Is Polkadot (DOT) Crypto worth an investment?
DOT (DOT 1-USD)
Coin Name and Crypto Trading Exchange Platform
Polkadot USD – Coinbase
– Binance. The US.
– Other Crypto Trading firms.
DOT is a native token that is built on the Polkadot blockchain network. The coins were released upon the launch of Polkadot’s Genesis block.
The network provides interconnectivity between blockchains by facilitating the exchange of messages, and data transfers, and enables transactions.
The Polkadot infrastructure utilizes the proof of stake algorithm, making it secure for the operation of other projects with its blockchains on its infrastructure.
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DOT aims to achieve high degrees of scalability and security by uniting multiple blockchains.
It was developed by Parity technologies who also run it. Other developers of the coin include Chainsafe Systems and Soramitsu.
DOT was founded by Ethereum Co-founder Gavin wood, and raised over $144.3M in its initial coin offering back in 2017.
Recent Most Important News about Polkadot (DOT)
The coin has found resistance at 7 dollars but experts are tipping it could be in for a bullish movement. Its identical peer token Kusama is having a good run and it is yet to be seen if DOT will follow suit.
DOT is risk-averse and has its priorities set on stability. Kusama is wild and vicious in getting into the market via different approaches that may otherwise be seen as speculative.
The crypto hedge fund Three Arrows owes Polkadot Developer Moonbeam foundation over $27M. The financial implosion of Terra spelled dire implications for many related funds.
Polkadot has been ardent in driving innovations for web3 development and other milestones in the blockchain world.
Its blockchain system has been used to develop Enjin’s Efinity platform which will power NFT collectibles. DOT has also revealed new parachains, forkless automatic upgrades, and more.
Current Position of Polkadot (DOT)
The coin has taken a hit just like most cryptocurrencies in the supposed Crypto winter. DOT’s development is coordinated by the Web 3.0 foundation. Which is based in Switzerland.
Many of its projects have raised tens of millions of dollars despite it receiving no post-IPO funding. It has grown its activities despite the huge haircut in its value.
Its network commenced operations in 2020 and though it’s fully functional, it is still in technical development.
The network uses a proof-of-stake blockchain called the relay chain, which leverages a novel consensus mechanism called nominated proof-of-stake, which is very efficient.
This relay chain acts as a governance layer of the network and can process an amazing 1000 transactions per second.
It is currently secured by 300 validators and over 20,000 nominators. Validators are required to stake a minimum of 1.8M DOT to become part of the network.
They must also lock their DOT coins for a minimum of 28 days.
The validators are strictly regulated and the rules governing them are subject to change when deemed appropriate.
Compensation for their services is pretty decent, estimated at around 15% per year according to staking rewards.
Polkadot is mart contracts crypto but its relay chain has limited this functionality as it only handles transactions related to staking, governance, and standard Dot transfers.
Most of its smart contract functionality comes from propriety blockchains called Parachains that plug into its relay chain for security.
Parachains don’t have to use Dot for transactions and do not even necessarily need a coin or token to operate.
They are three types of Parachains: Common good Parachains, Para threads, and Standard parachains.
Each type of para chain has its unique purpose and selection process. They act as bridges to other cryptos, payment gates, and many other functions.
In early March, Gavin Wood donated about $6M worth of DOT to Ukraine as an aid to the crisis. The move was a bit controversial as arguments rose on the form of currency used.
Enjin launched on the blockchain in March, bringing its community of more than half a million people into DOT’s ecosystem.
Parity Technology also announced that it had completed a major upgrade in the custom program language for smart contracts called Inc, making it easier for developers to build on the platform.
Big-time Crypto investor Katie Haun put over $10m into a DEFI protocol on a moonbeam.
This is more interesting when considering her firm broke the record this year, bagging a staggering $1.5B in funding.
This is good news for Polkadot as they could engage in more projects.
The coin is still on its feet and running and a Coinbase study reveals it’s an Ethereum competitor.
Polkadot (DOT) Coin Price Chart
The coin has been massively decimated in the past few months, losing over 80% of its value. This is despite its robust progress in development.
The wonky markets have not spared the coin.
As of the 26th of July 2022, it trades at |$6.60 and is down by -2% in the last 24 hours. It has returned to its starting levels in 2020 after its IPO.
The severe poor price action is due to several factors including rising interest rates and massive sell-offs.
The supply of Dot has also been found to be increasing which is further diluting the price.
Its market cap is now at $6.5B, a heavy drop considering it’s the third largest crypto held by funds after ETH and BTC.
The total circulating supply is now at 987.57M out of a total supply of 1.1B.
It could fully roll out all the untapped reserves in two years which will increase their volume but be of less benefit in the long run.
Dot was at its all-time high just nine months ago, in November 2021, reaching an estimated $55. It is now at record lows, registering an annual low of $6.09 in recent weeks.
The token is in a shaky position right now like the rest of the markets. The Crypto market as a whole has shed over $2 Trillion in value this year.
