The situation of the Russia-Ukraine conflict is critical. What potential opportunities are there in the crypto market?

Since Russia sent troops into Ukraine on February 24, the United States and the European Union have imposed comprehensive sanctions on the Russian Central Bank, Putin and his inner circle, and frozen Russian assets. The ruble exchange rate has plummeted due to the sanctions, and even Facebook, Russian Twitter and YouTube have banned access to Russia. For a time, Russia has become the target of public criticism.

During the Russia-Ukraine conflict, the crypto market also showed signs of recovery, and the price of coins began to rise. The public began to use the changes in the situation of the Russia-Ukraine conflict as a signal light for market price fluctuations. But gradually, the market began to show polarized attitudes on the impact of the Russia-Ukraine conflict on the crypto market. Some people believe that the Russia-Ukraine conflict will drive the price of Bitcoin to rise rapidly, but others believe that the Russia-Ukraine conflict will bring a new bottom to the crypto market.

Currently, the market situation is very serious, and the various actions of Russia and Ukraine are also affecting the hearts of crypto investors.

Markets are in a state of anxiety as cryptocurrencies become the main financial tool in the Russia-Ukraine conflict

In the current urgent situation, cryptocurrency is playing a new role as the main financial tool in the Russia-Ukraine conflict. On the one hand, it provides a decentralized economic channel for Russia facing economic sanctions. On the other hand, it has successfully become a medium for Ukraine to receive aid from all over the world.

For Russia, which is suffering from EU economic sanctions, exchanging its currency for Bitcoin seems to be a good choice, and the crypto market has also given a very positive response to this move, and the market has recovered in a short time. But in fact, the war has brought greater harm to the crypto industry. According to a Coinbase report, Russia has the world's third largest Bitcoin mining business, accounting for about 11% of the global hash rate. In addition, the threat of geopolitical risks to risky assets seems to be reaching a peak.

In this war, the Ukrainian side is also actively using cryptocurrencies, which has a significant impact on the war or rescue work. Because before the conflict began, the Ukrainian government had legalized cryptocurrencies to promote the development of cryptocurrency circulation by investors and business entities.

On February 26, Ukraine's official Twitter account said that it was collecting donations in ETH, BTC and USDT cryptocurrencies, and anyone could donate to help the country fight. According to the latest news, the current cryptocurrency donations have reached 63 million US dollars, and the types of cryptocurrency donations accepted have also increased to more than 70. Ukrainian officials also stated that 15 million US dollars in cryptocurrency donations have been used to purchase military supplies.

In fact, the use of cryptocurrencies in Ukraine and Russia has surged since the Crimea incident in 2014. According to the Chainalysis October 2021 report, Ukraine ranks fourth in the world in terms of cryptocurrency use, second only to Vietnam, India and Pakistan. The new use cases for this encryption in Russia and Ukraine also deeply reflect the key principles of cryptocurrency as a decentralized and trustless form of currency.

Russia-Ukraine conflict boosts crypto development potential, but short-term disadvantages outweigh advantages

By their very nature, private cryptocurrencies exist without borders and are largely outside the government-regulated financial system. However, in terms of Russian use cases, cryptocurrencies cannot replace current banking transactions in Russia, and cryptocurrencies at this stage still lack transparency and liquidity.

Although cryptocurrencies have played a key role in the Russia-Ukraine conflict, they have also caused the crypto market to be suppressed by different international governments in the short term. During this crisis, many politicians speculated that Russia would choose cryptocurrencies to circumvent international sanctions, so it is recommended to take timely action on the issuance of cryptocurrency-related regulations. Therefore, we can foresee that after the Russia-Ukraine conflict, cryptocurrencies are bound to usher in a strong regulation, which will eventually restrict the development of cryptocurrencies in a short period of time.

But in the long run, through this crisis, cryptocurrency has finally truly stood at the center of the world's financial stage, and countries around the world have begun to notice the real use case value of cryptocurrency. Over time, cryptocurrency will become more and more common, and these use cases may also form some new policies and regulations internationally. Under this crisis, the potential of cryptocurrency has been greatly stimulated, and with such favorable endorsement, cryptocurrency will be closer to the goal of becoming a truly global, digital, and decentralized currency.

What opportunities are hidden in the market turmoil?

At this stage, the crypto market has been in a bear market for some time. Under the influence of the situation in Russia and Ukraine and the withdrawal of AC, the crypto market has been severely hit in the short term. At this time, investors are also eager to find potential projects and ambush in advance for the arrival of the next bull market.

Although the overall market is in a downturn, it is in this environment that some projects with independent trends and promising prospects are beginning to emerge. Let's take a look at which projects still show considerable development potential in this downturn. (The following content is for reference only)

1. Smooth Love Potion (SLP)

In Axie Infinity's Battle and Adventure modes, Smooth Love Potion (SLP) is a prize token that can be won and used to produce new Axies digital pets. Small Love Potion is the name of the token before it was updated to the Ronin Chain.

On February 3, Axie Infinity launched its latest 20th season update. The recent game update is the explanation behind the positive market value of SLP tokens. Some of the enhancements in the update are designed to modify various parts of the Axie infinite game mechanics. Due to this upgrade, the number of SLP tokens issued as user rewards will be reduced.

