Among all the new crypto projects, smart contract ones are the most interesting. This is because, in the blockchain revolution, smart contracts supply the building blocks for decentralized applications (dApps).
So let’s dive in and find out what they are and the best types available.
What are smart contracts?
A smart contract is essentially a contract written in code. It is designed to automatically carry out a set of specific instructions when some conditions are met. The conditions are predetermined with the consent of the parties of the contract.
Smart contracts are great because they are:
- Secure: Records are secured through cryptography, so they cannot be altered.
- Transparent: Everyone can easily see what the terms of the contract are, and what it’s being used for.
- Autonomous: They work automatically, without human intervention.
- Accurate: Since smart contracts are written in code; they have fewer grey areas.
- Third-party free: With them, verification of transactions does not need a mediator. The blockchain takes care of it.
They also remove the need to decode contractual interpretation. In doing so, they will transform the way we do business.
The best smart contract crypto projects of 2023
1. Ethereum (ETH)
Ethereum currently is leading the smart contract projects space with almost 57% of dominance and a market cap of $132 billion.
To maintain its position, Ethereum is preparing to change its transaction verification mechanism, moving to a Proof-of-Stake (PoS) algorithm instead of the current Proof-of-Work (PoW) one. Why? Because the high fee is pushing developers and investors to opt for other alternatives. With ETH 2.0, it is said, smart contract terminologies will change.
Earlier, users expected a reduction in gas fees after the launch of EIP-1559. But that didn’t happen, and it left a lot of people disappointed.
The delay has been one of the reasons for the bearish sentiments recently. But once the Merge does take place, we can expect Ethereum’s smart contract abilities to grow multifold.
2. Cardano (ADA)
In the smart contract projects race, Cardano is a relative newcomer. With a market cap of $16 billion, Cardano is steadily growing. Its smart contract capabilities now extend to the development of NFT marketplaces, DeFi protocols, and more.
Founder Charles Hoskinson said that there are more than 100 smart contract projects in development in its ecosystem.
3. Solana (SOL)
Solana was one of the top-performing cryptos of 2021, with a price increase of over 11,000%.
Currently, Solana is the fastest crypto on the block, with a capacity of 50,000 transactions per second. It uses a Proof-of-History consensus algorithm to make this possible.
The market cap of Solana has reached $13 billion, and it looks like it will keep growing. Right now, Solana has over 1,000 smart contract projects in its ecosystem, and it keeps making great partnerships with big companies. What separates it from other smart contract projects is its special affinity for DeFi projects.
4. Polkadot (DOT)
Polkadot’s founder, Gavin Wood was also one of the creators of Ethereum. Polkadot’s market cap is currently $8 billion, and enough investors seem to have adopted the ecosystem.
Unlike Layer-1 blockchains, where smart contracts run as part of the ecosystem, Polkadot, being a Layer-0 platform, is faster.
Polkadot’s main advantage is its transaction verification mechanism (a.k.a. consensus mechanism). The mechanism is what sets it apart from its competitors. Polkadot uses parachains—chains that run parallel to the main blockchain. The smart contracts of Polkadot thus run on parachains instead of running on the main blockchain. This allows it to process transactions faster and gives it the unmatchable speed it has.
Some of Polkadot’s ecosystem projects are Kusama (KSM), Litentry (LIT), Karura (KAR), DOCK, and REEF.
5. Avalanche (AVAX)
Investors seem to love Avalanche because it has low transaction fees, is environmentally sustainable, and is extremely agile. Avalanche is therefore currently considered one of the rising stars of the crypto world.
Avalanche claims that it is the fastest smart contract platform in terms of finality, beating Solana. It actually finalizes the transaction, instead of simply processing it.
It sort of works like a credit card. When a retailer accepts a credit card payment, it is still listed as pending on your end, and the full transaction is finalized after a certain number of days, which had been pre-determined.
Avalanche ensures that the platform is scalable and has low fees, despite using three different blockchains to achieve the speed.
Conclusion
When it comes to smart contract projects, there is no winner-takes-it-all race. There’s a good chance that several new or old smart contract crypto projects will end up being on top for a while. As an investor, you need to keep in mind that several programmable cryptos can win this race, but none will stay at the top forever.
You may look at Solana’s 11,000% price increase last year and feel the need to find the next Solana or Ethereum, but when it comes to crypto, there are no guarantees of more extraordinary gains overnight. The safest options may or may not be the best. The list above may have helped you find the best smart contract projects, but it’s best to do your own research and only then invest.
FAQs
What are smart contract projects in the cryptocurrency space?
Smart contract projects in the cryptocurrency space are blockchain-based applications that automate and enforce self-executing contracts. They include Ethereum, Cardano, and more, enabling various decentralized applications (DApps).
Why should I be interested in smart contract projects?
Smart contract projects offer benefits like trustless automation, security, and transparency. They enable decentralized applications, financial services, and reduce intermediaries, potentially revolutionizing industries like finance, supply chain, and more.
What are the potential returns on investment for these smart contract projects?
Returns on smart contract project investments vary widely. Factors include project success, market conditions, and your strategy. While potential for gains exists, it’s important to understand the risks and do thorough research before investing.
