Best Altcoins of 2021 | Altcoin Quarterly Report | Q4 2021
Eﬁnity ($EFI)88% fundamental // 86% code review
You might better know the Eﬁnity team for its ﬁrst project, Enjin coin ($ENJ). Nowadays the company’s new project is a Polkadot parachain that harnesses the power of Polkadot’s blockchain to bring NFTs to the masses. Eﬁnity endeavors to work as an NFT highway as opposed to a general computing blockchain, letting people easily create NFTs on Ethereum. The Eﬁnity network facilitates token creation, transfers, and purchases.
Eﬁnity established itself as a world-class blockchain developer after its successful 2017 ICO for Enjin. Now, the Enjin project represents a holistic ecosystem of user-ﬁrst products that anyone can use to develop, trade, monetize, and market with blockchain and NFTs. Enjin currently has more than 20 million users around the world.
This Eﬁnity team knows how to build blockchain products, and has raised approximately $20 million in venture backing from investors like Hashkey Capital, CMT Digital Ventures, Kinetic, Animoca Brands, and Crypto.com.
In terms of technology, Eﬁnity has some unique features worth keeping in mind.
The Eﬁnity blockchain can process up to 1,000 transactions per second, and conﬁrm each one in less than six seconds. It also has plans to include an automated market maker (AMM) called Eﬁnity Swap, which allows users to easily swap NFTs.
Eﬁnity’s native token, EFI, has multiple use cases and incentivized network eﬀects. Some of this utility includes
- Rewards for Collator Nodes who run the network
- EFI functionality as the currency for transactions on the premier marketplace
- EFI functionality for transaction fees on the network (approximately 2.5% of these fees will be distributed to EFI pools).
- Rewards for buyers and sellers who facilitate EFI price discovery.
- Developer grants to initiate organic ecosystem development from the community pool.
There is a capped total supply of 2,000,000,000 EFI tokens. Importantly, the token supply is fairly distributed:
- Ecosystem: 35%
- Staking & Pools: 15%
- Company: 20%
- Team: 10%
- Seed Round: 3%
- Early Round: 7%
- Strategic Round: 5%
- Public Sale: 5%
Compared to the average valuation of projects within the NFT sector, Eﬁnity is currently trading relatively cheap at a $1.8 billion fully diluted valuation vs. the $3.3 billion average of the industry.
Moonriver ($MOVR)84% fundamental // 80% technology
Moonriver is a launchpad for Ethereum-based projects that oﬀers complete EVM compatibility. This compatibility makes it easy for Ethereum-based blockchain developers to move to, expand to, or transition to Kusama to build their respective applications. This means developers can deploy the existing codebase they were running on Ethereum through Moonbeam without re-engineering it for Kusama.
Moonriver lets users seamlessly access applications and wallets via their Ethereum address, making the transition to Moonriver’s ecosystem fully compatible with Ethereum-based applications like MetaMask and SushiSwap. Strong accessibility to developers and users alike means Moonriver should enjoy broad, built-in network eﬀects and composability from inception. Over time, this should put Moonriver’s growth in tandem with the growth of Ethereum and Kusama.
Slow transaction speeds, network congestion, and high transaction costs are some of the problems currently plaguing Ethereum. While the transition towards Ethereum 2.0 promises to solve these issues, there is still a chance that these improvements will either be delayed or create new problems.
If this worst-case scenario plays out, developers can write smart contracts in Solidity and launch them on Moonriver. For most projects, building a parachain on Kusama is a complicated and expensive process, so deploying on Moonriver is an easier way to gain access to Kusama’s ecosystem.
Regarding tokenomics, Moonriver’s MOVR token is similar to a typical layer one token. MOVR’s use-cases include:
- Supporting the gas metering of smart contract execution
- Incentivizing collators and validators to secure the network
- Facilitation of on-chain governance
- Payment for network transaction fees
Importantly, fees related to Moonriver transactions and smart contract execution will be handled through two systems. First, 80% of the spent fees will be burned, acting as a deﬂationary force on the supply curve. Second, 20% of the spent fees will be transferred to the on-chain treasury. As Moonriver becomes decentralized, one can expect the treasury to beneﬁt the whole community rather than a few major stakeholders.
On the supply side of the tokenomics, notably, there is no allocation to the founding team, nor any private sales, VCs, or seed rounds that have been conducted at network genesis. Investors, therefore, do not have to worry about poor price action due to supply unlocks and subsequent token dumps. From the beginning, Moonriver’s community members will own a majority of the MOVR tokens on the network, giving them considerable control over the governance and hence the direction of the network.
