these three smart contract networks could gain greater adoption in 2022
Decentralized finance (DeFi) has dominated media headlines throughout 2021 – this sector, along with non-fungible tokens (NFTs), has contributed to the mass adoption of cryptocurrencies.
While the high returns of staking and instant profits from selling digital images have proven very lucrative for investors, it’s important to remember that none of this would have been possible without the underlying capabilities of smart contract technology.
The Ethereum network remains, hands down, the most used layer-one smart contract platform in the cryptocurrency ecosystem, but everyone knows the problems of high fees and network clogging in recent years.
In 2021, competing networks such as Avalanche and Binance Smart Chain activated compatibility with the Ethereum Virtual Machine (EVM), producing positive results for investors in both ecosystems.
Let’s take a look at some of the best performing layer-one protocols in Q4 2021 and analyze how partnerships, traditional finance investments and protocol developments could benefit each project in 2022.
Algorand
Algorand (ALGO) is a layer-one proof-of-stake (PoS) blockchain network, designed to be self-sufficient and highly scalable, thus making it capable of handling high transaction loads for minimal cost.
In Q4, the protocol launched the Algorand Virtual Machine which enables decentralized applications (DApps), which means that DeFi and NFT projects can now operate on the network.
Tether (USDT) and USD Coin (USDC) had already been launched on the network, so their integration into new DeFi platforms was relatively easy, allowing for a quick build-up of liquidity. The launch of ALGO’s 150 million Viridis fund by the Algorand Foundation was designed to accelerate the development of the DeFi ecosystem on the network.
The project also attracted the attention of institutional investors, with a substantial cash flow coming from Borderless Capital, which launched a $ 500 million fund to help develop DApps on Algorand. Hivemind Capital Partners has also selected the protocol as its first technological partner.
“We are thrilled to announce the launch of our $ 500 million Borderless ALGO Fund II!”
We are excited to announce the launch of our $ 500M Borderless ALGO Fund II! Https: //t.co/EP0U6Ib8HV pic.twitter.com/okXf6GBFo8
– Borderless Capital (@borderless_cap) November 30, 2021
In October, Algorand launched governance capabilities, allowing ALGO owners to have a say in the future development of the protocol.
On November 18, 21Shares announced the launch of an exchange-traded (ETP) product on Algorand with physical support, helping to trigger a rally in ALGO’s price to an annual high of $ 2.99.
Tezos
Tezos (XTZ) is a flexible proof-of-stake blockchain designed to evolve over time without the need for hard forking. In the fourth quarter, traditional financial entities such as Arab Bank Switzerland partnered with the protocol to launch staking, trading and custody services for the native XTZ token.
On December 7, the project made headlines after expanding its NFT ecosystem by partnering with Ubisoft, a multinational company active in the gaming sector. The Ubisoft platform, Quartz, uses the Tezos blockchain, allowing players to Ghost Recon: Breakpoint to buy and trade NFTs.
December 15th too Rarible, a popular NFT marketplace, has announced the integration of the Tezos blockchain into its ecosystem. This means that Rarible users can now buy, sell and trade NFT Tezos in a much cheaper environment than the Ether-based section.
“The Tezos blockchain is now live at https://t.co/BplWYgszwb
Here’s everything you need to know: https: //t.co/opRwEeF1HB “
Tezos blockchain is now live on https://t.co/BplWYgszwb
Here’s everything you need to know: https: //t.co/opRwEeF1HB
– Rarible (@rarible) December 15, 2021
The increased attention on the Tezos blockchain has partly resulted from the energy efficiency of the network, in a world increasingly attentive to environmental sustainability.
According to a recent carbon footprint report by PricewaterhouseCoopers Advisory SAS, the Tezos network recorded a 70% increase in energy efficiency in 2021: it is estimated that the network currently has the same carbon footprint of only 17 people.
At the time of writing, XTZ is trading at a price of $ 4.34 after recording an annual high of $ 9.17 on October 3. This retracement pre-dates the current and larger market downturn.
Related: ‘I’m a big believer in cryptocurrency technology,’ says the former US SEC chairman
Elrond
Elrond (EGLD) is a blockchain platform for enterprise-grade distributed and business applications, aiming to become the technology ecosystem for the “new internet”.
According to the project’s website, the network uses sharding technology to enable processing of 15,000 transactions per second (TPS), with an average transaction cost of $ 0.001.
The year-end price rally for the protocol’s native token, EGLD, follows the launch of a $ 1.29 billion liquidity incentive program by Elrond-based decentralized exchange Maiar (DEX).
Prior to the launch of the liquidity program, EGLD’s price increased due to increasing use as a form of digital payment, including a partnership with the Romanian music festival Untold, which announced the possibility of buying tickets for the 2021 festival with the cryptocurrency.
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