Best Altcoins of 2021 | Altcoin Quarterly Report | Q2 2021

WHERE SHOULD YOU PUT YOUR MONEY AFTER BTC?

Altcoins Quarterly Review, Q2 2021

AUDIUS ($AUDIO)

Audius is perhaps our favorite bull case for crypto.

The company offers a streaming music platform that’s primarily aimed at giving independent artists an easy way to distribute their music and get paid for their work. When we interviewed co-founder Roneil Rumburg on Token Metrics TV, he suggested that Audius more readily competes with the likes of Soundcloud — independent artists put their music out directly to the fans without any middlemen involved.

But Audius also maps pretty cleanly to the Spotify model, and those financials are rather inspiring — the company filed for a $1 billion IPO in 2018. When a mature Audius can assert itself as “Spotify on the blockchain,” those holding the AUDIO token are going to be very happy.

In the present day, Audius has millions of users on its platform, an open-source codebase with a solid development team, and an all-star lineup of advisors from the music and blockchain worlds. Audius is well placed to create artist-centric token economies and create new forms of engagement between artists and their fans.

ALCHEMIX ($ALCX)

Alchemix Finance is a future-yield-backed synthetic asset platform and community DAO. The platform pays you an advance on your yield farming by way of a synthetic token that represents a fungible claim on any underlying collateral in the Alchemix protocol. The DAO will focus on funding projects that help the Alchemix ecosystem grow, as well as the greater Ethereum community. The only collateral currently supported by the platform is DAI, but other stablecoins should be supported in the near future.

This new protocol allows for a vast range of use cases. It has already been widely adopted by the DeFi community and collected more than $60 million in total value locked in the process. The smart contracts that drive it are open source, but the development team has chosen to remain anonymous and use empty Github profiles.

In any case, Alchemix closed a $4.9 million funding round led by CMS, Alameda Research, and Immutable Capital, and the ALCX governance token is currently trading on Sushiswap. The project is still young and the smart contracts are unaudited, so you should be cautious using this protocol, but it does show some true promise.

PERPETUAL PROTOCOL($PERP)

Perpetual Protocol launched in 2019, calling itself “Strike Protocol” at the time. Nowadays Perpetual Protocol is responsible for an automated market maker design that operates in a fashion similar to Uniswap, except it has some unique technology running under the hood.

PERP purports to be the first virtual AMM (vAMM), meaning it can drive markets without any market makers involved, all while still guaranteeing on-chain liquidity. This unique setup reduces the capital demands that conventional markets usually require

The protocol’s liquidity pool is algorithmically controlled. Instead of relying on liquidity providers, PERP can programmatically define (and change) the parameters that drive its vAMM. It’s designed to offer a competitive product for any given market, all of the time.

Those holding $PERP serve to guarantee the Perpetual Protocol Insurance Fund. This fund exists to cover any unexpected losses from leveraged trading. $PERP holders can also stake their assets to the protocol’s staking pool for a fixed period of time, getting a percentage of the transaction fees that accumulate there as a reward.

ARMOR.FI ($ARMOR)

Crypto can be risky, but some companies seek to protect your investments. Armor is a smart cover aggregator for the DeFi world. It offers pay-as-you-go protection for user

funds across popular protocols like Uniswap, Sushiswap, AAVE, Maker, Compound, Curve, and more. This insurance protocol is underwritten by Nexus Mutual — Armor tracks the precise amount of user funds as they flow across various protocols, and bills its customers by the second using a streamed payment system. The end result is that the user pays minimal costs and gets maximum flexibility, it’s a compelling use case for crypto.

Armor is a compelling protocol to use if you want added security and certainly in your DeFi experience. It uses the established Cover Protocol with an added layer for enhanced user flexibility. As the amount of value moving into DeFi continues to increase and new projects race to get their products out, this type of protocol is worth knowing and taking advantage of.

LIQUITY ($LQTY)

How do you feel about free loans?