Token allocation is as follows:
- Community/Slot Reserve: 40%
- Parachain loan: 30%
- Network Stewardship & Adoption: 24.5%
- Developer Adoption: 4.5%
- Parachain Bond Reserve: 0.5%
- Treasury: 0.5%
MOVR appears to be the cheapest at a fully diluted valuation of $1.8 billion amongst its peer group of Layer 1 and Smart Contract protocols. If we assume Moonriver will have valuation growth similar to Cardano (ADA) or Solana (SOL), then ROI potential for MOVR is between 31X and 49X, respectively..
Polymesh ($POLY) 86% fundamental // 82% technology
Built as an institutional-grade permissioned blockchain for regulated assets, Polymesh opens the door to new ﬁnancial instruments by solving regulatory challenges with blockchain infrastructure around identity,
compliance, conﬁdentiality, and governance. With regulatory restrictions in mind, Polymesh is integrating these core principles into the base layer of its chain, which is not currently possible on other layer ones. Using Polymath’s Token Studio, developers can tokenize assets in the private markets like equity, debt, real estate, VC/PE funds, intellectual property, and other intangible assets.
Polymesh’s proprietary technology lets anyone registered on the network create, issue, and manage digital securities on a substrate-based blockchain. A unique feature of its blockchain infrastructure is the base layer of compliance and regulation it provides.
Any future changes in law and regulation can easily be managed, and compliance is baked into security tokens issued on this network.
The main diﬀerence between Polymesh’s approach and that of a general-purpose blockchain (like Ethereum) is that Polymesh’s design focuses on a precise solution to speciﬁc requirements, rather than a generalized solution to abstract needs. In our opinion, this method helps the issuer of security tokens to more easily satisfy regulatory requirements. Since Polymesh makes it simple for securities to bake in KYC, AML, and other regulatory requirements (whereas other blockchains currently have no mechanism to do so) Polymesh has a considerable regulatory edge when issuing security tokens.
Tokenizing assets fosters liquidity and accessibility while democratizing ownership of a more comprehensive array of asset classes (particularly in the private markets). Polymesh’s blockchain is not furthermore limited to tokenized securities, as it can also be used to automate dividend payments, proxy vote via smart contracts, and create programmable equity. The total addressable market for tokenized securities is north of $100 trillion, and Polymesh has a ﬁrst-mover advantage as a layer one to tap into this sector.
POLYX is the native token of the Polymesh network. It has multiple use cases that indicate strong token utility:
- Transaction fees (gas fees) – fees charged for all transactions on Polymesh. Fee payment is split at a 4:1 ratio between the network treasury and the block-creating node operator.
- Protocol fees – fees charged for certain types of native functions (like reserving a token ticker) and set by the Polymesh Governing Council. Fee payment is split at a 4:1 ratio between the network treasury and the block-creating node operator.
- Developer fees and grants – charged and set by developers of smart contracts and smart extensions. Developers who provide an answer and solution to a speciﬁc request for proposal (or even address unsolicited solutions) may be provided a grant in the form of POLYX. While these are not yet activated for Polymesh, further details will be determined through the on-chain governance process.
- Staking rewards – By staking, holders have the ability to nominate node operators of their choice with POLYX. Both are either rewarded or ﬁned based on the operator’s performance running their node (that is, keeping their node online and writing blocks to the chain per the rules of Polymesh). For each block created, the node operator who made it is rewarded in POLYX along with their stakers.
- Governance – Staked POLYX may be simultaneously used to signal support in Polymesh governance.
POLYX on Polymesh will not be created from scratch. With the launch of the chain, the main mechanism to build the supply of POLYX will be developed through an upgraded bridge, which will let future Polymesh users upgrade their Ethereum-based POLY utility tokens to POLYX on Polymesh. In other words, POLY ERC-20 tokens will maintain the ability to upgrade to POLYX tokens at a 1:1 ratio (that is, 1,000 POLY = 1,000 POLYX). The total supply of POLYX will be uncapped, unlike POLY, which was capped at 1 billion. The newly minted POLYX will be used for rewards to secure the network, and the inﬂation rate could go as high as 14% if less than 70% of POLYX is staked to incentivize network security. Initial token distribution was centralized.
We conducted diﬀerent market sizing exercises to determine the price potential of POLYX. At the current POLY price, the market believes it can capture 0.11% of Ethereum’s market share. Although Ethereum is not a direct competitor, it is home to the most ﬁnancial innovation in the crypto space. If we assume that the Polymesh network can secure a 0.5% to 1% market share of ETH, the ROI potential is 3.7X to 8.5X. This by no means is a radical assumption, as Polymesh is going for a $100+ trillion TAM (total addressable market). If the security token narrative within the crypto market gets reignited, then this creates a possibility for Polymesh to take 0.5% to 1% total market share of the crypto industry.
RMRK ($RMRK) 80% fundamental // 80% technology
RMRK is the ﬁrst protocol to create NFTs on Kusama, Polkadot’s canary
network. This protocol oﬀers a set of rules and speciﬁcations for interpreting a set of messages on Kusama without smart contract functionality.
