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As the crypto industry’s most bullish year ever comes to a close, it’s time to look back on the tokens that captured the zeitgeist of the past 12 months.
These are the coins that sparked a new trend, created a sub-niche, or defied the odds by gaining traction. Sometimes their emergence resulted in massive price hikes, sometimes extreme volatility. Many of the coins listed here also earned mainstream attention, revealing that there’s a whole lot more to crypto besides market leaders Bitcoin and Ethereum.
Without further ado, here is Decrypt’s (subjective) rundown of the year’s most impressive coins by category. Separately, make sure to check out our list of the top-performing crypto assets of 2021 based strictly on the data.
Besides the prices of Bitcoin and Ethereum, another key metric folks have been tracking is the market cap for stablecoins. This year the cumulative value of all the dollar-pegged cryptocurrencies has skyrocketed, reaching more than $167 billion.
But for decentralization purists, there’s just one problem (well, two actually). The largest and most-used stablecoins on the market, Tether (USDT) and USD Coin (USDC), are both controlled by traditional, run-of-the-mill companies. There are no DAOs, no Discord channels, and, arguably, very little transparency into what’s backing these coins.
Decentralized projects like Terra (and its stablecoin UST) have emerged and built on the success of one of the original algorithmic stablecoins, DAI, to counter these centralized incumbents. These stablecoins are decentralized because they’re backed by other cryptocurrencies like Ethereum or Luna, rather than cash deposits or equivalents.
Terra’s UST has had a particularly big year. On January 2, the stablecoin’s market cap was less than $200 million. Today, that figure is now more than $10 billion, with UST recently overtaking DAI as the largest decentralized stablecoin in crypto.
This move would indicate that there’s a clear appetite for a solid decentralized digital dollar, and now there’s even competition for the top spot.
Marketed as a “floating” cryptocurrency that maintains “stable purchasing power,” OHM has been one of the top tokens leading the DeFi 2.0 trend.
Instead of encouraging mercenary yield farming (that’s so Q1), projects that fall under the DeFi 2.0 umbrella are working to create better incentives that retain precious liquidity over the long term. Rather than multi-million-dollar rewards schemes (of which 2021 saw many) that turn into hit-and-run cash grabs, these projects are opting out of so-called rented liquidity.
Olympus Pro is a new service that aims to share Olympus’ “protocol bond” innovation with treasuries across DeFi.
Bonding solves a recurring problem faced by DeFi protocols that rely on liquidity mining incentives: the liquidity is a temporary, rented asset.
— ͏c͏h͏a͏s͏e ͏d͏e͏v͏e͏n͏s (@chasedevens) October 6, 2021
OlympusDAO, the project behind OHM, was one of the first to take a crack at reinventing these incentives with its bonding and staking mechanism.
With OlympusPro, the team also offers a white-label solution that lets DeFi projects bootstrap the mechanism for their community’s liquidity needs.
The service has gained ground quickly, with projects like Thorswap, StakeDAO, and ShapeShift turning to Olympus. Most importantly, though, the project (and cohorts like Tokemak, Alchemix, and Fei Protocol) has provided a glimpse into how the decentralized finance (DeFi) space will evolve.
What would a year-end list be without at least one of the famed dog coins?
Birthed in August 2020, Shiba Inu (SHIB) didn’t capture the hearts and minds of crypto enthusiasts until an initial doubling in price in May 2021. The meme coin subsequently crashed shortly after—only to hit another all-time high of $0.00008616.
Though these prices represent less than a penny in value, the meteoric rise of this canine crypto turned many retail speculators into overnight millionaires.
What’s even stranger was how this cryptocurrency also gave rise to a whole pack of ravenous, but minuscule, dog coins. Tokens such as Floki Inu, Baby Dogecoin, and Kishu Inu also began appearing throughout TikTok, Twitter, and Instagram—all of them aiming to be the next Dogecoin.
It quickly became a crapshoot, as people scooped up at random whole portfolios filled with different dog coins in hopes of joining the nouveau crypto rich.
And yet few have enjoyed the same staying power as SHIB or its predecessor DOGE, revealing, once again, that a good meme is worth billions.
If you can’t afford to buy an Axie, the Pokémon-like creatures that players use to battle in Axie Infinity, that’s because the original play-to-earn crypto game has had a monumental year. Just one of these little critters can sell for up to 300 Ethereum. And you’ll need three of them to start your campaign. Yikes.
But thanks to the success of Axie, you might be able to catch the next wave.
The play-to-earn trend, sometimes called GameFi (other times gambling with extra steps and nice graphics), has attracted venture capitalists and criticism alike. Still, the niche appears to have serious staying power.
In a nutshell, the trend is attempting to let people monetize all those hours spent in virtual worlds fighting baddies and picking up unique in-game collectibles.
Those in-game collectibles, like plots of land, a magical shield, or an Axie character, are all tokenized as non-fungible tokens (NFTs) on a blockchain (usually Ethereum). Other networks are taking note, with Solana-based projects like Aurory and Star Atlas all earning serious attention despite just getting started.
Larger traditional gaming studios are eyeing the trend, too. Ubisoft, the firm behind labels like the Far Cry series and Assassin’s Creed, has even announced plans to launch in-game NFTs built on the Tezos blockchain.
Though the firm has been clear that these NFTs won’t have an earning component, the niche is gaining steam.
And as this idea becomes more entrenched, gamers may soon have yet another incentive to hit a new high score.
Every metaverse needs virtual real estate and a frothy digital housing market.
Units of LAND, the pixelated parcels of land divvied up on Decentraland, are gaining in value. In November, just one plot sold for a record $2.43 million in the virtual world’s native cryptocurrency, MANA. This was more than double the previous record of $913,000 set back in June.
Stepping back and examining the rest of the subsector’s growth from last year paints a similar picture. Not just one, but hundreds of plots sold for a total of $470,000 in a virtual world called Somnium Space back in May 2020.
Pop icons are also cashing in on the metaverse. Rapper Snoop Dogg, for example, is attempting to recreate his California mansion in The Sandbox. Already, the adjacent plot has sold for $450,000.
The grander narrative here, of course, is that of Facebook rebranding to Meta. The shift suggests that a digital world in which we live next door to multi-millionaires isn’t a profitable grift, but may very well be the future of online interactions.
From dog coins that capture the attention of armies of TikTokers to the future of gaming, 2022 will prove whether these five trends are more than just a fad.
After all, questions remain: Now that UST has overtaken DAI, what are its chances of taking on (and beating) Tether and USDC? Will DeFi 2.0 crash and burn like the ponzis of yesteryear or are we witnessing the future of finance unfold before our eyes?
With anything in crypto, it’s easy to get starry-eyed.
While 2021 has been a year for the ages (not just for crypto), establishing a new normal in a post-pandemic society would mean that the always-online sphere of tokens, gaming, and virtual worlds takes a backseat to popular meat-world hobbies.
Still, crypto has already attracted much of our collective mindshare. And each year it attracts more, bull run or bust.
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