With much of the Polkadot community blocking the DOT amidst the ecosystem’s first batch of parachain rental auctions, many participants are looking to contribute through projects that offer innovative products with staking liquidity.
Ethereum pioneered smart contract functionality with its mainnet launch in 2015, however, its developers quickly realized that greater scalability was needed to fulfill its goal of becoming the world’s decentralized computer.
Although Ethereum has pledged to soon deliver a second version of the protocol validated by proof of stake (PoS) consensus to achieve scalability, the long-awaited “Ethereum 2.0” updates have only been partially implemented today. The launch is expected to end around the second quarter, with the merger of the existing Ethereum network and its recently launched proof of participation (PoS) beacon network.
In early 2021, Ethereum’s lead developer Vitalik Buterin announced that fragmentation was further delayed in the project’s roadmap until after the chain merge, stating that Ethereum’s growing Layer 2 ecosystem will provide sufficient scalability in the interim.
Gavin Wood, one of Ethereum’s eight co-founders, walked away from the project in 2016, citing dissatisfaction with the project’s shift from seeking to scale through a fragmented, decentralized ecosystem. In 2017, Ethereum co-founder Gavin Wood launched the Web3 Foundation and began working on Polkadot in an attempt to realize his own vision of an Ethereum fragmented stake trial.
Since launching in May 2020, only Polkadot’s central relay chain is active. The relay chain exclusively supports a small variety of transaction types, including DOT transfers and staking functions, and does not support smart contracts. Advanced and specialized computing will be supported by up to 100 fragments of “parachain” operating in parallel with the retransmission current.
Upcoming Polkadot auctions allocate parachain slots to projects built on top of the Polkadot network, fulfilling their vision of a scalable, fragmented blockchain ecosystem. Without parachains, the Polkadot network is unable to host DeFi protocols.
Without parachains, the Polkadot network is unable to host DeFi protocols.
Parachains are allocated to projects built in Polkadot through leases, where they compete with each other, pledging to guarantee large sums of DOT for terms of three months to a maximum of two years.
The model gave rise to a new token-issuing model dubbed the Parachain Lease Offer (PLO), where a project seeking to secure a crowdsourced parachain slot, the DOT proposed to bid on its community’s auctions.
batches of five
PLO participants will receive the native and governance tokens of major projects built within the Polkadot ecosystem, and will receive their DOT back if the bid for that project is unsuccessful or at the end of the parachain rental period if they secure a slot.
The auctions are conducted in lots of five, each with a one-week interval, and the auctions will be perpetual as the lease periods expire and become available for re-auction.
Many projects have innovated liquid staking (Mint) products that will allow PLO participants to contribute without losing the ability to manage the liquidity represented by their contributed DOT, including platforms that facilitate access to a wide range of parachain auctions through a single interface.
LcDOT of the Acala network
Acala Network, the self-styled “DeFi hub of Polkadot,” will issue Liquid Crowdloan DOT (lcDOT) tokens to participants who contribute to their two-year crowdloan directly at a ratio of 1:1 to the number of blocked DOTs.
During the lease of the Acala parachain, PLO participants will be able to use lcDOT as collateral to mint Acala’s aUSD establecoin, with Acala’s automated market maker (AMM) DEX also configured to support lcDOT.
Although the token is freely traded on Acala DEX and is not indexed to the DOT price, the token will be redeemable in exchange for the DOT on a 1:1 basis once the lease period has expired.
Parallel Fi CDOT
Many of the other liquid collective loan products offered by platforms make it easy to access a wide variety of parachain auctions through a single interface.
Parallel Finance is among the most popular platforms that aggregate access to multiple PLOs and offer net derivatives to taxpayers.
Participants using Parallel will receive cDOT tokens that represent the underlying DOT that was blocked during the rental period. The protocol also rewards you with four units of your TO governance token per DOT contributed through your platform.