RMRK is a set of standards on the Kusama blockchain that is composed of ﬁve NFT “lego” primitives. By putting these legos together, developers can create NFT systems of arbitrary complexity. By using this lego logic along with Kusama’s multi-chain architecture, these NFTs become eternally liquid, forward-compatible with unannounced projects, and seamlessly portable to any connected parachains.
RMRK’s technology enables innovations like the following:
- Nested NFTs that can own other NFTs, or equip other NFTs to change their output media. Imagine an in-game character who owns a backpack, and the backpack owns some health potions.
- On-chain emotes, like those found on an emoji keyboard, can be sent to any NFT. Any UI implementing this is able to show the full range of received emotes, allowing for social mechanics and relative price discovery across NFTs.
- Multi-resource NFTs that are context-dependent and can have diﬀerent outputs.
Consider an e-book that might have a PDF resource, a cover resource, and an audio ﬁle resource. If you load it into Audible, it can automatically play. If you load it into a Kindle, it will open in reading mode.
RMRK’s protocol standards enable custom messages to be interpreted in a special way according to predetermined speciﬁcations. The end result is NFTs with programmable features on a logic-less blockchain. Additionally, RMRK 2.0 takes this concept further by deﬁning multi-chain standards for evolving, reactive, multi-resource conditional NFTs that go beyond being digital-dust-gathering collectibles. RMRK is currently deployed on the Kusama Relay Chain, making it compatible out of the box with Polkadot and any other Substrate-based chains. The RMRK protocol is spearheaded by the RMRK Association in Zug, Switzerland.
Several utilities are planned for the RMRK token.
- Minting Fee: To oﬀset the cost of pinning NFTs on IPFS and to increase long-term availability
- Metaverse Currency: The team plans to launch a metaverse in Q4 of 2022, with playable elements launching before that. The metaverse will oﬀer many ways to utilize RMRK tokens, beginning with staking incentives and progressing to mining for raw materials that are useful in the metaverse, to paying for travel costs, rent, and the purchase of land, and more.
- Staking: The token is deﬂationary, which means there is no staking to get more of this token. However, staking operations will be possible. One example: to craft a new NFT item compatible with Kanaria, you will need raw materials, which are inherently fungible tokens that you can mine from the land or buy on the market. Kanaria birds can be used to mine the materials. An added perk is the capability of staking RMRK alongside them to give them a performance boost.
- DAO Collateral: If you want to turn an NFT into a batch of fungible tokens and govern it like a DAO, you have to stake some $RMRK. This prevents fungible token spam.
- Curation and Veriﬁcation: Mint an NFT which can be discovered by communities by staking RMRK. If some time elapses (a period to be deﬁned by RMRK governance) and no one reports your NFT for plagiarism, for being NSFW when it was designated SFW, or any other breach of terms, you get your stake back.
- DeFi Collateral and LP use: The token can be leveraged as collateral on platforms like Karura and Acala. It will also be usable for liquidity provision in DEX implementation.
- Governance of DAO
The maximum supply of RMRK is 10,000,000 (10 million). There is no inﬂation, and the token is deﬂationary by design due to its stake-to-report and stake-to-curate mechanics that are to be announced (see curation and veriﬁcation below). Notably, these mechanics can change by vote of the RMRK DAO when it’s up and running, once RMRK has moved its protocols onto a parachain.
- 8.9 million RMRK (89% of supply) was distributed to original Kanaria egg purchasers in a fair drop.
- 5% is locked for the team (1-year cliﬀ, 1-year linear vesting per-block).
- The rest of the supply is with the community.
Compared to the average valuation of the metaverse sector, RMRK is currently trading cheaper at $320 million fully diluted valuations vs. the $3.1 billion average.
Trader Joe ($JOE) 80% fundamental // 80% technology
Trader Joe is a decentralized trading platform built on the Avalanche network. It combines DEX services with DeFi lending to oﬀer leveraged trading to its users. The full DeFi suite oﬀers multiple features through an automated market maker (AMM) that helps users swap between two tokens. It also enables farming, where users can earn JOE tokens by staking their liquidity provider (LP) tokens, the staking of JOE tokens to earn more JOE via protocol fees, as well as lending and borrowing to earn yield or increase trading leverage.
As the Avalanche DeFi scene slowly emerges, Trader Joe aims to oﬀer a solution that includes all the major services that users would expect from traditional DeFi protocols. Trader Joe’s team took development inspiration from leading protocols within the Ethereum DeFi ecosystem, like Compound and Cream.
The team is not the most seasoned, however. They are extending existing protocols that are already successful and well-designed. Their goal is to make Trader Joe a real DeFi hub, letting users access multiple diﬀerent services on a single platform. JOE is currently trading on both centralized exchanges (like Gate.io) and decentralized exchanges (like Trader Joe itself).
