Decentralized finance (DeFi) dominated media headlines throughout 2021 and the sector, along with nonfungible tokens (NFTs), helped to initiate the mass adoption of cryptocurrencies.
While high yields on staking and instant profits from flipping jpegs have proven to be very lucrative for investors, it’s important to remember that none of it would have been possible without the underlying capabilities of smart contract technology.
The Ethereum network remains, hands-down, the most widely used layer-one smart contract platform in the crypto ecosystem, but everyone knows about the high fee and clogged network issues of the past few years.
In 2021, competing networks like Avalanche and Binance Smart Chain enabled compatibility with the Ethereum Virtual Machine (EVM) and this produced positive outcomes for investors in both ecosystems.
Let’s take a look at a few of the top-performing layer-one protocols in Q4 2021 and investigate how partnerships, investment from traditional finance and protocol developments might benefit each project in 2022.
Algorand (ALGO) is a pure proof-of-stake (PoS) layer-one blockchain network designed to be self-sustaining and highly scalable, thus making it capable of handling heavy transaction loads for minimal costs.
In Q4, the protocol launched the Algorand Virtual Machine which enabled decentralized applications (DApps), meaning DeFi and NFT projects could now operate on the network.
Tether (USDT) and USD Coin (USDC) had previously launched on the network, so their integration into new DeFi platforms was relatively effortless, allowing for the quick build up of liquidity. The launch of the 150 million ALGO Viridis Fund by the Algorand Foundation was also designed to accelerate the development of the DeFi ecosystem on the network.
The project also attracted the attention of institutional investors, and a sizable cash infusion came from Borderless Capital who launched a $500 million fund to help develop DApps on Algorand. Hivemind Capital Partners also selected the protocol as…