The Polkadot ecosystem underperforms other Layer-1 networks in 2021, while the slow implementation of parachain auctions and mainnet launches make it difficult for the network to catch up to the market in 2021.
This trend seems to have ended in mid-March, with the price of many projects in the Polkadot ecosystem moving higher after users started interacting with the networks expanding the service and boosting the ability to compatible Ethereum Virtual Machine (EVM).
DOT, GLMR, ACA, ASTR, SAITO, CFG and KYL with USDT trading pairs | Source: TradingView
Here are the top six protocols in the Polkadot ecosystem that are helping to establish this project’s presence in the crypto market.
Table of Contents
Interoperability is key
Interoperability has been one of the aspects driving the crypto market over the past year, Moonbeam (GMLR) and Astar (ASTR) are two Polkadot parachains focused on bringing multi-chain compatibility with Ethereum to the Ethereum blockchains. other network.
Moonbeam is a smart contract parachain that aims to make it easier for Ethereum developers to use tools, helping them build or deploy Solidity projects in Polkadot’s substrate-based environment.
This is the first parachain to go live on the Polkadot mainnet, and there are plans to bring on-chain governance, staking, and cross-chain integration to the basic Ethereum feature set.
Astar is a decentralized application (DApp) hub that supports multiple standards including Ethereum, WebAssembly (WASM), and Layer-2 solutions like zk-Rollups. The goal of the protocol is to be a multi-chain smart contract platform, capable of supporting multiple blockchain networks and virtual machines.
Since its launch in late January, Astar has seen the total value of assets locked on the protocol reach $1.47 billion and the figure now stands at $1.31 billion.
Total value of assets locked on Astar | Source: DefiLlama
Moonbeam and Astar provide an important service to the Polkadot ecosystem because Polkadot Relay Chain does not support smart contracts.
Polkadot’s DeFi ecosystem is still in its infancy
The DeFi ecosystem on Polkadot is already starting to gain traction, thanks to new developments from Acala and Centrifuge.
Acala played a key role in Polkadot’s DeFi ecosystem by bringing the first stablecoin, aUSD, to the network.
Stablecoins have become a fundamental part of DeFi infrastructure, and the addition of aUSD brings a decentralized stablecoin to the market, collateralized by Polkadot (DOT), DOT derivatives, and on-chain assets. cross like Bitcoin (BTC) or Ether (ETH).
With Acala and aUSD, the Polkadot ecosystem has now joined Terra, Frax Share and Curve Finance in the ongoing “stablecoin war” that has become a key theme in DeFi development.
Centrifuge is a decentralized asset finance protocol designed to connect the real world with DeFi through the tokenization of assets such as bills, real estate, and royalties.
The main goals of the protocol are to help users generate profits without being tied to crypto-assets, reduce capital costs for small and medium-sized businesses, and provide investors with a source of income. stable input.
With Centrifuge, companies can use tokenized real assets as collateral to access financing on the Tinlake Lending DApp.
Acala and Centrifuge are participation into the $250 million “aUSD Ecosystem Fund” launched on March 23, just before the Polkadot ecosystem started trending higher.
Web3 Growth Catalyst
Web3 is the prevailing “story” in the crypto ecosystem and it is really just 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 growth of Web3, through scalability and data management.
Saito is a blockchain network designed to process large volumes of data, up to Terabytes, by paying rewards to nodes in a peer-to-peer (P2P) network, rather than using miners or staking, as a method distribution and network expansion.
This is the functionality required to provide support for decentralized versions of popular websites, currently exclusively in the Web2 space, such as Twitter, Facebook, and Amazon.
For data management in the Polkadot ecosystem, Kylin has taken the lead by providing a decentralized data infrastructure solution called DeData for Web3. Kylin ecosystem includes data oracle, data analytics and data marketplace.
Kylin Data Analytics is a toolkit designed for data warehouses to extract meaningful data results, patterns, and interpretations, all with low-cost commercialization implemented to enable public integration.
Kylin data oracle is an advanced decentralized data delivery protocol that is capable of handling any type of data on-chain and off-chain in a validated manner.
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According to Cointelegraph