Markets
Best Cryptocurrency to Watch in 2023 – Forbes Advisor Australia
As the cryptocurrency landscape evolves, certain projects stand out for their innovative approach and substantial growth potential.
Here are some cryptocurrencies to keep an eye on in 2024:
Immutable X (IMX)
Immutable X has quickly risen to prominence in the blockchain gaming sector, an area Baktyary calls “the most funded sector in the crypto space in 2022 and 2023.” This significant funding underscores the sector’s vast potential and investor interest. Immutable X’s strategic partnership with longtime competitor Polygon has been a game-changer. Together, they now dominate about 80% of the blockchain gaming market.
“Formerly competitors, Polygon and Immutable X now hold a dominant position with the majority of crypto games being developed within their combined ecosystem,” Baktyary notes.
This partnership has transformed Immutable X into a blockchain gaming hub, not just focusing on a single game but facilitating the development of over 200 games.
“They’re not just building a game; they’re becoming the hub for games built on the blockchain.” This broad approach increases the likelihood of significant success within the gaming industry, says Baktyary.
Additionally, Immutable X has partnered with major industry players such as Amazon Web Services (AWS) and Ubisoft, and has games available on the Epic Games Store. These partnerships signify the project’s strong business development and potential for widespread adoption.
Another key feature of Immutable X is its focus on zk-rollup technology, which improves scalability, security, and user experience. This positions Immutable X at the forefront of technological innovation in the crypto space. “They are one of the pioneers in zk technology,” Baktyary adds, “which opens the door to much more than what the market sees today.”
Polygon (MATIC/POL)
Polygon, in partnership with Immutable X in gaming, stands out for its broader contributions to blockchain technology. Its widespread adoption of the Chain Development Kit (CDK), more colloquially known as the Polygon stack, demonstrates the robustness and versatility of its technology.
“The adoption of the Large Chain Development Kit marks Polygon’s significant presence in blockchain infrastructure,” says Baktyary.
Polygon’s introduction of Polygon 2.0 adds a multi-layer structure to its protocol, with a notable layer being the Staking Layer. This layer uses Polygon’s native token and allows validators to earn rewards, including transaction fees, from the chains they validate.
“Polygon (Staking Layer) offers validators the potential for additional revenue streams,” says Baktyary.
Additionally, Polygon is a leader in zero-knowledge technology, with its zkEVM already operational. This technology enhances privacy and scalability in blockchain transactions, making Polygon a forerunner in this area.
Polygon is also making progress on scalability by transitioning its PoS chain to become Validium, including experiments in parallel execution. This move further increases the efficiency of the network.
“Polygon’s transition to becoming a Validium demonstrates its commitment to advancing blockchain modularity and alignment with Ethereum,” said Baktyary. Its technological advancements and strategic direction underscore Polygon’s role as a pioneer in the blockchain ecosystem.
Optimism (OP)
Optimism (OP) stands out as a significant player in the blockchain space, with several key achievements underscoring its importance in the evolving cryptocurrency landscape.
One of Optimism’s key achievements is its success in stack adoption, where it ranks second only to Polygon. In the blockchain world, a “stack” refers to the layered structure of technology solutions and protocols that build on each other to create a comprehensive system. In this context, Optimism’s stack refers to its core codebase that is used to help bootstrap other layer 2 blockchains within the Optimism ecosystem.
Baktyary says: “Optimism has the second highest public stack adoption among layer 2 stacks, following Polygon, including strong customers like Coinbase who are committed to maintaining the integrity of the stack.”
This high level of adoption signals confidence in Optimism’s technology and its potential for broad application and integration across different blockchain platforms.
Another significant step for Optimism is its partnership with Coinbase, one of the largest cryptocurrency exchanges. This collaboration, with Coinbase using Optimism’s stack, is a testament to the project’s security and technological robustness, Baktyary notes, and “is huge from a security perspective.” This relationship bolsters Optimism’s credibility and extends its reach to a wider audience, fostering greater adoption.
In terms of governance and community engagement, Optimism has made remarkable progress and has received plaudits from the crypto community. The success of Optimism’s governance model was even highlighted in a Stanford articleindicating a mature and considered approach to involving the community in decision-making processes.
Baktyary adds that the Optimism team appears to be strongly aligned with the Ethereum ecosystem, and this demonstrates their adherence to the core values of blockchain, which resonates with a significant portion of the market.
Like Polygon and Immutable X, Optimism is also at the forefront of technological innovation with its advancements in zero-knowledge (zk) technology.
“The Bedrock update of Optimism enables support for multiple execution layer clients and an abstraction of the proof system, allowing a rollup into the OP stack to use a failsafe or validity proof system,” says Baktyary.
“This update is Optimism’s first step towards adopting zk technology.”
Own layer
Another project that is attracting attention for its pioneering technology is EigenLayer.
The project is bolstered by the prospect of a rewards system for users, a move Baktyary suggests is aimed at rewarding early adopters.
“EigenLayer does not yet have a token, but its points system and the introduction of projects like EigenDA have led the market to assume that there may be an airdrop in the future,” he says.
The foundation of EigenLayer’s innovation is its groundbreaking Actively Validated Services (AVS) technology.
This technology benefits a variety of applications, from data availability layers to oracle networks, by allowing them to benefit from external validator suites, thereby reducing the cost of securing and verifying their networks.
“AVS is a huge new primitive that allows us to export validator security from a blockchain to a new set of software and use cases,” says Baktyary.
EigenLayer’s ability to export validator security could also contribute to improving ecosystem interoperability. Previously siloed networks and ecosystems would need to bootstrap their own validator pool, often committing high token incentives to validators, and at the same time risking a somewhat centralized validator pool. Now, early-stage networks could simply pull their validator security from another network that already has these early-stage blockchain issues addressed.
Addressing critical issues within the Ethereum ecosystem, particularly around staking providers, EigenLayer proposes a solution to bring balance and improved security.
“EigenLayer can help incentivize a cap system for staking providers with a majority stake from validators like Lido; a topic that has been a major topic of debate within the Ethereum ecosystem,” says Baktyary.
Furthermore, EigenLayer’s advancements could advance scaling solutions like Validiums and potentially extend the use of Ethereum validators to secure other blockchains, including Solana and Cosmos. This development represents a leap forward in blockchain scalability and security, which Baktyary notes as a crucial step toward the broader application of Ethereum’s technology.
“EigenLayer can help enable Validiums with projects like EigenDA and could theoretically have blockchains like Ethereum securing alternative layer 1 blockchains like Solana,” he says.