The crypto market positions flow back and forth between bitcoin and altcoins, right now money seems to be moving more into Bitcoin. It’s however just a matter of time before altcoins market greed would put it in the green.
Polkadot is one of the big altcoins yet to explode in price despite the upside move in bitcoin price. We could expect to see a massive spike in DOT as the market moves around. In this article, we discuss; what is Polkadot? what has the project been up to? and the upcoming milestone that will make DOT go to the moon.
Polkadot was founded in 2016 by Dr. Gavin Wood, he was one of the Ethereum Co-founders. He served as the Ethereum foundation CTO until late 2015. Polkadot was built by parity technology, a full profit software company based in the UK. Polkadot development is coordinated by the web3 foundation, a nonprofit based in Switzerland.
The first Polkadot ICO was hosted by them in 2017 which raised a total of $145 million worth in Eth. Over $90 million dollars of this Eth got locked in the wallet due to a bug in the wallet smart contract. To get over these losses, the web3 foundation hosted another Polkadot ICO in 2019 which was believed to have gathered over $100 million dollars.
Polkadot’s main net went live in spring 2020, DOT transfers got enabled in 2020. Polkadot uses a unique proof of stake mechanism called “nominator proof of stake mechanism” the summary of how this works is that DOT holders nominate validators by delegating their DOT to them. Polkadot validators secure the relay chain which is on the Polkadot central blockchain.
The relay chain according to Dr. Gavin can process over 1000 transactions per second, this is quite good by blockchain standards. The relay chain is not smart contract compatible, it only supports DOT transactions related to; DOT transfers, staking, governance, and parachain slot auctions. Parachains are blockchains that plug in to the relay chain, in contrast to the relay chain parachains are smart contract compatible and host all Polkadot’s dApps.
What’s Been Happening with Polkadot?
In January grayscale filed for a Polkadot trust with the SEC, unfortunately, it has yet to materialize. Another Polkadot trust did manage to get approval in April-Ospreys trust. In April, Coinbase announced that it was investing heavily into select projects that were built on Polkadot. In June, an Asian venture capitalist firm pumped $30 million dollars into the Polkadot ecosystem.
The biggest Polkadot event happened in June, this was Polkadot’s listing on Coinbase pro. This has been perceived by many to be long overdue. In September, Polkadot and Solana Exchange Traded Note (ETN) created by VanEck started trading on the German stock market.
Despite all of these big events and pump actions, it is surprising to see that the price of DOT hasn’t moved significantly. DOT is actually one of the “blue chip” cryptocurrencies to set an all-time high. This begs the big question “why is DOT not pumping?”. The answer to this seems to be none other than China. Chinese were amongst the biggest holders of DOT but with the recent massive crackdown on crypto mining and the ban. Many have been forced to sell their crypto.
The Way Forward for Polkadot?
Polkadot’s parachain slot auction is one major milestone that is perceived to send DOT to a new all-time high. DOT price has been seen to be climbing high after a vote by its board of directors authorized the addition of parachain auctions to its protocol. On its open-source governance platform Polkassembly, the community recently passed a motion authorizing two rounds of parachain auctions for the network starting in November.
According to CoinGecko, the permission sparked a rally that saw DOT increase 26 percent in one day, moving from $32.21 to $42.16. Users bid crypto assets over a fixed period of time to choose which network will acquire a parachain slot, a specialized blockchain that verifies transactional accuracy. The decision to offer parachain auctions to Polkadot follows the successful launch of parachains on DOT’s canary network, Kusama (KSM). A canary network is a blockchain that is used to test features that will be implemented on the main net in the future.
Rather than being onboarded immediately after each auction, the first five projects to win a Polkadot auction would be onboarded on December 15, 2021. Unlike Kusama, each project would have a 96-week lease duration. A public referendum is now being conducted on the proposal, and the first batch of five auctions will take place, with one new sale taking place each week.
After that, there will be a second round of six auctions, with one new sale every two weeks. For lease period seven, which begins March 9, 2022, the second set of six auctions would be onboarded. According to Polkadot executives, the rolling weekly auction procedure will begin on November 11 and will continue until the number of parachains on Polkadot does not exceed 75% of those on Kusama.