Liquity is a decentralized borrowing protocol that lets you take out loans against your ETH collateral at a 0% interest rate. This protocol is non-custodial, immutable and governance-free. Users receive their loaned funds in LUSD, a stablecoin pegged to the US dollar, and they need to maintain a minimum collateral ratio of just 110%.

Beyond the ETH collateral, Liquity loans are secured by a stability pool of LUSD, as well as by a collection of fellow borrowers who act as last resort backstops to protect loans from defaulting. Users can open a “trove” to mint LUSD debt against their ETH, and can deposit that LUSD into the stability pool to earn liquidation gains and other rewards paid in LQTY. There is also the opportunity to stake LQTY and earn revenue from issuance fees (paid in LUSD) and redemption fees (paid in ETH).

Liquity has a solid development team with high-quality code and technical documentation. The team’s core innovation is its liquidation mechanism, which is based on incentivized stability deposits and a redistribution cycle from riskier to safer troves. This provides stability at a much lower collateral ratio than other systems.

There’s a lot to like here!

CHIA ($XCH)

Chia Network is an improved blockchain and network for value transfer that bills itself as more environmentally friendly and more decentralized than Bitcoin. It’s been in development since 2017, and its key innovation is the novel “Proof of Space and Time” consensus mechanism. It operates in a manner similar to the proof of work, but instead of staking cryptocurrency, users stake hard drive space — in Chia parlance, this is called “plotting.”

Led by Bram Cohen, the notorious computer prodigy who developed the peer-to-peer BitTorrent protocol, Chia is being built by a large team of experienced developers. Their codebase is among the best there is to see in the blockchain.

Chia is still in the pre-minting phase, so the XCH token is not transferable at the time of this writing. You can only acquire IOUs via a few exchanges, like Gate.io. But there’s nothing stopping you from buying several hard drives and plotting your way to a wallet full of XCH.

In the short term, the use of a brand-new development language to build on top of the network might slow developer adoption. But as this new blockchain brings its consensus mechanism to bear (and as the company moves toward a conventional IPO), we see this as a contender to keep track of in the long term.

IEXEC RLC ($RLC)

iExec offers dApps that run on the blockchain in a scalable, secure, and easy-to-access fashion. The underlying technology relies on Ethereum, which enables a virtual cloud infrastructure that offers high-performance computing services on demand. The iExec chain uses the Proof of Contribution (PoCo) consensus mechanism to provide consensus externally to the chain. It furthermore allows for incorporating external price oracles within iExec’s infrastructure.

iExec is an ambitious project that began in 2017, aiming to build an entire ecosystem for decentralized cloud computing. It’s led by a team that boasts lots of experience in distributed computing, and they’ve demonstrated a strong track record for several years, securing multiple partnerships along the way. The team’s public code repository is still showing a lot of activity.

In its early stages, the team was focused on providing computation to dApps developers but later turned their business plan more towards the enterprise. This simply takes more time to reach a critical level of adoption. Their RLC token is trading on centralized exchanges like Coinbase and Binance, as well as decentralized exchanges like Uniswap.

TERRA ($LUNA)

Terra is a smart contract-enabled blockchain that’s powered by the native LUNA cryptocurrency and UST stablecoin. It has become a compelling development center for blockchain-based applications, and it offers an all-in-one payment solution to let businesses accept (and even automate) Terra payments without any third parties required. Terra is furthermore responsible for the development of several other successful crypto projects, including Mirror Protocol and Anchor Protocol.

The Terra blockchain itself was created by Korean blockchain company Terraform Labs and incubated by the Terra Alliance, a group of 15 e-Commerce companies based throughout East Asia. This dual-coin system is designed to incentivize arbitrage opportunities, which has helped contribute significantly to the growth of the network (as well as LUNA and UST). Network governance is conducted by LUNA holders, who can vote on proposals to make changes to the various parameters and reward structures that drive the Terra protocol.

