Last week we reported that the total cryptocurrency market capitalization is finally back above $2 trillion, but at the end of Week 33 the total valuation of all cryptocurrencies in circulation combined already exceeded $2.1 trillion. Nevertheless, for the second week in a row, market leaders Bitcoin and Ethereum were pushed in the background of attention while altcoins like AVAX, ADA, LUNA, DOT, and SOL claimed the spotlight with their high weekly gains. Furthermore, several altcoins are either at or very near their ATH prices. Together with a drop in BTC dominance, this has led a few analysts to believe that we are at the beginning of a new altcoin season.
1. Polkadot (DOT)
Polkadot is a blockchain solution that allows multiple specialized blockchains called parachains to run at the same time and interoperate. Polkadot can connect diverse blockchains into a single, decentralized and highly scalable ecosystem. The network operates using a proof-of-stake consensus algorithm and utilizes a native currency DOT. The project was originally designed by Dr. Gavin Wood, one of the co-founders of Ethereum and the inventor the smart contract programming language Solidity. Along with Cardano and Solana, Polkadot is considered one of the potential “Ethereum killers”.
DOT could pull an ADA-like rally when parachains get announced
The genesis block of Polkadot’s Relay Chain has been created in May 2020 and the project now finally all set to launch several Parachains in 2021. Crypto analysts and project followers are speculating that the launch of parachains on Polkadot will have a similar effect on the price of DOT as the announcement of smart contracts roll out had on the price of ADA. Nevertheless, even without parachains, DOT is soaring at a much faster pace than an average altcoin in this bull market as it has more than doubled its price in past 30 days. DOTs are currently changing hands at a price of $27.50. The decentralized governance of Kusama, Polkadot’s test blockchain, announced the auction of another five parachain slots on Kusama. The auctions, that will begin at 12:00 PM GMT on September 1, 8, 15, 22 and 29 will follow the same format as they did in the first round, which took place between June 15 and July 20. Also in this round, there is quite a lot of interest for the auctioned parachain slots, indicating that many projects and developers want to try out launching their code on Kusama, before ultimately deploying it on Polkadot.
2. Avalanche (AVAX)
Avalanche is a highly scalable open-source smart contract-enabled blockchain ecosystem. It relies on its own Proof-of-Stake consensus protocols called the Avalanche consensus protocol and the Snowman consensus protocol, which guarantee blockchain immutability while consuming minimal amount of energy at the same time. In addition, Avalanche ecosystem is also highly interoperable – for example Avalanche applications are compatible with Ethereum’s Solidity smart contract programming language and Ethereum-based tokens can be transferred to Avalanche blockchains via Avalanche Bridge. As such it is most often used for various DeFi applications and enterprise blockchain deployments. Every blockchain within Avalanche is part of a subnet, but validators can choose which subnets they want to participate in. Nevertheless, validators are required to be active on the Primary Network, which consists of three blockchains: the Platform chain or P-Chain, the Contract chain or C-Chain and the Exchange chain or X-Chain.
Avalanche Foundation brings Aave and Curve onboard and dedicates $180 million worth of AVAX to accelerate adoption of Avalanche in the DeFi
While Avalanche has already attracted several renowned projects onto its platform, the project’s team is putting up a real effort to further boost Avalanche adoption rate. Circle’s stablecoin USDC, decentralized oracle service Chainlink, indexing protocol The Graph, tokenized securities platform Securitize, and many others which already have versions of their protocols running on Avalanche were recently joined by two DeFi space giants: Aave and Curve. This news alone could represent a significant boost for the project, but Avalanche Foundation introduced a special liquidity mining program called Avalanche Rush at the same time. As part of the Avalanche Rush program, the team will distribute $180 million worth of AVAX to users providing liquidity on Avalanche, among which $20 million worth of AVAX are reserved for Aave and up to $7 million worth of AVAX are reserved for Curve liquidity mining in Phase 1 of the program. These announcements triggered the bull run that carried AVAX from below $25 to above $50 in three days. AVAX markets have since corrected a bit and the coin is now trading at slightly less than $42 apiece. Nevertheless, the positive market sentiment does not derive entirely from the announcement. Looking at fundamentals, the number of daily active addresses and the cumulative address count on Fuji, an Avalanche testnet, stands out as both numbers seem to be entering parabolic growth. A high activity on the testnet usually means that many users are trying out Avalanche and among them are likely several developers that are eying Avalanche deployment.
3. Cardano (ADA)
Cardano is a decentralized blockchain platform focused at creating a smart contract-enabled environment on which developers can build decentralized applications. Cardano utilizes a Proof-of-Stake consensus model and aims to provide a more sustainable, scalable, and transparent operation compared to other smart contract blockchains. The project was started in 2017 by Charles Hoskinson, a mathematician, who was once part of the Ethereum developer team. The team raised $62.2 million for project’s development through an ICO. Hoskinson and the company IOHK stive to follow the principles of academic peer review in Cardano’s development process. The native asset of the Cardano blockchain is called ADA, but previously this year, the developers rolled-out an update, which allows users to issue other tokens on Cardano blockchain as well.
ADA Sets New ATH Price and Now Ranks 3rd by Market Capitalization
As we predicted in the last week’s Top 3 Coins to Watch article, ADA managed to overtake BNB on the list of cryptocurrencies sorted by market capitalization and now claims the title of the cryptocurrency with the third largest market cap, right after BTC and ETH. This was made possible by ADA’s amazing price performance, which is largely due to the last week’s announcement that the Alonzo upgrade, which will introduce smart contract functionality to Cardano, is soon to be deployed. By successfully riding the wave of anticipation, hype and attention, ADA soared towards $2.65 during Week 33, which was this crypto’s ATH price until today, when ADA climbed even higher, setting yet another ATH price – the bar now sits at $2.96. At the time of writing, ADA is trading at $2.82, which is 2% below its new ATH. Nevertheless, even at that price, ADA is still up by more than 35% in the last 7 days. Predictions for the future are even more bullish. In one of the interviews, Cardano founder Charles Hoskinson himself predicted that ADA price will hit $150 by the end of this year, which translates into huge almost 60x gain from its current price. Several other crypto analysts believe that ADA will post smaller yet still incredibly high gains in the range of +600% to +1000% from now to the end of 2021. Judging by the fact that ADA is up by more than 1300% YTD, these predictions may prove to be more realistic, as Hoskinson’s sounds a bit too far-fetched to be believable.