Solana (CRYPTO: SOL), Polkadot (CRYPTO: DOT), and Luna (CRYPTO: LUNA) have soared a respective 76.24%, 29.08%, and 67.36% in the past seven days, as of 10:30 a.m. EDT Saturday. They are now trading at $76.66, $28.73, and $28.62 per token, respectively. Projects on the decentralized finance (DeFi) networks behind these tokens have sharply picked up traction of late.
Image source: Getty Images.
First of all, the total value of projects staked on Solana recently exceeded $2 billion. It has also become the token of choice for cryptocurrency billionaire Sam Bankman-Fried, the founder of FTX, the fifth-largest cryptocurrency in the world. As a result, Solana’s gains did not lose their momentum even as the network suffered its first-ever rug pull. Developers of the Luna Yield crypto-lending platform shut down their websites and social media pages after allegedly defrauding over $8 million from investors.
Second of all, Polkadot is evolving to become a powerful internet of blockchain (IoB) network that allows the transfer of data and assets between multiple chains. Last month, the first decentralized cryptocurrency exchange launched on Polkadot’s Acala DeFi hub with $3.4 million in total value locked. As the feature expands, it could potentially allow Polkadot to not only compete with the smart contract functionality of Ethereum but also that of decentralized cryptocurrency swap protocols like Uniswap.
In addition, on Aug. 18, Acala integrated MetaMask, a browser extension and mobile app that allows users to access their Ethereum wallet to interact with decentralized applications on the Ethereum network, to enable users equal access to the Polkadot network. MetaMask has over 7 million downloads on Alphabet‘s Google Chrome and 1 million downloads on Google Play.
Lastly, Coinbase Pro recently launched Wrapped Luna (CRYPTO: WLUNA) and TerraUSD (CRYPTO: TUSD) on its trading platform. Both tokens, along with Luna, are part of the Terra network’s ecosystem. Developers behind the Terra network had seemingly solved a critical problem in the cryptocurrency space — by allowing a cryptocurrency to simultaneously be stable enough for use as payment, as well as volatile enough so there’s room for capital appreciation.
It does this by linking the value of Luna tokens to the TerraUSD stable coin, which has a theoretical exchange rate of 1:1 against the U.S. dollar. Users can buy-swap their Luna tokens for TerraUSD when the latter is at a discount to the U.S. dollar, or sell-swap their TerraUSD for Luna Tokens for a premium when the latter is at a premium to the U.S. dollar. This way, users themselves receive rewards for equalizing the exchange rate with Luna tokens, while consumer transactions are settled in the stable TerraUSD. A recent network update opened up its integration with Ethereum, with $2.7 billion in capital already flooding into Terra’s lending and savings protocol Anchor.
Keep in mind that at one point in history, all major cryptocurrencies today like Bitcoin and Ethereum were little-known altcoins trading at very low prices. In the past year, the total addressable market for DeFi has grown from around $14 billion to over $100 billion. So there’s a huge number of opportunities to get rich in this sector right now.
10 stocks we like better than Solana
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now… and Solana wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
*Stock Advisor returns as of August 9, 2021
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Zhiyuan Sun owns shares of Ethereum, Polkadot, and Uniswap. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Bitcoin, and Ethereum. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.