One of the familiar themes from previous crypto market cycles is the shift in market caps, popularity, and ranking of the top 10 projects that make significant gains during bulls only to be forgotten during the bear markets. For many of these projects, they follow a recognizable boom-to-bust cycle and never return to their former glory.
During the 2017-2018 bull market and Initial Coin Offering (ICO) boom, fueled by network-based Ethereum projects, all kinds of small smart contract-driven projects surged thousands of percent to unexpected highs.
During this time, projects such as Bitcoin Cash (BCH), Litecoin (LTC), Monero (XMR) and ZCash (ZEC) also rotated in and out of the top 10 rankings, but investors still argue about which project is actually presented “Useful” use case.
While all of these tokens are still unicorn-level projects with billion dollar valuations, these large-cap megaliths have fallen far behind their former glory and are now struggling to stay relevant in the current ecosystem.
Let’s take a look at some of the current projects threatening to knock these dinosaur tokens off the shelf.
Dollar-linked stablecoins emerge as the most “transactional” currency
Bitcoin’s (BTC) original use case was that it would simplify the process of completing transactions, but the network’s “slow” transaction time and the costs associated with sending funds make it a better store of value than a medium of exchange, though the other blockchain networks are considered options.
Terra (LUNA), a protocol that focuses on creating a global payment structure through the use of fiat-linked stablecoins, has emerged as a possible solution to the problems encountered when using the top proof-of-work projects (PoW) currencies occur as means of payment.
The most important token used next to LUNA for the transaction of values on Terra is TerraUSD (UST), an algorithmic stablecoin pegged to the US dollar, which forms the basis of Terra’s decentralized financial ecosystem (DeFi). UST’s market capitalization has steadily increased over the course of 2021 as the activity and number of users in the ecosystem have increased.
The recent addition of Ether (ETH) as collateral for minting UST on the Anchor Log has given token holders the ability to access the value of their Ethers without having to sell and create a taxable event.
This opens up the possibility of other tokens such as BTC being used as collateral for the minting of UST, which can be used in everyday purchases.
It appears that the APR for UST on Anchor is 25.85%, while the APR of the distribution is 40.67%.
From privacy coins to privacy protocols
Privacy is also a cornerstone of the cryptocurrency sector, and privacy-focused projects like XMR and ZEC offer obfuscation technologies that support covert transactions or transactions that are temporarily considered untraceable.
Unfortunately, regulatory concerns have made these tokens difficult for users to access as many exchanges have canceled them for fear of inciting the wrath of regulators and overall demand among crypto users has declined along with their availability.
Their lack of smart contract features has also limited the performance of these protocols, and so far users don’t seem too excited about using Wrapped Monero (WXMR) for use in DeFi, as the token loses its privacy capabilities in the process.
These limitations have led to the development of privacy-oriented protocols such as the Secret Network, which enables users to create and use decentralized applications (DApps) in a privacy-enforcing environment.
Data protection functions are not common on smart contract-enabled platforms in the crypto ecosystem, which makes Secret an experimental case in the constantly evolving Web 3.0 landscape.
Secret is also part of the Cosmos ecosystem, which means it can use the Inter-Blockchain Communication (IBC) protocol to seamlessly interact with other protocols in the ecosystem.
The network’s native SCRT can be used as a medium of value transfer on the platform as well as to interact with protocols operating on the network, including Secret DeFi applications and the network’s NFT offering, Secret Heroes.
New business solutions are no better, but they come without controversy
One of the ways cryptocurrency projects wanted to differentiate themselves from the “medium of exchange” label was by offering enterprise solutions to help businesses transition to a blockchain-based infrastructure.
XRP and Stellar (XLM) are two of the veteran protocols that fit this bill, but continued controversy and slow development have caused these early movers to now catch up with newer networks that also haven’t had the legal controversy that has followed Ripple for years .
Hedera Hashgraph has emerged as a competitor in this space and data shows that the network is capable of more than 10,000 transactions per second (TPS) with an average transaction fee of $ 0.0001 and a time to final of 3-5 Seconds to process.
These statistics are comparable to both XRP and XLM, suggesting that their ledgers are reaching consensus every 3-5 seconds on all outstanding transactions with average transaction costs of 0.00001 XRP / XLM.
Hedera is also smart contract enabled, which means users can create both fungible and non-fungible tokens and developers can create decentralized applications to accompany the network’s decentralized file storage services.
For each sector (stablecoins, privacy and enterprise solutions), the main difference between the old school and next generation projects was the introduction of smart contract features and plans for development within the side chain and DeFi sectors where the top logs exist. This gives newer projects an added value allowing them to meet investor and developer demand and thereby increase their token values and market caps.
With smart contracts, the ability to interact with the growing DeFi landscape is built in, while the legacy tokens such as LTC, XMR and BCH require special wrapping services that middlemen employ and thus introduce additional fees, rigor and risks into the process .
Newer protocols have also adopted the greener proof-of-stake consensus model, which aligns with the larger global shift towards environmental awareness and sustainability. A plus is that holders can also use their tokens directly in the network for a return.
It remains to be seen whether the slow passage of time will eventually lead to capital migration from older large-cap projects to newer generation protocols or whether these old blue chips will find a way to evolve and survive into the future.
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