Evolve or die: How smart contracts are shifting the crypto sector’s balance of power

65 0

One of the familiar themes seen in previous crypto market cycles is the shifting market caps, popularity and ranking of the top 10 projects that see significant gains during bull phases, only to fade into obscurity during the bear markets. For many of these projects, they follow a recognizable boom-to-bust cycle and never return to their previous glory. 

During the 2017–2018 bull market and initial coin offering (ICO) boom, which was driven by Ethereum network-based projects, all manner of small smart contract-oriented projects rallied thousands of percentage  to unexpected highs.

During this time, projects like Bitcoin Cash (BCH), Litecoin (LTC), Monero (XMR) and ZCash (ZEC) also rotated in and out of the top 10 ranking, but to this day, investors still argue about which project actually presents a “useful” use case.

While all of these tokens are still unicorn-level projects with billion-dollar valuations, these large-cap megaliths have fallen far from their previous glory and now struggle to stay relevant in the current ecosystem.

Let’s take a look at a few of the current projects that threaten to unseat these dinosaur tokens from their perch.

Dollar-pegged stablecoins take the stage as the most “transactable” currency

Bitcoin’s (BTC) original use case stipulated that it would simplify the process of conducting transactions, but the network’s “slow” transaction time and the cost associated with sending funds makes it a better store of value than a medium of exchange when the other blockchain networks are considered as options.

Terra (LUNA), a protocol focused on creating a global payment structure through the use of fiat-pegged stablecoins, has emerged as a possible solution to the issues faced when trying to use the top proof-of-work (PoW) projects as payment currencies.

The main token used for transacting value on Terra aside from LUNA is TerraUSD (UST), a U.S. dollar-pegged algorithmic stablecoin that forms the basis of Terra’s decentralized finance (DeFi) ecosystem. The market cap of UST has steadily been increasing throughout 2021 as activity and the number of users in the ecosystem increased.

UST supply changes. Source: SmartStake

The recent addition of Ether (ETH) as a collateral choice for minting UST on Anchor protocol has given token holders a way of accessing the value in their Ether without having to sell and create a taxable event.

This opens the possibility for other tokens such as BTC to be utilized as collateral to mint UST that can be used in everyday purchases.

As it stands, the borrowing APR for UST on Anchor stands at 25.85%, while the distribution APR is at 40.67%, meaning users who borrow UST against their LUNA or Ether actually earn a yield while borrowing against their tokens.

From privacy coins to privacy protocols

Privacy is also a cornerstone characteristic of the cryptocurrency sector and privacy-focused projects like XMR and ZEC offer obfuscation technologies that support covert or what, for a time, were thought to be untraceable transactions.

Unfortunately, regulatory concerns have made it more challenging for users to access these tokens, as many exchanges have delisted them for fear of drawing the ire of regulators and the overall demand among crypto users has declined alongside their availability.

Their lack of smart contract capabilities has also limited what these protocols are capable of and, so far, users do not appear to be too excited about utilizing 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-focused protocols such as the Secret Network, which allows users to create and use decentralized applications (DApps) in a privacy-preserving environment.

Privacy features are not common among smart contract capable platforms in the crypto ecosystem, which makes Secret something of an experimental case in the ever-evolving Web 3.0 landscape.

Decentralized applications on the Secret Network. Source: Secret

Secret is also part of the Cosmos ecosystem which means it can utilize the Inter-blockchain Communication (IBC) protocol to seamlessly interact with other protocols in the ecosystem.

The network’s native SCRT can be used as the value transfer medium on the platform as well as to interact with protocols that operate on the network, including Secret DeFi applications and the network’s NFT offering, Secret Heroes.

New enterprise solutions aren’t better but they come without controversy

One of the ways cryptocurrency projects sought to differentiate themselves from the “medium of exchange” label was to offer enterprise solutions as a way to help corporations navigate the transition to a blockchain-based infrastructure.

XRP and Stellar (XLM) are two of the veteran protocols that fit this bill, but continual controversy and slow development has resulted in these early movers now playing catch up with newer networks that also don’t have the legal controversy that has followed Ripple for years.

