The year 2021 was a watershed year for the crypto market in many ways and most investors are absolutely delighted that the price of Bitcoin (BTC) has set a new all-time high of $ 68,789. In the same time frame, Ether (ETH)) posted a parabolic rally causing its price to surge 565% from January 1 to hit an all-time high of $ 4,859 on November 10.
While it has been an impressive year for large-cap cryptocurrencies, some of the biggest gains and most shocking developments have occurred in the altcoin market, where decentralized finance (DeFi) and non-fungible tokens (NFT) skyrocketed. by thousands of percentage points and helped usher in a new level of awareness and adoption of blockchain technology and crypto assets.
With all that said, let’s take a look at five altcoin projects that made significant contributions to the crypto ecosystem in 2021.
Uniswap
The decentralized exchange Uniswap (UNI) has had arguably the biggest impact on the overall cryptocurrency ecosystem since its launch in the summer of 2020, with the DEX seeing significant growth throughout 2021 as it helped facilitate the launch of thousands of new projects by removing the barriers that existed in centralized exchanges.
Data provided by Dune Analytics shows that Uniswap has been the dominant DEX throughout the year and has consistently seen more trade volume than all other DEXs combined.
As seen in the graph above, the volume moved on decentralized exchanges actually started to increase in the second half of 2021, largely led by activity on Uniswap.
Throughout 2021, Uniswap was also a leader in development, with the protocol developers announcing the release of Uniswap version 3 in March. The update included multiple protocol updates and laid the groundwork for integrating layer two scaling solutions like Optimism and Arbitrum with Uniswap as a way to help reduce transaction costs and processing times for users.
Aave
Aave (AAVE) is a DeFi loan protocol that allows users to deposit their tokens and lend them as a way to earn passive income or leave them as collateral to borrow another asset.
As the DeFi sector began to gain prominence in early 2021, Aave emerged as a community favorite thanks to the wide range of crypto assets it accepted and the backing of some well-funded players.
Throughout the year, Aave expanded its capabilities and scope with the release of version 2 of the project, which added support for Polygon, a layer two scaling solution, and Avalanche, which is a popular blockchain network.
As a result of these added capabilities, the total liquidity available on the AAVE protocol has exceeded $ 25.7 billion, making AAVE the leading DeFi protocol when it comes to Total Value Locked (TVL).
Curve
Curve Finance is a stablecoin-centric protocol that uses an automated market maker (AMM) to manage liquidity on the platform and throughout the DeFi ecosystem.
Stablecoins have emerged as a foundational piece for the crypto community in 2021, as they provide sufficient liquidity to the market and a safe haven for traders seeking refuge during periods of high volatility.
The growing importance of stablecoins has benefited the Curve protocol and its native CRV token by accelerating its integration of stablecoins into many of the major DeFi protocols, including the Yearn.Finance and Convex Finance ecosystem.
Despite the fact that a significant part of the assets locked in the Curve protocol are stablecoins, the platform now ranks as the second protocol in terms of TVL behind Aave, with data from Defi Llama showing that USD 21.77 billion in value they are now locked in the vaults of Curve.
Curve has also integrated with many of the most active blockchain networks, such as Ethereum, Avalanche, Harmony, xDAI, Polygon, Arbitrum, and Fantom, further proof of the protocol’s quest to be the stablecoin liquidity provider for everything. the cryptocurrency market.
Axie Infinity
Axie Infinity is a “play-to-earn” (P2E) trading and battle game that allows participants to collect, breed, breed, fight, and trade with NFT-based creatures called Axies.
The P2E model emerged as a new fan favorite throughout 2021 because it provides users with the ability to earn a daily income for playing, which offers some unique advantages compared to the traditional payment model.
Along with the rise in popularity of Axie Infinity came a new all-time high for the platform’s native token AXS. As the token hit new highs, the platform generated daily revenue of $ 17.55 million at its all-time high on August 6.
Axie Infinity was also one of the first projects to set the trend to migrate off the Ethereum network due to high fees and slow transactions. At the beginning of the year, the project migrated to the Ronin sidechain and in November it released its own DEX called the Katana.
Dogecoin
Dogecoin is an open source proof-of-work cryptocurrency that leads the field of “meme coins” that made headlines throughout 2021.
While the project has few contributions on the tech or development front, frequent mentions from the likes of Tesla CEO Elon Musk and Shark Tank star Mark Cuban helped push Doge to a 23.746% rally. which caused the price to rise from $ 0.0031 on January 1 to an all-time high of $ 0.74 on May 8.
In addition to the gains in DOGE’s price, the token received increased attention after it was announced that it would be used to help fund SpaceX’s launch of a lunar satellite, and the Dogecoin movement also kicked off a meme rally. coins that spawned a group of copycat projects such as Shiba Inu (SHIB) and Dogelon Mars (ELON).
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