5 altcoin projects that made a real difference in 2022

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Bitcoin (BTC), Ether (ETH), and the crypto market had a tough 2022 from a price perspective, but traders are hoping that 2023 will include bullish developments that will drive crypto prices higher.

Despite the market-wide slowdown, a handful of altcoins have continued to make a positive contribution to the crypto space and thanks to Ethereum, the term altcoin is no longer a derogatory term.

Let’s explore the best altcoins that made a difference in 2022.

Ethereum Fundamentals Shine in 2022

Ether price hit a yearly high of $3,835 on January 2 and struggled to regain its footing amid the bear market and other macro factors. The Ethereum network is the best project in 2022 not because of Ether’s price action, but for its fundamentals and for completing the long-awaited mainnet upgrade. The Ethereum merger was completed on September 15, 2022 and while many feared that the Proof of Stake (PoS) merger could cause problems, the transition was seamless.

The main advantage of PoS is that it is much more energy-efficient than proof-of-work (PoW) because it does not require expensive and energy-consuming hardware to validate transactions. This reduces usage costs for the end user and makes it a more sustainable and scalable solution for Ethereum’s long-term growth. The merger also reduced the power consumption of Ethereum networks by more than 99.9%.

Some analysts are bullish on Ether post-merger due to its issuance schedule becoming deflationary. Although daily active users have increased for the network, emissions have remained inflationary and the price of Ether is still down from yearly highs.

In 2023, investors hope that the increase in transactions on the network will create more demand for Ether and that this will translate into an increase in the price of altcoins.

Lido (LDO) Brought Ethereum Network Staking to the Masses

Lidos makes it easy for users to participate in Ethereum PoS as validators by providing a simple interface to bet without having to reach the high threshold required by the network to bet.

Since launch, Lido has earned $158.8 million in fees from its staked Ether protocol. At its peak, Lido saw 823 daily active users on September 17.

Cumulative Lido charges and daily active users. Source: TokenTerminal

With the Ethereum Shanghai network hard fork scheduled for March 2023, Lido will have a busy first quarter and all Ether staked in the platform will have the opportunity to be withdrawn. Aztec Connect, the creator of the Lido protocol, also recently secured a $100 million fundraiser to build an encrypted blockchain.

Polygon partnerships show long-term resilience

Massive adoption is forcing traditional businesses and brands to get involved in crypto. Polygon (MATIC) is primarily focused on partnerships and some of the relationships developed in 2022 include Warner Music, JP Morgan, Instagram and Warren Buffetts Neobank.

These partners use Polygon in a variety of ways, including integrating the Polygon network into their infrastructure and using Polygon to offer Distributed Ledger Technology (DLT) for their products and services.

Notable companies, including Cointelegraph, have also chosen to launch NFTs on Polygon. In addition to Cointelegraph, former President Donald Trump, Reddit, DJ Deadmau5, and Nike have all launched NFT collections on Polygon.

Some traders are expecting a 200% uptick in MATIC due to on-chain metrics showing traction and a slew of future partnerships. Despite all the growth of Polygons, the Ethereum network is still consuming more fees.

Daily fee comparing Polygon (Orange) and Ethereum (Green). Source: TokenTerminal

Polygons focus on the fundamentals of Web3 combined with their partnerships, earning them a spot among the top altcoin projects in 2022.

MakerDAOs DAI shows resilience

In a year that has seen algorithmic stablecoins fade and perish, Dai (DAI) has shown resilience. Unlike centralized stablecoins, DAI is a decentralized stablecoin that offers transparency, censorship resistance, and the ability to operate outside of traditional financial systems.

Although DAI is not new to the crypto space, the decision to increase exposure to lower risk assets such as Treasuries and bonds earns them a place among the top altcoins. According to an analysis by crypto specialist Sébastien Derivaux, this decision generated 75% of all DAI’s revenue (600 million.)

Cosmos upgrades attract attention from institutional investors

In 2022, Cosmos (ATOM) focused on solving the interoperability and communication issues that exist between different blockchains. On January 1, Cosmos had 74 active developers and that number more than doubled, peaking at 154 on November 30.

In a year plagued by cross-chain losses, Cosmos’ inter-blockchain communication (IBC) protocol has so far seemingly weathered the storm. The success caught the attention of the research arm of Delphi Digitals and the fund managers of VanEck.

Cosmos fees and developer activity. Source: TokenTerminal

Overall, Cosmos has the potential to be an important infrastructure layer for the crypto ecosystem, helping to facilitate the exchange of value and information between different blockchain networks and enabling a more interoperable future.

While 2022 is a year most crypto investors would like to forget, positive factors in mass adoption have emerged. Building-focused altcoins will continue to power the future of crypto in 2023 and beyond.

The views, thoughts and opinions expressed herein are the sole authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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