2021 was a breakthrough year for the cryptocurrency market in many ways, and most investors are absolutely thrilled that Bitcoin (BTC) hit a new all-time high of $ 68,789. In the same time frame, Ether (ETH) saw a parabolic rally that saw its price rise 565% since Jan 1st and hit a record high of $ 4,859 on Nov 10.
While it was a stellar year for large-cap cryptocurrencies, some of the biggest gains and most influential developments came from the altcoin market, where decentralized finance (DeFi) and non-fungible tokens (NFTs) rose and contributed thousands of percent ushering in new levels of awareness and acceptance for blockchain technology and cryptocurrencies.
Here’s a look at five altcoin projects that made significant contributions to the cryptocurrency ecosystem in 2021.
Uniswap
The decentralized exchange Uniswap (UNI) has arguably had the greatest impact on the entire crypto ecosystem since its launch in the summer of 2020, with DEX seeing significant growth in 2021 as it facilitated the start of thousands of new crypto projects by removing the Barriers to going to market that existed on centralized exchanges.
Data from Dune Analytics shows that Uniswap was the dominant DEX year-round, consistently trading more than all the other DEXs combined.
Monthly DEX volume by project. Source: Dune Analytics
As can be seen in the graph above, the volume traded on decentralized exchanges really increased in the second half of 2021, mainly led by activity on Uniswap.
Throughout 2021, Uniswap was also at the forefront of development, with the developers behind the protocol announcing the release of Uniswap v3 in March. The v3 upgrade included several protocol upgrades and laid the foundation for integrating Layer 2 scaling solutions such as Optimism and Arbitrum with Uniswap to reduce transaction costs and processing times for users.
Aave
Aave (AAVE) is a DeFi credit protocol that allows users to deposit and lend their tokens for a return or mortgage them as collateral to borrow some other asset.
As the DeFi sector gained momentum in early 2021, AAVE became a community favorite thanks to the wide range of crypto assets it supports and the support of some well-funded players.
During the year, AAVE expanded its capabilities and reach with the release of AAVE v2, which added support for Polygon, a Layer 2 scaling solution, and Avalanche, a popular cross-chain blockchain network.
Total liquidity according to the AAVE protocol. Source: Aave
As a result of these additional features, the total available liquidity of the AAVE protocol has exceeded $ 25.7 billion, making AAVE the leading DeFi protocol under Total Value Locked (TVL).
Curve
Curve Finance is a stablecoin-centric protocol that uses an automated market maker to manage liquidity on the platform and across the DeFi ecosystem.
Stablecoins have emerged as a fundamental element of the cryptocurrency community as a whole in 2021 as they provide ample liquidity for the market and a safe haven for traders seeking protection during times of high volatility.
The growing importance of stablecoins has benefited the Curve Protocol and its native CRV by accelerating the integration of stablecoins into many of the leading DeFi protocols, including the Yearn.Finance ecosystem and Convex Finance.
Despite the fact that a significant portion of the assets locked up on the Curve Protocol are stablecoins, the platform ranks second behind AAVE as the second-leading protocol in terms of TVL today, with data from Defi Llama showing that is now valued at US $ 21.77 billion -Dollar locked in curve is vault.
Total value locked on curve. Source: Defi Lama
Curve has also integrated into many of the most active blockchain networks, including Ethereum, Avalanche, Harmony, xDAI, Polygon, Arbitrum, and Fantom, which is further evidence of the protocol’s ambition to be the stablecoin liquidity provider for the entire crypto market.
Axie infinity
Axie Infinity is a play-to-earn (p2e) trading and fighting game that allows participants to collect, breed, raise, battle, and trade NFT-based creatures called Axies.
The p2e model has emerged as a new fan favorite over the course of 2021 as it gives users the ability to earn daily income alongside their gameplay, which offers some unique advantages over the traditional pay-to-play model.
In addition to the soaring popularity of Axie Infinity, there was a new all-time high for the platform’s native AXS token. As the token surged to new highs, the platform was generating $ 17.55 million in daily revenue at its peak on August 6th.
Axie Infinity price versus total sales. Source: Token Terminal
Axie Infinity was also one of the earliest projects to establish the trend of churning off the Ethereum network due to high fees and slow transactions. At the beginning of the year the project was migrated to the Ronin sidechain and in November the project launched its own DEX called 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 makes few contributions on the technology or development front, frequent shillings from Tesla CEO Elon Musk and Shark Tank star Mark Cuban helped drive Doge into a 23.746% rally that saw the price drop on Jan. January rose from $ 0.0031 to an all-time high of $ 0.74 on May 8.
DOGE / USDT 1-day chart. Source: TradingView
In addition to DOGE’s price gains, the token received increased attention after it was announced that it would be used to fund the launch of a lunar satellite by SpaceX, and the Dogecoin movement also launched a meme coin rally and spawned a bevy of copy- Dog projects li Shiba Inu (SHIB) and Dogelon Mars (ELON).
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