2022 is expected to be a massive year for smart contract cryptocurrencies. Smart contracts are small pieces of self-executing code that live on the blockchain and allow for the development of applications. And this year’s major trends, from the metaverse and gaming tokens to decentralized finance and Web 3 apps, will be built on smart contract platforms.
What exactly are smart contracts?
Smart contracts are a groundbreaking layer of blockchain technology that allows users to interact and transact with one another via a ‘robotic intermediary.” A smart contract can be thought of as a self-executing pile of code that can perform specific actions that would normally have to be performed manually.
- Smart contracts have a huge impact. DeFi Developers often use them to automate cool features like flash loans, standard loans, staking, and more.
- They can, however, automate tasks and host decentralized applications in addition to providing trust.
- Many smart contract cryptocurrencies are competing for developer attention and critical projects. It is unclear which cryptocurrency will triumph in this battle of blockchains.
- There are so many contenders, and any of them could be eliminated by a major technical issue or security flaw. Anyway, here is a list of smart contracts to watch for in 2022.
Ethereum
Ethereum is well-known for being one of the first cryptocurrencies to implement smart contracts on its network. But the cryptocurrency has some problems that will be fixed by ETH 2.0, a newer and better version. This makes the coming year very important.
- It was the first cryptocurrency to implement smart contracts. As a result, it powers the vast majority of applications. According to the State of the dApps, Ethereum’s network hosts approximately 80% of DeFi applications.
- This cryptocurrency has some flaws that will be resolved by a more updated and efficient version of it. But until ETH 2.0 is released, it gives its competitors a lot of time to work on and release more advanced versions of smart contracts to attract more customers.
Polkadot
Polkadot is a blockchain network created by the software development company Parity Technologies. It is currently the fifth-largest crypto project by market cap. It is also backed by the Web3 Foundation, which is a group of people who all want to build a decentralized web.
- Polkadot is well-known for hosting parachains on its blockchain network. This means that the platform can run multiple chains within an existing blockchain, which is known as sharding. Polkadot employs a technique known as parachains.
- These operate in parallel with the main blockchain and allow it to process transactions more quickly. Smart contracts operate on parachains rather than the main blockchain.
- To process transactions faster, it employs parachains that run in parallel to the main blockchain. However, when it comes to DOT, smart contracts run on parachains rather than the main blockchain.
Solana
Solana is one of the best-performing cryptocurrencies in 2021. With a price increase of over 11,000%, it jumped from 120th place at the start of 2021 to fifth place by the end of the year. Solana is currently the fastest cryptocurrency on the market, with a transaction rate of 50,000 transactions per second.
- Aside from that, investors are drawn to SOL for a variety of other reasons. It employs the proof-of-history consensus algorithm, which allows it to process transactions even faster.
- Because projects are an important part of investors’ trust in cryptocurrencies, SOL has quickly acquired several projects and now has over 400 projects on its network.
- It can process between 50,000 and 65,000 transactions per second (TPS), compared to 15 to 45 TPS for Ethereum. According to its website, the average cost per transaction is 0.00025. Its ecosystem also includes over 1,000 projects.
Cardano
Cardano is on a different path than other cryptocurrencies. It takes a systematic approach to development, preferring to peer review and thoroughly test new features before releasing them. As a result, smart contracts were only introduced in September. Even so, Cardano was criticized on social media by people who said it hadn’t done everything it said it would.
- Cardano is a relative newcomer to the smart contract race. The crypto industry prefers the most recent technological advancements and peer-reviewed processes, so development is slow and steady.
- This means that the majority of its processes take a long time to implement; several community members decided to launch it after years of research.
Avalanche
According to Avalanche, it is the fastest smart contract platform in terms of finality, surpassing even Solana. It accomplishes this by utilizing three different blockchains on its system while also keeping fees low and the platform scalable.
- According to DeFi Llama, Avalanche’s platform currently has more value locked in than Solana’s.
- Avalanche is currently regarded as one of the cryptocurrency market’s rising stars. It is the blockchain industry’s fastest smart contract platform in terms of time-to-finality.
- It is highly flexible, has low transaction fees, and is environmentally friendly. The AVAX token has a hard cap and can be used as a payment method.
Algorand
Algorand is a blockchain-based network that is independent, decentralized, and supports a wide range of applications. It is also one of the newest smart contract platforms, promising low costs, scalability, and speed without sacrificing security.
- Alogorand, like the other new smart contract platforms, promises low costs, scalability, and speed without sacrificing security.
- Algorand smart contracts can be written in a variety of programming languages by developers. Clarity, for example, is intended to make it simple for users to understand what the contract will do, even if they are not seasoned developers.
Cosmos
Cosmos is focused on interoperability, or ensuring that different blockchains can communicate with one another. Interoperability becomes more important as people use multiple smart contract networks. Cosmos wants to create an ecosystem of blockchains that can talk to each other instead of separate silos that can’t exist together.
- Cosmos focuses on interoperability, which ensures that different blockchains can communicate with one another.
- It positions itself as a project that addresses some of the most complex issues confronting the blockchain industry today. One of the other goals is to make blockchain technology easier for developers to use when making frameworks for decentralized apps.
Final Thoughts
Cryptocurrencies with smart contracts are an exciting area. We don’t know how this nascent industry will develop, but these digital currencies have a good chance of surviving and performing well in the long run. If you decide to invest, most of these coins can be found on top cryptocurrency exchanges.
