As the year that followed the infamous COVID-19-stricken year of 2020, 2021 turned out to be a strikingly different timeline that saw both the global equity and crypto markets mark new highs as fears around the pandemic subsided.
With the US Federal Reserve printing more fiat, refusing to raise interest rates, and the international borders opening once again to facilitate global trade and commerce, 2021 pretty much undid all the chaos orchestrated by the previous year. The crypto markets had a similar arc that saw bitcoin emphatically rebound from $3400 in March 2020 to its new ATH of $69,000 in Q4 2021.
While all established cryptocurrencies witnessed significant gains throughout the year, some coins outperformed the market by orders of magnitude.
In this article, we look at the top 3 coins with the best price action throughout 2021. We delve deep into the possible reasons behind their bullish performance such as mass adoption, utility, and others.
1) Solana (SOL)
To say 2021 was the year of Solana (SOL) would be a gross understatement.
Solana’s SOL token rose more than 100x from its price of around $1.50 in January to its current market price of more than $160. If we also take into account SOL’s all-time-high value of $259 in November, SOL would cement itself as the undisputed best performing large-cap token throughout the crypto market in 2021.
There are several reasons behind SOL’s astronomical surge in price, the primary of those reasons being Ethereum’s inability to accommodate small and retail users.
It’s no secret that Ethereum’s notoriously high gas fees are a major weakness for the world’s largest smart contract platform. At its peak, a mere ERC-20 token transaction on the leading Ethereum-based decentralized exchange (DEX) Uniswap cost upward of $150.
Throughout 2021, the market has been in a desperate search of a scalable, reliable, and high-throughput layer-1 alternative to Ethereum that doesn’t price out small users from participating in decentralized finance (DeFi) and the booming NFT landscapes.
Today, Solana boasts one of the largest DeFi ecosystems in the world.
According to data from DeFi Llama, the TVL of digital assets locked across various Solana-based DeFi protocols is $11.40 billion. Some of the top DeFi platforms on Solana are Raydium, Marinade Finance, and Serum that hold a TVL of $1.58 billion, $1.31 billion, and $1.28 billion, respectively.
In addition, the Solana NFT ecosystem has firmly established itself as the most promising NFT space outside Ethereum. Top NFT collections such as Solana Monke Business, Thug Birds, and others command a floor price of 50 SOL and above.
With almost gasless transactions and instant finality, Solana is eyeing to cement itself as the de-facto blockchain for instant and cheap transactions.
2) Polygon (MATIC)
At the beginning of the year, Polygon – previously known as Matic Network – emerged as the clear outperformer when it rallied from almost one cent to $2.45 in five months.
Interestingly, Polygon shares with Solana a factor that contributed to the token’s awe-inspiring rise – the sky-high Ethereum gas fees.
However, Polygon benefitted from this in the way that instead of providing an alternative layer-1 blockchain, it functioned as an Ethereum side-chain that didn’t require Ethereum users to leave the ecosystem to execute cheap and quick transactions.
Polygon is the world’s first widely adopted Ethereum scaling solution and that is evident from the rapid pace of adoption of its MATIC token.
Data from DeFi Llama indicates that Polygon currently boasts a TVL of $4.85 billion across its DeFi ecosystem. Some of the top Ethereum-based DeFi applications such as Aave (AAVE), SushiSwap (SUSHI), Curve (CRV), Balancer (BAL), and others are already running on Polygon.
Most recently, Polygon has been on a continual business spree to further scale the Ethereum ecosystem. For instance, recently Polygon acquired ZK-rollups startup Mir Protocol for $400 million to leverage ZK-proof technology to bring more scalability and privacy to Ethereum.
3) The Sandbox (SAND)
While 2020 belonged to DeFi, 2021 was dominated by metaverse-themed projects such as Decentraland (MANA), and The Sandbox (SAND), among others. Facebook’s rebranding to Meta worked as the critical shot in the arm for the metaverse space as shortly after the announcement by Mark Zuckerberg: we witnessed parabolic rallies in a wide array of metaverse tokens. Among the top-performing metaverse tokens are SAND, the native token of The Sandbox project.
Trading at a modest price of $0.10 at the beginning of the year in January, Sand catapulted to as high as $8.40 in November, indicating an increase of close to 85x within 11 months.
The Sandbox has entered into a multitude of high-profile partnerships over the last year, signifying a high level of trust among top enterprises across the globe. For instance, recently, The Sandbox teased a partnership with the leading sportswear manufacturer Adidas.