- Summary:
- The crypto winter has left a trail of losses for many investors and projects. But which projects have overcome the odds to shine?
Investors in the blockchain space have endured a torrid time this year, with the vast majority of crypto projects bleeding value amid a sharp decline in the wider economy.
Crypto has been hard hit, and it came as a bit of a shock, given the incredible heights the space reached less than a year ago. Back in November 2021, Bitcoin peaked at a new all-time high of more than $69,000 per coin, while most other tokens hit spectacular highs too.
What followed was an unmitigated disaster, as the crypto industry experienced a sudden reversal in its fortunes. While the market has always been notoriously volatile, no one could have expected that within a few short months, most tokens would lose more than 90% of their value, with even Bitcoin’s price plummeting to under $20,000 by the middle of February 2022.
The negative market sentiment wreaked havoc on numerous crypto projects, and some of the most ambitious fell apart completely. The biggest casualty by far was the Terra ecosystem, where the popular Terra USD stablecoin and LUNA cryptocurrency both collapsed completely within a space of just 48 hours.
The Terra collapse was followed by the breakdown of well-known DeFi protocols like Celsius Finance, which suddenly blocked all withdrawals before shutting down forever – and taking investors’ funds with it. Similar events unfolded at protocols like Babel Finance, Vauld and BlockFi, with the ensuing negative sentiment adding to the downward pressure on cryptocurrency prices.
Inexperienced investors sounded the alarm, but long-term crypto enthusiasts took everything that happened with a pinch of salt. They’ve seen these kinds of events play out in the past. The market had simply entered what’s known as a “crypto winter”, the nickname for periods when cryptocurrency tokens experience a sharp decline in value after hitting new all-time highs. Crypto winters have come and gone before, and to date, they have always been followed by another, even more dramatic bull run.
While many unsustainable crypto projects will die off during this crypto winter, those that are built on more realistic ideas will use this time to knuckle down and build, laying a foundation for success in the future.
Long-term investors in the crypto space understand that crypto winter is, therefore, the best time to invest in extremely promising projects, taking advantage of low token prices to stack up their wallets ahead of the next bull run.
Radix: Reinventing DeFi With Lego-Like Components
The failure of popular protocols like Celsius, Babel Finance, BlockFi and others has illustrated the need for an entirely new approach to DeFi that’s based on the ideas of greater transparency, more security and ease of use.
This is the mission of Radix, a layer-1 blockchain built especially for DeFi that’s based on the belief that crypto assets like tokens and NFTs should be a critical feature of the platform itself, as opposed to being implemented as smart contracts. According to Radix, the interaction of crypto assets is a fundamental element of each transaction, so those assets should be a core feature of the platform to ensure higher security.
To that end, it has come up with an entirely novel architecture for DeFi. With Radix, tokens are created by requesting them from the underlying platform and specifying the desired parameters of that token. This allows them to be treated as physical objects held in accounts and moved to another account when transactions occur. That’s quite different from traditional Ethereum Virtual Machine-based DeFi, where tokens are implemented via smart contracts. With Radix, accounts are essentially “vaults” of tokens that their owners control, in contrast to Ethereum, where a user’s tokens are spread across multiple smart contracts.
The key to this architecture is Radix Engine, which is a development engine that’s designed to mitigate the risk of smart contract vulnerabilities. It does this by ensuring that coding for new smart contracts is kept to an absolute minimum. Unlike other platforms, where developers must write all of their smart contract code from scratch, Radix makes it possible to create scalable decentralized applications using templates referred to as “DeFi Lego bricks”.
Radix Engine employs its own programming language called Scrypto, which is used to create these lego bricks. In Radix-speak, these lego bricks are known as “components”. They’re used to provide smart contract-like functionality for dApps, only they’re far more intuitive. Essentially, they’re like modular components that can be pieced together with others to create highly specialized DeFi apps.
Components are accessed through the Radix Component Catalog and can be activated, or “instantiated”, using component templates via an API. Once instantiated, the components can be applied to multiple applications, knowing they’ll work in the same way every time they’re used. Modularity is further encouraged with the use of “blueprints”, which are basically templates that describe very specific functionality for each component.
Through this entirely new architecture, Radix makes it possible for developers to easily build secure DeFi applications, even if they’re not fully versed in the Scrypto language. Rather than writing masses of highly specialized code for each smart contract function, they can simply draw on tried and tested components and blueprints and use them as the basis of highly customized dApps.
To incentivize the community to create these components and blueprints, Radix has created a developer royalties program that automatically pays out rewards in its native token XRD whenever someone else uses them in a transaction.
To summarize, Radix has created a much simpler DeFi development environment that negates the need to write tons of complex smart contract code. It has two key benefits – fewer vulnerabilities and more time for developers to focus on the functionality of their dApps, leading to the promise of a safer and more functional generation of DeFi applications in future.
Aptos: Solving Blockchain Security Without Sacrificing Scalability
The blockchain industry is still struggling to strike that elusive balance between security and scalability, and for that reason, there’s a lot of optimism about the prospects of Aptos.
