Written by Chris MacDonald at The Motley Fool Canada
Regardless of whether you are a cryptocurrency skeptic or a fan, there’s a lot to be said about the innovation right now that’s happening as a result of blockchain technology. Among the top trends I’ve been watching in this space is how blockchains validate and secure their networks. Thus, proof of stake tokens are a hot commodity right now.
Proof of stake (PoS), as opposed to proof of work, is a validation mechanism that doesn’t require as much complexity in validating blocks. Via staking tokens, the network uses much less power consumption to secure its network. That’s better for the environment, and for the growth of the crypto world.
Here are three of the top proof-of-stake tokens I’ve got my eye on right now.
Top proof-of-stake tokens: Cardano
Created by one of Ethereum’s co-founders, Cardano (CRYPTO:ADA) was engineered to excel in areas where other cryptos fall short. For instance, Cardano uses a PoS protocol that makes it more efficient and faster than Bitcoin.
Currently, it can process approximately 250 transactions per second. Once it releases its Hydra upgrade, this rate can reportedly go up to one million transactions per second. That would make Cardano among the fastest networks in the world.
Additionally, Cardano has picked up steam of late for the network’s attempt to become carbon-negative. Via tree planting, this blockchain network aims to actually help the planet. For those using the environmental argument against crypto, Cardano is a blockchain to look at.
Another top PoS token is Polkadot (CRYPTO:DOT). This scaling solution allows for parachains (parallel blockchains) to exist aside leading networks like Ethereum. Accordingly, for those concerned about speed and cost along the Ethereum blockchain, Polkadot offers an intriguing solution.
Indeed, it’s not surprising to see growth in the Polkadot ecosystem surge. The number of developers working on the Polkadot network has exploded this past year. Experts have looked at the data and seen the number of lines of code written on the Polkadot network dwarf all the previous years combined. Accordingly, as the developer community continues to grow, investors stand to benefit from an increasing value of this parachain platform’s native token, DOT.
Perhaps one of the most intriguing Ethereum competitors that has picked up steam of late is Avalanche (CRYPTO:AVAX).
This is one of the leading PoS tokens with smart contract capabilities. Like the other networks on this list, Avalanche is growing fast. Accordingly, it’s this network’s growth rate that has many investors excited.
Currently, Avalanche provides users and developers with a network that can handle approximately 4,500 transactions per second. Compared to Ethereum and other more bloated networks, that’s lightning fast.
Additionally, Avalanche’s structure, as a combination of three blockchains working together, provides a compelling scaling argument. For those looking for PoS tokens that can outperform in 2022, Avalanche is one to keep an eye on right now.
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Fool contributor Chris MacDonald owns Ethereum. The Motley Fool owns and recommends Bitcoin and Ethereum.