Currently, there are many newcomers to the Crypto market and hear a lot about the terms “Mainnet” and “Testnet”. Let’s learn these 2 terms together and how does this affect the price of that coin and token?
What is Mainnet?
Mainnet is the term used to describe the data of the protocol blockchain has been officially recorded on the blockchain. However, it is not accurate to say that only foundation coins have a mainnet. There are some cases that are still considered mainnet for example Chainlink (LINK): ChainLink implements Mainnet on Ethereum platform ie after Mainnet event, ChainLink protocol data will be recorded on blockchain of ChainLink. Ethereum.
Those are the protocols that are built on the third platform blockchain and they officially back up the data on the Mainnet of that platform blockchain.
Data recorded on the blockchain cannot be changed. Therefore, in order to avoid errors, bugs, bugs, etc., blockchain protocols need to be tested on a network called Testnet before officially launching.
What is Testnet?
Testnet is an environment for developers to test all features, security of blockchain protocol is safe before proceeding to Mainnet.
Since it is a test phase, the data is not officially saved on the blockchain, so it is very flexible if there are security errors, failed transactions… So when the mainnet starts running, it stamps a the technical soundness of that token.
What is Mainnet Swap?
Mainnet Swap is the process of converting tokens from the original platform blockchain to the protocol’s official blockchain.
Initially: Binance (BNB) runs on Ethereum’s blockchain, so Binance’s token is BNB-ERC20. However, Binance has implemented their own blockchain Binance Smart Chain.
Once Mainnet Swap is successful, all BNB-ERC20 tokens to Native Binance run on Binance Smart Chain.
The essence of the swap is to convert at a certain rate, usually 1:1. If the project converts higher or lower than this rate, it will affect the token price.
Does the mainnet make tokens go up in price?
Mainnet is an important event of any blockchain. However, whether the Mainnet affects the token price or not, no one really dares to 100% guarantee. More and more investors in the cryptocurrency market are realizing that the Mainnet is no longer a price-affecting event at the time of the Mainnet launch in 2019.
At the beginning of 2020, there were a lot of quick studies on the potential impact of this event:
The figures below show that:
- If investors buy right at the time of going to Mainnet and hold for 31 days, the majority of them will have a ticket to reduce 40% – 60% of the account.
- On the contrary, if investors buy before the scheduled time of Mainnet about 62 days. There is a chance to increase your account by 50-90%.
In particular, it can be seen that:
- The amount of additional profit will depend on the Market Cap of that token.
- Specifically, tokens with a Market Cap of less than $10 million are the ones that bring the highest returns.
Conclude: The mainnet is a very important thing to be able to influence the price of those tokens because it marks a step in its technical confirmation. Most of the coins are developed very strongly after launching their own mainnet.
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