Decentralized finance (DeFi) made headlines throughout 2021 and the sector, along with non-fungible tokens (NFTs), helped initiate what appears to be a massive adoption of cryptocurrencies.
While the high returns from staking and the instant returns from converting jpegs have proven to be very lucrative for investors, it is important to remember that none of this would have been possible without the underlying capabilities of smart contract technology.
The Ethereum network is still by far the most widely used layer one smart contract platform in the cryptocurrency ecosystem, but everyone knows the problems of high transaction rates and network stagnation of recent years.
In 2021, competing networks such as Avalanche and the Binance Smart Chain enabled compatibility with the Ethereum Virtual Machine (EVM) and this produced positive results for investors in both ecosystems.
Let’s take a look at some of the top performing layer one protocols in Q4 2021 and investigate how partnerships, traditional financial sector investment, and protocol developments could benefit each project in 2022.
Algorand (SOMETHING) is a pure blockchain proof-of-stake (PoS) network, designed to be self-sufficient and highly scalable, making it capable of handling large transaction loads with very low costs.
In the fourth quarter, The protocol launched the Algorand virtual machine, which enabled decentralized applications (DApps), which meant that DeFi and NFT projects could now operate on the network.
Tether (USDT) Y USD Coin (USDC) they had previously been launched on the network, so their integration into the new DeFi platforms was relatively straightforward, allowing for the rapid accumulation of liquidity. The launch of the USD 150 million ALGO Viridis FUND by the Algorand Foundation was also designed to drive the development of the network’s DeFi ecosystem.
The project also attracted the attention of institutional investors, and a major injection of money came from Borderless Capital, which launched a $ 500 million fund to help develop DApps in Algorand. Hivemind Capital Partners also selected the protocol as its first technology partner.
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 features that allowed ALGO holders to have a say on the future development of the protocol.
On November 18, 21Shares announced the launch of a listed, physically backed Algorand product, which helped cause ALGO’s price to spike to an annual high of $ 2.99.
Tezos (XTZ) is a flexible PoS blockchain designed to evolve over time without the need for hard forks. In the fourth quarter, traditional financial entities such as the Arab Bank Switzerland partnered with the protocol to launch staking, sale and custody services for the project’s native XTZ token.
On December 7, the project made headlines after expanding its NFT ecosystem by partnering with Ubisoft, a major video game developer. The Ubisoft Quartz platform uses the Tezos blockchain, and Ghost Recon: Breakpoint players will be able to purchase and trade game-specific NFTs on the market.
On December 15, Rarible, a popular NFT marketplace, also announced the integration of the Tezos blockchain into its ecosystem. This means that Rarible users can buy, sell and trade native NFTs from the Tezos network in a much cheaper environment than Rarible’s Ether-based marketplace.
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
Part of the reason for the increased attention around Tezos is the energy efficiency of the grid in a world increasingly focused on environmental sustainability.
According to a recent carbon footprint report from PricewaterhouseCoopers Advisory SAS, the Tezos network experienced a 70% increase in energy efficiency in 2021, and Their annual energy consumption is now estimated to be roughly the same as the carbon footprint of just 17 people.
At press time, XTZ is trading at a price of $ 4.34 after hitting an annual high of $ 9.17 on October 3, just before the general market crash that has pushed prices across the cryptocurrency ecosystem as the market heads into the final weeks of 2021.
Elrond (EGLD) is a blockchain platform for distributed applications and enterprise-grade businesses that aims to become the technology ecosystem of the “new Internet”.
According to the project website, the network uses sharding technology to allow processing 15,000 transactions per second (TPS) with an average transaction cost of USD 0.001.
The end-of-year price spike for the EGLD protocol native token came after the launch of a $ 1.29 billion liquidity incentive program by the decentralized exchange (DEX), Maiar, native of the Elrond network.
Before the launch of the liquidity program, the price of EGLD was on the rise thanks to its increasing use as a digital payment method, including a partnership with Romanian music festival Untold, which announced that tickets for its 2021 festival could be purchased with EGLD.
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