When looking for a cryptocurrency to invest into it’s best to avoid flashy cryptocurrencies marketed with promises of “going to the moon” and other gimmicks.
Instead you should look at the following factors:
- Who is the team behind the cryptocurrency?
- Does it have a working project? Or are they currently building one?
- How does this product or cryptocurrency benefit users in the blockchain space?
- What drives demand behind the token and what is it’s use case?
Today we’ll look at three different cryptocurrencies with ambitious and interesting use cases.
Polkadot (DOT) is a proof-of-stake (PoS), multi-chain network that aims to bridge different blockchains together. In simple terms, it is a protocol that allows independent blockchains to exchange information.
Polkadot was founded by Gavin Wood, the co-founder of Ethereum and inventor of Solidity, the coding language used for Ethereum.
Polkadots co-founders include Robert Habermeier, partner at Hypersphere Ventures and Peter Czaban the founder of the Web3 Foundation
Polkadot is designed to operate two types of blockchains:
- The Relay Chain
The Relay Chain is the main blockchain on Polkadot, tasks such as governance (voting), parachain auctions, and staking take place here.
The Relay Chain is deliberately limited in it’s functionality, for example, smart contracts are not supported on the main chain but can be deployed via a parachain.
The Relay Chains main purpose is to coordinate the overall system and its connected parachains.
Parachains are individual layer-1 blockchains that work alongside the Polkadot network. Parachains are connected to the Relay Chain so they benefit from the security, scalability, interoperability and governance of Polkadot.
Parachains reduce the strain on the Polkadot network by running transactions through their own blockchain. This prevents the main chain from becoming congested, making Polkadot highly scalable.
According to Gavin Wood, the founder of Parity Technologies, Polkadot parachains can handle up to 1 million transactions per second.
“Ethereum can do 25 transactions per second (TPS), but, of course, the more you use it the worse it gets,” said Wood. “Polkadot uses parachains and can go from 100K TPS to up to 1 million TPS.”
Parachains on Polkadot have many different use cases including:
- Smart Contract Chains — Deploy smart contracts on the Polkadot network.
- Oracle Chains — Make off chain data available to the Polkadot network.
- Data Curation Networks — Connect all file storage chains into curated data sets.
- Identity Chains — Link accounts to a persistent identity and enable access to other parachains.
- Financial Chains — Hold all your different crypto assets in one portfolio.
- Internet of Things (IoT) Chains — Set standards for machine-to-machine communication.
- File Storage Chains — Enable and incentivize storing data on-chain
- Privacy Chains — Privacy focused chains or bridges to existing ZK-snarks chains.
Polkadot’s ecosystem is powered by it’s cryptocurrency DOT. DOT’s main functions are:
- Governance — DOT holders can vote on protocol upgrades and changes to the Polkadot network.
- Staking — Investors can stake their DOT and earn interest on their holdings for securing the network.
- Bonding — New parachains are added to Polkadot by “bonding”, which is a form of staking.
Polkadot has a lot of potential to become a big player in the blockchain space. Scalability and interoperability are two major obstacles in the blockchain space.
The developers behind Polkadot have an ambitious vision. If Polkadot succeeds in building an interconnected, multi-blockchain system, it could increase a lot in value over the long term.
Bitpanda Ecosystem Token (BEST)
Bitpanda Ecosystem Token (BEST) is a cryptocurrency developed by the crypto exchange Bitpanda, which is also the only place where investors can currently buy this cryptocurrency.
BEST is an exchange coin, offering benefits to it’s holders including token burns, trading discounts, access to upcoming launchpads and more.
BEST is similar to Binance Coin (BNB) in this respect since they’re both exchange coins with a range of similar benefits for token holders
Benefits of holding BEST include:
- Regular token burns to reduce supply
- Vote on strategic decisions for the platform
- Access to the upcoming Launchpad
- Access to future products
- Discounts for verified users paying their fees with BEST within the Bitpanda ecosystem
Exchange coins are great investments since they’re backed by a working product (crypto exchange). BEST is is backed by Bitpanda, a crypto exchange valued at $1.2 Billion, making it Austria’s first “unicorn” startup.