According to the development substack updated on February 3, the daily increment of the game token supply will be reduced by 165 million tokens. As the 20th season begins to operate, the SLP emission will decrease by about 45 million tokens per day. In addition, due to the widespread publicity and use of the game, more price increases are expected in the future.

2. Avalanche (AVAX)

Launched by Ava Labs in 2020, Avalanche is a blockchain platform with smart contract capabilities. Avalanche aims to provide scalable blockchain solutions while maintaining decentralization and security, focusing on low costs, fast transaction speeds, and eco-friendliness. According to its website, Avalanche claims to be the fastest smart contract platform measured by finality. Finality is the time it takes for a blockchain network to verify a transaction and guarantee its execution.

The native token AVAX is a utility token. AVAX serves as a medium of exchange for the Avalanche ecosystem and is also used to stake AVAX, thereby securing the network. Stakers will then receive more AVAX rewards. Some users stake AVAX to earn passive income on the network.

Today's Avalanche has attracted global companies. Payment giant Mastercard and consulting firm Deloitte Touche Tohmatsu have reached a cooperation agreement with its Ava Labs research team. In terms of token performance, AVAX has soared more than 107% in the past year, from about $36 on February 22, 2021 to more than $75 on February 21, 2022.

3. Terra (LUNA)

Terra is a blockchain network built with the Cosmos SDK that allows users to create stablecoins pegged to fiat currencies. These tokens primarily use the network's seigniorage mechanism. Instead of using fiat or overcollateralized cryptocurrencies as reserves, each Terra stablecoin can be converted into the network's native token, LUNA.

The Terra network was founded in 2018 by Do Kwon and Daniel Shim of Terraform Labs and uses Tendermint Delegated Proof of Stake (DPoS) as its consensus mechanism. Terra provides smart contract functionality to create a variety of different stablecoin types. LUNA allows holders to pay network fees, participate in governance, participate in the Tendermint Delegated Proof of Stake consensus mechanism, and be anchored to stablecoins.

From an ecological perspective, the successful launch of the Columbus-5 upgrade will further expand the Terra ecosystem, with at least 160 new projects launched on Terra in early 2022. These actions should increase the use cases of LUNA tokens and have a positive impact on prices. Although Terra is currently engaged in an ongoing legal battle with the U.S. Securities and Exchange Commission, which may have a negative impact on prices, this background also makes LUNA tokens a good investment with more advantages than disadvantages.

4.Polkadot (DOT)

Polkadot is the next generation blockchain that drives a heterogeneous multi-chain framework. It has attracted a lot of attention from the entire investor, developer, and user community and is considered one of the most innovative projects in the cryptocurrency space. The Polkadot ecosystem attempts to address many of the current limitations of blockchain, such as scalability and security. It serves as a solution while implementing the unique features of the technology.

Polkadot was conceived in 2016 and took several years to come to fruition. The DOT token was not launched until August 2020 and received final recognition when it was listed on Coinbase in June 2021. DOT is currently the eighth largest cryptocurrency by market cap. Utility tokens provide governance, bonding, and staking functions in the network.

The governance function allows DOT holders to exercise control over the Polkadot network. DOT holders can determine the network's operating expenses, auction dynamics, and the schedule for adding new parachains. They can also decide when to perform upgrades and fixes on the platform. In addition, DOT plays an active role in securing the network. As a proof-of-stake protocol, DOT holders are tasked with validating transactions across parachains. To participate, DOT holders must stake their DOT tokens. The third role that DOT plays in the network is to add new parachains by holding DOTs, called "bonding." DOT tokens cannot be used during this period and are only released after the bonding period ends and the parachain is removed.

Overall, Polkadot is a unique asset that is quickly gaining traction in the crypto space. It uses revolutionary technology to further decentralize blockchains and allow for the creation of new chains. Although, its market competition is still fierce, Polkadot is different by creating cross-chain capabilities to seamlessly connect different blockchains. Polkadot's future projects and uses will ultimately determine the price. In the crypto world, Polkadot is a powerful force with unlimited potential.

5. Compound (comp)

Compound is an Ethereum-based token that allows the community to manage the Compound protocol. The protocol consists of a decentralized interest rate market that enables users to supply and borrow Ethereum tokens at variable interest rates. According to the white paper, asset suppliers and borrowers interact directly with the protocol to earn and pay floating interest rates without having to negotiate terms such as term, interest rate or collateral with peers or counterparties.

In addition, Compound has two types of tokens - COMP and cToken. Nowadays, Compound has developed into a mainstream DeFi token. Although its price trend has been bearish in the past few months, COMP tokens are still very valuable for investors with strong risk tolerance.

6. Cosmos (ATOM)

Cosmos is also an older project, with its first white paper released in 2016. In simple terms, it can be described as the "Internet of Blockchains" because it is a collection of blockchain networks. Its goal is to create an inclusive network of other cryptocurrency networks that are fully interoperable, which will allow for cheap and efficient transactions. Similar to SOL, it aims to solve problems around scalability and decentralization.

In addition, Cosmos makes it easier to create dApps, and simplifying its infrastructure to make it easier to use is also an important goal. Cosmos' native token ATOM was created through a proof-of-stake algorithm. In 2021, ATOM has been growing at a gradual rate almost throughout the year and reached its all-time high on September 20, almost the last train of the last bull market.