There are more than 7,000 cryptocurrencies currently in circulation, but, as with the Jonas brothers, you don’t need to be familiar with all of them. After starting out with a total of 38 coins spread among our investment baskets, this week we’re adding another eight. You can find some of them in our new Web 3.0 Basket, some in the Decentralized Finance Basket, and all of them will be added to the Universe Basket. These 46 coins are the ones we see as having the most potential, both as investments and in terms of the types of transactions they handle. And because our mission is never to lead you blindly (although we can, if you don’t feel like doing the work), we also want to make sure that you have a good sense of what your investment options are.
Below is a brief guide to the history and function of our eight new coins. For the other 38, click here.
This DeFi lending platform runs on the Ethereum network, creating loans that are automatically paid back over time. It does this by requiring users to deposit the stablecoin DAI in an interest-accruing vault in order to borrow a synthetic asset. Users can borrow only half as much as they deposit, adding stability to the loan. As interest is earned, it is automatically put toward repaying the loan.
Ankr is a distributed computing platform that aims to leverage idle computing resources in data centers and edge devices around the world to provide alternatives to traditional cloud services. It benefits both the providers, who can earn revenue with otherwise wasted computing power, and users, who get the same services at reduced cost.
If there’s a simple way into crypto, it’s Axie Infinity—an easy play-to-earn pet-training game inspired by Pokémon and Tamagotchi and built on the Ethereum network. Players can collect, breed, battle, and trade in-game pets called Axies. All in-game assets are purchased via Ethereum tokens and, thus, trade on secondary markets. The game and others like it are increasingly popular in nations like the Philippines, Argentina, and Venezuela, where in-game economic opportunities can exceed those available in the real world.
Dogecoin is a cryptocurrency that started as a joke. Based on a meme about a Comic Sans–loving, encouraging, and somewhat ineloquent Shiba Inu, the project started with a tweet by Jackson Palmer on November 27, 2013, in which he said he was going to invest in Dogecoin, a name he made up. At the encouragement of friends, within barely a week, Palmer had turned Dogecoin into a real token with the help of software engineer Billy Markus. They saw Doge as a way to make the crypto space more palatable to newcomers, since, unlike Bitcoin, it had no associations with Silk Road and the Dark Web. Although Palmer exited the project a year later, Doge has proven itself surprisingly resilient and is currently the ninth-largest cryptocurrency in terms of market cap. Despite its origins, Doge is highly liquid, has been one of the best performing assets in the space, and, unlike many other tokens, doesn’t need any more development. It’s fully a currency.
As a Layer-1 blockchain, Fantom, like Bitcoin or Ethereum, has its own native coin and can power applications and protocols. Unlike those two assets, however, Fantom runs on a unique independent consensus mechanism called the “Lachesis Protocol” that allows it to perform an incredible number of unrelated functions while still remaining secure and unchangeable. It uses a single consensus layer to power multiple execution chains. The first layer added to the Fantom ecosystem was Opera, a smart contract platform that launched in December 2019. This Proof-of-Stake (PoS) layer uses Lachesis to validate transactions and produce new blocks, and it features several DeFi applications, including SushiSwap and Curve.
Launched in 2020 and built on the Terra blockchain, Mirror Protocol creates synthetic assets called mAssets that mimic the price behavior of traditional and digital financial assets. After depositing collateral, users can obtain their mAssets and gain price exposure to the underlying assets without having to actually purchase them—opening up the digital ecosystem to traditional investments and providing near universal access to investors. It also enables global access to financial markets, low transaction costs among mAssets, and fast order execution relative to other traditional and digital exchanges. By May 2021, Mirror grew to be the fifteenth-largest DeFi protocol by total value, with $118 billion of collateral locked in the protocol.
Terra launched in January 2018 to facilitate the mass adoption of cryptocurrencies by creating digitally native assets that are price-stable against the world’s major fiat currencies. It was born with the support of the Terra Alliance, a group of fifteen large e-commerce companies in Asia that have 45 million users and collectively process $25 billion in transactions every year. The hope is that being backed by such a massive payment network, Terra will be able to offer merchants significantly cheaper transaction fees, which could lead to it being the first blockchain payment network to reach the scale it deserves—an infrastructure that would encourage the invention of far more powerful products and use cases.
Arthur Breitman first proposed Tezos in 2014 as a response to what he saw as Bitcoin’s failed design, which did not give all stakeholders a voice or facilitate the creation of new tokens. As a multipurpose blockchain that aims to combine a self-amending protocol and on-chain governance, Tezos enables all token holders to propose rule changes and make decisions together (each token accounts for one vote) to improve the network over time. It supports the creation of new tokens and smart contracts. When it launched in 2018, Tezos introduced a new version of a Proof-of-Stake consensus model. The Tezos design expands on traditional PoS systems by enabling users to delegate tokens to stakers (which Tezos users refer to as bakers) without transferring ownership. When a baker receives a block reward in the form of new XTZ tokens, a proportional amount is distributed to users that delegated tokens to the baker. This egalitarian system enables smaller token holders to participate in the validation and reward process just as easily as those with larger stakes.
Even with just these eight coins, you can see the true breadth of the crypo industry. And there’s so much more out there, with new tokens being added every day. That constant growth is one of the most exciting aspects of the digital asset market. It’s also why we are always analyzing tokens in an attempt to find the best options for Makara—and, thus, for you.