When it comes to digital currencies, the first thing that comes to mind is Bitcoin. However, the field of mining is astonishingly diverse. If you're interested in cryptocurrencies, altcoins are worth a look.
Altcoin sphere: understandable about the complex
The term "altcoin" means "alternative bitcoin." Since there is no centralized regulation of the cryptocurrency market, no one prohibits the emergence of alternative digital currencies. Altcoins appear based on blockchain technology, mostly on the foundation of the Ethereum network, continuing to develop it. Programmers are expanding the practical platform to transfer the methodology to the field of data preservation. At the same time, the purpose of the next cryptocurrency modification is to replace the reference coin - Bitcoin - or to demonstrate a more successful offering - for example, a cheaper digital currency or one that is more convenient to mine.
All types of tokens are characterized by keeping users anonymous, maintain every transfer and wallet in private.
There is no exact data on the number of altcoins in the world. Presumably, their total number exceeds 500 types.
According to statistics, the growth of users in DeFi in the previous 12 months was more than ten times (from less than 100,000 to more than 1 million people).
In order to invest profitably, it is important to choose the best offer, i.e. to understand which tokens (crypto coins) have occupied the top niche in the sphere of decentralized finance.
TOP rankings criteria for alternative tokens
As in the world of real finance, digital money is evaluated relative to the world's reference currencies. To date, this is the U.S. dollar, the euro, etc. Financial markets track the characteristics of a particular crypto. For the major, strong players of the crypto market and little-known altcoins also make ratings, evaluating the popularity, demand, value, focusing on Bitcoin, which continues to hold the position of the leader. As for the TOP 10 participants, tokens are constantly changing, outperforming or giving way to competitors.
Factors for evaluating altcoins:
- The level of appeal to the consumer.
- The following technical features are taken into account here: ease of use, speed of transactions, etc.
- The size of the market value at the time of rating formation.
- Indicators of the overall price dynamics for the previous period.
- Volume of market capitalization. The figure is calculated by multiplying the value of the coin by the total number of tokens formed .
The ease of creation of altcoins is not a direct guarantee of their high value in the market, so the objective comparison of indicators is typical for cryptocurrencies.
The most promising DeFi cryptocurrency
Which DeFi-sector altcoins will be the "dark horse" in 2021 and will be able to surprise with unpredictable price hikes?
Experts in the financial crypto market recommend taking a closer look at a number of token modifications:
- Curve Finance;
- Matic Network;
- Yearn Finance;
Most rankings are generated by online resources, such as CoinMarketCap (New York, USA), which specialize in tracking and analyzing the current cryptocurrency market. The positions in the rankings change depending on the activity of the mining process, new volumes of cryptocurrencies, their price attractiveness. However, it is possible that it is their rates that will skyrocket, turning these altcoins from unknowns into particularly sought-after ones. At the same time, they can help reduce transaction fees.
Let's take a closer look at some of them.
UNI token, which occupies a leading position in the segment, is one of the most popular among decentralized exchanges - Uniswap.
The altcoin has a market capitalization of $1.47 billion at the beginning of 2021.
The Federal Reserve Bank of St. Louis is expected to contribute to the growth of the token rate, after a report, as it is the bank that personally studies the decentralized finance market and believes in its development in the future.
Polkadot with a DOT token is an open source protocol based on sharding, making data and token transfers between blockchains available. The goal of developing this interoperability is to create a completely decentralized private network that will serve to develop applications (services). The altcoin has a market capitalization of $8.5 billion.
The token is predicted to grow rapidly thanks to the investment of a large cryptocurrency exchange Binance (on average $2.4 million) in the preparation of a separate network (parachain) Plasm Network (on the platform of the Polkadot network). The coin created as a result of the DOT project has several functions at the same time. It is an operational token, a management currency that deals with the creation of parallel.
After the token was listed on most leading cryptocurrency exchanges, its exchange rate literally took off in the fall of 2020 and renewed its historical high of $6.84, continuing to increase its growth rate, guaranteeing a positive momentum for the current year. Crypto investors are closely watching Polkadot, which is on course to join the club of the most significant cryptocurrency projects.
ADA token has a capitalization of $7.4 billion
Investors call Cardano with its native ADA token another ambitious project that aims to provide the tools that crypto-enthusiasts - creators, innovators who are interested in better things for the planet and its inhabitants - need.
To date, the project has moved into its second phase, which is expected to launch at the end of February 2021.To date, the project is moving steadily towards new highs. The active dynamics of altcoin predicts that it will soon take a confident bronze in the ranking of projects with high market capitalization and the highest return on investment (ROI).
In fact, the cryptocurrency market is little studied, one might say "wild", so before investing, one should monitor the information and keep track of the data, which can change dramatically any day.