Hedera Hashgraph has emerged as a competitor in this field and data shows that the network is capable of processing more than 10,000 transactions per second (TPS), with an average transaction fee of $0.0001 and a time to finality of 3-5 seconds.

These statistics are comparable to both XRP and XLM, which have indicated that their ledgers reach consensus on all outstanding transactions every 3-5 seconds with an average transaction cost of 0.00001 XRP/XLM.

Hedera is also smart contract capable, meaning users can create both fungible and nonfungible tokens, and developers can build 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 has been the introduction of smart contract capabilities and plans to develop within the side-chain and DeFi sectors where the top protocols exist. This gives newer projects additional utility, allowing them to meet the demand of investors and developers, thus increasing their token values and market caps as a result.

With smart contracts, the ability to interact with the growing DeFi landscape comes built-in, whereas the legacy tokens like LTC, XMR and BCH require special wrapping services which insert middlemen and thus insert additional fees, rigor and risk into the process.

Newer protocols have also embraced the more eco-friendly proof-of-stake consensus model that aligns with the larger global shift toward environmental awareness and sustainability. A plus is that holders can also stake their tokens directly on the network for a yield.

It remains to be seen if the slow march of time will eventually lead to a capital migration from older large cap projects to the newer generation protocols or if these legacy blue-chips will find a way to evolve and survive into the future.

Want more information about trading and investing in crypto markets?

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

  1. Qnjted says

    cheap tadalafil generic – buy cialis 10mg pills cialis 20mg uk

  2. Xrqilf says

    plaquenil 200mg us – purchase hydroxychloroquine for sale hydroxychloroquine generic

  3. Ofxmon says

    stromectol 3 mg price – ivermectin humans stromectol how much it cost

  4. Adtapz says

    buy cephalexin 125mg generic – cephalexin pills order erythromycin

  5. Zqnmms says

    fildena pill – disulfiram sale buy antabuse sale

  6. Jycisa says

    order rhinocort generic – order cefuroxime 500mg without prescription ceftin 250mg ca

  7. Dxtksr says

    purchase bimatoprost without prescription – robaxin brand purchase trazodone sale

  8. Hddkue says

    purchase sildenafil online cheap – cheap viagra pills cost zantac 300mg

  9. Srixrq says

    brand cialis – stromectol dosage buy ivermectin 12 mg online

  10. Lyitgn says

    cialis order online – ivermectin 12 mg for humans buy ed pills sale

  11. Vgffxb says

    online casino usa real money – free casino games no registration no download order prednisone online

  12. Rwbooe says

    purchase prednisone online – isotretinoin 40mg drug isotretinoin order online

  13. Yyolql says

    order amoxil sale – order amoxicillin 500mg generic sildenafil brand

  14. Njbqay says

    tadalafil 40mg drug – buy cialis 20mg generic order tadalafil 10mg

  15. Ltwasf says

    ivermectin humans – ivermectin 12 mg pills for humans zithromax pill

  16. Kfozom says

    zithromax cost – oral lasix 100mg methylprednisolone 8 mg over the counter

  17. Unspyx says

    purchase baricitinib pills – dapoxetine 90mg tablet buy dapoxetine 60mg

  18. Xlhday says

    order metformin 500mg – online pharmacy atorvastatin 10mg cheap

  19. Xmldkw says

    buy generic amlodipine 10mg – buy omeprazole 10mg pill buy prilosec 20mg sale

  20. Ycjmpe says

    lopressor medication – order atenolol online cheap order generic tadalafil

  21. Wztwwp says

    oral cialis 10mg – sildenafil mail order us sildenafil online

  22. Jakvgn says

    stromectol generic name – ivermectin 3mg without prescription ivermectin cream 5%

  23. Izdqym says

    order clomid 100mg – albuterol 2mg usa cetirizine 5mg pill

  24. Vgrrdr says

    buy clarinex – triamcinolone cheap triamcinolone 10mg us

  25. Omeqvt says

    misoprostol canada – order misoprostol 200mcg online levothyroxine buy online

  26. Ywyhsn says

    purchase sildenafil sale – sildenafil 100mg tablets gabapentin cost

  27. Yjgnbh says

    cialis 10mg pill – oral cialis 5mg cenforce price

  28. Kswmgi says

    diltiazem pills – acyclovir us cheap zovirax 400mg

  29. Ivcxtx says

    atarax 10mg generic – crestor buy online crestor 10mg without prescription

  30. Ookthd says

    order zetia 10mg pills – buy generic ezetimibe 10mg buy celexa 20mg for sale

  31. Uonbpy says

    sildenafil 100mg for sale – order flexeril generic order cyclobenzaprine 15mg for sale

