WWith just nine days before we turn the page of 2021, it’s fair to say that cryptocurrency investors had another above-average year. Until December 18, the aggregate value of all digital currencies increased by 185%. Additionally, the market value of all cryptocurrencies has risen by over 1,400% since the March 2020 low.

While throwing a dart at many of the most popular cryptocurrencies over the past year would have worked for investors, five cryptocurrencies really stood out. So much so that they are sure to be on Santa’s beautiful list this holiday season.

Image source: Getty Images.

Solana

Want to know an easy way to get on Santa’s Beautiful List? Offer investors a cumulative gain greater than 11,000%. This is precisely what Solana (CRYPTO: SOL) made for investors who had the luck, the stomach and the means to buy it at midnight on January 1st.

Since all of old Saint Nick’s job is based on delivering gifts to households around the world overnight, he’s bound to appreciate Solana’s need for speed. According to its developers, Solana is capable of 50,000 transactions per second (TPS). For comparison, the two most popular blockchain networks on the planet, Bitcoin and Ethereum (CRYPTO: ETH), process 7 TPS and 13 TPS respectively. In fact, the GST announced by Solana is more than double that of the payment processing hub Visa (24,000 GST).

What makes Solana so special is her unique history proof protocol. Instead of validators wasting precious time having to talk to each other to confirm the time that has elapsed between events, the Proof of History protocol establishes a record of an event. This speeds up network processing and enables rapid scaling.

Although Solana remains a bit rough around the edges, her sheer speed gives her real long term potential and endurance.

Image source: Getty Images.

Algorand

Another cryptocurrency that will definitely bring some zest for life is Algorand (CRYPTO: ALGO). This less followed digital coin is up nearly 300% this year and looks to have a bright future.

Like Solana, Algorand will attract Santa’s attention due to the efficiency of his blockchain network. Last weekend, Algorand traded at 1,162 TPS and offered a bouldering finish of 4.36 seconds. This means transactions are validated and settled in just over four seconds. In comparison, cross-border payments with existing financial infrastructure can take up to a week to verify and settle.

Yet what’s more exciting about Algorand is the project’s focus on blockchain interoperability. With so many unique blockchain projects in development, many may not be compatible with each other and therefore not be able to exchange files, data, or money. Algorand developers are focused on filling these gaps, especially in the business world.

The icing on the cake is that Algorand also has a special consensus mechanism, known as pure proof of stake (PPoS). With PPoS, users are secretly and randomly chosen to propose blocks and vote on proposals. Thus, PPoS ensures that bad actors holding small amounts of ALGO cannot disrupt the network.

Image source: Getty Images.

Infinite Axis

Santa is also safe to put Infinite Axis (CRYPTO: AXS) on its nice list, especially considering how much joy it has brought investors this year. The AXS token soared 18,600% in 2021.

Axie Infinity is a game to win built on the Ethereum blockchain. It allows users to collect, breed, breed, and fight monsters, called Axies. At least three Axies are required to go into battle, with the winner gaining experience points which he can use to upgrade his Axies.

While there’s no dearth of games or gaming rigs to choose from, what makes Axie Infinity so intriguing is that every Axie is a non-fungible token (NFT). This means that users own their Axies as digital assets that can be used in-game or monetized in a marketplace (i.e., they can be bought or sold to other users).

What really kept Axie Infinity going was the actual revenue from the game. According to TokenTerminal.com, Axie Infinity generated $ 1.24 billion in protocol revenue over 180 days. This makes it the second decentralized application (dApp) in terms of revenue over this period, behind only Ethereum ($ 4.73 billion). These dollar figures demonstrate the attractiveness of the real world.

Image source: Getty Images.

avalanche

A fourth cryptocurrency that has been a real gift under the tree for investors this year is avalanche (CRYPTO: AVAX). After starting the year around $ 3 per AVAX token, Avalanche rose over 3,500% to $ 116.

Similar to Solana and Algorand, the good news provided by Avalanche comes in the form of a very fast and efficient network. Avalanche’s development team says its contract-based smart grid can process over 4,500 TPS and complete transactions in under two seconds. Smart contracts are protocols that help enforce, verify and facilitate the negotiation of a contract between two parties. They can be particularly useful in non-financial applications, such as supply chain management.

But what could be most responsible for getting Avalanche on Santa’s beautiful list is his ability to play well with others. You see, the Ethereum virtual machine is already running on the Avalanche blockchain. Even though Ethereum is the preferred destination for building dApps, Avalanche offers a heck of a hanging carrot given its faster execution, lower transaction costs, and clear competitive advantages over the Ethereum network.

Suffice it to say, Avalanche appears to have a lot of momentum by 2022.

Image source: Getty Images.

Cardano

The fifth and last cryptocurrency to make it onto Santa’s Beautiful List is Cardano (CRYPTO: ADA). Gaining 625% through December 18 is more than enough to send investors singing in the streets.

The reason Santa would have such high regard for Cardano has to do with the “milk and cookies” the development team left out to investors. In other words, the developers of Cardano provide transparent updates as to the direction the network will take next.

For example, in July 2020, the Shelley upgrade went live. This upgrade increased the number of nodes that users could run on the network. As a result of this upgrade, the average number of daily transactions on Cardano’s blockchain has increased from around 2,000 to over 100,000.

In September 2021, the highly anticipated Goguen update debuted. Goguen brings smart contract capability to the Cardano blockchain, which in turn enables more complex transactions. Goguen is Cardano’s ticket to becoming a serious threat to Ethereum.

Going forward, the Hydra upgrade is what will make the most noise. Hydra will direct transactions to off-chain staking pools (i.e. hydra nodes), which will allow for rapid scale-up without compromising the processing efficiency of the main blockchain. In short, this means that Cardano could eventually blow Visa’s 24,000 GST out of the water.

10 stocks we like better than Solana
When our award-winning team of analysts have stock advice, it can pay off to listen. After all, the newsletter they’ve been running for over a decade, Motley Fool Equity Advisor, has tripled the market. *

They just revealed what they think are the ten best stocks investors can buy right now … and Solana was not one of them! That’s right – they think these 10 stocks are even better buys.

See the 10 actions

* Returns of the portfolio advisor as of December 16, 2021

Sean Williams has no position in the stocks mentioned. The Motley Fool owns and recommends Bitcoin, Ethereum, and Visa. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.