Crypto in 2021 has a vibrant selection of blockchain ecosystems and coins. Each brings its own flavor, focuses, and use-cases. As I covered in my last story, there are a number of factors I use to evaluate a blockchain as an investment opportunity, so in this story, I’m going to apply that methodology to some of the biggest and most recognizable blockchains out there. These are listed in order of how much potential I believe they have.

Terra ($LUNA)

Terra is a blockchain protocol that uses fiat-pegged stablecoins to power price-stable global payments systems. According to its white paper, Terra combines the price stability and wide adoption of fiat currencies with the censorship-resistance of Bitcoin (BTC) and offers fast and affordable settlements. — CoinMarketCap

Terra’s aim is to create an ecosystem of crypto stablecoins — coins pegged to various traditional fiat currencies around the world like USD, EUR, AUD, KRW, JPY, etc. These stablecoins can be used to power international payments and other financial services applications in currencies that are already familiar to users.

I’m going to write a more extensive story on the value of stablecoins later, but suffice it to say that I believe stablecoins are going to power the next generation of blockchain applications. So a chain that’s built around facilitating such currencies, in a completely decentralized manner, without needing to hold custody of a large amount of actual fiat currency (like other traditional stablecoins like $USDC rely on) is, in my opinion, the most interesting and exciting project in all of crypto.

1. Overall Market Cap/Chain Health — 8/10
2. Transaction Fees/Chain Performance — 6/10
3. Stablecoin Support/Savings and Lending — 10/10
4. DEX Liquidity — 8/10
5. Cross-Chain Support — 10/10
6. Team and Backing — 10/10
7. Overall — 8.67/10

Terra’s market cap, as of writing this article, is around $20B which means it is a large project (in the top 15 by market cap) but also still has a lot of room to grow. Terra’s emphasis on being a DeFi chain means that it has attracted development of a wide array of exciting projects, and though its ecosystem is still quite small, it’s very diverse, with projects for many different DeFi segments. There’s a story exploring DeFi in more detail coming tomorrow, so don’t sweat it if you aren’t sure what that really means yet.

However, in the last few months, as Terra’s adoption has climbed considerably ($LUNA went from $6 to $50 in the last four months), it has experienced several instances of network congestion, including slow and even failed transactions. These are unfortunate and a sign of potential growing pains, but considering the caliber of the team and investment backers that are building Terra, I am confident that they can ultimately figure out how to continue to scale.

I believe Terra is going to be a top-10 crypto project soon, probably before the end of this year, and I would not be surprised if it reached $100B or more in total market cap by the height of this market bull run.

Solana ($SOL)

The Solana protocol is designed to facilitate decentralized app (DApp) creation. It aims to improve scalability by introducing a proof-of-history (PoH) consensus combined with the underlying proof-of-stake (PoS) consensus of the blockchain. — CoinMarketCap

Solana has seen a meteoric run this year, with its gas coin, $SOL, going from $1.5 to $250 so far this year. Solana boasts incredibly high chain performance, outpacing Ethereum in transactions-per-second by several orders of magnitude, and very low gas fees for usage. These performance metrics are primary drivers behind Solana’s rapid rise, as it’s now the #4 crypto by market cap (as of time of writing this).

1. Overall Market Cap/Chain Health — 7/10
2. Transaction Fees/Chain Performance — 10/10
3. Stablecoin Support/Savings and Lending — 8/10
4. DEX Liquidity — 9/10
5. Cross-Chain Support — 8/10
6. Team and Backing — 9/10
7. Overall — 8.5/10

I like Solana a lot, but it’s also already climbed a lot this year. If you’re looking for something with the best possible multiplier potential today, I would put Terra ahead of Solana for sure. However, I believe Solana is a fantastic investment with a lot of potential to continue to grow.

Solana has a healthy ecosystem, and its value as a blockchain in terms of how fast it is and how cheap it is to use compared to Ethereum will keep it extremely relevant in the near future.

Polygon ($MATIC)

Polygon effectively transforms Ethereum into a full-fledged multi-chain system (aka Internet of Blockchains). This multi-chain system is akin to other ones such as Polkadot, Cosmos, Avalanche etc. with the advantages of Ethereum’s security, vibrant ecosystem and openness. — CoinMarketCap

Polygon is the most promising scaling solution for Ethereum today. As Ethereum gained recognition and usage in the past handful of years, it became a victim of its own success. Ethereum today is practically unusable for the average user, with slow and *extremely* expensive transaction fees, especially during periods of higher usage.

Polygon aims to solve this problem by building out Ethereum’s layer-2 ecosystem with a suite of technologies for building Ethereum-compatible chains where users can transact off Ethereum and get their transactions aggregated and submitted back to Ethereum later. Sound technical? Well, it is, but it’s also very promising.

1. Overall Market Cap/Chain Health — 7/10
2. Transaction Fees/Chain Performance — 8/10
3. Stablecoin Support/Savings and Lending — 6/10
4. DEX Liquidity — 8/10
5. Cross-Chain Support — 3/10
6. Team and Backing — 8/10
7. Overall — 6.67/10

Polygon (and other layer-2s) will be an important part of Ethereum’s continued development. If you believe that Ethereum will continue to be a dominant player, then investing in layer-2s like Polygon is a great idea. Not only do they have better investment multiplier potentials than $ETH, but they are often far better user experiences than Ethereum’s main chain, as they have much cheaper fees and faster transactions.

