The crypto sector is one that encompasses thousands of coins and tokens. This isn’t an aspect of crypto that gets a lot of attention, but it is interesting. Both tokens and coins are digital assets. However, tokens rely on other blockchains and power decentralized applications, or dApps. Coins, or native cryptocurrencies assigned to specific projects, have their own blockchains and are seen more as stores of value.
Users interact with a given dApp and are rewarded with its native tokens. Generally, those tokens are transferred into ETH as Ethereum (ETH-USD) powers most dApps. Tokens can, in some sense, be viewed as governance tokens, providing investors with voting rights for a specific project. Overall, a token should become more valuable as its native system becomes more useful and popular. In turn, that token will buy more ETH and thus becomes more valuable.
Let’s look at a few tokens to watch, which look to be headed that direction.
| SAND-USD | The Sandbox | $0.393 |
| QNT-USD | Quant | $100.56 |
| LINK-USD | Chainlink | $5.37 |
The Sandbox (SAND-USD)
The Sandbox (SAND-USD) is one such token that logically has a chance to break out in the near future. That’s because it’s a virtual world based on the blockchain, in which users play and interact in the game and are rewarded with tokens.
The Sandbox was one of the trendiest cryptos back in 2021 when all things metaverse were hot. It was at the time that then-Facebook (now Meta Platforms (NASDAQ:META)) announced its rebrand to capitalize on that trend. The idea of the metaverse was clearly gaining steam, and companies like Roblox (NYSE:RBLX) were flying high.
The Meta rebrand put anything metaverse-related into hyper-growth mode, resulting in a near-immediate surge in the value of SAND. However, major forces intervened, and with markets accepting the notion that the easy money era was ending, anything speculative or tied to loss-producing areas of the market (like the metaverse) sunk in value. The Sandbox saw its core token receive a similar fate.
That said, it’s once again a race to build out the most innovative technology. This time, many major tech titans are moving into augmented reality and virtual reality. That logically means that The Sandbox will again be the target of increasing interest in the coming months. Expect this token to have big breakout potential, so long as this rally can last.
Quant (QNT-USD)
Quant (QNT-USD), like the token that follows below, is focused on increasing connectivity across blockchain projects. The overarching goal of Quant is to connect blockchains and networks globally. That means it can be thought of as an operating system for blockchain networks. Quant’s marketing team wants you and I to think of it as being analogous to Windows or Mac operating systems.
As clever as that is, it’s also important, because it draws a parallel between computing and crypto. Crypto is part of the next iteration of computing or Web3. The more people equate crypto and computers the better. People didn’t recognize the power of computers when they were first described either.
In any case, Quant is acting to bridge disparate blockchains. Quant allows developers to build multi-chain applications or mApps. Essentially, mApps create usability from blockchain to blockchain. That’s vitally important for communication across the entire cryptocurrency landscape.
Just as a lone computer is much less valuable without the internet, blockchain networks are less useful if they exist in a vacuum.
Chainlink (LINK-USD)
Chainlink (LINK-USD) is valuable because, like Quant, it is focused on connecting various blockchains and their associated cryptocurrencies. Whereas Quant is focused on network connectivity, Chainlink is focused on smart contract connectivity.
A smart contract is a program that is stored on the blockchain and is executed when a certain set of conditions are met. That means smart contracts allow programs to be built that automate certain tasks and enforce agreements.
So, the more smart contracts that are connected across disparate blockchains, the more utility that can be built. In time, this will allow all kinds of utility to be built on the blockchain.
Data feeds, payments, and events are being built with Chainlink as we speak. It’s the kind of thing that is clearly utilitarian. But that means it’s also the kind of thing that doesn’t get appreciated until it does. When that day comes remains to be seen. However, it’s clear that some sort of critical mass needs to be met. I’m not sure how to define or measure that, but it’s a function of connectivity and utility. Chainlink provides both.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
