Polkadot is Showing Signals of Rallying After the Drop
This October 2022 TabStocks Article takes an IN-DETPH look at the Polkadot crypto
DOT USD (DOT-USD)
Coin Name and Trading Exchange Platform
Polkadot USD – Kraken
– 87 other exchanges.
Polkadot was formed with the primary purpose of accelerating the development and interoperability of web3.
DOT is the native token of the chain, along with a cluster of other tokens supported on the chain. The community believes in a secure ecosystem of specialized blockchains called parachains.
The network is the flagship project of the web3 foundation that is organized in Switzerland and seeks to build an intelligible decentralized web.
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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Founded by Ethereum Co-founder Gavin wood, together with Robert Harbermeier & Peter Czaban. It raised over $144.3M in its initial coin offering back in 2017.
Recent Most Important News about Polkadot
Since we last covered the token in July, a lot of exciting action has been seen. It had a good run until August before the easing recently.
Stablecoins have not fared well after the LUNA implosion, which mired the entire sector. DOT further experienced a security breach on its Acala network which caused it to lose its peg to the dollar.
This occurrence resulted in a massive collapse in price as millions of tokens were mistakenly minted. The stolen funds remain on the network and efforts can be taken to retrieve them, salvaging the network.
Investigations are still underway as the Acala network remains temporarily halted. DOT has assured that it will handle the issue and this will certainly not escalate to a Terra crisis.
The network has introduced more interesting features set to be released soon including Cross-Consensus messaging (XCM), Nomination pools, and Parathreads mention a few.
Polkadot has made a huge move, allowing Tether USD, the largest stablecoin to mint on its blockchain. This is a bid to open up its chain to get more users and adoption.
Current Position of DOT
The chain announced last week its new roadmap for what lies ahead.
The developer community is discussing and weighing the implications of the last quarter and reviewing steps on the way forward.
The biggest highlights are governance, bridging, and staking.
The community is removing their council and technical committees and introducing Polkadot fellowship, with decision-making done by referendums by the blockchain community.
More decentralization is seen by this move and the chain is moving in the direction of being a DAO (Decentralized Autonomous Organization).
These changes are necessary for the long-term survival of the network and industry as a whole. The token has also discussed bridging to other chains via the Polkadot-Kusama bridge.
Scepticism has arisen following opening up the network, a lot of money is spent in securing a para chain and new players coming in will hamper profitability in auctions.
The baseline protocols that power DOT will however benefit in the long haul as it gains mass adoption.
A BIS study conducted on the top crypto assets chosen by banks revealed that DOT, XRP & ADA were among the most preferred. The BIS further explained that:
These exposures would likely be classified as Group 2 crypto assets under the current consultative proposal of the Basel committee.
Banks also reported, in smaller amounts, a stablecoin (USD coin) and tokenized assets.
DOT’s arch-rival at the moment is Cosmos, both competing to be the top layer-0 interoperable chain.
Cosmos is having a better run at the moment and bagging many cool projects. DOT still has a price advantage through and a bullish outlook.
Another important development taken by the chain in its roadmap goals was improving the transaction speed by a factor of at least 10, that’s 10x the current speed!
This will be facilitated by several measures like Asynchronous backing, which will exponentially increase the transactions per second from 1000 to potentially 1M.
Dot remains a leader in developer activity outperforming Cardano. The Dot network will also be upgraded to v9280 which will fundamentally improve its technology.
The upgrades are expected to have a strong impact on the future performance of DOT.
The chain is one of the most flexible there is and has the backing of many large establishments, including Europe’s largest telecommunication company, Deutsch Telekom.
Ethereum co-founder Antony Di Lorio is keeping an eye on the token. He said:
I’ve always been enthused with Polkadot. I’ve been enthused with Cosmos. Each one of them has what I’ve seen as potential limitations/problems, but I keep buying just to see.
Dot is hailed as the:
blockchain of blockchains
thanks to its multichain protocol.
DOT has the same level of security across its parachains and consequently was able to operate continuously even after the attack on the Acala network.
DOT is an edge over its peers in terms of its expeditious developer growth.
DOT price chart
DOT is now at $6.278 as of the 3rd of October 2022. It is still at the same level it was 2 months ago after rising slightly in August. It has been a good hedge in the period.
The days of reckoning are here, and world indices are down. Crypto is still in the bearish region but an exception will always exist. Most coins are down in the year, but little surges are not rare.
From a longer frame then token has still done quite well, two years down the line, in August 2020 it was trading
Short-term price action seems promising, with DOT looking to bounce from the current resistance.
DOT was oversold in June 2022, as panic reigns in the markets. The current price is too cheap to ignore and a plus above its competitors that are overvalued.
Sentiment on DOT
Polkadot has formed a strong bottom and breaks this level of resistance. There is a lot of trust in the network given its multichain.
Lux Algo, a technical indicator shows a strong buy signal for the token. DOT is now seen as of the ‘hottest blockchains right now.
Perhaps the most striking feature of the chain and token is its utility. The continual upgrades and launch of different projects.
It is one of the most creative projects and its interoperability and layer-0 solutions are truly unmatched.
Experts are betting big on the token and its network of many organizations is a powerful tool.
Pros of Investing in DOT
- Rapid blockchain development – It is probably the foremost ‘Ethereum-killer’, that seeks to pioneer the next phase of internet connectivity. Entire chains are created in minutes within the network.
- Institutional backing – After BTC, ETC, DOT is the digital asset most held by investment funds. This shows the immense faith that is bestowed upon the token and the superb developer team.
- User-driven governance – The network supports the novel idea behind crypto and that is decentralization. It has made further changes to engage its users in decision-making, not just concentrated on a handful of committee members.
- High Energy Efficiency – The chain has the lowest carbon footprint among proof-of-stake protocols as revealed by research analysis.
Cons of Investing in DOT
- Government Intervention – Big brother is ardent to remain incumbent and many drastic measures are being taken to ‘regulate’ the crypto sector.
- Capital flight – Nearly $700B has been wiped away from the crypto markets this year and capital is moving to more risk-averse markets. This could spell devastating effects in the short-term but will hopefully end in the not-too-distant future.
Growth Likelihood and Potential
The token is a disruptor in its space and will play a significant role in shaping the landscape for web3 and dApps.
The chain has in the past month surpassed both Ethereum and Cardano in developer activity with 522 Github events under its belt. ETH and ADA had 400 and 455 respectively.
DOT is now at a circulating market capitalization of $7.44B, down by a huge margin from its top. The next year will be determining a lot about the performance of the token.
DOT is a bargain and has 10x potential in the next decade. No chain comes close to its level of progression and advancement.
The track record of its founders is top tier, with Dr. Gavin Wood having worked with Ethereum before giving the chain an upper hand.
After two months of covering the DOT, the price has hovered around the same spot, but the thesis is still very much intact.
The Fundamentals of the chain are strong, and it will be the standard in the decentralized developments in the coming years.
Overall Verdict on DOT
The macroeconomic trends show that most indices are in a downtrend and crypto has especially felt the heat.
The token has a lot of potential and analysts rank it as a buy in the long term. The technical analysis shows that the bearish trends prevail in the near term.
At the current low price, the coin will come soaring after the crash. DOT is trading sideways which makes it a safe hedge at the moment and a huge win in the future.
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