The year 2021 gave way to a bunch of meteor rises in the crypto world. For example, Gala (GALA) enjoyed a 50,000% growth, Axie Infinfity (AXS) – the leading play-to-earn game – had a 19,000% growth, and Solana (SOL) broke through the scene with 10,000%.
When we talk about the cryptocurrencies that will have a good year in 2022, we’re looking at both the top players whose momentum is too big to slow down and the underdogs that have so much potential bursting at the seams, ready to explode.
Avalanche is one of many Ethereum’s rivals. It makes a name for itself by having an output of up to 6,500 transactions per second using the 3-chain architecture.
- The Exchange Chain (X-Chain) is specifically used to create AVAX and exchange it with other tokens, using the Avalanche consensus mechanism
- The Contract Chain (C-Chain) handles smart contracts and decentralized applications. This chain, however, uses the Snowman consensus mechanism.
- The Platform Chain (P-Chain) is used for validating new blocks on the blockchain which also uses the Snowman consensus mechanism.
By dividing the blockchain into smaller chains, each performing their own sets of tasks, Avalanche maximizes on efficiency. The chains even have different consensus mechanism yet are all interoperable with each other.
In 2022, the Avalanche brand will be even more recognizable due to partnerships with already big names like Deloitte. Additionally, in November 2021, play-to-earn game Crabada launched on the Avalanche blockchain and soon there will be a line of NFTs created on Avalanche, too.
The Fantom network is another so-called Ethereum killers that has gained major traction in 2021. Fantom achieves much faster transaction speed than Ethereum by using DAG, which is technically not a blockchain but a directed acyclic graph. DAG also helps improve transaction confirmation time (up to an hour for Bitcoin, 10 minutes for Ethereum, and 1-2 seconds for Fantom) (Bitcoin profitability).
One special thing about Fantom is how they attract users. While networks like Polygon and Avalanche attract users by incentivizing them to come over to their network and earn money, Fantom instead focuses on incentivizing developers. Fantom has an incentive program of over half a billion dollars for developers to build useful and valuable applications on their network.
The problem with giving a lot of money to users is that they will consequently only use your platform because of the rewards. Fantom uses their fund to add utility and actual value to their network, so people will come there for the product itself. Needless to say, this method is much better for longevity.
Furthermore, the Fantom network is compatible with Ethereum Virtual Machine, so any application built on Ethereum can be transferred onto Fantom. And it also has a DAO governance system, but while other DAOs only let people vote yes or no, Fantom’s allows you to vote from 1 to 4.
Aave, originally called ETHLend, is a decentralized landing protocol built on the Ethereum blockchain. During summer of 2020, Aave was one of the biggest DeFi projects in terms of value of crypto in its total liquidity pool.
People can lend assets by depositing them into Aave’s liquidity pools, pocketing an annual yield of over 3%. This makes Aave an extremely attractive destination for passive income considering most normal saving account yields barely surpasses 0.5%. Users also enjoy a great variety of options (about 30 cryptocurrencies).
Borrowers in turn can take the money from these pools, using their own money as collaterals with great interest rates. Moreover, Aave offers flash loans, the first uncollateralized loan option in the DeFi space. Flash loans must be paid back within the same transaction so many people use them to make profit by arbitrage trading which takes advantage of tiny differences in price between identical assets in different markets.
It’s crazy to think that even though being the world’s second-largest crypto, Ethereum still has so much potential to be discovered. 2022 may be a very important year for Ethereum as a major upgrade called Eth 2.0 is coming. This update will solve the biggest problem of Ethereum, which is transaction speed.
Eth 2.0 will transition from Proof-of-Work to Proof-of-Stake. Many competitors such as Cardano and Solana have demonstrated the advantage of the PoS method. Ethereum is also adding shard chains to prevent congestions on its main network. If you can remember, back in 2017 a simple collection game called Crypto Kitties singlehandedly created a traffic jam on the Ethereum network.
To have true longevity in this game, a cryptocurrency needs to have utility and quality. There are way too many coins out there just take the same route as the ones before without bringing anything new to the table. However, Cardano is one that truly pushes for longevity by attempting to solve many issues around cryptocurrencies like scalability and sustainability.
Cardano doesn’t simply write a whitepaper but has their papers peer-reviewed by experts from around the world to make sure everyone agrees with their method. Moreover, their Ouroboros POS system which divides time into epochs both increases scalability and creates passive income for stakers.Cardano also divides their network into subnetworks to improve the network bandwidth, so they can handle more transactions.
Finally, from very early on Cardano has aimed to be the internet of blockchain, which means it prioritizes understanding other blockchains so as to seamlessly move assets cross-chain. In September 2021, the Alonzo update helps Cardano be able to support NFTs, smart contracts and decentralized exchanges. Although Cardano has experienced plenty of growth in 2021, I believe there is more room for it to grow in 2022.