2 Cryptocurrency picks for April
*Please note that any information in this article is not financial advice
With the cryptocurrency on a rebound and charging past important technical indicators, investors are starting to become more optimistic. Thus, let us take a look at 2 cryptocurrencies with promising developments and exciting news ahead of them. These coins have promising news ahead of them but are also fundamentally sound projects that we believe will do well in the long run.
Zilliqa:
Our first pick for the month of April has to be Zilliqa. Zilliqa is a leading L1 smart contract platform that utilises sharding (breaking up the blockchain into smaller groups called “shards”) to scale the network. Zilliqa has a market cap of $1.7 billion, making it the 66th largest cryptocurrency.
Zilliqa’s token, ZIL, has increased over 500% from it’s recent low to high, from about $0.037 to $0.23. This was mainly due to the launch of Zilliqa’s Metaverse-as-a-Service (MaaS) platform, Metapolis, where brands and individuals are able to build their own metaverses using the tools provided by Zilliqa without any prior knowledge of programming. The Metapolis roadmap looks promising. In April, the Metapolis will initiate a private sale and launch. Zilliqa is also expected to announce new partnerships for the Metapolis. This will undoubtedly bring a lot of attention to Zilliqa as the ZIL token is used to power the Metapolis. Users need to use ZIL to fund transactions and interact with the platform. Consequently, the demand for ZIL’s token will increase exponentially, which will have a positive impact on the price.
Metapolis aside, Zilliqa also has a sound ecosystem and technology, with a great team of developers behind them. You can find everything you want on Zilliqa, be it NFTs (Okimoto etc.), DEX (ZilSwap, Switcheo etc.) or DeFi (Carbon, Pillar Protocol etc.). Zilliqa has an impressive TVL of around $706 million, although this is set to change as the token’s price fluctuates from its recent pump. Furthermore, Zilliqa’s number of wallets is growing at a rapid pace, boasting more than 5.6 million wallets. For comparison, Cardano, which has a $41 billion market cap, only has 3.5 million wallets. This is one metric that suggests that Zilliqa’s price may still have more upside.
Notably, Valkyrie, one of the largest specialised alternative asset management firms in the US, has a Zilliqa Trust. This opens Zilliqa up to large investors looking to gain exposure to smaller cryptocurrencies.
That being said, Zilliqa’s ecosystem is still not as mature as its bigger competitors. Zilliqa currently has 30 running dApps, which pales in comparison to Cardano’s 500+ and Solana’s 350+. Zilliqa’s Total Value Locked is also not as impressive as its competitors. However, given the smaller market cap of Zilliqa, this all makes sense. As more people start using the Zilliqa network and see its potential, more dApps and DeFi activity will naturally follow.
For a deeper dive into Zilliqa, take a look at my previous article. However, the month of April seems to hold good news and it should be no surprise to see Zilliqa continue to grow.
Polygon:
Next, let us take a look at one of the fastest-developing and exciting projects in the cryptocurrency space, Polygon. Polygon’s native token, MATIC, has a market cap of $12.8 billion, making it the 17th largest cryptocurrency. Polygon is based in India and built by a software company called Polygon technologies.
Polygon is a Layer 2 scaling solution on the Ethereum network and is perhaps the most popular Layer 2. As of right now, Polygon’s Proof-of-Stake chain is Polygon’s most active chain which can process an estimated 65,000 transactions per second. This comes at the expense of decentralisation, where only 100 validators are currently present. To address this, Polygon is currently looking for methods that improve decentralisation.
