The cryptocurrency market, which is rapidly evolving and known for its large fluctuations, continues to make headlines. While media coverage primarily focuses on price milestones and extraordinary returns, the most interesting changes are happening on a technical level. In this market, decentralized finance, non-fungible tokens (NFTs), and virtual reality (metaverse) projects continue their rapid growth.
So what are the most notable projects and why should we pay attention to them?
1. Terra: The Future Stablecoins
In terms of returns, this cryptocurrency was undeniably the top performer in 2021. The price of the LUNA token increased by 11,500% over 12 months, and Terra ranked 14th in market capitalization on coinpaprika.com by mid-November. Terra is a blockchain that allows for the creation of stablecoins – that is, tokens with a fixed value – which can be used for payments without exposure to market volatility. Unlike centralized stablecoin projects like Tether, Terra is a decentralized project that relies on algorithms and an active community to maintain value stability. Despite launching in just 2019, it has gained significant trust and interest.
2. Solana: High-Frequency Blockchain
Despite launching in just 2020, the Solana project jumped to fifth place in market capitalization rankings by November. The price of the SOL token increased by nearly 10,000% over one year. The project belongs to the decentralized finance sector and aims to provide a fast and cheap blockchain, overcoming the scalability issues faced by networks like Ethereum. By November, the network was capable of processing 2,705 transactions per second with an average fee of only $0.00025, thanks to new technologies like Proof of History. Solana is considered a third-generation blockchain, combining the advantages of Bitcoin and Ethereum with higher efficiency.
3. Decentraland: Digitizing Reality
Decentraland is a virtual world built on the Ethereum blockchain, a 3D game where users can – through a virtual character (avatar) – create a private reality, including owning real estate, starting businesses, and making profits. The currency used in this world is MANA, which increased in value by 4,500% over one year. Decentraland is a blend of NFT and metaverse technologies and recorded several achievements in 2021, the most notable being Republic Realm's purchase of land there for $900,000, and Barbados opening the first embassy in the virtual world.
4. Dogecoin: A Billion-Dollar Joke
In terms of technological innovation, Dogecoin is not a serious competitor, but it has become a phenomenon in the world of cryptocurrencies. It started as a joke but attracted a wide audience, most notably Elon Musk. It is sometimes used for online payments or in fundraising campaigns, such as supporting the Jamaican bobsled team to reach the Sochi Olympics. Thanks to campaigns like #dogecointoonedollar, its market value increased by 6,700% over the year, making it the seventh largest cryptocurrency by value. However, investing in it is highly speculative and subject to risks of sharp fluctuations and market manipulation.
5. Ethereum: The Giant Global Computer
Ethereum has long held the second position after Bitcoin in terms of market capitalization. Although its price increased "only" by 680% in 2021, it is gaining strength, with some seeing it approaching competition with Bitcoin. By mid-November, Ethereum's market capitalization was $0.5 trillion, compared to $1.1 trillion for Bitcoin. There are two main factors that distinguish Ethereum:
First, the vast majority of altcoins depend on the Ethereum blockchain – as 87% of all token issuances occurred through it.
Second, it is undergoing a significant technological transformation by transitioning from a Proof of Work (PoW) mechanism to Proof of Stake (PoS), which will greatly enhance its processing and scalability capabilities, solidifying its position as a decentralized global computer.