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04/10/2024

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4 Cardano Rivals to Add to Your Portfolio In 2024

Cardano (ADA) is one of the largest cryptocurrencies by market capitalization, ranking among the top ten.Cardano, founded by Charles Hoskinson —an Ethereum co-founder— is designed to be a flexible, scalable,...

4 Cardano Rivals to Add to Your Portfolio In 2024

Cardano (ADA) is one of the largest cryptocurrencies by market capitalization, ranking among the top ten.

Cardano, founded by Charles Hoskinson —an Ethereum co-founder— is designed to be a flexible, scalable, and high-throughput blockchain and smart contract platform for users and developers, gaining notoriety during the 2021 bull market.

As the crypto industry made a notorious comeback at the beginning of 2024, ADA remained in the portfolios of many investors and retail traders, looking to capitalize on the bullish run.

Yet, with renowned interest in the crypto market, investors tend to rotate their capital toward new coins or competitors that could provide high returns. 

This article will guide you through the best Cardano alternatives in 2024 based on factors like market capitalization, total value locked (TVL) across decentralized applications (dApps), potential room for growth, community sentiment, and more.

Four Cardano Alternatives to Consider in Your Portfolio In 2024

Note: this article does not provide financial advice. Please consult with a professional before investing and do your research.

Ethereum – The Pioneer of DeFi

Ethereum (ETH) is the largest smart contract platform and the pioneer of decentralized finance (DeFi). It’s the second-largest cryptocurrency with a market capitalization of $400 billion (as of April 2024) and home to over 2000+ decentralized applications, or dApps. Many of its features exist on Cardano but are not as widely adopted by users and developers.

The Ethereum ecosystem is vast and dominates the DeFi sector by a wide margin, controlling 55.92% of DeFi’s total value locked (TVL)—$100 billion, per data from DefiLlama.

Ethereum is home to many top-tier projects from the cryptocurrency industry. Notably, one of the predominant categories in Ethereum’s DeFi revolves around staking, particularly liquid staking and restaking. Projects like Lido and EigenLayer contribute $32B and $12B to the ecosystem.

TVL Locked across all chains. Source: DefiLlama

Liquid tokens have played a crucial role in Ethereum’s growth. Lido, for instance, mints a tokenized version of the locked ETH in the Beacon contract, giving birth to staked ETH (stETH). This allows depositors to put their tokenized ETH to work without unlocking their original capital (and losing their accrued yield). 

Meanwhile, EigenLayer introduced the restaking concept, essentially depositing staked Ethereum (stETH) or liquid staked tokens (LSTs) into the protocol’s liquidity pools. These tokens are restaked across multiple decentralized protocols within Ethereum.

Layer-2s (L2) have also been crucial developments for the Ethereum ecosystem. They scale the Ethereum network by processing and computing transactions on a parallel network. 

A burgeoning type of L2 is Zero-knowledge (ZK) rollups, with protocols like Starnet and zkSync contributing over $1 billion to the total value locked in layer-2 solutions.

ETH has recorded over 70% in gains in the first quarter of 2024, which is considerable growth but remains 31% down from its all-time high of $4,878 on November 10, 2021. 

As the ecosystem grows, we can expect an upswing for ETH as more projects use the coin and the network to power their apps, products, and services.

Solana – The ‘Ethereum Killer’

Solana (SOL) is the fourth-largest cryptocurrency, with a market capitalization of $81.4 billion. It’s characterized by its high-performance blockchain capable of processing between 1.5k and 2.5k transactions per second (TPS) —and at a cheaper cost than Ethereum. Many consider it to be a primary Cardano competitor.

Solana is one of the best-performing layer-1 of Q1 2024 regarding returns, recording 84.56% in gains. If we zoom out, however, we see SOL has risen from the dead, as the coin was trading at just $20 one year ago. As of April 2024, that figure is now at $182.5, which translates into an 812.5% increase.

Analysts have their eyes set on SOL, as it could reclaim its all-time high of $259.96 in November 2021 and reach new heights north of $300. Several factors and fundamentals support this idea. One of them is the accelerated resurgence of Solana’s TVL.

Solana’s TVL remained idle at $200 million through nearly 2023. However, by late November/early December, its DeFi ecosystem started to pick up the pace, pushing its TVL north of $4.8 billion by the end of March 2024.

TVL Across Solana. dApps. Source: DefiLlama

Another factor is that both retailers and institutional investors are becoming more interested in the Solana network and Solana-related investment products. A report from CoinGecko shows that Solana has emerged as the most popular blockchain ecosystem, capturing nearly 50% of global crypto investor interest in chain-specific narratives.

Another catalyst for SOL’s price was the meme coin frenzy, which followed popular tokens like dogwifhat (WIF) and launched a wave of new participants into the Solana ecosystem.

Tezos – Eco-Friendly Web3 Development

Tezos is one of the oldest and largests smart contract platform with over $1 billion in market capitalization. It was created by engineer and entrepreneur Arthur Breitman in 2014.

From the beginning, Tezos adopted an eco-friendly approach by adopting the PoS consensus – which Cardano embraced later on – making block processing less energy-intensive. This was to appeal to more developers and institutions interested in building and investing in Web3 applications. 

Moreover, Tezos stands out with its self-amending governance system. This allows the blockchain to upgrade itself without needing a hard fork. The rationale is that hard forks can split a community and disrupt its progress. 

Moving on, the self-amending feature happens through a five-period process: proposal, exploration, cooldown, promotion, and adoption. Each period takes place on-chain and is coordinated by XTZ holders who work together to support the evolution of the Tezos blockchain. 

As mentioned, many of Tezos’ efforts focus on building powerful applications for the crypto industry and institutions jumping into the Web3 space. For example, sports clubs like Manchester United use Tezos for digital collectibles, while Ubisoft chose Tezos to power Ubisoft Quartz, a platform for in-game NFTs.

Polkadot – A Network of Blockchains

Polkadot (DOT) is a Cardano alternative that connects multiple blockchains and enables interoperability for cross-chain transfers. This allows Polkadot to create a scalable ecosystem powered by the DOT token.

The DOT token has three leading roles: staking, bonding (a security deposit for Polkadot Parachains), and providing voting rights to token holders to decide the project’s future. 

While we can’t directly measure Polkadot’s TVL, we can refer to its ecosystem of parachains. Simply put, Parachains are layer-1s connected to the Polkadot network, inheriting the security components of Polkadot’s Relay Chain, which runs the system and allows interoperability between all parachains.

The main benefits of Parachains are increased throughput, scalability, and security. Yet they remain sovereign blockchains that can process transactions independently, boosting Polkadot’s overall throughput.

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Disclaimer

This article is provided for information only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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