A few reasons why BEST is a promising investment:
Regular token burns to reduce supply
Part of the BEST spent on trading fees is burned every 3 months until 50% of the total BEST supply is destroyed.
Due to this, the supply of BEST is constantly decreasing. Binance Coin (BNB) follows a similar token burn model, which has helped the coin to reach a value of over $300.
BEST VIP Votes
When you hold at least 5,000 BEST (VIP level 1) in your wallet, you get access to exclusive BEST VIP votes.
This gives you a say in decisions made within the Bitpanda platform, including which cryptocurrencies, stocks or digital assets are added to to the exchange.
Access to the Bitpanda Launchpad
Bitpanda are planning on releasing a launchpad where users can take part in Initial Exchange Offerings (IEO’s) through their platform.
This will give BEST holders access to unique investment opportunities.
Holders can invest in projects including new cryptocurrencies, blockchain platforms, Defi platforms, NFT platforms and more.
If Bitpanda continues to grow in popularity, Bitpanda Ecosystem Token (BEST) has the opportunity to experience growth similar to Binances BNB coin.
Once the launchpad is launched, demand for BEST could increase due to investor interest in Initial Exchange Offerings (IEO’s).
The regular token burns are another factor that can influence demand since the supply is constantly being reduced.
Finally governance (voting power on strategic decisions) is also a factor in why I feel BEST is a good investment.
Imagine having a say in what tokens will be listed on your chosen crypto exchange.
BEST is just over 2 years old and I feel that’s still early days for this coin with some room for growth if the exchange behind it continues to grow in popularity.
Uniswap is a decentralized exchange for ERC-20 tokens built on the Ethereum blockchain. Tokens can be swapped directly from a users personal wallet (i.e. MetaMask), allowing them to control their crypto holdings at all times. The protocol facilitates automated transactions between cryptocurrency tokens on the Ethereum blockchain through the use of smart contracts.
Uniswaps defining feature is the ability for investors to instantly exchange (or “swap”) ERC-20 tokens at the current market price. There is no orderbook so you don’t need to wait for other token holders to place buy or sell orders.
Instead Uniswap uses an automated liquidity protocol, a system where liquidity providers lock large amounts of cryptocurrency into the platform.
In exchange for this, liquidity providers received a portion of the fees generated by Uniswap.
Uniswap also has an automated market maker system which calculates the price of token when investors want to buy or sell on the platform.
Users can also add new tokens to Uniswap without paying an exchange fee. This feature makes it easier for investors to access new, low marketcap tokens.
Uniswap’s cryptocurrency “UNI” is used as a governance token, giving holders the right to vote on strategic decisions within the platform.
1 UNI = 1 vote, so the more UNI an investor holds, the more voting power they have.
Uniswap is currently the largest decentralized exchange and fourth largest exchange in general. As it’s popularity grows, more liquidity will be needed for it’s token pairs, which will attract more liquidity providers.
As more liquidity providers flock to the platform, demand for UNI will increase since these liquidity providers will benefit from increased voting power on Uniswap.
It’s always good to know how a cryptocurrency benefits the blockchain space and it’s users.
The more beneficial a project is to the blockchain space, the more potential it has to increase in value.
If any of these cryptocurrencies interest you, here is where you can find and invest into them:
Polkadot (DOT) and Uniswap (UNI) be bought directly from CEX Exchange, from anywhere in the world.
Polkadot (DOT), Bitpanda Ecosystem Token (BEST) and Uniswap (UNI) can be bought directly from Bitpanda, if you live in Europe or Canada.
It looks like the market is slowly edging into a recovery period, now is a great time to accumulate good projects for the long term. I cant wait to see how all of this turns out.