Disclaimer: The datasets shared in the following article have been compiled from a set of online resources and do not reflect AMBCrypto’s own research on the subject.
The price of Polkadot (DOT) has been on the rise for the last two days. On 21 November, Bifrost announced on Twitter a liquid staking via a Polkadot blockchain. This was soon followed by a 6% surge in its price.
Read Price Prediction for Polkadot [DOT] for 2023-24
One of the best-performing cryptocurrencies, Polkadot (DOT) has tremendous growth potential during a potential bull run.
The price of DOT has been steadily declining over the past few months. The ongoing demise of FTX, the second-largest exchange in the world after Binance, is the most recent cause of the drop. Fears of industry contagion have grown since the company’s demise. The crypto fear and greed index has consequently decreased to the extreme fear level.
In addition, there are issues with Polkadot’s ecology. The entire value locked in key parachains like MoonRiver, MoonBeam, and Acala has decreased over the last several months.
In a blog post published last month, the Polkadot team provided updates on their Roadmap Roundup.
The post described the Asynchronous Backing which aims to accomplish three things: reduce the duration of parachain blocks to six seconds, increase the amount of block space available to each block by a factor of 5-10, and allow parachain blocks to be reused when they don’t make it onto the relay chain on the first try.
The transactions per second (TPS) capacity of the network is also expected to increase in aggregate to 100,000-1,000,000, thanks to the update.
Prior to its launch, the Polkadot project had raised over $144.3 million through the Web3 Foundation in an ICO itself in October 2017. DOT was trading at $6.30 in August 2020 and kept oscillating between $4 and $5 throughout the rest of 2020.
The crypto bloom of 2021 proved to be wondrous for Polkadot too. Throughout the year, it remained bullish and reached its ATH of $55 in November. Similarly, the crypto crash witnessed in the second quarter of 2022 impacted its performance adversely. By mid-July, it was trading at just a little above $6.
A proof-of-stake (PoS) blockchain, Polkadot recently upgraded to the v9270 version which was reflected in some upward movement in its price. A few days back, its performance was rather resurgent. But with the Merge, Ethereum has emerged as a serious competitor of Polkadot as an alternative PoS blockchain and DOT’s price has been plunging since then.
Polkadot Co-Founder Robert Habermeier, however, claimed that he is super happy to see Ethereum transition from PoW to PoS mechanism. In fact, he views Polkadot as an “ETH collaborator.” Polkadot, at press time, was trading at $5.38.
In December 2021, the largest telecommunication company in Europe, Deutsche Telekom, bought a large amount of DOT tokens. T-Systems Multimedia Solutions, its subsidiary, has also bought a large amount of DOT tokens to help groups staking on the Polkadot network.
Working on the proof-of-stake consensus mechanism is unique in supporting multiple interconnected chains, helping it earn a large number of users.
Shawn Tabrizi, the lead developer at Polkadot network, talked about the possibility of “a cohesive, multi-blockchain future” during an interview in February 2022. He also stressed on the need for preserving the fundamentals of data privacy in the Polkadot ecosystem.
The Polkadot infrastructure supports two kinds of blockchains, relay chains, and parachains.
The central blockchain of the Polkadot infrastructure is the Relay Chain where validators provide consensus for a transaction. The Relay Chain is built in a way so as to coordinate the management and operation of the whole Polkadot infrastructure, with minimal functionality in regard to other applications.
A parachain, on the other hand, is an application-specific chain on the Polkadot infrastructure that is validated by the validators of the Relay Chain itself. Since these chains run parallel to the Relay Chain, they are called parachains. It is here that developers can develop both applications and their own blockchains. All of these parachains can communicate with each other on the network. In short, this cross-chain technology facilitates the transfer of both assets and data across blockchains. Users therefore don’t have to depend on a particular system for all of their cryptocurrency transactions.
Polkadot parachains can easily communicate with other blockchains existing on Ethereum and Bitcoin networks. The blockchain also provides better control, flexibility, and security, reducing the risk to its miners due to unauthorized validators. Acala, Moonbeam, Clover, Astar, and Parallel are some of the oldest projects running on the Polkadot network. The blockchain is growing rapidly and seems to promise a reliable future to its users.
Wood believes that from a Web 3.0 perspective, the inter-chain blockchain protocol of a network like Polkadot will connect different technological threads into a single economy and movement.
The ability to communicate without the need to trust each other is the cornerstone of the Polkadot system. The parachain auctions of Polkadot can truly build a democratic internet space as decentralized or distributed network architectures form the infrastructure of the online world.
In May this year, a Polkadot upgrade enabled parachain-to-parachain messaging over XCM. The XCM format is aimed at helping the Polkadot network become a fully interoperable multichain ecosystem. XCM allows communication not only between the parachains themselves but also between smart contracts and decentralized applications.
As a blockchain running on the PoS consensus mechanism, Polkadot is one of the most eco-friendly blockchain cryptocurrencies.
The PoS method is more sustainable than the PoW method as there is no race to mint more coins.
As per a new study by the Traders of Crypto, Polkadot, along with Cardano and Algorand, are among the most environment-friendly cryptocurrencies. With annual CO2 emissions of 50 tonnes, Polkadot is the fourth most eco-friendly cryptocurrency.
For eco-conscious investors, Polkadot has remained the preferred option for years and continues to be.
The ongoing Russia-Ukraine conflict had a devastating effect on the international community. The crisis abetted the crash of the cryptocurrency industry but industry leaders and hundreds of others nonetheless came together to support Ukraine in her moment of vulnerability. In May 2022, Polkadot co-founder Gavin Wood donated 298,367 DOT worth $5.8 million to Ukraine.
The contribution of the crypto community has also been acknowledged by Mykhailo Fedorov, Vice Prime Minister of Ukraine. On 17 August 2022, he tweeted that $54 million from these funds has been spent on military gear, including rifle scopes, vests, helmets, and tactical backpacks.
A Forbes report quotes Bilal Hammoud, CEO, and founder of National Digital Asset Exchange, “Polkadot’s mission is to securely allow Bitcoin and Ethereum to interact with each other in a scalable manner… Imagine if you store your wealth in Bitcoin and use that Bitcoin on an Ethereum dApp [decentralized application] to take out a loan for a house quickly and securely.”
The interoperability and scalability of the Polkadot infrastructure have helped it endear itself to a lot of enthusiastic developers, thereby significantly raising the value of DOT.
Why these projections matter
Among all the market’s leading cryptocurrencies, what is peculiar to Polkadot is that it offers an opportunity to users to operate and transact across blockchains. With a circulating supply of over 1 billion coins, DOT is expected to remain one of the market’s most popular cryptos.
This also makes DOT one of the most closely observed cryptocurrencies in the market. Ergo, it is critical investors and holders remain aware of what popular analysts have to say about the future of DOT.
In this article, we will briefly summarize the key performance metrics of DOT such as price and market cap. Thereafter, we will observe what the most popular crypto-market analysts have to say about the current and future states of DOT, along with its Fear & Greed Index. We will also present metric charts to complement these observations.
Polkadot’s Price, Market Cap, and everything in between
Polkadot performed very well during the crypto-bloom of 2021, crossing the price level of $20 in early February and $30 in mid-February. It breached the $40-mark in early April and kept going up and down for the next few months. After going through a rough patch, it hit an ATH of $55 in early November.
The last month of 2021 was a difficult period of time for the entire cryptocurrency market. Things were no different for Polkadot, with DOT trading at just a little above $26 on 31 December.
Come 2022 and the Russia-Ukraine crisis further pushed the market into chaos. In January-February, DOT was trading at around $18-20. It was thought that the Ukrainian…