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Hey DEFI TIMES community,
The DOT token has performed exceptionally well during the last couple of weeks, and it seems like there will be a lot of attention to the Polkadot ecosystem soon. As the Polkadot hype becomes more intense, many people ask us which Polkadot-based tokens they should keep an eye on.
Polkadot is a sharded blockchain, which aims to connect all other blockchains. Therefore, the project doesn't seek to compete with other blockchains. It tries to complement them.
Polkadot has two main advantages over other blockchains.
Polkadot aims to make blockchains more scalable using its PoS consensus algorithm. It will minimize transaction fees while keeping the block throughput high. The blockchain can process thousands of transactions per second.
Polkadot connects all other blockchains through its Parachains. Parachains connect to them via bridges, making it possible to bring all kinds of assets from one blockchain to another. For example, you could potentially get your ERC-20 tokens on the Polkadot blockchain.
Today, we would like to introduce five different projects that utilize Polkadot's scalable and interoperable ecosystem to their advantage.
With that said, let's explore the world of Polkadot!
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Acala is an all-in-one DeFi application on Polkadot. Just like Maker, it lets you create decentralized stablecoins. You can deposit collateral in their smart contracts and mint aUSD. On Acala, you can also lend and borrow aUSD, trade tokens on a decentralized exchange, and many more things. It also has a governance system, where users can vote on protocol decisions.
Acala is the Polkadot network's backbone, and it could become as crucial to the Polkadot ecosystem as Maker is to the Ethereum ecosystem. All in all, the way Acala works is similar to the Maker protocol.
Minting decentralized stablecoins is nothing new, but every major blockchain will need a trustless way to hedge against volatility.
Acala has the first-mover advantage on the Polkadot blockchain. The protocol is likely to perform exceptionally well during the next Polkadot hype.
Moonbeam is an EVM compatible Parachain on Polkadot, which means that every project launching on Ethereum can seamlessly migrate to Moonbeam. Developers, who write code in Solidity, do not need to reconfigure the smart contracts to deploy them on Moonbeam.
Gas fees on Ethereum are as high as never before, which could prevent teams from building on Ethereum. They will search for alternatives. Moonbeam makes it easy to transition from Ethereum to Polkadot. That's why Moonbeam could be the number one alternative for many Ethereum based projects.
Moonbeam has a high chance of receiving a Parachain slot. The community is quite big, and many projects have already decided to build on Moonbeam when launched. Among others:
Polkastarter is the Uniswap of the Polkadot ecosystem. It is a decentralized exchange, which launched its MVP on the Ethereum blockchain. The code is written in Solidity, which is not a disadvantage because Polkastarter will soon launch on Moonbeam (EVM compatible).
Polkastarter will be one of the first exchanges launching on Polkadot, and it has a great chance to become the leading one. It has the first-mover advantage.
It could build momentum similar to Uniswap. If your token is not traded on Uniswap, does it even exist? I expect Polkastarter to construct a similar religious fanbase in the Polkadot community.
Even today, we see a lot of projects launching on Polkastarter. As of today, Polkastarter is mainly used for fixed-price token sales. However, it will expand its product base very soon.
RioChain aims to become a Parachain of the Polkadot ecosystem. It seeks to bring crypto to the masses through bridging traditional and decentralized finance. RioChain is built with the Substrate framework, which allows faster transactions and lowers transaction fees.
Currently, RioChain uses a Proof of Authority consensus model. Even though RioChain is centralized today, it aims to become completely decentralized by switching to Proof of Stake shortly. The transition to full decentralization is their number one priority.
At the core of the protocol is the native token RFUEL. RFUEL is used to pay for transaction fees. You will also use it for staking. Stakers lock their tokens in a smart contract and receive inflation rewards as compensation.
RioChain already has a lot of cooperations in the Polkadot ecosystem. For example, MANTRA DAO confirmed it would launch on the RioChain after its release.
RioChain is one of the most promising bets on the Polkadot ecosystem because it has one of the most active Polkadot communities. Therefore it stands a high chance of receiving a Parachain slot.
5. Darwinia Network
Darwinia also aims to become a Parachain of the Polkadot blockchain. It distinguishes itself from other projects by focussing on NFTs. It will have an NFT marketplace, where users can trade cross-chain NFTs (NFTs from other blockchains).
Darwinia also focuses on Decentralized Finance. Developers can build decentralized financial applications on the Darwinia Parachain. The DeFi applications will then be able to connect to its native decentralized exchange.
Darwinia could be your bet on NFTs. If you don't want to do a lot of research about the NFT space as a whole, you could invest in Darwinia. That's how you can profit from the NFT hype without actually owning any NFTs.
You can invest in Darwinia by buying the protocol's native token (RING). RING is used for staking and transaction fees. When you stake RING, you receive KTON, which is a right to claim your staked RING.
We covered five parts of the Polkadot ecosystem, which are all different in their nature. The Polkadot ecosystem is developing at an insane speed, making it particularly difficult to keep up with all the things that are happening.
At this point, the Polkadot blockchain is almost as diverse as the Ethereum blockchain. You can invest in:
- lending platforms
- decentralized stablecoins
- auction platforms
- any DeFi application
Don't stop at the projects we mentioned in this article! The Polkadot ecosystem is an excellent opportunity right now. The risk-reward ratio during this bull market seems extremely attractive.
So, do your research. Become an expert in the Polkadot ecosystem. Connect with the founders and builders. Learn about all kinds of projects that are building on Polkadot.
All information presented above is meant for informational purposes only and should not be treated as financial, legal, or tax advice. This article's content solely reflects the opinion of the writer, who is not a financial advisor.
Do your own research before you purchase cryptocurrencies. Any cryptocurrency can go down in value. Holding cryptocurrencies is risky.