Polkadot’s young ecosystem has spawned many projects that would otherwise not do well on the Ethereum network; due to Ethereum’s high fees. Ali Raza lists his top 5 picks below.
Polkadot is one of the most popular blockchains out there when it comes to developers. The project’s creators saw the issues that Ethereum’s network has been struggling with in terms of high fees, long transaction processing waiting periods, and low scalability, and they decided to create a project that would address those and allow the crypto industry to take the next step in its development and adoption.
To do it, it invented parallel chains that run alongside its main blockchain. These chains’ purpose is to take over a portion of the work and free up Polkadot’s main chain. Along the way, these parachains also proved to be quite useful when it comes to achieving interoperability in the blockchain space, due to their ability to build bridges to other projects.
But, now that Ethereum fees are growing so much that many now consider them intolerable, Polkadot has become one of the go-to alternative chains, which led to the development of great many projects, with more set to come in the future. If you wish to learn more about them, we recommend starting with the following five.
1. Moonriver
The first on our list is Moonriver, which is a parachain built on Kusama, Polkadot’s public pre-production environment. The project is compatible with Ethereum smart contracts, meaning that it can serve as a tie between Polkadot’s and Ethereum’s ecosystems. Apart from that, it also acts as a companion network to a project known as Moonbeam, where it acts as an incentivized canary network.
What this means is that Moonriver can serve as a network for testing and experimenting when it comes to new code and upgrades, allowing developers to see how their projects would work, and verify their impact on the network under real economic conditions. Only after they are sure that the project works adequately would they import it on Moonbeam on Polkadot.
Naturally, this offers an opportunity for investors who wish to keep an eye out on any new and upcoming upgrades and projects, as they will first learn of them and see them in action on Moonriver. As for its native token MOVR, it is a utility token that can be used for paying gas fees for smart contract executions, as well as regular transaction fees. It is also used as an incentive, for powering the project’s mechanics, and more, so it has quite a few uses that guarantee its value.
To learn more about this token visit our Investing in Moonriver guide.
2. Celer Network
Celer Network is another popular Polkadot-based project, and it acts as a layer-2 scaling platform application. It is compatible with Ethereum, but also with other chains, but its true value lies in the fact that it can offer off-chain transaction handling.
By handling transactions off-chain, the project reduces the load that the chain itself has to deal with, thus speeding up the blockchain, while simultaneously offering fast, convenient transactions that are also highly secure. It can be used for regular payments, as well as for handling smart contracts.
The project was developed using the Substrate framework, and it was actually one of the first projects to be developed via this framework. Now, its goals are to help the network work as best as possible, increase its efficiency, security, speed, power, and more.
To learn more about this token visit our Investing in Celer Network guide.
3. Shadows
Moving forward, we also liked a project called Shadows, which was designed to serve as a financial hub for lending, borrowing, and trading derivatives. It is a DeFi-focused project that allows users to tackle some of the most popular derivatives in this multi-billion dollar-large sector.
Shadows aim to redefine investment opportunities that exist on the blockchain, and in doing so, it is also unlocking plenty of new and valuable opportunities. It has created its own decentralized application, also called Shadows, which is a web-based derivatives platform. The dApp can be used for issuing, staking, or trading derivative asset classes.
The project also invested in Polkadot and Binance Smart Chain, and it offers a number of benefits for investors, traders, and users alike. For example, it offers rewards to those who hold its token, DOWS, and it grants access to a derivatives market to users. Its use cases also mean that DOWS is getting its own utility, which can ensure its value down the road. It is an interesting project, especially for those who wish to expand their portfolios and enter the derivatives market easily, via a user-friendly dApp.
4. Ternoa
In the fourth spot is a project called Ternoa, which is a decentralized data transmission project that relies heavily on NFTs. The project uses Polkadot’s tech to offer its services to the users, and its developers created it in order to store and transmit data in one of the most secure ways available with the current technology.
The project’s devs saw many opportunities and possibilities when it comes to the NFT sector, particularly due to the NFTs’ ability to offer secure access to new products in entertainment, gaming, data management, and other industries. Also, while NFTs did emerge as a separate trend, they are also becoming a crucial component of the next big crypto trend, the metaverse.
Other than that, NFTs can also be used to preserve data and easily prove or manage its ownership, which, in a way, allows them to act as time capsules. Any data that gets tokenized and used for minting the NFT can only be accessed by the NFT owner, which could have significant implications for how we handle sensitive information in the future.
All in all, the project has great potential, and it is definitely worth keeping an eye on this January, as well as in the months to come.
5. Centrifuge
Lastly, we recommend looking into a project called Centrifuge, which aims to bring real-world assets to the world of blockchain technology. Basically, the project acts as a decentralized asset financing protocol, which connects DeFi with assets that exist in the real world. At the same time, it is trying to reduce the cost of capital for small businesses, and well as mid-sized enterprises.
Investors stand to benefit from it, as well, as they can receive a relatively stable source of income. The project’s primary concern is generating profits that would not be tied to the crypto industry itself. Due to its volatility, the crypto industry is not reliable enough to secure a stable income. Instead, the project will transfer real monetary value from fiat to the crypto industry. As such, it can be useful to companies that might wish to use it to access the liquidity of the DeFi sector, or for tokenizing assets, or even as using its CFG token as collateral to access financing.
The project has attracted many influential partners due to the possibilities that it offers, which could potentially make its price climb rather high, as its usage continues to increase.
Conclusion
Polkadot’s ecosystem may be young compared to Ethereum’s, but it is advancing at a rapid speed. It has already given birth to plenty of projects that would otherwise struggle on Ethereum’s network. Instead, they are thriving in Polkadots, serving as an example to others that this is a better, more productive network. As early movers, they get the advantage, and so investing in them in the near future could be quite advantageous for investors seeking new opportunities, as well.
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