Wednesday, January 19

The 5 blockchains of 2021: Solana, Cardano, Terra, Avalanche and Polygon

After Ethereum and Bitcoin, which continue to dominate the crypto market, the 5 blockchains of 2021 have been: Polygon, Avalanche, Terra, Cardano and Solana. The year that is about to end has been that of the consolidation of these five blockchains, due to their performance and possibilities. The growing concern about sustainability and the high gas fees that must be paid to operate on the Ethereum network, has turned the eyes of developers and users towards Solana or Avalanche. Both, with more sustainable consensus protocols and better performance in some respects than the Ethereum network, have benefited greatly from the NFT boom.

The 5 blockchains of 2021

5. Polygon (MATIC)

Due to the problems suffered by the Ethereum blockchain, this project that proposes a parallel network, has become very popular among users and companies in recent months. The price of Polygon’s cryptocurrency, MATIC, has grown 14,740% in the last year and has reached a market capitalization of nearly $ 19 billion. As of press time, MATIC’s price is $2,55.

In some ways, Polygon is everything Ethereum claims to be with Ethereum 2.0. It is a project that, in addition to correcting Ethereum’s processing capacity problems, uses Proof-of-Stake (Pos) as a consensus mechanism. Polygon offers a much more intuitive architecture for developers, making it a more attractive network for inexperienced users. Polygon does not seek to change the original layer of the Ethereum blockchain, but rather to help Ethereum expand in size, with the goal that developers can bring products to market more quickly.

EY partners with Polygon to deliver blockchain solutions to businesses

Polygon’s main chain is a blockchain that uses Proof of Stake (PoS) as a consensus method. A system based on the economic participation of users who have protocol tokens. In this case, MATIC. The validator nodes are randomly selected from among the users who have MATIC and the users with the most reservations have a better chance of being chosen to validate transactions and vote on network updates.

Currently, Polygon is used by a multitude of blockchain companies and users for the development of operations. According to data from Polygonscan Y, On Saturday, October 2, the number of active addresses on Polygon exceeded the number of active addresses on Ethereum for the first time.

4. Avalanche (AVAX), 2020

The price of Avalanche’s cryptocurrency, AVAX, grew 3,239% in the last year. It started 2021 trading around $ 3 and today it is trading at $1o668. Avalanche is an open and programmable smart contract platform for decentralized applications. Like Cardano (ADA), Solana (SOL) and others, Avalanche’s goal is to compete with the Ethereum blockchain in the development of smart contracts. However, unlike the two cited blockchains, Avalanche has the advantage of its compatibility with the Ethereum Virtual Machine (EVM). That is, the Avalanche Blockchain can host applications developed on Ethereum, but with additional advantages.

One of the great advantages is scalability. The Avalanche blockchain has the capacity to perform 4,500 transactions per second, vastly outperforming Ethereum, which allows 14. Also, transactions made on the Avalanche blockchain take less than a second to confirm. On the Ethereum blockchain the time is 14 seconds. The second big advantage over Ethereum is that the implementation of smart contracts in Avalanche costs only a tenth of what they cost in the network created by Vitalik Buterin. Transaction fees on Avalanche are based on Ethereum’s dynamic fees (EIP-1559), setting a gas fee cap and a cap on gas ‘tip’. As a result, Avalanche rates are much cheaper.

What is Avalanche (AVAX), the cryptocurrency that has risen 515% in two months

3. Earth (LUNA), 2019

Terra has been one of the big surprises of 2021. The price of Terra’s cryptocurrency rose 15.286% in the last year. At the beginning of the year, it did not reach $ 0.5 and currently it is trading at $86,23. Terra is a blockchain protocol focused on stablecoins that has two cryptocurrencies: the LUNA token and the UST stablecoin. The LUNA token is used as collateral to achieve price stability for the UST stablecoin.