Polygon is investing heavily in zero-knowledge rollup solutions that many deem to be the future of smart contracts. Zero-knowledge (ZK) refers to a party being able to prove to another party that a transaction is valid without ever conveying any additional information apart from the fact that the transaction is valid (Imagine your boss knowing that you truly have a university degree without actually looking at your university certificate). Essentially, the Layer-2 blockchain performs computations and storage off-chain while taking periodic snapshots of a bunch of transactions, “rolling them up”, and sending the snapshot to the blockchain. This will decrease network congestion and increase the scalability of the Ethereum network, which will be extremely valuable as demand for the Ethereum network ramps up in the face of the upcoming Ethereum 2.0 update. Currently, Polygon already has a functioning ZK Rollup chain called Polygon Hermez and are developing 3 more, Polygon Miden, Polygon Zero and Polygon Nightfall. Since the Ethereum Virtual Machine (EVM), a computation engine that runs smrt contracts on Ethereum, was not developed with ZK proofs in mind, Hermes is recreating the whole set of instruction machine codes to build a zkEVM from scratch. This will put Polygon at the forefront of ZK technology.
Obviously, Polygon has cutting-edge technology. What about recent developments? Well, Polygon has been putting out promising news all year. There are too many to include in one article and so we will cover the main ones. Polygon purchased a ZK Startup, Mir, for $400 million to create Polygon Zero scaling solution and has partnerships with big-name brands such as Ernst Young and Reddit. At the end of January, Polygon onboarded Youtube head of gaming Ryan Wyatt to aid in development of Polygon’s NFT, metaverse and gaming ecosystems. Aave, a leading DeFi protocol, has launched LENS, a decentralised social media platform, on Polygon. Two developers have added Polygon’s POS chain to Minecraft. In early March, Polygon partnered with Tether to bring USDT to Swiss City Lugano to be used as legal tender along with Bitcoin. Even DraftKings, a popular sports betting company, has joined Polygon as a validator. Adobe has also partnered with Polygon to utilise its POS chain for NFTs related to Adobe’s Behance social media platform. Polygon’s developments come every few days, demonstrating Polygon’s rapid pace of development to better its competitors.
Polygon’s ecosystem is astoundingly large, given Polygon’s relatively small market cap compared to popular Layer 1s such as Solana and Avalanche. Polygon has more than 7000 dApps running on Polygon or using Polygon’s scaling solutions. The largest Metaverse games right now, Sandbox and Decentraland, all have partnerships with Polygon that allow their tokens to run on the Polygon network. Uniswap, the world’s largest decentralised exchange, now runs on Polygon. Evidently, Polygon has a mature ecosystem that houses some of the world’s most prominent cryptocurrency projects. Polygon also boasts a TVL of $4.76 billion, which is much larger than Cardano’s $254.38 million and only half of Solana’s $8 billion. Polygon also has more than 135 million addresses. For reference, Ethereum has 192 million addresses and Binance has 149 million addresses. In October last year, Polygon’s active users actually surpassed that of Ethereum. All these pay tribute to Polygon’s robust ecosystem that is expanding at an exponential rate.
Of course, Polygon also has shortcomings. One point of concern is Polygon’s relative lack of decentralisation with only 100 validators. This relative centralisation may be preferred by some as certain blockchain games do not need mass decentralisation, allowing for millions of small transactions every minute. However, for other larger value transactions such as those in DeFi, Polygon’s centralisation might be a point of concern. Last December, Polygon found a bug in its POS chain that put $24 billion at risk. Polygon’s POS chain also suffered from congestion and high gas fees when bots from Sunflower Farmers, a blockchain game on Polygon at that time, swarmed the chain. Therefore, Polygon does have a history of mishaps. However, these mishaps are present in all blockchains and it does not take away from the impressive technology and ecosystem Polygon has.
All in all, Polygon seems to be relatively undervalued compared to other cryptocurrencies by looking at certain metrics mentioned above. This might convince new investors to look into Polygon as an investment option. Recently, Polygon’s EIP-1559 upgrade allows users to manually burn Polygon, putting a deflationary pressure on its supply. Polygon also put out polygon ID, a ZK Identity initiative for Web 3.0 where users can obtain blockchain-based identities to facilitate on-chain verification without jeopardising privacy. These updates just add further to Polygon’s impressive ecosystem. As such, the Polygon network will continue to grow at a rapid pace and become technological pioneers in the cryptocurrency space.
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