Proof-of-Stake Blockchains: Identifying the Most Promising Investment Opportunities

By 0xGorki 11/13/23 9:42 AM

Proof-of-Stake (PoS) blockchains have taken center stage in the ever-evolving world of cryptocurrencies, with Ethereum, Polygon, Cardano, Avalanche, Solana, and Polkadot emerging as the frontrunners in this landscape. As investors and enthusiasts seek to navigate through this plethora of choices, Siam Blockchain presents a comprehensive comparison of these six popular PoS blockchains, shedding light on key factors such as inflation rate, real staking return rate, Total Value Locked (TVL) in DeFi, active user base, and stablecoin supply.

Inflation Rate: Unveiling the Dynamics

The inflation rate, a crucial metric, indicates the rate at which the total token supply within a blockchain system increases. A higher inflation rate may imply potential depreciation of the coin’s value in the future.

Ethereum, demonstrating strategic foresight, boasts a negative inflation rate, underscoring its commitment to reducing new token issuance. On the contrary, Polkadot emerges with the highest inflation rate among the considered blockchains. Investors take note: high inflation might pose challenges to long-term value.

Ethereum: -0.23%
Polygon: 2.01%
Cardano: 2.58%
Avalanche: 6.37%
Solana: 7.31%
Polkadot: 7.47%

Real Staking Return Rate: Unraveling the Potential Gains

Real staking return rate gauges the return a user earns by staking coins to validate transactions. Polkadot stands out with an impressive 14.09%, potentially impacting inflation dynamics down the road.

Ethereum: 3.47%
Polygon: 2.38%
Cardano: 0.37%
Avalanche: 2.2%
Solana: -0.19%
Polkadot: 14.09%

Total Value Locked (TVL) in DeFi: Assessing Market Presence

TVL in DeFi reflects the value of digital assets locked on a DeFi platform. Ethereum leads the pack, followed by Polygon, Avalanche, and Solana. Cardano and Polkadot, however, seem to be playing catch-up.

Ethereum: $26.032 B ($29.682 B, including ETH L2s)
Polygon: $883 M
Cardano: $258 M
Avalanche: $593 M
Solana: $543 M
Polkadot: $150 M

Active Users: The Human Element

Active users signify the number of users regularly engaging with a blockchain network. Ethereum takes the lead, followed by Polygon, Solana, Avalanche, and Cardano.

Ethereum: 335 K (650 K, including ETH L2s)
Polygon: 368 K
Cardano: 37 K
Avalanche: 39 K
Solana: 170 K
Polkadot: 10 K

Stablecoin Supply: Evaluating Stability

Stablecoin supply sheds light on the amount of stablecoins within a blockchain network. Ethereum leads the pack in this category as well.

Ethereum: 65.168 B (68 B, including ETH L2s)
Polygon: 1.169 B
Cardano: 17.64 M
Avalanche: 1.072 B
Solana: 4.508 B
Polkadot: Unknown

Conclusion

In the analysis above, Ethereum emerges as the powerhouse, excelling in inflation rates, real staking yields, and active user numbers. Polygon holds its ground, showcasing strength in TVL in DeFi and active users.

On the flip side, Cardano, Avalanche, and Polkadot may need to address inflation, staking rates, and TVL in DeFi to compete effectively. Solana, while facing challenges in tokenomics, proves resilient with a noteworthy active user base.