What Is BOBA Token? | Boba Network Review
Mar 31, 20224 min read
What Is BOBA?
There is a well-known “trilemma” in the blockchain space based on three major parameters: security, decentralization, and scalability. Unfortunately, all three characteristics are challenging to achieve within one system. Often two out of three are reached with a compromise on the third. In the case of Ethereum, developers first optimize security and decentralization and work on scalability with a lower priority. For this reason, the Ethereum network has become increasingly overloaded in recent years. In 2021, the main catalyst for the congestion of Ethereum was the rapid growth of DeFi and NFT spheres. Users and developers face problems such as crazy gas fees and slow throughput. To solve these problems, such projects as Boba Network are created.
What is Boba Network?
The Boba Network is a subcategory of Ethereum’s Layer 2 scaling solutions called Optimistic Rollups. There are various scaling solutions to date, but sidechains and Optimistic Rollups are the most widespread. It is Optimistic Rollups that are considered to be truly Layer 2 solutions. Thereby, Boba Network has five main characteristics that make it an indeed Layer 2:
- The use of Boba allows you to save on gas fees significantly. Since gas fees in the Ethereum network reach incredible amounts, Boba aims to reduce costs several times. Furthermore, the developers claim that the transaction fees on the Network are less than one BOBA per transaction.
- Developers can benefit from the advanced features of smart contracts. With Boba, developers can build innovative decentralized applications that were previously either too expensive or impossible to execute on-chain.
- Users can use the bridge to transfer their NFTs between L1 and L2 protocols seamlessly. The Boba NFT Bridge supports both protocols and allows users to easily mint, sell, and transfer between L1 and L2.
- Users get the opportunity to withdraw funds instantly. Within the framework of the project, community-driven liquidity pools have been created. With this approach, both sides benefit: users can receive their funds in a matter of minutes instead of a week, and liquidity providers receive attractive rewards.
- Users can be confident in the security, as it is provided by the Ethereum network. Since Boba is a Layer 2 Optimistic Rollup scaling solution, its security is fully ensured by Ethereum. This is crucial because scaling solutions that work on the sidechain principle rely on their own blockchain and consensus algorithm.
BOBA token became available for trading in December 2021, according to CoinMarketCap. Boba Network launched the token alongside OMG Foundation. BOBA has two main utility functions in Boba Network:
- Governance. Each BOBA holder will have the opportunity to make proposals, participate in the voting, or delegate their powers within the Boba DAO.
- Staking. BOBA stakers will also receive a portion of the Network’s fees. According to a statement from the official website, at the moment, staking rewards are allocated from the treasury until the Network’s transaction fees stabilize.
Despite BOBA’s youth, the token has already been listed on many major crypto exchanges: FTX, Poloniex, Bitfinex, Bithumb, and others. In addition, the token is also available for trading on many of the popular decentralized exchanges.
As for the circulating supply, it amounts to almost 159 million tokens to date. The maximum supply of 500 million tokens will go into circulation within four years.
BOBA Price Overview
Unfortunately, the launch of the BOBA token occurred during the market downturn. Since January 2021, the crypto market has entered a bearish trend, and the value of all assets has fallen rapidly. So, BOBA’s all-time high was recorded on November 25, 2021, and amounted to almost $8. Today — March 24, 2022 — the BOBA price is about $1.2. Hopefully, with the stabilization of the crypto market, the token’s price will continue to grow.
DeFi Projects on Boba Network
To date, Boba Network has already hosted several DeFi projects. Among which the largest are: OolongSwap, Synapse, cBridge, UMA Protocol, and others.
Boba’s Network has a TVL (total value locked) of $51.11 million, according to DeFi Llama. The largest share is occupied by OolongSwap — 46.06%. OolongSwap is the liquidity hub of the Boba Network and has a TVL of $23.54 million. OolongSwap is neck and neck with Synapse, which has a TVL of $11.12 million.
Boba Network has solid fundamentals and allows users to benefit from Boba’s speed and cost-effectiveness along with the decentralization and security of Ethereum. Therefore, we can conclude that this scaling solution will help relieve the Ethereum network congestion. However, it isn't very easy to make any predictions regarding the Boba Network because the Network has not yet passed the test of time and has not so many projects in its ecosystem. In addition, unfortunately, the project developers presented rather poor documentation on the official website, which negatively affected users’ trust.
With an increase in the number of partners, the involvement of large institutional investors, and the development of the ecosystem, Boba may be able to break out into the leaders. Still, until that moment, Boba has a very long way to go.