The price of Polkadot has not been very impressive lately. It has been struggling to meet the expectations and the hype it generated when it first launched. Falling from a top 10 cryptocurrency, it is currently ranked 17th, with a market cap of just over $6 billion.
Altcoin Buzz, a YouTube channel with more than 400,000 subscribers, made a video to explain the current state of Polkadot. The crypto analyst who presented the video expressed doubts about the coin returning to the top 10 cryptocurrency rankings.
Altcoin Buzz has long been an advocate for Polkadot and its DOT token, emphasizing their appreciation for the project. However, they acknowledge that the performance of Polkadot over the past few years has been disappointing. This leads to the pressing question of whether Polkadot is nearing the end of its journey as a significant player in the crypto space.
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Polkadot’s Performance and Market Position
The analyst notes that Polkadot has been struggling recently, currently hovering just around the bottom of top 20 cryptocurrencies by market cap. They reflect on a time when Polkadot reached as high as eighth place in May 2021, boasting a market cap of $54 billion in November of the same year.
In stark contrast, Polkadot’s market cap has now plummeted to under $6 billion, with a fully diluted valuation of about $6.3 billion. The analyst points out that many devoted supporters of Polkadot have sold off their holdings, especially as newer projects with superior technology have emerged.
Polkadot 2.0 Brings Little Hope
Despite these challenges, the analyst highlights the upcoming Polkadot 2.0 as a beacon of hope. They intend to delve into the specifics of Polkadot and its potential impact on the price of DOT, generating cautious optimism among investors.
Polkadot is characterized as a layer-zero chain, which serves as a foundational infrastructure for other chains to build upon. The main architect behind Polkadot, Dr. Gavin Wood, is also recognized as one of Ethereum’s co-founders, adding credibility to the project.
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Polkadot is particularly noted for its parachains, where projects can bid for two-year slots. This bidding process has become costly, requiring projects to lock up substantial amounts of DOT.
The analyst explains that crowdfunding through auctions allowed supporters to temporarily lock their DOT in exchange for potential rewards after the auction period. Initially, projects like Aala Network won auctions with bids of 32 million DOT, but less than a year later, the winning bids had dropped dramatically.
Technical Features of Polkadot 2.0
Altcoin Buzz outlines several key technical improvements in Polkadot 2.0:
Asynchronous Backing: This feature aims to enhance throughput times, reducing block times from 12 seconds to 6 seconds.Agile Core Time: This enhancement increases agility in the network, allowing for fractionalized core times on various marketplaces.Elastic Scaling: This allows projects to lease additional resources dynamically as needed.User Experience EnhancementsPolkadot has also upgraded its website, messaging framework, and overall visual identity to improve user experience.
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The analyst emphasizes Polkadot’s robust on-chain governance system, which is community-driven, with over 1,000 proposals made. They highlight the Nakamoto coefficient of 134, indicating a strong level of decentralization compared to competitors.
Jam: The New Layer Zero
Looking beyond Polkadot 2.0, the analyst mentions the introduction of Jam, which will replace the current relay chain as Polkadot’s layer zero chain.
The analyst observes that the crypto landscape is highly dynamic. While Polkadot remains a resilient project, it faces competition from new chains like Sui, Aptos, and Sei, which offer arguably better technology.
The analyst expresses a moderately optimistic outlook for Polkadot 2.0, suggesting that it could potentially reach its previous all-time high of $55 in a favorable market environment. However, they remain skeptical about Polkadot reclaiming a spot in the top 10 cryptocurrencies, reflecting a blend of optimism and caution regarding its future.
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The post Why Polkadot (DOT) May Never Return to Top 10 Cryptos Despite Upcoming Upgrades appeared first on CaptainAltcoin.
