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Gas tokens are quietly growing in value as the expense of transacting on the Ethereum network highlights the advantages of dual-token models of fixed fees.
For the past year, network fragmentation and high transaction costs on the Ethereum (ETH) network have become a recurring problem for investors and developers, shining a spotlight on blockchain ventures that provide a solution to these problems.
Gas tokens, which help control transactions on their respective blockchain networks, are one type of token that has seen an increase in both trading volume and price over the last two months.
Data from TradingView shows that Gas (GAS), Ontology Gas (ONG) and VeThor Token (VTHO) have all seen their prices increase more than 300% since the beginning of February thanks to increased attention on dual-token models.
Following the project’s rebranding in 2018, VeThor Token was one of two tokens released on the VeChain Thor public blockchain. VeChain (VET) is the platform’s native token that acts as the primary value-transfer token, while VTHO is a VIP-180 basic token that reflects the expense of transacting on the VeChain Thor blockchain.
VTHO’s price has risen 615 percent after a low of $0.00125 on February 1 to a peak of $0.00897 on February 13 due to a historic $325 million in trade volume. Following a price decline to $0.0037, VTHO is now back on the rise and trading above $0.008.
VTHO is inextricably linked to the overall functionality of VeChain Thor because it also serves the network’s smart contract layer, handling both transfers and smart contract executions.
VTHO is automatically issued to VET investors as part of the dual-token model at prices ranging from 1.4 percent to 1.9 percent based on the wallet supplier. This is similar to the staking compensation concept in that it gives extra rewards to those who have VET.
Neo (NEO) was one of the first campaigns to popularise the dual-token concept, with network transfers being paid for with Gas (GAS).
Users who keep Neo in a wallet they own automatically receive staking prizes at a cost of 1.61 percent, which is charged in the form of GAS, similar to the VeChain Thor token model.
Excitement for GAS started to grow in early February, when news of the launch of Neo3 and the creation of cross-chain bridges to Ethereum and the Binance Smart Chain spread.
GAS traded at a low of $1.79 on February 1 before soaring to a peak of $15.80 on February 21, just as transaction fees on the Ethereum network reached their highest level in 6 months, thanks to a historic $1.5 billion in trading volume.
Although Ethereum’s gas fees have reduced by more than half since February 23, the network’s high price of Ether tends to make transactions unmanageable for the regular user, while transactions on the Neo blockchain cost an average of 0.001 GAS.
GAS has the potential to see more upside as the Neo ecosystem grows with the rise of DeFi networks like Flamingo Finance and the Switcheo decentralised exchange, by providing a more fixed, low-cost solution for blockchain transactions.
Ontology Gas is the Ontology (ONT) blockchain’s exchange token, specialising in digital identity and data management.
Users that keep ONT in eligible wallets will receive an average of 8.56 percent interest in the form of ONG, which can be exchanged or used to cover transaction costs.
ONT ID, the software ID platform used by the ecosystem, and the open data sharing DDFX, which supports data tokenization, data tracing, and cross-system data analysis, are key features of the Ontology network.
Ontology was created to promote cross-chain convergence and Layer 2 scalability, with initiatives such as the Wing.finance DeFi network, which supports Neo and Ethereum-based tokens, and the ONTO wallet, which recently gained support for 12 different blockchains, including Polkadot (DOT) and the Binance Smart Chain.
As operation on the Ontology network increased and its ecosystem grew, ONG experienced a 480 percent price spike from $0.196 on February 1 to a peak of $1.137 on February 21, with the token touching a record $1.42 billion in 24-hour trading volume.
Both network transactions depend on ONG for completion, and as Ontology’s ecosystem grows, ONG is likely to see a healthy surge in demand, eventually contributing to more price appreciation.