What is the blockchain Terra and why is its cryptocurrency LUNA growing so much

Unlike other stablecoins, such as Tether, whose price is directly linked to the dollar, the Terra platform uses an elastic monetary policy to maintain the stability of its cryptocurrency. The process is similar to that of the DAI stablecoin, but done in reverse. While with DAI you have to collateralize the loan by creating new DAI, in Terra you have to burn the LUNA tokens. DAI expands the monetary base and LUNA reduces it. In other words, to create new USTs, you have to burn the equivalent amount in dollars of LUNA.

Mirror Protocol and Anchor Protocol are the two DeFi protocols that have catapulted Terra’s success. Mirror Protocol (Mirror Protocol) allows you to create synthetic assets that reflect the price of an underlying asset. That is, it allows you to create assets that reflect the price of any asset in the real world, such as gold, although it is specially designed to represent stocks on the US stock market. Anchor Protocol (Anchor Protocol) is a savings platform based on Terra’s blockchain that provides its users with returns with low volatility assets (stablecoins).

2. Cardano (ADA), 2017

Arguably, the success recorded by the Cardano blockchain during this year was an announced success. Its founder, Charles Hoskinson, was also a co-founder of the Ethereum blockchain. The rapid growth that the summer of 2021 experienced surprised everyone. The price of the cryptocurrency of Cardano (ADA) grew 740% in the last year, reaching a capitalization of almost 50,000 million dollars. ADA is currently listed at $ 1,41.

Cardano launched in 2015 as an alternative to Ethereum. Throughout all this time it has become a scientific project, based on research. But also in the creation of prototypes that allow discovering and solving the main problems that blockchain networks present. The Cardano blockchain, based on the Proof of Stake (PoS) protocol, is structured in several layers or updates that are activated sequentially. Each of these layers, as explained by the Cardano Roadmap, will be delivering a series of new functionalities to achieve a robust, balanced and accessible network for all.

In this sense, investors see in it capabilities that Ethereum does not have. Cardano, the blockchain where ADA is developed, pursues similar objectives to those of Ethereum, but with a more friendly and flexible ecosystem and digital infrastructure. Like Ethereum, Cardano also allows the creation of decentralized applications and smart contracts. To do this, it uses an infrastructure that offers scalability, performance, flexibility, interoperability and economy.

1. Solana (SOL), 2020

Along with Terra, it is the blockchain that has evolved the most throughout 2021. In fact, its great impact has caused it to rank as the fifth cryptocurrency by market capitalization. In the last year, the price of SOL, Solana’s cryptocurrency, grew more than 10,000%, reaching a current price of $175.

Solana, the cryptocurrency whose value has soared thanks to NFTs

Solana is a decentralized blockchain created to enable scalable and user-friendly applications for everyone. That is, an open source blockchain that facilitates the development of decentralized applications (DApps). Solana’s technology has been developed from the ground up to offer a fully scalable platform. Solana defines itself on its website as the fastest blockchain in the world, with more than 400 projects, ranging from DeFi to NFTs.

The project was founded in 2017 by Anatoly Yakovenko through an ICO, which raised more than $ 25 million. The main proposal of the project was to create a blockchain with a new transaction system called Proof-of-History (PoH). A complementary algorithm to the Proof of Stake, which encodes the time in which a transaction is made on the blockchain. In this way, it allows the nodes to trust the timestamps of the blocks and to verify the moment and the order of the transactions that take place in the network. This prevents validators from having to communicate with each other, significantly reducing consensus time

The price of Solana did not begin to grow exponentially until August 15, which was when the launch of the NFTs project took place: Degenerate Ape Academy. This collection of NFTs, which depicts monkeys in disguise, sold out 10,000 collectibles in just 8 minutes. Each of these “monkeys” was released at a price of $ 336. Today some of these apes are worth more than $ 7 million. It also has some of the most famous DApps of the moment, such as Phantom or Audius. Phantom is described on its website as a crypto wallet that allows to store, send, receive, bet and exchange tokens on Solana. Audius is a decentralized music platform designed to compete with Spotify and the rest of today’s music platforms.

Picture of Pixabay

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