Ethereum ($ETH)

Ethereum is a decentralized open-source blockchain system that features its own cryptocurrency, Ether. ETH works as a platform for numerous other cryptocurrencies, as well as for the execution of decentralized smart contracts. — CoinMarketCap

Ethereum is crypto’s Godfather. Forget Bitcoin, Ethereum is the project that kicked off most of crypto’s innovations in recent years. It was the birthplace of DeFi, NFTs, and more. There’s not much more I can add that others haven’t already said, but Ethereum is likely to stick around for the long-haul.

1. Overall Market Cap/Chain Health — 7/10
2. Transaction Fees/Chain Performance — 1/10
3. Stablecoin Support/Savings and Lending — 6/10
4. DEX Liquidity — 10/10
5. Cross-Chain Support — 6/10
6. Team and Backing — 4/10
7. Overall — 5.67/10

Despite its legacy, Ethereum currently is suffering from huge problems in terms of scalability. As I mentioned earlier, it’s very, very difficult to actually use the Ethereum blockchain as an average user because of its ludicrous fees. The team has been attempting to implement several improvements and changes that collectively are known as Ethereum 2.0, but progress against those milestones is much slower than it should be. As such, I do not personally invest in Ethereum, even though I believe it’s the project that’s most likely to stick around the longest.

Binance Smart Chain ($BNB)

Aside from being the largest cryptocurrency exchange globally, Binance has launched a whole ecosystem of functionalities for its users. The Binance network includes the Binance Chain, Binance Smart Chain, Binance Academy, Trust Wallet and Research projects, which all employ the powers of blockchain technology to bring new-age finance to the world. — CoinMarketCap

The Binance Smart Chain is a smart-contracts chain developed by Binance as one of the first “Eth-Killers” and as such experienced significant growth in 2021 while Ethereum was struggling with its high gas fees. It has not recovered as well as many others on this list when compared to before the May 2021 market crash, however, and in general has a handful of issues that are holding it back.

1. Overall Market Cap/Chain Health — 5/10
2. Transaction Fees/Chain Performance — 5/10
3. Stablecoin Support/Savings and Lending — 6/10
4. DEX Liquidity — 8/10
5. Cross-Chain Support — 6/10
6. Team and Backing — 1/10
7. Overall — 5.17/10

$BNB is the third largest crypto by market cap today, but despite that status, it has a remarkably boring ecosystem. It’s full of DEX and yield farm clones with very little creativity. Gas fees are fairly cheap, but the chain is also not very decentralized, with only 21 validators as of the time of writing. Finally, I would be remiss if I didn’t mention the fact that Binance and its CEO Changpeng Zhao are not the most trust-worthy of entities, being accused of money laundering and other things. All things considered, even though the BSC has some very high-quality projects like PancakeSwap, I do not believe it is a good investment, full stop.

Cardano ($ADA)

Cardano is a proof-of-stake blockchain platform that says its goal is to allow “changemakers, innovators and visionaries” to bring about positive global change. — CoinMarketCap

Oh, Cardano. Cardano might have the best marketing team in all of crypto. Cardano is rank 6 by market cap (and has often been rank 3–4), despite only just launching smart contract functionality a few months ago (the core functionality that this type of chain relies on for building an ecosystem). This project was founded in 2017, and it took them four years to get smart contracts working, which, quite frankly, is just sad. Cardano’s team seems to be taking a research-first, build-later approach to development, and somehow that’s managed to resonate with a lot of users, hence it’s very high market cap. However, this development methodology, in real life, means that Cardano has a comically slow development pace, even slower than Ethereum which is itself very slow to develop new features and updates.

1. Overall Market Cap/Chain Health — 3/10
2. Transaction Fees/Chain Performance — 5/10
3. Stablecoin Support/Savings and Lending — 5/10
4. DEX Liquidity — 5/10
5. Cross-Chain Support — 2/10
6. Team and Backing — 1/10
7. Overall — 3.5/10

If you haven’t already detected, I believe Cardano is one of the most overrated projects in all of crypto. It’s team believes more in “research” and marketing than actually shipping a functional product. It’s ecosystem is extremely young, as smart contracts have only just come online. And it’s already-high market cap leaves little room for further investment gains. Don’t invest in Cardano. Just don’t do it.

What Projects Are You Interested In?

Given everything I discussed in this story, what projects are you interested in? If you have further questions, feel free to leave them in the comments, and I will elaborate more. As I’ve mentioned before, I’m 100% invested in the Terra blockchain and projects that run on it, and I believe in its potential very much. But I am also a big believer in Solana and Polygon (and will be researching additional blockchains in the near future as well, like Avalanche and Fantom).

As I am not a registered fiduciary agent, none of my advice is legally binding in any way, and choosing to follow or not follow it is a responsibility that lies squarely on your shoulders. Crypto is a volatile market, and a significant crash in values is a normal event in this space, just as a significant increase in values is. Treat the market as an irrational actor (which is what it is), buy the proverbial dip when possible, take some profits along the way, and enjoy the ride.