- Digital-asset strategist Armando Aguilar bet on metaverse assets months before the recent surge.
- He shared five lesser-known altcoins on his radar and why they are worth watching.
- Aguilar explained the significance of polkadot’s parachain auction and why it could send up DOT.
After Facebook’s corporate-name rebrand to “Meta Platforms,” tech giants such as Microsoft and Tencent are also placing their bets on virtual worlds. But it is the metaverse-linked cryptocurrencies that are exploding onto the scene.
The tokens for The Sandbox (SAND) and Decentraland (MANA) have both surged more than 200% in the past two weeks, while those for Axie Infinity (AXS), Gala Games (GALA), Yield Guild Games (YGG), and Star Atlas (ATLAS) are also on the rise.
For Armando Aguilar, the vice president of digital-asset strategy at Fundstrat Global Advisors, the metaverse boom did not come as a surprise. In September, he shared with Insider his sector-based approach toward picking altcoins that could notch substantial gains. The two sectors he bet on — metaverse-linked altcoins and layer-one protocols — have continued to be among the best-performing baskets of tokens since then.
5 altcoins on his radar
Now, he is setting his sights on some of the lesser-known altcoins that have been gaining price momentum, while generating increasing Google searches and social-media mentions. These up-and-coming tokens include kadena (KDA), render (RNDR), helium (HNT), polkadot (DOT), and moonriver (MVR).
Kadena is the first company to spin out of JPMorgan’s Blockchain Center for Excellence. Its cofounders Will Martino and Stuart Popejoy built JPMorgan’s first blockchain, known as JPM Coin.
Like many ethereum competitors, kadena has low gas fees and high throughput. It says it’s the fastest blockchain platform, with the ability to support 480,000 transactions per second. (To put it in perspective, the upstart layer-one protocol solana has said it can handle 50,000 transactions per second.) The KDA token has shot up 253.6% in the past week, according to CoinGecko pricing.
Render is a distributed protocol for graphics-processing-unit rendering. It provides users with GPU-rendering services at “a fraction of the cost and speed of in-house rendering,” which makes it easier, more powerful, and widely scalable. The RNDR token rose 67.2% in the past week.
Helium, also dubbed “the people’s network,” draws on a decentralized network of individually owned hot spots to connect low-powered Internet of Things devices to the internet. Miners can earn the HNT token by providing network coverage and relaying data to hot spots. The token increased 60.6% in the past seven days.
Polkadot, which was created in 2016 by ethereum cofounder Gavin Wood, hopes to enable different public and private blockchains to communicate with each other. The DOT token retreated 0.4% in the past week but surged 1,076.5% over the past year, CoinGecko data showed.
One of the unique attributes of the polkadot protocol is the parachain. Parachains are the various layer-one blockchains that run in parallel on the polkadot networks to achieve scalability and interoperability. Moonriver is a parachain on kusama (KSM), which is polkadot’s “canary network” where developers can test their projects before releasing them on polkadot. The MOVR token rallied 32.7% in the past month.
What is polkadot’s parachain auction?
Aguilar noticed that the price of the DOT token had been stuck in the $48 to $55 range for the past week, while its fellow smart-contract platforms such as solana went parabolic.
Thanks to its increased market momentum, ecosystem growth, and capital inflows, solana has continuously reached new highs. But as polkadot’s parachain auctions kick off on Thursday, the “internet of blockchains” could soon have its own moment in the sun.
So what are parachain auctions?
Essentially, polkadot’s base chain is called a relay chain, and other layer-one blockchains that run in parallel on the polkadot networks are called parachains. The parachains connect to the relay chain.
“Imagine if you become good friends with the cool guy. Now that you’re friends with the cool guy, you have access to the cool restaurants, cool hotels, and cool clubs,” Aguilar said. “In a way, parachains are the same. Now you can connect through polkadot into their whole ecosystem and have access to ethereum and bitcoin.”
Parachain auctions are used to determine which projects will get slotted into the ecosystem. To win a parachain slot, projects must secure enough DOT tokens, which is why parachains are funded through a crowdloan system. To participate in a crowdloan, DOT holders loan their tokens to projects of their choice for a certain period of time and receive the project’s native tokens as rewards.
As of Wednesday afternoon, investors have deposited over $1.2 billion worth of DOT via crowdloans, according to Dot Market Cap.
dotmarketcap.com
Outlook on the DOT token
Aguilar said he believed polkadot would benefit from the new projects coming to parachains.
“As parachains auctions go live, investor demand could drive the price as the auctions require DOT token to allow crowdloans to work and get the community to support new projects coming to use polkadot’s parachain,” he said.
He also mapped out the price trajectory of other layer-one protocols such as avalanche (AVAX), terra (LUNA), and solana to determine whether DOT had more room to run. These tokens experienced a 26 to 46% seven-day jump.
“Assuming an average increase of 32% based on the weekly increases from the layer ones mentioned above, and the price range DOT has been stuck for the last week,” he said, “we could see a price momentum building for DOT.”