The LUNA coin has seen loads of positive price movement throughout 2021, achieving a market cap of $65 million at the time of this writing. There’s good reason to suspect it will continue to gain value as crypto continues to go mainstream.

POLKADOT ($DOT)

Polkadot is the open-source multi-chain protocol that enables the cross-chain transfer of data and assets. As it’s not limited strictly to tokens, it makes a wide range of blockchains fully compatible and interoperable with each other. Want to receive a payment in Ethereum when someone sends you Bitcoin? Polkadot can do it.

This interoperability is ultimately about establishing a fully private, decentralized web that’s controlled by its users. The Polkadot protocol connects public chains with private chains, permissionless networks, and oracles so that all these entities can trustlessly share data and transactions through the Polkadot relay chain.

Polkadot’s relay chain is the figurative “heart” of the system, helping create consensus, interoperability and shared security across the network of disparate chains. Its parachains are independent chains that can have their own tokens, and can be optimized for specific use cases. So-called “parathreads” are similar to parachains, but offer flexible connectivity on a pay-as-you-go model. Polkadot’s bridges are the solution that let parachains and parathreads connect and communicate with external blockchains like Ethereum.

Technically savvy Polkadot users can develop custom blockchains quickly and easily through the Substrate framework, and can connect them to Polkadot’s network within minutes.

As Polkadot effectively unites the wide, siloed world of cryptocurrency so that people can transact as they see fit, it’s going to prove to be invaluable crypto infrastructure in the medium- to long-term.

RARIBLE ($RARI)

NFTs made national headlines in 2021, largely due to the $69 million sale of a digital artwork by the American artist Beeple. As a creator-centric NFT marketplace and minting platform, Rarible is perfectly positioned to continue riding the NFT wave.

Rarible users have access to straightforward tools for creating their own NFTs, as well as a full-featured marketplace for selling them after the fact. The RARI token is the figurative star of the show on this platform — it’s used to reward active users for participating in the protocol’s governance. Importantly, Rarible intends to later transition to being a fully decentralized autonomous organization. The Rarible team is Moscow- based. The company was co-founded by Alexei Falin and Alexander Salnikov in early 2020. Falin graduated from the University of Southern California and Moscow’s Higher School of Economics. Salnikov co-founded Zenome and served as ICO Director at Humaniq, a blockchain project for bringing fintech to the unbanked. Previously founding at least five other successful companies, he is now Rarible’s head of product. Given the rise of NFTs within mainstream perception lately, we suspect Rarible is poised to thrive by making NFTs easily accessible to everyone, whether they’re making their own or buying them from others.

OPYN ($OCRV)

Opyn Finance is a DeFi protocol for options traders, making it simpler to hedge a portfolio and reduce risk in uncertain market conditions. The options market in legacy finance totals hundreds of trillions of dollars, yet crypto options are only in their infancy. There is a major opportunity here, and Opyn Finance may emerge as a leader in decentralized options.

Opyn’s Convexity protocol aims to offer call and put options for crypto assets like WETH and WBTC. Put options are particularly important for crypto investors because they function as a certain kind of “insurance” that can protect their portfolios from large and unanticipated downward movements. For example, if ETH is trading at $3,100 and an investor holds a put option with a strike price of $2,500 before the price crashes all the way to $1,500, that option holder can sell ETH at $2,500 despite current market prices. It’s compelling stuff!

Opyn has executed more than $320 million in options volume since its inception, and the launch of Opyn V2 brought more improvements to its permissionless architecture — it improved capital efficiency by implementing spreads and gas efficiency by integrating into the 0x decentralized exchange. This project seems bound to lead the nascent DeFi option market, which is only going to continue to develop into the future.

TRUEFI ($TRU)

TrueFi is an uncollateralized blockchain-based lending protocol by TrustToken, perhaps best known for its TUSD stablecoin. This network lets users get a loan in TUSD with zero collateral for borrowers meeting certain requirements. The TUSD lenders on the network earn an appealing APY on their loans while farming the native TRU token at the same time.

