As a crypto trader/investor/enthusiast, you would definitely be interested in knowing the best ethereum projects you can invest into in Q4 of 2021. According to the cryptocurrency app tracker State of the Dapps, approximately 3,000 decentralized apps (also known as “dapps”) are now operating on the Ethereum blockchain.
These applications vary from normal mobile and web-based apps in that they attempt to provide consumers more control over the data managed by the apps. Traditional applications, such as Robinhood or Twitter, are administered by a central authority, which has the last say on how their users’ data is safeguarded and utilized – for better or worse.
Dapps adopt a decentralized approach to data management, ostensibly restoring power to the user through the use of blockchain technology — the foundation of the Ethereum network. Ethereum is the name of both the world’s second-largest cryptocurrency by market capitalization (behind bitcoin) and the first platform to enable the development of decentralized applications (dapps).
While the potential of Ethereum is enticing to supporters of the technology, it is an open-source platform, which means that applications created on it are frequently experimental and, in some cases, blatant frauds. It is strongly advised to conduct thorough research before investing.
The Best Ethereum Projects
As seen in a recent survey we carried out, we discovered that many of the top Ethereum projects are currently focused on decentralized finance, or DeFi. DeFi intends to broaden the value of cryptocurrencies beyond everyday transactions on platforms like Crypto Engines, and into more complicated financial use cases such as loans and derivatives.
The DeFi market gained traction in 2020, with the total value of crypto assets locked in its protocols increasing over 2,000% from $650 million at the start of the year to $16.05 billion at the end.
Because Ethereum dapps have grown in popularity, increased network congestion has driven transaction fees — the amount of ether necessary to make payments over the network – higher than ever before. This is a direct effect of dapp users trying to get their transactions processed by miners as quickly as possible. The greater the transaction price, the more probable an ETH miner will add it to the blockchain sooner.
Stablecoins are an attempt to address one of cryptocurrency’s major drawbacks. Cryptocurrency values vary erratically, rendering them unsuitable as a means of payment and a dependable deposit of wealth. While most stablecoins are centralized, MakerDAO is unique in that it has laid out a comprehensive strategy for decentralizing governance of their stablecoin, dai.
Uniswap is a decentralized exchange, which means that it never takes control of a user’s money, unlike other exchanges. So far, it is the most popular decentralized exchange. This exchange, which facilitates exchanges from currency to coin, is a cornerstone of Ethereum’s current thriving DeFi movement. SushiSwap, a “vampire” rival, attempted to suck up all of the project’s users.
Another distinguishing feature of Uniswap is that it uses an automated market maker (AMM) system to facilitate trading, which means that the underlying liquidity pools that govern the actual coin-swapping are managed by smart contracts rather than a regular order book system.
The market price of an asset is decided by supply and demand while trading on a traditional controlled crypto exchange. A trader must locate someone on the other side of the order book to supply liquidity to execute a transaction in order to buy and sell. A pricing algorithm sets the market price of each item on AMM-based exchanges such as Uniswap. Investors are rewarded for providing liquidity, which is pooled and utilized to execute all trades at market pricing.
Chainlink is an Oracle platform, which implies that it links smart contracts to real-time data from the outside world, such as weather or market prices. That data is used by a smart contract to carry out predefined commands. For example, in the event of a hurricane, pay out an insurance claim.
While Chainlink has been operating since 2017, it didn’t truly take off in the area until 2019 – when it joined with Google. Chainlink is powered by an ERC-20 crypto currency called LINK and runs on the Ethereum network.
Axie Infinity is an online role-playing game in which players gather and raise digital, fanciful beings known as “Axies.” Axies are nonfungible tokens (NFTs) under the hood, which means that each one is cryptographically unique. Gamers have complete control over them, and in certain situations, they have monetary worth owing to their scarcity and collectibility.
Aave is a decentralized lending and borrowing platform that just secured $25 million in venture funding from prominent venture capital companies Blockchain.com and Blockchain Capital.
Aave is now the fourth-largest DeFi app, according to tracker DeFi Pulse, with $1.14 billion locked up in the app. Earlier this year, it was the largest for a brief period of time.
Other Ethereum-based Dapps You Should Know
Compound: Compound, a decentralized lending platform, is credited with creating liquidity mining, in which the firm creates a one-of-a-kind coin that only those supplying liquidity to the network can get.
This DeFi method has since become foundational, with people employing it to generate money and businesses emulating it in order to attract customers.
Wrapped bitcoin (WBTC) is an Ethereum currency that is backed 1:1 by bitcoin. The objective is to transfer the liquidity of bitcoin to Ethereum. Its popularity has increased in part because investors may receive interest on the bitcoin they store on Ethereum.
SushiSwap: A fork of the famous decentralized Uniswap exchange, this decentralized exchange (DEX) compensates liquidity providers with its own native SUSHI currency. According to DeFi Pulse, it is now a top ten Ethereum DeFi app.
Status: An ether wallet and private chat system are in development.
Unstoppable Domains: One of Ethereum’s frequently stated aims is to decentralize the internet by developing apps that are not controlled by IT behemoths. Unstoppable Domains is doing its part by building domains that cannot be taken down by a central body or government.
Kyber Network: A popular AMM, similar to Uniswap, invented by researcher Loi Luu.
OpenSea: A marketplace for purchasing and trading NFTs such as Axies (as previously stated), unstoppable domains, digital art, and so on.
Livepeer: A decentralized live-streaming network that serves as an alternative to YouTube.
Decentraland: A decentralized virtual reality game in which participants own virtual plots of land and may construct monetizable constructions like as theme parks and casinos.
There are hundreds of additional cryptocurrency dapps with smaller user counts than the services mentioned above. Some were more popular before the DeFi boom and are historically significant.
Decentralized Exchanges (DEXs)
Tether: Tether: This popular stablecoin exists on many blockchains at the same time. It currently controls the majority of Ethereum transactions.
This is only the tip of the iceberg. Other Ethereum dapps are ranked by State of the Dapps based on a number of variables such as current active users, transaction volume, and developer activity. Meanwhile, DeFi Pulse rates DeFi applications based on the amount of ether trapped in them.