Despite all the gloom and doom associated with the current crypto winter, the blockchain and cryptocurrency industry remains remarkably innovative. If anything, the ability to develop next-generation products and services may be easier now that there is no constant media hype to produce something immediately.
That’s why I really like what I’ve seen with three different tokens that are changing the crypto landscape: Uniswap (UNI -3.84%), Polygon (MATIK -4.39%)and BitDAO (BIT -2.70%). Each of these tokens is helping to lay the foundation for a stronger, more robust cryptocurrency industry while changing the way we think about cryptocurrency. Let’s take a closer look at each of them.
As the collapse of cryptocurrency exchanges continues 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 who wants to avoid the risk of holding their cryptocurrencies with a potentially unreliable exchange.
The most important of these consequences is that you should never keep your money on Uniswap to trade. Instead, you store your funds in a digital blockchain wallet that you only control. If you want to trade, you just connect your wallet to Uniswap.
Another important result is that you have access to a wider set of cryptocurrencies to trade on Uniswap compared to centralized exchanges. This creates a very attractive value proposition for Uniswap, along with better prices for most cryptocurrencies.
Uniswap faces a lot of competition, but remains the world’s largest decentralized exchange by trading volume. It is also ahead of the curve when it comes to trading other digital assets, such as non-tradable tokens (NFTs).
What many investors may not realize about Polygon is that it is a Layer 2 blockchain built on top of Polygon. Ethereum (ETH -4.24%) blockchain, so there is a very symbiotic relationship between the two. Ethereum provides security and stability as the underlying base layer.
Polygon provides faster transaction speeds, lower costs and superior user experience; it says it can process 65,000 transactions per second for just a fraction of a cent. This makes it fast and incredibly cheap compared to Ethereum. If you use Polygon, you really get the best of both worlds: fast speeds, low costs, and full interoperability with the Ethereum blockchain.
Building on this incredible value proposition, Polygon hit the scene in 2022. Blockchain has lined up a number of high-profile partners over the year, including Disney, Starbucks, Meta platformsand Nike. All of them are working with Polygon on innovative NFT projects, and this trend looks set to continue in 2023. For example, Starbucks created an NFT-based customer loyalty program that runs on Polygon.
BitDAO is unique in that it is a decentralized autonomous organization (DAO). In layman’s terms, it’s an organization held together by a decentralized blockchain network. Every decision and every transaction of this organization is placed on the blockchain and coordinated through smart contracts.
This leads to greater transparency and trust. Imagine if your boss in the corner office had to publish a complete list of all the actions taken during the day in a public ledger for all to see.
While each DAO can be set up to achieve different goals, BitDAO is set up to invest in different cryptocurrencies and blockchain projects. In many ways, it’s like being part of an investment club where you collaborate with people from around the world to choose your next investment.
Once you own a BitDAO token, you have the right to vote in this process. If you take a look at the BitDAO website, you can see some of the projects it has invested in, such as the new Layer 2 blockchain. If DAOs ever become more popular, it could change the way we think about investing in blockchain and cryptocurrency. Instead of investing in solo cryptocurrencies, the focus can be on blockchain projects and digital assets.
Which of these is the best investment?
All three of these cryptocurrencies have interesting long-term growth prospects and are ranked as top 50 cryptocurrencies by market capitalization. Currently, Uniswap and Polygon are strong long-term buys. However, the jury is still out when it comes to BitDAO, as this type of cryptocurrency is very new.
As a result, if you are already holding Bitcoinboth Polygon and Uniswap can be a great way to diversify your crypto portfolio in 2023.
Randi Zuckerberg, former director of market development and Facebook spokesperson and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Dominic Basulto has positions in Bitcoin, Ethereum and Polygon. The Motley Fool owns and recommends positions in Bitcoin, Ethereum, Meta Platforms, Nike, Polygon, Starbucks, Uniswap Protocol Token, and Walt Disney. The Motley Fool recommends the following options: $145 January 2024 Walt Disney calls Nike $47.50 January 2025 calls Starbucks $92.50 calls Walt Disney January 2024 $155 calls . The Motley Fool has a disclosure policy.