Cryptocurrencies hit the mainstream like never before in 2021, and prices duly soared. But, after the dizzying bullish action for most of the year, Bitcoin (BTC) closed in May with its biggest monthly drop in nearly three years.
Despite BTC’s ongoing volatility, the altcoin markets are thriving. Altcoins offer excellent opportunities to diversify a cryptocurrency portfolio, but it’s the coins with solid fundamentals that demonstrate their ability to deliver sustained and, perhaps more predictable, value.
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With that in mind, let’s look at five top altcoins to keep an eye on this summer.
Polygon (MATIC) has enjoyed enormous success in 2021, following a rebrand from its original name of Matic Network at the start of the year.
The project first started making waves in early 2019, when it emerged as a standout effort to solve Ethereum’s scalability challenges through side-chain scaling. It gained early endorsement from Binance’s Launchpad IEO platform and launched its Layer-2 on mainnet in May 2020.
Since then, apps have proven eager to take advantage of the network’s high throughput (up to 7,000 transactions per second) and low fees. It’s particularly popular among gamers, including Decentraland, Atari, and Aavegotchi, and DeFi apps, including Aave, Curve, and SushiSwap.
Perhaps most critically, as a Layer-2, Polygon retains full compatibility with Ethereum assets.
The network’s MATIC token has recently proven its ability to defy prevailing market trends. Even as BTC and ETH went into bear mode in mid-May, MATIC kept on climbing to reach an all-time high of $2.68.
Blockchains operate as a walled garden. Even in the age of interoperability between platforms, blockchains cannot access data from outside of their network. The Ethereum network doesn’t even contain price data about the value of ETH because the value of the US dollar is off-chain data.
As such, the utility of smart contracts is limited without the use of oracles such as Chainlink. An oracle offers a way of bringing off-chain data on-chain. However, the oracle must be trusted by all parties, and Chainlink oracles rely on trustless data feeds that are verified by a decentralized network of validators.
As one of the earliest movers into the oracle space, Chainlink has integrated with a vast array of projects and platforms, including Google, which has helped propel the LINK token to considerable success. It recently hit an all-time high of $52.88, up over 1,000% since the same time last year.
Another infrastructural project, The Graph, is a decentralized indexing protocol for blockchain data, offering a similar service to the blockchain as Google offers to internet search. Indexed data is then grouped into open APIs called sub-graphs, which anyone can query.
As blockchain data is always linked to transactions grouped in blocks chronologically, The Graph provides an essential means of querying data no matter when it occurred.
The project has made significant headway in terms of cross-chain support in 2021. Following its successful launch on Ethereum and IPFS, The Graph announced extending support to Ethereum Layer-2 side chains, including Polygon. Soon after, it also included Polkadot, NEAR, Solana, and Celo Layer 1 blockchains.
GRT has a legitimate utility for allocating resources with The Graph network and made healthy gains following its launch in late December. Although it’s fallen back recently, the project is gaining traction with over 20 billion queries in April.
Polkadot is the long-awaited culmination of many years of work on behalf of Ethereum co-founder Gavin Wood. He conceived Polkadot as a faster, more scalable, interoperable, but similarly secure version of Ethereum. Based on a Proof of Stake consensus model and sharding, Polkadot has attracted significant attention from the developer community.
Therefore, Polkadot’s big moment comes when the platform opens its “parachain slot auctions” later this year. Although the platform has been operational on the mainnet for over a year now, the slot auctions will mark the first time apps can start running on the Polkadot infrastructure.
Many have confirmed they’re ready to go, including DeFi protocol Acala and Ethereum bridge Moonbeam.
The DOT token has undergone significant growth in anticipation of the parachain slot auctions. It hit an all-time high close to $50 in mid-May 2021, up from around $5 in January.
Uniswap was founded as recently as 2018, but in DeFi, which moves at breakneck speed, that seems a lifetime.
The decentralized exchange and automated market-maker have provided the basis for many code forks, resulting in Uniswap clones on other platforms, including Binance Smart Chain’s PancakeSwap and Polygon’s QuickSwap.
However, despite Ethereum’s ongoing fee problems, Uniswap remains the DEX of choice for many in the crypto community. The project recently launched a V3, which overtook Uniswap V2 within a matter of weeks. Creator Hayden Adams took to Twitter to point out that liquidity providers on both versions were earning more in fees than Bitcoin miners.
The UNI token, which provides the right to participate in the governance of the Uniswap protocol, has been the top-performing DeFi token for several months now. Launched last summer, it’s gone on to claim a place at the fringes of the top 10 cryptocurrencies by market cap.
Each of these projects is based on robust technology and a solid use case. As such, they’re well-positioned for a sustained long-term success.
Of course, always do your own research and understand the risks involved in any investment.
While much of the headlines are dominated by the price of Bitcoin (BTC) and constant debates over whether we’re in a bull or bear market, the Bitcoin network carries on undeterred, mining a new block every 10 minutes. Read five fascinating facts about the OG crypto here.
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