Polkadot continues to be the most developed network, but what’s up with DOT price?
What is Insight of POLKADOT Project?
Polkadot continues to be the most developed network, but what’s up with DOT’s price?
Polkadot is one of the most successful project within the DeFi space, mainly focused on specific applications rather than generalized infrastructure.
The architecture of the Polkadot chain is divided into Parachains & relay chains, both working on a nominated Proof-of-Stake algorithm.
Both chains work independently but are bound to each other and serve as a governance layer of the network.
The network’s bridge allows different blockchains to interact with each other and enable data transfer among them. The platform is powered by its native token DOT which is also used for governance and earning rewards by staking.
TECHNICAL ANALYSIS OF POLKADOT(DOT)
- Polkadot price broke down from the crucial support levels and reached a 20-month low after hovering within very narrow ranges for nearly a month
- Numerous outside factors are thought to have fueled the bearish action and may cause it to drop to the bottom
- While the RSI is about to enter the oversold area, AO continues to remain more or less stagnant
- A continued bearish action may compel the price to drop below $5 initially. If the bulls fail to hold the price above these levels, then an extended bearish action may drag the price close to $4.5
- However, a rebound may still be in place that could be triggered as the price reaches the levels around $5.5
DOT SEES SUSTAINED DEVELOPMENT ACTIVITY
DOT Development Activity | Source: Santiment
The development of any project is often used as an indicator of the platform’s success as it embraces the team’s dedication to building a strong & reliable product. Presently, Ethereum has the highest development activity, and Polkadot ranks second.
The developers build applications over the existing blockchain, handling the front-end, and back-end development & maintenance.
The development activity maintained a significant upswing ever since the project began to function. The developer’s count also was on rising considerably that reached a peak of more than 70 contributors a day.
As a result, it is anticipated that the DOT price will benefit from the increased development activity.
FUTURES FUNDING RATES
The funding rates help to keep the price in sync as the payments are made between the market participants and the future markets in a fixed interval of time.The Binance funding rates have been largely trading within the positive ranges while the FTX maintained a negative trend.
While both trades are slowly sliding to the negative ranges, it appears that the marked price is rising compared to the perpetual contract, hence indicating a bearish trend since short traders have to pay to keep holding on to their position.
Polka Project
PolkaProject Index
$269.2328 -0.48%
2022-12-30 17:05:00
Rank
| # | Project |
(30d) |
Token |
Price/24h |
👍 |
|---|---|---|---|---|---|
| 1 |
Polkadot |
825 -5.17% |
DOT |
$4.2628 -1.28% |
76 |
| 2 |
Kusama |
46 -6.12% |
KSM |
$24.6438 -2.21% |
35 |
| 3 |
Acala Network DeFiSmartContracts |
13 -7.14% |
ACA | — | 126 |
| 4 |
ChainX Bridge |
8 +0.00% |
PCX |
$0.4073 -9.1% |
33 |
| 5 |
Edgeware SmartContracts |
17 +0.00% |
EDG |
$0.0004 +0% |
13 |
| 6 |
Darwinia BridgeGamingNFT |
109 -6.03% |
RING |
$0.0086 +4.89% |
25 |
| 7 |
Phala Network PrivacyDataGrant |
175 -4.37% |
PHA |
$0.1052 -6.25% |
39 |
| 8 |
Ocean Protocol Data |
243 -4.71% |
OCEAN |
$0.1465 +1.71% |
18 |
| 9 |
Robonomics IOTGrant |
196 -2.97% |
XRT |
$2.46 +4.19% |
7 |
| 10 |
MXC IOT |
13 -18.75% |
MXC |
$0.0301 -8.04% |
8 |
DOT price
Launched in October 2017, Polkadot released 10 million dot tokens into circulation via an initial coin offering (ICO) raising 485,331 ether worth (approximately $145 million at the time.)
The tokens in the current supply are allocated as follows:
-
58.4% of the tokens are held by investors, including 50% issued in the original token sale, followed by a sale of 5% of the total supply in 2019 and another sale the following year representing 3.4% of the total supply.
-
The Web 3 Foundation, the Swiss organization that runs the network, owns 11.6% of the tokens.
-
30% is held by founders and the foundation.
The dot token serves three key functions in Polkadot:
-
To be used for governance of the network.
-
To be staked for the operation of the network.
-
To be “bonded” to connect a new blockchain – called a “parachain” – to Polkadot.
