The Top 5 Layer-1 Altcoins to Buy In 2022Sep 18, 2022
If you’re into Crypto and want to invest, you’re probably a little overwhelmed by the sheer number of options available. There are more than 20,000 Crypto coins & tokens available now.
Many people want to find the next Bitcoin in crypto. To do that, you need to understand that Bitcoin is a Layer-1 coin.
- It is the native currency of the blockchain it operates on.
- It creates an ecosystem for developers to build dapps on.
- Holds value as a currency.
I like to personally think about it like Shopify. Shopify is the Layer 1, and then the smaller Apps or so you download on top of it to make the experience better is Layer 2.
Or think about it like an iPhone is a Layer 1 and the Apps you download are Layer 2.
Anyhow, this article will teach you about the top five Layer-1 Altcoins you can invest in.
Altcoins are chosen according to the following:
- Large market caps.
- Relatively safer investments in a volatile market.
- Strong use cases and wide adoption of users.
The chosen Altcoins are currently the top 5 Altcoins according to market cap who are layer-1:
Market Cap: $7.8 Billion
Price (as of 9/19/22): $6.76
Interoperability has been a pain in Web3 since Nakomoto rolled out the Bitcoin whitepaper. Many blockchains were developed afterward, but none of them was able to interact with one another. This caused a lot of issues for users and slowed down adoption.
Polkadot is a project that seeks to solve the interoperability problem across chains. The end goal for Polkadot is to make blockchains interact with each other as quickly as computers can send emails. This will escalate the mass adoption of blockchain technology and improve user experience.
This gives Polkdot an impeccable use case that can promote mass adoption, provided the demand for blockchain technology stays strong.
Polkadot allows its users to stake DOT, which is the native coin of the blockchain, to vote. However, the longer the locking period, the more voting rights they get. This incentivizes validators to hold their tokens instead of selling them.
Locked DOTs take 28 days to be unlocked. This makes the project an investor’s dream and a trader’s nightmare. The developing team made all of these preparations to avoid coin dumps during bull runs which usually damage the price action of blockchain projects.
Polkadot is like other layer-1 projects since it has an ecosystem where developers can build dapps and deploy smart contracts. However, the project considers itself a layer-0 blockchain.
Market cap: $11.47 Billion
A blockchain validating 71,000 transactions per second surely grabs anybody’s attention. This is triple the number of transactions that VISA can process!
This is because of their proof-of-history consensus mechanism. Proof of history is like proof-of-stake but with timestamps integrated into the blockchain data. This allows a fast sequencing of validators, hence the high transactions/second.
Smart contracts on the Solana blockchain are more potent than Ethereum’s, but developers must develop everything from scratch. This can be considered a merit for some and a demerit for others.
For some time, 100% of transaction fees on Solana were burned. Currently, this number sits at 50%
Staking rewards are currently 8% and are continuously cut down daily until they reach 1.5% in 10 years. That’s not bad for an inflation schedule. Provided the demand for SOL stays intact, price action can move upwards easily in the upcoming bull run.
You should proceed with caution as Solana is still in its BETA stage, and this is an early stage where many bugs could happen. Multiple network outages occurred over the last 2 years that caused a lot of FUD (fear, uncertainty and doubt) about Solana. But SOL is still the 9th coin according to market cap.
Market cap: $15.8 Billion
ADA is the native coin of the Cardano blockchain. Cardano was built and developed by Charles Hoskinson, the co-founder of Ethereum. He wanted to create a proof-of-stake blockchain faster and cheaper than Ethereum.
Hoskinson took the approach of slow and steady wins the race. He developed Cardano slowly since 2017, following a systematic and academic process.
Note that the blockchain is still being developed today. Upgrades on the blockchain are applied after rigorously testing and researching. This ensures that unexpected bugs wouldn’t happen.
However, this approach has slowed the adoption rate of Cardano as the ecosystem still hasn’t attracted developers and builders yet. So far, around 1000 dapps are being built on-chain. This number is nothing compared to other blockchains.
The Cardano blockchain has a promising roadmap; some expect the price to explode in a few years. The design aims to reduce fees without compromising speed or security.
ADA has a solid vesting schedule to ensure ADA coins are completely in circulation between 30-70 years. This ensures that inflation wouldn’t hit ADA hard like other coins.
ADA also has a loyal community, and Hoskinson constantly interacts with the community. This is very important in Web3 as communities make or break projects.
Current market cap: $44.6 Billion
Binance is the largest crypto exchange in the world. It was funded through BNB’s (Binance Coin) initial coin offering or ICO in 2017
BNB is currently the native coin of the Binance smart chain. The Binance smart chain was forked from the Ethereum blockchain, which means it was built using Ethereum’s open-source code.
- Binance smart chain allows the development of smart contracts on-chain.
- Is extremely secure.
- Supports peer-to-peer cashless payments.
- Fast and cheap.
These merits attracted a lot of developers and builders to start building dapps on the Binance smart chain. The Binance ecosystem is considered one of the most significant ecosystems after the Ethereum ecosystem.
BNB has a robust tokenomics model. Every quarter, the Binance team buys BNB with 20% of Binance’s profits and then burns these tokens. So far, almost 20% of the total supply of BNBs have been burned.
The Binance team ensures that BNB has various use cases to incentivize users to buy and hold BNBs rather than sell them. Combining this demand driver with their burning mechanism, the price of BNB could rally to an all-time high in the next bull run.
#1 Ethereum (ETH)
Current market cap: $166.8 Billion
Ether is the native coin of the Ethereum blockchain. The Ethereum blockchain has been around since 2013 when the network was launched. Like Bitcoin, Ethereum allows cashless peer-to-peer transactions to happen through the blockchain.
Ethereum also allows smart contracts to be developed and deployed on the blockchain. Smart contracts are pieces of code that are programmed to do whatever a developer codes them to do. Smart contracts have revolutionized blockchain.
Because smart contracts allowed the building of dApps or decentralized applications on the Ethereum blockchain. This means that developers can start treating Ethereum like Google play or Apple store.
Applications can be developed and built on Ethereum. This includes:
- Decentralized Exchanges or dexs that allow for quick exchange of cryptocurrencies.
- DEFI lending & borrowing protocols allow users to earn passive income on their crypto or borrow crypto after depositing collateral.
- Insurance dApps.
- Decentralized social media applications.
- Minting and creation of Non-fungible-tokens
These are just examples of the decentralized applications that can be built using the Ethereum blockchain. When this ecosystem attracts users and developers, Ether will be in demand because it is used to perform transactions and deploy smart contracts on the blockchain. Increased demand means an increase in Ether’s price.
Further, until September 2022 Ethereum was a proof-of-work blockchain.
In September, the merge took place, and Ethereum became a proof-of-stake blockchain. Why would this affect your investment decision?
- The merge happened successfully, and there were no reported bugs.
- After the merge, Ethereum will be consuming 99.5% less electricity.
- A lot of institutions have been waiting patiently for the merge to happen to start investing in Ethereum on a bigger scale (since it will be environmentally friendly)
- If these institutional investors start pouring money into Ether, it’s only a matter of time before Ether goes to the moon.
This list suits believers in blockchain technology and its use cases. It’s designed to include all the blockchains that enable builders to build dApps and smart contracts to drive mass adoption.
What’s your end goal? Is it to invest in Layer1 coins? Or layer2 tokens? Layer3 dApps?
Are you looking for meme coins?
Investing in crypto can be overwhelming if you don’t set clear goals. It’s essential to determine precisely what you seek out of your crypto investments. This helps you assess your expectations and manage your risk.
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