The 6 Most Interesting Cryptocurrencies of 2021
It has been a bonkers year in crypto. Bitcoin faced a mini crisis when China kicked all the miners out this spring, only to reach an all-time high in November. (The recent dip brought that back down, but we’re not worried.) Ethereum saw several young competitors like Solana and Cardano rise in popularity—but still held its position as the most vibrant and valuable blockchain ecosystem around. Like Bitcoin, its currency, Ether, also hit an all-time high in November. Dogecoin and Shiba Inu, in some respects, became cultural phenomenons as the media and, of course, Elon Musk kept them front and center. And all sorts of other up-and-comers presented themselves as possible game-changers for the future of crypto.
There’s a ton to be excited about, and given December’s market contraction, it’s almost like crypto is holding its own holiday sale. But this list isn’t so much about what to buy next: It’s about which coins had some of the biggest influence on a year that was arguably the biggest in crypto’s history. (At least until next year.)
Here’s the Makara team’s 2021 selection of cryptocurrencies and tokens that we find interesting and representative of the many innovations happening in the industry. This is not a holistic review of the investment opportunities within the cryptocurrency industry or a suggestion to purchase these assets individually. We encourage you to learn more about these projects and their use cases as you explore the industry.
If crypto hopes to replace the old financial system, it’s going to need to be able to handle more transactions. Like, a lot more. Right now, a network like Ethereum—which hosts not just a range of decentralized finance apps, but also NFT marketplaces and gaming metaverses—can get really congested. That makes it slow, with fees that are frustratingly high.
Formerly known as Matic Network, Polygon offers a solution to Ethereum’s biggest problem: It gives developers tools to create their own independent chains that can still be connected to Ethereum. Those separate chains, which use the MATIC token, offload huge amounts of traffic from Ethereum, making everything faster and cheaper for everyone. And all the while, Polygon has made it so that those separate chains—and the apps built upon them—still can benefit from Ethereum’s security.
Vitalik Buterin, a cofounder of Ethereum, has written about how layer-2 solutions like the ones Polygon offers will be key to Ethereum’s ability to grow and improve. With Polygon planning to introduce four new kinds of blockchains, investing in MATIC is yet another way to support that progress (and to benefit from its success).
MANA is part of the recent burst of energy around the greater metaverse ecosystem. It’s one of two coins of Decentraland—a sprawling metaverse of exactly 90,601 parcels of land, where owners can build games, scenes, or other interactive elements. You can use it to buy avatars, all kinds of limited-edition clothes for your avatar to wear, and even names for your virtual self, including Mark Zuckerberg if you happen to be a fan. (One thing MANA won’t buy you is land. You’ll need the other coin, creatively called LAND, to do that.)
Think of the Sandbox Project as the Minecraft of blockchain gaming—only in this Minecraft people actually get to own what they build (and buy) and make money either from playing or by making their own games that other gamers pay admission to play. The token at the heart of this is SAND, which lets people buy avatars, equipment, or art in the form of NFTs that they can then sell or trade.
The Sandbox was a particularly exciting place to be even before someone spent the equivalent of $450,000 to become Sandbox neighbors with Snoop Dogg. The global gaming industry has been estimated to have a value of more than $300 billion, and a big chunk of that, The Sandbox hopes, will be blockchain gaming that happens on its platform. The network already has more than 60 brands developing content for it, including Atari, which means you’ll be able to use The Sandbox to play classics like Pong, Centipede, Asteroids, and RollerCoaster Tycoon.
So you’ve got this data source—maybe it’s a payment system, or an ever-changing list of asset prices, or a tally of how many people watched your unboxing videos—and you want to put it on a blockchain to be sure nobody can mess with it. Chainlink pioneered how to make that happen. It uses a version of what’s called an oracle network—a series of decentralized nodes that operate between the off-chain world (a.k.a. the real world, depending who you ask) and a blockchain—and that provides the chain’s smart contracts with the necessary data. It’s all overseen by a vast community that includes node operators, who are paid in LINK for their work.
Chainlink’s infrastructure has become essential to decentralized finance applications, and since DeFi is far from the only ecosystem that needs reliable, secure data (just about every industry nowadays needs that), we think Chainlink could be key to building the next internet, in which all those data processes could be automated for everyone. And we’re not alone: Chainlink has been attracting support from builders of the current internet, with the former CEO of Google, Eric Schmidt, having just signed on to be an adviser.
LUNA is the glue that holds the Terra blockchain protocol together. Terra offers a collection of stablecoins that are pegged to some of the world’s most important fiat currencies. When the value of the U.S. dollar rises or falls, so does the value of TerraUSD. The point of those stablecoins is to let people hold an asset equivalent to those traditional currencies (and save it or spend it or trade it), but also have all the benefits of blockchain—decentralization, security, and cheaper transaction fees. LUNA is what you use to buy Terra’s stablecoins. It also helps absorb some of the price volatility of the stablecoins, and it enables holders to vote on network governance. As for LUNA’s value, the builders of the protocol put it this way: “The more Terra is used, the more LUNA is worth.”
Recently, LUNA became one of the top ten coins by market cap, with the equivalent of $27 billion invested. Terra was built with the backing of the Terra Alliance, a major collective of Asian e-commerce companies that handle billions of dollars worth of transactions each year. That’s pretty solid footing to become the first mainstream blockchain payment network.
Ethereum fans are probably quite happy right now, maybe even so happy as to be quoting Omar from The Wire: “You come at the king, you best not miss.” Despite the growth of Solana and Cardano, Ethereum kept chugging along, holding its position as the blockchain to build on, whether you’re making a DeFi app, an NFT market, or a metaverse. And, all the while, its developers have continued to work toward its next version, ETH2, which will make the system more secure, faster in terms of transaction speed, and the fees far lower, along with significantly cutting its carbon emissions.
The blockchain, which runs on the Ether currency, is a workhorse. And the thing is, it’s poised to have an even better 2022, when people expect the final two major installments of ETH2 to arrive.
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