An interesting feature of Polkadot is that it has no hard limit on its total supply. Instead, new dot tokens are constantly released into circulation, at a predetermined, annual inflation rate of 10 percent.
DOT’s price reached a peak of $6.30 shortly after it launched in May 2020, then wavered between $4 and $5 for the remainder of 2020. In May 2021, DOT’s price hit an all-time high of $49.80. During the Q4 bull run of 2021, DOT’s price hit another peak of $44.41 in October.
How Polkadot works
There are thousands of cryptocurrencies across the ecosystem, a vast majority of which can’t communicate with each other. For example, users can’t send their Dogecoin over Chainlink for instance, or vice versa. Polkadot aims to fix that by building a framework that interconnects blockchains, even if each chain performs different functions to one another.
At the center of Polkadot sits the “relay chain,” a central blockchain that connects all other participating blockchains together. The relay chain processes all transactions taking place in the ecosystem at the same time, with the goal of improving scalability.
User-created blockchains that hook into the relay chain are known as “parachains.” By allowing blockchains to communicate with its platform, Polkadot is able to connect many blockchains in a way that wasn’t possible before.
Polkadot relies on Nominated Proof-of-Stake (NPoS), a method of validating crypto transactions based on how many coins each participant has put up as collateral. NPoS is designed with four roles for users who hold dot:
-
Validators: Those who secure the network by staking their dot tokens and performing verification of the Relay Chain.
-
Collators: Users who maintain the entire history of the Relay Chain and their particular parachain nodes, which is vital for cross-chain messaging.
-
Fishermen: Individuals who have full nodes of Parachains but police for invalid transactions.
-
Nominators: Those who are active dot holders but don’t want the responsibility of the other roles and choose simply to stake their tokens.
Polkadot’s roadmap describes in more detail how far along the developers are in connecting blockchains.
Key events and management
Polkadot was founded in 2016 by Gavin Wood, who also co-founded Ethereum, Peter Czaban and Robert Habermeier.
In 2017, Parity Technologies, the company behind Polkadot, suffered a high-profile attack, leading Polkadot to lose a staggering two-thirds of its ICO funds (worth $98 million at the time).
Curiously, the funds weren’t exactly stolen, but frozen in place. The frozen funds were triggered by an anonymous developer who “accidentally” triggered a bug in the code.
Polkadot launched its “relay chain” in 2020, putting the core infrastructure on mainnet for the first time, and released version two of its Substrate software for easily building new parachains that can hook into the wider Polkadot ecosystem.
Polkadot’s next hotly anticipated milestone is auctioning off the first parachain slots to those who want to deploy chains on the platform. Polkadot’s development can be tracked on their GitHub.
How many Dapps are there on Polkadot?
Polkadot vs. Solana – Which is better?
Both blockchains are two of the biggest and the most popular projects in the industry with massive institutional interest. For example, Solana was partnered with FTX exchange to develop Serum. Moreover, OpenSea – the biggest NFT marketplace – recently started supporting trading Solana-based tokens on its platform.
Similarly, at the end of last year, Enjin announced the launch of Efinity on the Polkadot network. Katie Haun – CEO and founder of Web3 venture capital, Haun Ventures – poured $10 million into Moonwell, a Polkadot lending protocol.
As far as network speed goes, Solana is the fastest blockchain network in the industry, with the potential to process about 65,000 transactions per second. It clearly beats Polkadot, which can only validate about 1,000 transactions in the same period.
When it comes to sustainability and interoperability, Solana does not even come close to Polkadot, which is the lowest carbon footprint blockchain today. In this respect, Polkadot takes the prize here.
Polkadot attempts to address scalability and interoperability issues in blockchain technology.
Solana is a blockchain that aims to provide low fees while also being fast.
At the end of the day, Polkadot and Solana’s mission is to improve the way cryptocurrency is used to better people’s lives.
CONCLUSION
Despite the Polkadot chain having been marking new highs in phrases of community enhancements & improvement activity, the DOT charge stays mostly unaffected.
The current drop from the pivotal zones signifies that the bulls are presently extraordinarily exhausted & additionally sceptical about the upcoming market trend.
Meanwhile, the upward thrust in improvement recreation signifies the developing energy of the project.
Hence with mild ease in the market sentiments, may additionally ignite a terrific bullish style in the upcoming days.
Stay Tuned…
