Polkadot's ecosystem far underperformed other layer 1 networks in 2021, while the slow rollout of parachain auctions and mainnet launches caused the network to catch up in 2021.
This trend appears to have come to an end in mid-March when numerous projects in the Polkadot ecosystem saw their prices rise further after users began engaging with networks that expanded their offerings and pushed support for Ethereum Virtual Machine (EVM). ).
Here is a look at the top six movement protocols in the Polkadot ecosystem that are helping to establish a presence in the cryptocurrency market.
Interoperability is the key
Interoperability has been one of the driving themes in the cryptocurrency market over the past year, and Moonbeam (GMLR) and Astar (ASTR) are two Polkadot parachains focused on bringing multi-chain compatibility with other Ethereum networks.
Moonbeam is a smart contract parachain that aims to make it easy to use Ethereum's development tools to build or redeploy Solidity projects on Polkadot's substrate-based environment.
It was the first parachain to go live on the Polkadot mainnet and plans to bring on-chain governance, staking, and cross-chain integration to the core feature set of Ethereum.
Astar is a decentralized application (DApp) hub that supports a variety of standards including Ethereum, WebAssembly (WASM), and layer 2 solutions like zk-Rollups. The goal of the protocol is to become a multi-chain smart contract platform capable of supporting multiple blockchain networks and virtual machines.
Since its launch in late January, the Astar network has seen the total value locked in the protocol peak at $1.47 billion, with the metric currently sitting at $1.31 billion, according to data from DefiLlama. .
Moonbeam and Astar provide an important service to the Polkadot ecosystem, as the Polkadot Relay Chain does not support smart contracts.
Polkadot's DeFi ecosystem is still in its infancy
The decentralized finance (DeFi) ecosystem on Polkadot has started to gain traction thanks to new developments from Acala and Centrifuge.
Acala has filled a important role in Polkadot's DeFi ecosystem by bringing its first native stablecoin to the network: aUSD.
Stablecoins have become a critical piece of the underlying DeFi infrastructure and the addition of aUSD brings to market a decentralized stablecoin that is collateralized by Polkadot (POINT), DOT derivatives, and eventually cross-chain assets like Bitcoin (BTC) or ether (ETH).
With Acala and aUSD, the Polkadot ecosystem has now joined the likes of Terra, Frax Share, and Curve Finance in the ongoing โstablecoin warsโ that have become a dominant theme in the evolution of DeFi.
Centrifuge is a decentralized asset finance protocol designed to bridge the real world with DeFi by tokenizing assets such as bills, real estate, and royalties.
The main goals of the protocol are to help users generate profits that are not tied to cryptocurrency assets, reduce the cost of capital for small and medium-sized businesses, and provide investors with a stable source of income.
With Centrifuge, businesses can use tokenized real assets as collateral to access funding on the Tinlake DApp lending protocol.
Acala, nine parachain teams and a group of venture funds have launched the $250 million 'aUSD Ecosystem Fund'๏ธ
The fund seeks early-stage projects of any @Moles or @KusamaNetwork parachute with strong $ toUSD stable coin use cases https://t.co/OJ2V47ZUry pic.twitter.com/NDgLg2bG8N
โ Acala (@AcalaNetwork) March 23, 2022
Acala and Centrifuge are participating in the $250 million "aUSD Ecosystem Fund" that launched on March 23, shortly before the Polkadot ecosystem began trending upwards.
Web3 pivot catalyzes growth
Web3 is another buzzword in the crypto ecosystem, and the term is really a fancy term for the integration of blockchain technology with the Internet.
Saito and Kylin are two protocols in the Polkadot ecosystem that focus on facilitating the evolution of Web3 through scalability and data management.
Saito is a blockchain network designed to process Terabytes of data by paying rewards to nodes in the peer-to-peer (P2P) network, rather than using miners or staking, as its method of delivering a scalable, permissionless network.
This functionality is needed to one day power decentralized versions of popular sites like Twitter, Facebook, and Amazon that currently have a monopoly on Web2.
When it comes to data management in the Polkadot ecosystem, Kylin has led the charge by providing a decentralized data infrastructure solution known as DeData for Web3. The Kylin ecosystem consists of a data oracle, data analytics, and a data marketplace.
Kylin Data Analytics is a suite of tools designed for data warehouses that extract meaningful data insights, patterns, and interpretations, all while implementing low-cost marketing capabilities to the public.
The Kylin Data Oracle is an advanced decentralized data feed protocol that is capable of processing any type of data on and off chain in a validated manner.
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