After a jarring start to the year in the cryptocurrency markets, we are finally seeing a turnaround in the digital assets space. Bitcoin finally crossed the $40K threshold after months of consolidation, and Ethereum has risen by over 16% in a week. These price increases have surged the entire cryptocurrency market cap by 10%, currently trading at $.9 trillion.
But currently, it’s the smaller altcoins that seem to be gaining more traction, with a variety of exciting updates including smart contract deployments and an overall increase in trading volumes and transactions. Could these two altcoins be the hottest buys of February? Let’s take a look.
Cardano has been one of the most under-performing altcoins since the second half of 2021. When the crypto markets rose to an all-time high of over $3 trillion in the final quarter, ADA was trading sideways for the majority of the part, according to Coinmarketcap.
Since reaching an all-time high of $3 in March 2021, ADA has been correcting ever since. This was due to the failure of the cryptocurrencies ability to deploy smart contracts onto the blockchain, after their official earlier in 2021.
But a huge breakthrough in their smart contracts growth rate may change the fate for Cardano.
100 new smart contracts added in 2 days on Cardano
In September 2021, Cardano added smart contracts compatibilities on their blockchain. While the price rose temporarily, the network did not witness a huge increase in the number of smart contracts deployed. This resulted in a bearish trend for the majority of the year to follow. However, in 2022 a reversal is being noticed. Plutus, which is a Cardano-based smart contracts platform has experienced an increased growth rate to this upgrade.
Between January 30 and February 1, the number of smart contracts on the network climbed from 1,111 to 1,127, which is an increase of 116.
A popular crypto-based news and information channel known as Altcoin Daily posted a screenshot of the Plutus smart contracts graph, depicting the increase.
While Plutus was noticing a steady increase, the number shot up after more than 1,000 smart contracts had been deployed in total. Smart contract deployment became possible on Cardano after the Alonzo upgrade, making the blockchain more lucrative to developers of decentralized apps (dApps).
While Ethereum still has a monopoly over DeFi projects and NFT marketplaces by almost 75%, slowly other powerful players like Solana and Cardano have started to eat a chunk of their market share. ADA provides a much cheaper platform for developers and investors to conduct transactions, and are even increasing their block size to optimize their network.
Cardano increases block size by 11%
Input Output, the research and development company that is behind the Cardano blockchain officially announced that the network is going to be ready to increase its block size.
Input Output further mentioned that this update would help to improve the Dapp user experience while raising the overall network capacity. This means that the Cardano network will be able to conduct a greater number of transactions as their consumer rates increase. This has the potential to make Cardano one of the fastest networks which provide smart contract compatibility, just behind Solana (SOL) and Polygon (MATIC).
This comes after a growing number of projects on the Cardano mainnet, which will be better fitted with a more optimized network.
The company released a statement saying, “This adjustment forms part of a planned series of network optimizations. Cardano will continue to be steadily optimized in a series of measured steps this year, carefully & methodically scaling Cardano for future growth as demand increases”.
The company also expects Cardano to witness an increased number of DApp launches and NFT drops in the year to come. Since this news came out on February 2, ADA has gone up from $1.07 to $1.17, including a 5% gain on February 7.
If the network follows to increase the number of smart contract deployments and applications, we can expect to witness an increased growth of dApp projects on the Cardano blockchain.
Another important update coming from the smart contract networks is the increase in the transactions for Tezos. Although this network’s token, XTZ is ranked only 42nd, in terms of market cap, it is popular for its smart contract’s adaptability.
In 2021 itself, Tezos has witnessed a 500% increase in the number of transactions involving smart contracts. This number was lesser than 10,000 at the start of last year and has gone up to more than 50,000 a day since the beginning of 2022.
The report released by State of the Network observes that the growth has been driven by a high number of NFT-based transactions taking place using the Tezos network. In particular, the NFT platform FX hash has witnessed increased growth in Tezos based transactions, while the increase is also a direct result of the network partnering with the gaming giant, Ubisoft, as part of a gaming NFT deal.
While active addresses are at an all-time high and the number of smart contract transactions is increasing monthly, the cryptocurrency XTZ has slowly started forming an uptrend in the last few weeks.
During the flash crypto crash, XTZ fell by more than 50%, trading at just $3 in January after falling from $6 in November. But since January 26, the token is up by more than 25% and is currently trading at $4, according to Coinmarketcap.
With a market cap of just $3.5 billion, this token could witness a lot of movement in the coming few weeks, and it could also be a good long-term investment.