Despite all the gloom of the current crypto winter, the blockchain and crypto industry remains remarkably innovative. On the contrary, the ability to develop next-gen products and services might actually be easier now that there’s gone the constant hype to produce something immediately.
That’s why I really like what I see with three different tokens changing the crypto landscape: Uniswap (UNITED -4.49%), Polygon (MATIC -5.13%)and BitDAO (BIT -2.27%). Each of these tokens changes the way we think about crypto, while helping to lay the foundation for a stronger and more resilient crypto industry. Let’s take a closer look at each of them.
With the continuing fallout from the collapse of the cryptocurrency exchange FTX, it’s perhaps no surprise that Uniswap is making headlines. Unlike FTX, which is a centralized exchange, Uniswap is a decentralized exchange. This has several important implications for the average investor looking to avoid the risk of holding their crypto with a potentially untrustworthy exchange.
The most important of these consequences is that you will never have to keep your funds on Uniswap to trade. Instead, you keep your funds in a digital account blockchain wallet that only you control. If you want to trade, all you have to do is connect your wallet to Uniswap.
Another important consequence is that you have access to a much wider set of cryptos to trade on Uniswap than on centralized exchanges. This, combined with better prices for most cryptos, makes for a very attractive value proposition for Uniswap.
Uniswap faces plenty of competition, but remains the largest decentralized exchange in the world by trading volume. It is also ahead of the curve when it comes to trading other digital assets, such as non-fungible tokens (NFT).
What Many Investors May Not Realize Polygon is that it is a layer 2 blockchain built on top of the Ethereum (ETH -4.15%) blockchain, so there is a very symbiotic relationship between the two. Ethereum, as the central base layer, provides security and stability.
Polygon delivers faster transaction speeds, lower costs, and a superior user experience; it says it can process 65,000 transactions per second at a cost of just a fraction of a penny. This makes it super fast and incredibly cheap, compared to Ethereum. If you use Polygon, you truly get the best of both worlds: fast speeds, lower costs, and full interoperability with the Ethereum blockchain.
Based on this unbeatable value proposition, Polygon exploded onto the scene in 2022. The blockchain lined up a number of top partners throughout the year, including the likes of disney, Starbucks, Metaplatformsand Nike. All are working on innovative NFT projects with Polygon, and this trend is expected to continue in 2023. Starbucks, for example, has created an NFT-based customer loyalty program that runs on Polygon.
BitDAO is unique in that it is a decentralized autonomous organization (DAO). In simple terms, this means that it is an organization maintained by a decentralized blockchain network. Every decision and every transaction of this organization is published on the blockchain and coordinated via smart contracts.
This leads to enormous transparency and trust. Imagine if your boss working in the corner office had to post a complete list of every action taken during the day in a public ledger for all to see.
While each DAO can be configured to achieve different goals, BitDAO is configured to invest in different cryptocurrencies and blockchain projects. In many ways, it’s like being part of an investment club where you join with people from all over the world to choose your next investment.
Once you own a BitDAO token, you have voting rights in this process. If you check BitDAO’s website, you can see some of the projects it has invested in, such as a new layer 2 blockchain. If DAOs ever become more popular, it could change the way we think about investing in blockchain. and crypto. Instead of investing in cryptocurrencies solo, the focus could be on blockchain projects and digital assets.
Which of these is the best investment?
These three cryptos have attractive long-term growth prospects and rank in the top 50 cryptos by market capitalization. Right now, Uniswap and Polygon are strong long-term buys. However, the jury is still out when it comes to BitDAO, simply because this type of crypto token is so new.
Therefore, if you already hold BitcoinPolygon and Uniswap could be great ways to diversify your crypto portfolio in 2023.
Randi Zuckerberg, former director of market development and spokesperson for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a board member of The Motley Fool. Dominique Basulto has positions in Bitcoin, Ethereum and Polygon. The Motley Fool holds and recommends Bitcoin, Ethereum, Meta Platforms, Nike, Polygon, Starbucks, Uniswap Protocol Token, and Walt Disney. The Motley Fool recommends the following options: January 2024 Long Calls at $145 on Walt Disney, January 2025 Long Calls at $47.50 on Nike, January 2023 Short Calls at $92.50 on Starbucks, and January Short Calls 2024 at $155 on Walt Disney. The Motley Fool has a disclosure policy.