Since Bitcoin‘s launch in 2009, the crypto market created tremendous wealth. In fact, the value of all crypto assets currently sits at over $1.7 trillion, which is about 500% growth over the past two years. Naturally, some people have a hard time understanding this number. But cryptocurrency is still relatively small compared to other asset classes.
For example, the global real estate market topped $325 trillion in 2020, and the collective market cap sits at $120 trillion, according to nonprofit trade group Sifma. If cryptocurrency is the disruptive force that many think it is, the market itself could grow 10 times or even 50 times over the next few decades.
In this spirit, Phantom (CRYPTO:FTM) and avalanche (CRYPTO:AVAX) are two of my favorite blockchain projects, and both could generate significant wealth for long-term investors. Here’s why.
Fantom is a smart contract platform powered by FTM coin. Its main innovation is a Proof of Stake (PoS) consensus protocol known as Lachesis, which allows each node (computer) to capture the temporal order of events on the blockchain. In turn, these nodes can independently verify transactions without a tedious message exchange, which speeds up throughput.
To that end, Fantom can process thousands of transactions per second, while finalizing those transactions in about a second. In fact, the Fantom Foundation – the organization behind the platform – believes it to be the fastest public blockchain in the crypto industry. This scalability keeps transaction fees low. Although you can expect to pay $20 per transaction on Ethereumyou will only pay pennies on Fantom.
Additionally, Fantom is compatible with Solidity, the coding language used to build decentralized applications (dApps) on the Ethereum blockchain. This means that developers can easily deploy Ethereum-based software to Fantom, and many have done so. Most notably, Ethereum native Aspire Finance — a decentralized finance (DeFi) protocol for yield farming — went live on Fantom in October.
Here’s the bottom line: Fantom is fast, cheap, and compatible with Ethereum — the largest network of dApps and DeFi products — and these qualities have fueled significant adoption. Over the past year, daily transaction volume has grown from less than 10,000 to nearly 1 million, and Fantom currently ranks as the fifth most popular DeFi ecosystem, with $8.1 billion invested across the platform. As more consumers adopt products and transact on Fantom, the demand for the FTM token will increase, leading to an increase in its price as well. That’s why this cryptocurrency looks like a smart buy.
Avalanche is a smart contract platform powered by the AVAX coin. Its main innovation is the Snowman protocol, a type of PoS in which a small subset of nodes are randomly sampled and repeated until a consensus is reached. This differs from most other PoS protocols where each node must confirm each transaction with all other nodes, a much longer process.
Like Fantom, Avalanche also bills itself as the fastest smart contract platform in the blockchain industry, citing a throughput of 4,500 transactions per second and a completion time of less than two seconds. To this end, transaction fees on the platform are usually only a few cents. But that’s not the only similarity. Avalanche is also compatible with Ethereum smart contracts. In this case, this compatibility allowed the native Ethereum lending protocol Aave and exchange of stablecoins Curve to be deployed on Avalanche. Perhaps most notable, native of Ethereum USD Coin – the second most popular stablecoin in the cryptoeconomy – is also available on Avalanche.
The organization behind Avalanche, Ava Labs, has an ambitious growth strategy. CEO Emin Gün Sirer said the long-term goal is to disrupt traditional finance, while the short-term motivation improves DeFi. And so far, Ava Labs has made tremendous progress. Since its launch in September 2020, Avalanche has become the fourth most popular DeFi ecosystem, with $11 billion invested in blockchain.
The value proposition of fast and cheap transactions should attract more developers to Avalanche, thereby expanding its ecosystem of software and services. And as more consumers and investors adopt dApps and DeFi products on the platform, demand for the AVAX coin is expected to increase, driving up its price. This is why this cryptocurrency could make you richer in the long run.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end consulting service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.