DOT’s ambitious projects could catapult back up.
Sentiment on Polkadot (DOT)
Polkadot has a bullish sentiment by investors who see the long-term prospect and the current low price.
Many believe now is the time to take a position, following the downtrends in the market that has triggered panic selling. There are selling signals everywhere, which is quite ironic really.
During the run on the way, up many jumped into the coin and are selling at the current cheap prices. Some see it as close to the bottom and gearing to rebound hard.
A few naysayers have negative sentiments about the stock and are concerned about the high supply of coins. Individuals are still raw on the Luna fiasco and are staying away from speculative assets in these uncertain times.
DOT is still showing signs of resistance at the current price and could weather a storm in the markets. It is sure to rally in the future with more projects hitting the ground.
It will make it through the bear market and is a central player in the blockchain, NFT, and crypto sectors, all of which seem promising in the coming decade.
Pros of Polkadot (DOT) based on Investors Outlook
- Cheap price – Compared to the large players, Dot is stupidly low in price for a token of its caliber.
- Prospective Projects – DOT has undertaken many tech projects with industry players which could be very beneficial if successful.
- Hypergrowth – It is growing at a rapid pace and releases new projects each day. The size of the market of its operating sectors is hugely untapped, thus they have a lot of room to expand.
- Network – It has the leverage of a large community and has a rising number of users. It is particularly popular with institutions, which is a big factor for price action.
Cons of Polkadot (DOT) based on Investors Outlook
- Reputation issues – Within the community, there are a lot of security issues that have resulted in the token being rated lower.
- Illiquid – The token is still relatively new to the market and has infrastructural challenges that cause it to have insufficient liquidity. Investors are worried about a possible ‘crypto Bank run’ as was the case for Terra Luna.
Pros for investing in Polkadot (DOT) based on the General Outlook
- Efficient chain – It allows developers to launch chains and applications via a shared security model. Thus it does not have to worry about attracting enough miners. The technical structure for DOT is equally impressive.
- Huge funding – It is one of the top ten coins in crypto and has secured more than $200M in financing its operation.
- Expanding ecosystem – It has continued to expand as new parachains are introduced. It is also fully scalable and upgradable with no forks which are unparalleled, even by ETH.
- High Interoperability – The token is known for this and projects function seamlessly under this chain. This has made it very useful across a variety of sectors including the medical sector.
Cons of investing in Polkadot (DOT) based on the General Outlook
- Poor Price action – This is a result of the rough bear market and it has consequently suffered. It also has supply and demand issues.
- Tech-concentrated – It has focused entirely on technology which is a good thing, but the markets are looking bleak, as the earnings season is revealing. Tech has thrived in the last decade but with a recession in sight, it is retracing as demand declines.
Growth Likelihood and Potential for Polkadot (DOT)
The road ahead for the token is based on future updates.
These include its already releases cross-chain communication protocol and the rollout of pareathreads which will create more demand for the token.
It is actively pursuing these developments.
The current plan is to gradually plug all 100 of its parachains, which will be done on its canary network Kusama to ensure there are no issues.
DOT’s founder Gavin Wood is focused on making a difference in the world through the chain.
He revealed in early January that Parity technologies and the web3 foundation were hiring lots of people in preparation for DOT 2.0
There has been a lot of DOT selling given that none of these institutions have received post-ICO funding.
DOT is also working on a new governance structure and its core developments are focused on improving the projects’ scalability, intending to achieve millions of transactions per second in the coming years.
Announcements were made it had entered a partnership with the Wormhole Bridge, this could mean a collaboration between DOT and Solana.
It has been confirmed that they will indeed work together which will see an even greater output.
The developers are looking to create bridges to other crypto ecosystems. DOT has taken a stand to become decentralized from top to bottom and is against centralization by other tokens.
This is the core mission of crypto.
Despite a few headwinds, DOT has the potential to rise above and revolutionize blockchain tech.
Overall Verdict on Polkadot (DOT)
Although the global economic conditions are shaky, DOT has established itself as a powerful brand with a mission that has the longevity and persistence required to weather prolonged bear markets.
The overall majority are bullish on the token due to its power to attract institutions and other developers.
It’s underperforming compared to the mania of other coins and thus could be a good value play due to sound pricing.
The technical factors show that the coin has more upsides and will make a comeback. The downtrend in the markets is a chance to capitalize on the discounted prices.
Moving averages indicate a buy while oscillators indicate a sell. DOT is a good consideration for one’s portfolio in the long term.
It will likely dominate in bleeding-edge tech in the industry which will see its price explode.
It is predicted to rise to a median price range of $40-$60 by next year. In the long run, it could be a 100x return if it eventually goes beyond $500.
Is it worth investing in DOT? Definitely yes, for a visionary and patient investor who looks beyond near-term action.
Caution should be taken on when to get, if an economic disaster is not averted the markets could suffer. The best time to buy is after a crash.
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