 18-week outflow streak has drained 89% of the total assets under management (AUM) dedicated to crypto investments.
These large outflows “suggest that it will take longer than earlier anticipated to get a bullish catalyst for the markets, and the longer the ETF saga draws on, the less pronounced the effect could be on actual market prices across crypto assets,” said Bitfinex.
But at the same time, stablecoins are seeing increased adoption, with over $6.8 trillion recorded in stablecoin transactions on L1 blockchains since 2022. Recently, PayPal, too, launched its stablecoin called PYUSD. This week, Visa expanded its stablecoin settlement capabilities with Circle's USDC stablecoin to the Solana blockchain to improve the speed of cross-border settlement.
On-chain metrics also suggest that a potential market bottom may be in for Bitcoin in terms of price depreciation percentage. However, the price may not recover soon due to the lack of new money in the market.
The broader crypto market simply remains in a sideways trend, with trading volumes of crypto funds declining to $1.3 billion, a 16% drop from the yearly average. The global activity has also fallen by 12% to around $1.6 trillion, while crypto derivatives platform Deribit saw trading volume increase 17% to $42 billion in August. For Deribit, which controls nearly 90% of global crypto options activity, ETH options were the driving force that recorded their highest volumes since March.
Amidst this, Coinbase (COIN) has created a new crypto lending service in the U.S. for institutional clients, which has already raised $57 million, as per an SEC filing on Sept. 1st.
Reportedly, clients can lend Coinbase money, primarily crypto assets, and get collateral exceeding the loan's value, which the platform can use to make secured loans to institutional trading clients. This service differs from Coinbase's controversial Lend program, which was pitched at retail customers and was canceled in 2021 after SEC officials objected.
If we look at Bitcoin, it continues to trade under $26K, and its monthly technical stochastic indicator is giving an “overbought downturn” signal. Not to mention, September is historically a difficult period for BTC's price, with the crypto recording negative monthly returns in this month in every year since 2016. The market is actually expecting the largest crypto asset to sink to as low as $22,000 and maybe even below $20k if things get worse.
With crypto's total trading volume being the weakest since 2020, realized volatility near record lows, and Google search trends at multi-year lows, the market looks primed for a price drop. This means ENJ will also feel the brunt of the sell-off when it happens, though, for the time being, the excitement surrounding the launch of Engine Blockchain may keep the prices uplifted in the short term.