  32. Nhewpa says

    sildenafil 100mg tablet – purchase cialis online cheap brand tadalafil 5mg

  33. Jrwjej says

    buy toradol 10mg pill – zanaflex pills buy ozobax generic

  34. Sudrby says

    gloperba pill – order colchicine online cheap strattera 25mg pills

  35. Szflrt says

    viagra 100mg generic – sildenafil 200mg for sale generic plavix

  36. Dikeoo says

    oral sildenafil 100mg – order viagra generic buy viagra 100mg generic

  37. Ftzmzz says

    order esomeprazole online – nexium 20mg uk buy phenergan pills

  38. Jicmaa says

    buy cialis without prescription – cialis generic name generic tadalafil 20mg

  39. Tabapx says

    modafinil 200mg cost – buy provigil 100mg without prescription buy best erectile dysfunction pills

  40. Cjwvbz says

    order accutane 40mg pill – order generic amoxil azithromycin 250mg sale

  41. Goucwh says

    order furosemide without prescription – lasix 100mg pills cheap viagra sale

  42. Gswxeo says

    purchase cialis for sale – cialis 10mg oral female viagra cvs

  43. Mqcnqp says

    cialis australia – buy losartan 25mg generic buy coumadin 2mg generic

  44. Aubdei says

    buy topiramate 200mg online cheap – levaquin online buy order imitrex 50mg online

  45. Ikxhia says

    avodart 0.5mg cost – tadalafil 10mg oral tadalafil medication

  46. Prdely says

    buy viagra 150mg generic – oral cialis 40mg order tadalafil 40mg generic

  47. Hwquac says

    ed pills otc – order prednisone pills prednisone medication

  48. Aaksfb says

    buy accutane 20mg online cheap – buy amoxil 1000mg pills generic amoxil 500mg

  49. Ahquqd says

    lasix 100mg sale – cost furosemide 100mg zithromax us

  50. Ikqjiv says

    doxycycline 100mg pills – hydroxychloroquine 400mg cheap buy aralen without prescription

  51. Tyjtai says

    buy tadalafil 10mg pills – Sales cialis oral sildenafil

  52. Mplzzn says

    provigil 200mg without prescription – viagra pharmacy viagra brand

  53. Zpjgof says

    low cost ed pills – order prednisone 10mg generic order deltasone 20mg pill

  54. Vxzhvb says

    order isotretinoin – isotretinoin tablet celebrex uk

  55. Ucfzec says

    cheap flomax 0.2mg – order spironolactone pills order aldactone 25mg without prescription

  56. Ngvwko says

    order zocor 20mg online – buy zocor 20mg without prescription affordable essay writing

  57. Ihsddm says

    doubleu casino online casino – online slot machines real money help writing research paper

  58. Rpugwf says

    empire casino online – casino games free ampicillin online order

  59. Lvhjzc says

    ciprofloxacin 1000mg brand – cost ciprofloxacin 1000mg brand tadalafil 5mg

  60. Cyuelk says

    sildenafil 150mg generic – buy viagra 100mg pill vardenafil prezzo

  61. Mnnboc says

    buy prednisolone 40mg online – order generic gabapentin 800mg cialis 5mg pills

  62. Hnrxkq says

    buy clavulanate online – order augmentin 375mg generic oral cialis 20mg

  63. Wejeve says

    bactrim 960mg for sale – oral sildenafil 150mg viagra 150mg

  64. Qmvgji says

    generic cephalexin 125mg – buy cephalexin sale brand erythromycin 250mg

  65. Ehfann says

    brand sildenafil 100mg – ivermectin 3mg tablets for humans generic ivermectin online

Leave A Reply

Your email address will not be published.