Web3, or Web 3.0, is heralded as the internet’s next phase. While Web3 is still in its nascent stage, elements of it such as decentralised finance (DeFi), non-fungible tokens (NFTs) and play-to-earn gaming have attracted attention.
Top executives from tech companies are migrating to blockchain companies to create Web3. Ryan Watt left his job as head of gaming at Youtube to join layer-2 network Polygon’s (MATIC) NFT unit. Sherice Torres jumped ship as chief marketing officer at Meta Platform’s crypto and payments unit to join Circle, the company behind USD Coin (USDC). Former Google chief executive Eric Schmidt joined blockchain oracle Chainlink (LINK) as strategic advisor in late 2021.
Web3 is as diverse as it is exciting. In this article, we’ve listed blockchain projects that are unique in their own respective offerings. The top five web3 coins selected below are based on a list of web 3.0 tokens by market capitalisation compiled by CoinMarketCap.
Are they the top web3 coins to invest in this year? Let’s dive deeper into the projects and look at their performances so far this year.
Top web3 coins 2022 by market cap
As of 11 April 2022, the top web3 crypto projects by market capitalisation included Polkadot (DOT), Chainlink (LINK), Filecoin (FIL), Theta Network (THETA) and Helium (HNT). Despite all of them experiencing double-digit losses year-to-date (YTD), they remain strong players in Web3.
Polkadot (DOT): Interoperability of blockchains
First on the list of top web3 crypto coins compiled by Coinmarketcap is blockchain platform Polkadot and its native coin, DOT.
Unlike smart contract platforms like Ethereum (ETH), which are also known as layer one (L1) platforms on top of which decentralised applications (DApps) are built, Polkadot is a layer-zero platform. Developers can build L1 platforms on the Polkadot network called parachains. These parachains have the freedom to operate independently. Polkadot gives parachains shared security and interoperability.
Polkadot was founded by Ethereum co-founder Gavin Wood. Its native coin, DOT, is used for governance and to participate in parachain slot auctions. Polkadot has limited parachain slots. Developers bid in auctions, where teams agree to lock up DOT tokens to earn the right to build on Polkadot. As of 11 April, DOT was the 13th biggest cryptocurrency with a market capitalisation of over $17bn, according to CoinMarketCap.
Chainlink (LINK): Web3 data provider
Next on the list of best web3 coins is Chainlink (LINK).
Chainlink is a network of decentralised oracles that relay data to smart contracts, thereby enabling contract execution based on inputs and outputs from the real world. The network was founded by Sergey Nazarov and Steve Ellis in 2017. It quickly established itself as the market leader in the blockchain oracle sector.
Oracle networks like Chainlink are crucial to the functionality of Web3, which is structured and maintained by pre-written codes and smart contracts. On Chainlink, users can form decentralised oracle networks (DONs) that provide data to and from existing blockchains, and work to guarantee data accuracy.
According to Chainlink, The Associated Press, AccuWeather, Switzerland-based telecom Swisscom, Amazon Web Services and Google Cloud Platform have launched oracle nodes on the platform.
Its native token, LINK, is used to pay Chainlink node operators for retrieving data from off-chain data feeds for smart contracts, formatting of data into blockchain readable formats, off-chain computation and uptime guarantees provided by operators. Chainlink is also working on a comprehensive staking mechanism for the network.
As of 11 April, LINK was the 23rd biggest cryptocurrency with a market capitalisation of over $6.5bn, according to CoinMarketCap.
Filecoin (FIL): Decentralised cloud storage
Filecoin (FIL) is an open-sourced cloud storage marketplace. The network is powered by a large number of storage providers and developers to help organisations and projects find cost-effective, decentralised and secure data storage solutions. Common use cases of Filecoin include the storage of large archives, NFTs and frequently-accessed data.
According to research firm GigaOm’s report, most storage providers on the Filecoin network are “committed” to offering datacenter resources by making investments in hardware and depositing collateral to ensure the quality of service, data availability and long-term data reliability. Its native token, FIL, is used to pay storage providers to store and retrieve their data.
“Storage providers are highly incentivized to store important data for end users by being offered a 10x reward multiplier through the Filecoin+ program. Storage providers participating in the network are required to pledge Filecoin collateral and can lose that money if they are not reliable enough,” said GigaOm.
As of 11 April, FIL was the 37th biggest cryptocurrency with a market capitalisation of over $3.6bn, according to CoinMarketCap.
What is your sentiment on DOT/USD?
Vote to see Traders sentiment!
Theta Network (THETA): Empowering content industry
Theta Network (THETA) is a media and entertainment-focused blockchain that aims to reduce content delivery network costs for the online video industry. It rewards end-users for sharing their storage or bandwidth on any device.
According to Theta Network, one of its potential use cases would be a web3 equivalent of a streaming business like Netflix (NFLX), leveraging Theta Network’s solutions to lower costs of video encoding, storage and delivery to multiple devices.
Theta Network consists of two systems called the Theta Blockchain, which provides payment, reward, and smart contract capabilities to users, and the Theta Edge Network, which enables storage and delivery of media assets.
The network also has two tokens. Theta Token (THETA) is the governance token. Theta Fuel (TFUEL) is the operational token used to pay for on-chain operations.
As of 11 April, THETA was the 40th biggest cryptocurrency with a market capitalisation of over $3bn, according to CoinMarketCap.
Helium (HNT): Providing decentralised internet
Closing the list of top web3 cryptos is decentralised wireless network Helium (HNT). According to its whitepaper, Helium is a decentralised wireless network that enables devices anywhere in the world to wirelessly connect to the internet and geolocate themselves without the need for satellite location hardware or cellular plans.
Helium is powered by a network of miners and wireless network coverage providers. Helium community governs vendor onboarding and third-party manufacturing of Helium-compatible hotspots. Participants of the network earn HNT tokens deploying these hotspots.
Its native token HNT is used to pay miners to send data to and from the internet. Miners have to stake HNT tokens to join the Helium network. Newly-minted HNT tokens are rewarded to miners who are a part of the consensus group.
As of 11 April, HNT was the 47th biggest cryptocurrency with a market capitalisation of over $2.4bn, according to CoinMarketCap.
Web3 market outlook: Analysts’ view
Catherine Wood’s investment company Ark Invest thinks Web3 will boost direct online expenditures at an annual rate of 28% from $1.4trn in 2022 to $12.5trn by 2030. The evolution of the video gaming industry and rising popularity of NFTs will create a new type of “active entertainment”, noted Ark Invest in its Big Ideas 2022 report.
The industry is indicating positive signs towards its predicted explosive growth, with monthly active Web3 developers surging from less than 6,000 in January 2018 to over 18,000 by the end of 2021, according to a report by Web3 venture company Electric Capital.
“Web3 has become a proxy for new economic ideas on how the Internet should be architected, and how individuals should share in this value creation.”
Note that the list of top web3 coins was compiled by measuring the cryptocurrencies market capitalisation, which can’t be used as a sole criteria of choosing and the ‘best’ web 3.0 cryptocurrencies.
To compile your own list of best web3 investments you should conduct a thorough research on the projects’ fundamentals, the coins’ price performance, market news and major price drivers. Note that cryptocurrency prices are highly volatile. Whether web3 coins are a suitable asset for you will depend on your risk tolerance and how much you intend to trade.