Crypto Market Returns To Fear; Should You BTFD?

Bitcoin is the first cryptocurrency and still #1, but there are thousands of other coins out there called “altcoins” with wide ranges of use cases.  Often times, most of these altcoins have little to no fundamentals, but there are some that stand out. Today, we will explore five undervalued altcoins that may be worth your attention. 

5. Loopring

Loopring (LRC) is a layer 2 blockchain built on Ethereum with the goal of allowing people to build their own decentralized exchanges. It specializes in a scaling technology known as ZK-rollups. This works by utilizing zero knowledge proofs to ensure data integrity and privacy as transactions are batched together for high throughput. As Ethereum grows larger as a blockchain, layer 2 solutions like Loopring will be essential to the continued decentralization and security of the network. Given LRC is currently trading around the #76 spot on CoinMarketCap with fellow Ethereum layer 2 solution Polygon at #17,  the price still has a lot of room to rise before catching its top peer.

4. Celo

Based on Ethereum’s codebase, Celo is a layer one proof-of-stake blockchain focused on smart contracts and DeFi on mobile phones. The design features two native tokens including CLGD, which is the native coin for paying gas fees and voting on protocol upgrades, and the CUSD stablecoin for DeFi and other uses. One of the coolest features of Celo is that it turns any phone number into a public key through its official Valora wallet available on mobile app stores. This gives them a massive first mover advantage in the blockchain mobile sector. Celo also happens to be a carbon-neutral blockchain! Trading at #73 on the charts below competitors like Algorand, Celo is a coin arguably worth more attention.

3. Tezos

Tezos (XTZ) is a layer one proof-of-stake blockchain with a unique on-chain governance structure and focus on verifiable smart contracts. Their governance model works so smoothly that there already have been 9 successful protocol upgrades. Their latest upgrade, Ithaca 2, featured a new important consensus algorithm called “Tenderbake,” bringing fast finality among other benefits to the Tezos blockchain. Tenderbake is based on Cosmos’ Tendermint protocol. Tezos also features a unique type of proof-of-stake, called liquid proof-of-stake, which allows users to move their coins out of delegated staking whenever they desire. One thing Tezos community members can’t figure out, though, is how the market cap at #45 is still below close peers like Cardano, who have had far more execution issues. In fact, the biggest selling point of Tezos’ governance mechanism is that it is designed to prevent hard forks from ever occurring.

2. Horizen

Another layer 1 smart contract blockchain, Horizen (ZEN) is different in the sense that it has its own interoperable system of sidechains. The main blockchain is secured by an equihash proof-of-work algorithm, while its sidechains (under the name Zendoo) use a proof-of-stake consensus mechanism. Horizen already has some impressive use cases, including an entire new blockchain for reward marketing being built by Dash. Being only #134 on the charts and since it’s still an early project, there is a lot of room for price improvement. We did an in-depth piece on Horizen recently, so you can look there for more information.

1. Polkadot

Number one on our list is Polkadot (DOT). A sharded, proof-of-stake, “layer 0” blockchain, Polkadot aims to be a base or “relay” layer for an interoperable system of blockchains called “parachains.” Thanks to the relay chain, protocol security is shared and all types of data are transferrable between different parachains. Unlike other projects on this list, the Polkadot relay chain does not natively support smart contracts. This makes sense, though, since the main purpose of it is to secure the entire ecosystem.

You may ask, why is Polkadot undervalued if it’s in the top 10 so frequently? The answer is the potential market that Polkadot is trying to address. With a world-class team led by Solidity creator and Ethereum co-founder Gavin Wood, Polkadot is an ambitious project that could power much of the future of web3 through its hundreds of parachains. When you understand the sheer size and weight of the project, it’s hard to understand why it’s not solidified in the top 10, instead of hovering in and out of it. Compared to other top ten names like Cardano and Solana, Polkadot just has not seen as much price improvement. As parachains continue to go live on the network, demand for DOT will likely rise since it is required to use the network, meaning the price should increase significantly in the coming years.