Uncollateralized lending is a highly underserved space within fintech allowing for long term and competitive returns for its users. This has attracted the likes of Alameda Research, Invictus Capital, and other reputable companies that have tapped into TrueFi for loans.

Since November 2020, institutional investors can participate in the network by passing KYC/AML requirements, then signing legally enforceable loan agreements that name TrustToken as the counterparty. Once the borrowers establish a strong record of repaying their loans of $1-2 million, they can gain access to larger loans — Alameda Research received a $10 million loan on TrueFi, for example. TrueFi has a number of public-facing plans for further development. Institutional borrowers active on the platform have asked for a line-of-credit option, and the team is working on bringing that to life.

In order to become a lending platform of consequence, TrueFi needs to excel at assessing risk. It plans to achieve this by introducing off-chain data in its protocol to add better multi-variable analysis to its platform. This improved analytical method may include information on legal jurisdiction, assets under management, leverage, options exposure, and more.

There is a lot to look forward to from this platform and its TRU token. If it can deliver on its extensive development plans, TrueFi may very well become a major trusted protocol for uncollateralized lending.

HELIUM ($HNT)

Helium is a compelling crypto project because it makes things happen in the physical world. It’s a decentralized blockchain network for Internet of Things (IoT) devices. Smart pet collars, environmental sensors, bike trackers, rental scooters, and other IoT devices can connect to the Helium mainnet to communicate with each other and send data across its network of nodes.

These nodes come in the form of “hotspots,” which are wireless gateways and blockchain mining devices rolled up into one. Users can set up hotspots as they see fit to serve other IoT devices, earning HNT whenever a device connects, and earning passive income in the process. This project aims to future-proof IoT communication by smoothing over its present-day inadequacies.

Helium relies on proof-of-coverage, a new consensus algorithm based on the HoneyBadger BFT protocol. The chief innovation here is that it lets various nodes in a network reach consensus even when connection quality is highly variable.

RIBBON FINANCE ($RBN)

Ribbon Finance builds so- called “structured products” — investing mechanisms in which the returns are directly linked with the underlying asset that it represents. This means users can generate yield on a crypto asset using financial instruments.

Ribbon leverages DeFi composability and derivatives to create structured products that let market participants deposit crypto assets into a vault that generates yield on their assets via automated strategies. In other words, Ribbon makes complex yield-generating tools accessible to anyone. So where does that passive income come from in DeFi? Primarily from yield farming — market participants will deposit liquidity into a protocol in exchange for that protocol’s native governance token, but this comes with a degree of unsustainability. It requires constant rebalancing of new liquidity farms in order to provide a consistent source of yield. Ribbon Finance tackles this problem by implementing its structured products in DeFi environments where yield can be generated through trading strategies using derivative products.

For example, Ribbon’s Theta vault lets users deposit ETH or WBTC that gets automatically deployed to the market using a covered call options strategy, generating passive income for the depositors. Yield from this system architecture is more sustainable in the long-term for those looking to generate yield on their crypto assets.

RALLY ($RLY)

Rally was founded in 2018 and is venture-backed by heavy hitters like Andreesen Horowitz, Canaan, Battery Ventures, and Green Bay Ventures. In October 2020 it launched the Rally Network, an Ethereum-based crypto project that lets creators, celebrities, and influencers make their own cryptocurrencies.

These creator-made cryptocurrencies on Rally Network are called Creator Coins, and they can be traded on the Ethereum blockchain. Fans can purchase the Creator Coins they want using traditional currency (via a credit or debit card) or with cryptocurrency. These Creator Coins end up functioning as a kind of fan club — people who buy various Creator Coins can be granted access to perks like exclusive merchandise or content from the creator they’re supporting. They can also earn the platform’s native currency, $RLY, simply by holding Creator Coins and being active on the network.

On the other side of the table, creators can cash out the value of their Creator Coins into $RLY, then convert that into ETH or conventional currency that lands right in their bank account. Rally furthermore does not charge a fee during these transactions.