Bitcoin (BTC), Ether (ETH) and the cryptocurrency market had a rough 2022 from a price perspective, but traders are hopeful that 2023 will include bullish developments that will push cryptocurrency prices higher.
Despite the downturn in the entire market, a handful of altcoins continued to contribute positively to the cryptocurrency space, and thanks to Ethereum, the term altcoin has ceased to be derogatory.
Let’s explore the top altcoins that made a difference in 2022.
Ethereum fundamentals shone in 2022
The Ether price hit a yearly high of $3,835 on Jan. 2 and has struggled to recover amid the bear market and other macroeconomic factors. The Ethereum network is the main project of 2022 not because of the evolution of the ETH price, but because of its fundamentals and because it has completed the long-awaited mainnet upgrade. The Ethereum merge was completed on September 15, 2022, and while many feared that the merger to proof-of-stake (PoS) could cause problems, the transition was seamless.
The main advantage of PoS is that it is much more energy efficient than proof-of-work (PoW) because it does not require expensive and energy-intensive hardware to validate transactions. This reduces usage costs for the end user and makes it a more sustainable and scalable solution for Ethereum’s long-term growth. The merge also reduced the power consumption of the Ethereum network by more than 99.9%.
Some analysts are bullish on Ether after The Merge as its issuance schedule has turned deflationary. Although daily active users of the network have increased, emissions have remained inflationary and the price of Ether remains below its yearly highs.
In 2023, investors hope that increased transactions on the network will lead to increased demand for Ether and that this will translate into a price boost for the altcoin.
Lido (LDO) brought Ethereum network staking to the masses
Lido makes it easy for users to participate in the Ethereum PoS consensus as validators by providing a simple interface to stake without having to meet the high threshold that the network requires to become a validator.
Since its launch, Lido has earned $158.8 million in fees from its Ether staking protocol. At its peak, Lido had 823 daily active users on September 17.
With the Shanghai hard fork of the Ethereum network scheduled for March 2023, Lido will have a very busy first quarter and all Ether staked on the platform will have the option to be withdrawn. Aztec Connect, the creator of the Lido protocol, also recently secured a $100 million fundraising round to build an encrypted blockchain.
Polygon partnerships prove their long-term resilience
Mass adoption requires traditional companies and brands to get involved in cryptocurrencies. Polygon (MATIC) has a strong focus on partnerships and some of the relationships developed in 2022 include Warner Music, JP Morgan, Instagram and Neobank.
These partners use the Polygon network in a variety of ways, including integrating the network into their infrastructure and using Polygon to deliver distributed ledger technology (DLT) for their products and services.
Notable companies such as Cointelegraph have also decided to launch NFTs on Polygon. In addition to Cointelegraph, former President Donald Trump, Reddit, DJ Deadmau5, and Nike have launched NFT collections on Polygon.
Some traders are expecting a 200% turnaround for MATIC due to on-chain metrics showing traction and the multitude of future partnerships. Despite all the growth of Polygon, the Ethereum network continues to receive more commissions.
Polygon’s focus on the fundamental principles of Web 3.0, combined with their partnerships, has earned them a spot as one of the top altcoin projects in 2022.
MakerDAO’s DAI token proves its resilience
In a year where algorithmic stablecoins have disappeared, Dai (DAI) has proven its resilience. Unlike centralized stablecoins, DAI is a decentralized stablecoin that offers transparency, resistance to censorship, and the ability to operate outside of traditional financial systems.
Although DAI is not new to the cryptocurrency space, the decision to increase its exposure to low-risk assets such as Treasuries and bonds has earned it a place among the top altcoins. According to a analysis From Sebastien Derivaux, a cryptocurrency expert, this decision generated 75% of all DAI revenue ($600 million).
Cosmos improvements draw attention from institutional investors
In 2022, Cosmos (ATOM) focused on solving the interoperability and communication challenges that exist between different blockchains. On January 1st, Cosmos had 74 active developers, and this number more than doubled, peaking at 154 on November 30th.
In a year plagued by cross-chain bridge casualties, Cosmos’s Inter-Blockchain Communications (IBC) protocol seems to have weathered the worst. Its success has drawn the attention of Delphi Digital’s research division and VanEck’s fund managers.
Overall, Cosmos has the potential to become an important infrastructure layer for the cryptocurrency ecosystem, helping to facilitate the exchange of value and information between different blockchain networks and enabling a more interoperable future.
Although 2022 is a year most investors would like to forget, positive factors emerged in terms of mass adoption. Construction-focused altcoins will continue to power the future of cryptocurrencies in 2023 and beyond.
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