Trader Joe was fairly launched via liquidity provider rewards. There were no pre-sales, seed investors, or VC allocations,
and token distribution is also reasonably decentralized. The allocation is as follows:
- Liquidity provider: 50%
- Treasury: 20%
- Dev team: 20%
- Future investor: 10%
Recently the Trader Joe team raised $5 million through lead investors such as DeFiance Capital, GBV Capital, and Mechanism Capital. Other backers include Three Arrows Capital, the Avalanche Foundation, Delphi Digital, Coin98 Ventures, Not3Lau Capital, and Aave founder Stani Kulechov. Trader Joe’s two lead investors, Deﬁance and Mechanism Capital, are two funds that have a signiﬁcant interest and investment in DeFi – both are involved in supporting and consulting projects that they invest in to build the space. This funding will help cover future expenses relating to marketing and technology upgrades.
The next few months will notably have aggressive unlocks regarding the token supply schedule. As the anticipated circulating supply quickly rises, there will be a period of time where the price of JOE may undergo signiﬁcant negative pressure.
Although JOE’s token utility isn’t particularly novel, it does have very similar uses to SushiSwap and PancakeSwap, with users currently earning fees from swaps performed on Trader Joe. Just like xSUSHI, 5% of all trading fees are used to buy JOE at the market price. With the recent introduction of lending markets, the token holders will collect a percentage of earned interest and closed liquidations. Users can earn all of the fees mentioned above through staking. JOE tokens will also be used for voting on governance proposals.
A new token meme coin called TRACTOR has been launched by the community this will add a deﬂationary eﬀect to the JOE token. Every transaction from TRACTOR (whether buy or sell) will involve a 2% fee, which is used to buy and burn JOE.
JOE is also inexpensive relative to many other decentralized exchanges on diﬀerent blockchains. The only option in its peer group that remains cheaper is SushiSwap.
Unique Network ($UNQ)80% fundamental // 80% technology
The Polkadot-based Unique Network can be seen as a foundation for good standards and practices for any software that uses or interacts with NFTs. The core components of Unique blockchain are NFT Pallet and Ink! smart contracts. Like the ERC-721 Ethereum standard for smart contracts, NFT Pallet provides the rails for creating NFT collections, minting tokens, managing ownership, and more. The smart contracts module is included to handle any application logic that is unknown at the time of chain design.
The Unique Network aims to provide a feature-rich and ﬂexible conﬁguration experience to its users, including multiple authorization levels, economic models for freemium application marketing, assorted administration options, advanced spam protection, and the like. The goal is to cover a wide range of NFT application development needs to provide maximum ﬂexibility at a lower, more aﬀordable cost.
Unique Network was born at Hackusama, the ﬁrst-ever hackathon for the Kusama/Polkadot ecosystem in 2020, and achieved some popularity and notoriety with the development of the Substrapunks game. 10,000 NFT characters were all claimed in a few days, and peer-to-peer trading for valuable assets such as ETH and KSM opened up shortly after that. The team then built an on-chain marketplace to facilitate safe trading, explore the possible dApp architectures, experiment with miscellaneous types of loads, and solve possible problems in a developer-friendly environment.
The ﬁrst version of Unique Marketplace was launched in November 2020 as one of the ﬁrst (if not the ﬁrst) decentralized apps to bridge multiple networks in the Kusama ecosystem. As a fully scalable blockchain for composable NFTs for advanced economies, the technology and infrastructure aim to provide a sustainable future free of limitations, delays, and the hindrances that plague NFTs today. Quartz, the canary network of Unique Network, won the 14th parachain slot auction and will soon be a Kusama parachain, giving us a glance at the advanced features of the network.
Astar Network ($ASTR)80% fundamental // 78% technology
Built with a real-time module library based on Substrate, Astar network is a platform where developers can add plasma features to their blockchain on both Substrate- and EVM-compatible chains. Using this library, developers can create a protocol that is smart contract-capable and extendable across multiple chains. With a comparable vision to be the center of all blockchains like Polkadot, Astar Network hopes to become the gateway to a multi-chain future. By connecting multiple layer 1 blockchains to Polkadot, developers can use Astar network to create protocols that are simultaneously compatible with Avalanche, Ethereum, and other EVM-compatible blockchains.
While competitors like Moonriver and Khala Network require developers to pay for the underlying smart contract service and the network it provides, Astar incentivizes developers to build on their platform by rewarding them with the protocol’s native token. Playing a role similar to Kusama, Polkadot’s testnet Astar Network is also creating a
testnet, Shiden Network, to facilitate smart contract agreements using Kusama. By doing so, Astar Network is focusing on sustainable growth and blockchain development across parachains.