Want small-cap cryptocurrencies with the potential for big growth? Look no further than The Sandbox (SAND 1.44%) and Elrond (EGLD -0.39%). These overlooked cryptos could be positioned for long-term expansion as they disrupt their respective niches. Let's dig deeper.
1. The Sandbox
What if you could game, socialize, and earn income within an immersive virtual experience? The Sandbox aims to make that possible with its blockchain-based metaverse. The project's early-mover advantage and compelling content strategy could help it dominate this opportunity.
Think of the Sandbox as a crypto version of Roblox., the online game-creation platform. Instead of creating its own content, it allows users to build experiences on its platform using non-fungible tokens (NFTs), digital proofs of ownership stored on the blockchain. The Sandbox has a portfolio of 166,464 plots of virtual real estate called LANDS, where users create and manage their content.
Roblox's popularity demonstrates the viability of the Sandbox's user-generated content strategy. It also shows that metaverse projects don't have to include hardware-based virtual or augmented reality (through VR goggles, for example) to attract users.
The Sandbox boasts significant real-world partnerships. In January, Warner Music Group bought LAND in its metaverse to create a virtual concert hall. And in April, Dubai's cryptocurrency regulator announced plans to build a virtual headquarters on Sandbox real estate. The Sandbox's early-mover advantage helps it attract these high-profile partnerships, which can serve as a long-term competitive moat for the project.
With a market cap of just $2.8 billion, Elrond is a small fry in the cryptocurrency market. But this gives investors a rare opportunity to bet on a growth opportunity while it's still cheap. Elrond's impressive technical specs and rock-bottom valuation can't be ignored.
Elrond can be considered one of the many potential "Ethereum killers" -- blockchains optimized to support decentralized applications (programs that use smart contracts to offer services) faster than the current market leader. With a transaction capacity of 15,000 per second, Elrond trounces Ethereum's 15. And it also holds its own against large rivals like Cardano and Avalanche, which boast capacities of 250 and 4,500, respectively.
Elrond is unique because it has implemented a technology called sharding, which involves breaking the blockchain into multiple parts (like creating more lanes on a highway) to increase throughput and reduce bottlenecks. According to its developers, transaction capacity could eventually scale to 100,000 per second -- which could catch the attention of dApps developers who need a robust platform for their projects.
Investing in a difficult market
Financial markets are facing uncertainty right now amid rampant inflation, rising interest rates, and the possibility of a recession. While crypto can correlate with the stock market (so the sector isn't immune from these challenges), it can give investors much-needed portfolio diversification as they seek to weather the storm. The Sandbox and Elrond would make great picks because of their dirt-cheap market caps and persuasive strategies for success.