Developed by former Meta employees that previously worked on Diem and armed with an impressive $350 million in Series A funding, Aptos is a Layer 1 blockchain that’s built on a proof-of-stake consensus mechanism. It aims to provide rapid transaction speeds, low fees and incredible scalability of the Solana network while improving considerably on its security.
Aptos is built on the foundations of Diem, and it aims to solve the security problems that have plagued other so-called “Ethereum killers” like Solana, creating what its team promises is the “most secure” blockchain the world has ever seen.
Not only that but it’s also said to be incredibly fast and scalable too. Such a claim is not to be taken lightly because most blockchains have only been able to achieve higher throughput and instant finality by sacrificing security. So if Aptos can convince people of its promises, it stands a real chance of surpassing Ethereum to become the world’s most prominent Layer 1 blockchain.
We will see if it can do it. Aptos’s mainnet is slated to launch in the third quarter of 2022. To date, its testnet and devnet have already been launched and have had good reviews, enabling fast transactions with low costs and no security problems. However, the team is yet to reveal details on its proposed tokenomic structure.
What we do know is that Aptos is written using a customized Move programming language that’s based on Rust, combined with its novel Move Virtual Machine. This combination is said to enable sub-second transaction finality while supporting over 10,000 transactions per second – putting it far ahead of Ethereum’s 14 TPS.
What’s really exciting about Aptos, though, is its security. The main focus of Move is on security and encryption, with the promise of preventing DDoS attacks and wallet-draining. The basic principle is that assets saved using Move code can only be stored on a local device, forcing security and eliminating the ability for hackers to drain someone’s wallet. This addresses one of the key weaknesses of Solana, which has seen millions of dollars worth of crypto and NFTs stolen through hack attacks.
Apto’s code is open-source, and there are a number of projects already building on its testnet. With millions of dollars in funding behind it and the promise of speed, scalability and security all bundled into one, Aptos may just have what it takes to create the next generation of DeFi, dApps, NFTs and crypto.
Sui: Building Unmatched Blockchain Scalability
Another Layer-1 blockchain project that’s leveraging the Move programming language to solve scalability issues is Sui. Also founded by a team of Meta engineers that previously worked on Diem, it’s said to be the world’s first permissionless network that’s designed from the ground up with scalability in mind.
The key ingredient is Sui’s novel consensus mechanism, Narwhal-Tusk, which is a proof-of-stake protocol that separates data transmission from the actual process of achieving consensus. In this way, it solves the problem of Mempool – a mechanism used by blockchains to store validated but unconfirmed transactions and a key cause of network congestion.
Together with the unique parallel execution capabilities of Move, Sui is able to scale horizontally to such a degree that it can potentially process millions of transactions per second without requiring dedicated nodes in the network to do so. In other words, Sui promises to scale without any upper limit, helping it to meet infinite application demands while ensuring low transaction fees and high security.
Sui, therefore, eliminates a key bottleneck that plagues existing blockchains. The issue with networks like Ethereum is that transactions are crammed into sequential blocks, leading to wasted computational processing power. Sui organizes transaction data into independent objects, allowing transactions to be executed in parallel.
Sui can also scale throughput horizontally via a process that ensures parallel agreement on causally independent transactions. This is achieved using a technique known as Byzantine consistent broadcast, which does away with the overheads created by global consensus without sacrificing security and liveness guarantees.
The unique capabilities of Sui blockchain promise unmatched scalability and almost instantaneous transaction finality. As a result, its network can grow to meet the needs of potentially millions of decentralized applications without any impact on performance. As such, it has everything required to become a foundational layer of the emerging Web3 ecosystem. Shifting to the play-and-earn theme is Affyn, a project that’s creating a more accessible metaverse that’s mapped to the real world where anyone can start playing for free.
Affyn is the creator of Nexus World, a unique metaverse that allows anyone to mint their own NFT-based “Buddie” at no cost and start playing a variety of games within its virtual landscape. Unlike other metaverses, Nexus World is uniquely mapped to the real world, meaning that each location within it is tied to a physical location somewhere here on Earth.
Within this mobile-accessible metaverse, players can explore, play games and join in various activities based on their physical geolocation. Nexus World has borrowed from the classic Pokemon Go augmented reality game, with challenges that involve hunting free Buddie NFTs in real-world shopping malls. To collect them, players have to visit a shopping mall and wonder around to discover them using an augmented reality lens
Affyn: Bridging the Gap Between Metaverse & The Real World
The play-and-earn element gives players a way to earn FYN cryptocurrency for completing various games and real-world challenges. What’s more, these tokens can then be spent in the real world through Affyn’s growing ecosystem of partners within the dining, entertainment, shopping and travel industries, where they can gain special privileges and discounts.
Like all metaverses, users can also spend their FYN tokens to buy virtual land that’s mapped to the real world and features digital properties These structures are digital representations of real-world real estate, each with their own set of characteristics.
Affyn’s Nexus World sounds similar in many ways to better-known metaverses such as Decentraland and The Sandbox, which connect players virtually. However, it differs from these platforms as it’s geolocation based and able to connect people physically, bridging the gap between the digital and physical worlds in a way that no other project can do.