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Polkadot (DOT) gains share – DOT rises 177%

Polkadot (DOT) has recently posted strong gains. And not without reason, because Polkadot already has a functioning technology and a large community. The project is conceptually based on a special approach. The core of Polkadot is the so-called relay chain, which represents the infrastructure for the connected parachains. Dot, the native token of the blockchain, is required for the development of these parachains.

DOT is now one of the largest cryptocurrencies in terms of market capitalization. In the last few weeks in particular, the token has been one of the most successful digital currencies on the market. Reason enough to take a closer look at the short- and long-term growth potential of DOT and the Polkadot blockchain.

Polkadot as a high-flyer in the crypto world

If you look at the daily Polkadot chart since mid-July, one thing immediately catches the eye: there are hardly any red candles. Since July 21, just 14 days have ended in the red zone. Overall, DOT has since recorded a price increase of over 177%. Needless to say, it is one of the most successful projects among the big coins and tokens. At the time of this writing, the price is over $ 33. In July, the price was just over 10 US dollars.

With a market capitalization of almost 33 billion US dollars, Polkadot is currently in 9th place according to Coinmarketcap. And some fundamental data also show that everyone is talking about polkadot. On Twitter, Dot can claim around 3 percent of all mentions in the crypto area. Data from Google Trends also show an increasing interest in polkadot in recent weeks.

Polkadot DOT
Polkadot in Google Trends. Source: Google

According to the co-founder, Polkadot is “still in the early stages”

If you take a closer look at polkadot, it quickly becomes clear that the project already looks back on an impressive technical basis. It was not until May 2021 that Kusama, the experimental test environment of Polkadot, was made ready for the use of parachains. With version 0.9 published at the time, the project reached an important milestone on the way to a fully comprehensive multi chain. The developers connected a Parachain of the Polkadot Relay Chain with Kusama and thus established interoperability between the two networks.

Founder Gavin Wood stated that this move would mark the final stage of Polkadot and that the project was still in its early stages. Current reports from September 2021 show that the system works sustainably and that the test phase was successful. Co-founder Rob Habermeier stated that six more Parachains have now been linked to Kusama. Habermeier announced that “the parachain season is just beginning”. Thanks to the interoperable approach, DeFi applications and smart contracts can already communicate across blockchains.

Polkadot: short-term bearish, long-term bullish?

A comparison of the many Polkadot forecasts on the Internet shows that the majority of experts expect further price increases from DOT in the future. For short-term forecasts, the fundamental data of the future markets are interesting, among other things. However, these data currently paint a rather negative picture. Most recently, the long / short ratio of DOT changed in the direction of the short traders. Liquidated long futures valued at over $ 130 million contrasted with short futures valued at 100 million. However, an excess of short positions is no guarantee of a short-term price loss.

Long / Short Ratio of Polkadot Open Interests. Source: OKEx

But what are the long-term forecasts? A long-term roadmap still has a lot of innovative features ready for the future of the project. Most recently, for example, referendum 33 was passed, which brought some fundamental changes to the system without a hard fork. Furthermore, the Parachain Crowd Loans could provide new momentum for the market. In this type of auction, free parachain spaces are sold to developers. The DOT tokens used for this can no longer be used for the duration of the auction. As a result, the valuable places would block large parts of the circulating supply for a certain period of time and thus cause a shortage.

These auctions are currently also taking place in the Kusama network. Kusama has long been more than just an experimental test network. The network, often referred to as Polkadot’s “cousin”, is itself one of the main reasons for the success of Polkadot. It allows new ideas or innovative use cases to be tested immediately in a scalable and secure network. In this way, Polkadot can test innovations much faster than other projects and thus has a clear competitive advantage.

Polkadot and the competition

Kusama is just one of many projects that use Polkadot’s blockchain architecture as an infrastructural basis. Akropolis (interoperable DeFi applications), Polkastarter (fundraising platform) and Centrifuge (use of real assets in DeFi applications) are further examples of the diversity of Polkadot projects. And the success could also attract other projects that are now based on platforms such as Ethereum. The scalability and interoperability of Polkadot are arguments that many of the existing smart contract platforms do not yet offer.

And this idea of ​​competition is not a coincidence, but is deliberately wanted by the founders behind Polkadot. Founder Gavon Wood, who previously helped develop Ethereum, left the Ethereum Foundation due to some discrepancies. With Polkadot, he wanted to focus on interoperability and scalability, as he lacked these properties with Ethereum. Polkadot is not yet able to build on the success of Ethereum, but the project is still a few years younger than its big competitor.

Conclusion: Polkadot is moving closer into focus

On paper, Polkadot is already one of the most technically advanced projects in the crypto world. And the project, which was founded in 2017, has also recently made good progress in practice. For the first time, the interoperability of Parachains could be tested together with the Kusama test network.

In the long term, Polkadot is said to have enormous potential. The official roadmap still has some innovative functions ready. In the short term, the picture is less clear, but the future potential is undisputed in the opinion of many experts

Jens Kerkmann was already interested in the topics of cryptocurrencies and blockchain technology during his studies in business informatics. To this day, the subject accompanies him in his everyday and professional life and he works as an author for advice articles and news from the blockchain and digitization environment.

Ethereum is burning

Hasan Sheikh
Hasan, who loves technology and games, is studying Computer Engineering at Delhi JNU. He has been writing technology news since 2016.


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