Crypto analyst Nicholas Merten thinks savvy crypto investors should pay attention to whether alternative blockchain protocols can overtake Ethereum – or at least grab a higher percentage of the market share.
Merten dubs the market competition “the protocol wars,” noting that all of the best-performing assets recently have either been enterprise blockchain or decentralized finance (DeFi) projects.
The host of DataDash notes that Cardano, EOS, Neo, Tezos and Cosmos are displaying promising metrics and should continue to perform well in the next year. The question, he says, is whether they can actually chip away at Ethereum’s protocol supremacy.
“I have no doubt all of these crypto plays that we just looked at are probably going to have higher levels [compared] to Bitcoin [BTC] a year from now than where they are right now. Let’s just get that off the table. Probably the vast majority.
Keeping that in mind though… whether or not we can actually get some fundamental development on these chains is going to be the question we need to get answered in order to see if this is going to do a 2 or 3x against Bitcoin or if a variety of protocol plays are going to do a 10, 20, 30, [or] 40x.
Because this time around, it’s not just speculation. There needs to be a bit of fundamentals with it. There really does. Quite frankly, a lot of blockchain protocols simply have one thing missing that Ethereum has hand-in-hand, and that is a developer ecosystem.”
Merten notes that while he appreciates the academic nature of Cardano, not much has been built on it. And EOS, he says, is probably in the second-best position in blockchain for DeFi, but he still hasn’t felt a need to use any of the protocol’s DeFi apps.
“This is a problem here. If you don’t have a way to have the leverage of building a network effect, you can have a great blockchain, you can be much more scalable than Ethereum, but you’re not going to be a better blockchain protocol in the long run.”
From an investment perspective, Merten says he believes NEO, Tezos, and Cosmos are all potentially worth a look.
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