Once the Parallel parachain is active, cDOT holders will also be able to use the project money market and AMM to generate income, provide liquidity and trade the derivative token. The cDOT can also be redeemed by the underlying staked DOT once the lease has ended.
Equilibrium is also offering a net participation token that represents the underlying contributions made through its auction platform in the form of its xDOT tokens.
xDOT will initially be available for coinage in Equilibrium’s Kusama deployment Genshiro, where users will be able to earn revenue on the token through the Genshiro liquidity pool, capable of using the token to secure borrowings on a variety of assets, including stablecoins .
Many of the features currently enabled in Genshiro will air on Equilibrium once the project has secured a parachain slot – at that point xDOT holders will be able to claim their tokens on Polkadot’s native platform or connect them from Kusama.
Bifrost SALP Tokens
Bifrost’s Slot Auction Liquidity Protocol (SALP) will also facilitate access to a wide range of PLOs through a decentralized application.
Unlike other platforms, Bifrost users will receive two derivatives – Voucher Slot DOT (vsDOT) and Voucher Slot Bond (vsBond) tokens.
Bifrost describes vsDOT as fungible tokens that represent the underlying DOT contributions and also accumulate stake rewards, while vsBOND tokens represent the reward parameters specific to the auctions a user participates in – such as rental duration and expiration date.
The two tokens allow Bifrost to leverage fungibility to aggregate liquidity by representing DOT contributions using the vsDOT token, while also using the non-fungible vsBOND tokens to capture the unique properties of each PLO it supports.
vsDOT tokens can be traded at any time on liquidity pools on Bifrost or on third party platforms. Describing vsBOND as a “equity token”, Bifrost bets on the derivative “does not require highly liquid transactions” and can be traded using pending orders on its vsBOND market.
Both tokens are required to redeem the underlying contributed point once a parachain lease expires.
Warning: this article is for informational purposes only, it does not constitute investment advice or an offer to invest. CriptoFácil is not responsible for any content, products or services mentioned in this article.
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Polkadot price analysis: DOT to retest support at $27.2, as price steps down to $28.7
- Polkadot price analysis is bearish today.
- Resistance for DOT/USD is present at $33.6.
- Support for DOT/USD is present at $27.2.
The Polkadot price analysis is bearish today as a further decrease in price has been observed. The price has been devalued till $28.7 today as well after encountering extreme loss yesterday when the coin crashed from $33.7 down to $29.3 while swinging as low as $27 at a time. The DOT/USD has been on a downtrend since 5th November, and today it completed a month of being on the decline, setting a lower low for the last two months. Currently, the price had come below the consolidation level of the month of September before it started its journey towards the higher side.
DOT/USD 1-day price chart: Downside continues as market pressure still persists
The one-day Polkadot price analysis is showing a bearish trend for today as the price has been depreciated today as well. The bearish momentum has been continuing over the past few weeks, and today, the trend is the same. The price has been lowered to the $28.7 level after the latest drop. The moving average indicator (MA) is present at the $34.8 mark above the price level.
The Relative Strength Index (RSI) is present at index 28 in the oversold region, indicating unfavorable circumstances for DOT. The volatility has been on the higher side for a long time, and the situation is the same volatility-wise. The upper Bollinger band value is $45, whereas the lower Bollinger band value is $29, and the price is trading below the lower value. The Bollinger bands are maintaining an average of $37.
Polkadot price analysis: Recent developments and further technical indications
Yesterday’s drop in price has been quite damaging to the market value of DOT. The current price is still below the moving average, whose value is present at the $29 mark on the 4-hour chart. The price is going up once again as a bullish trend has been observed during the last four hours. Although the price recovered earlier for a brief period yesterday but decreased again, and the most recent trend is going in favor of bulls.
The Bollinger bands indicator average has been maintained at $32, whereas the upper Bollinger band is showing a $39 value, and the lower band is showing a $25 value, representing high volatility range for DOT. The RSI curve is floating just at the borderline of the neutral and oversold zone at index 30.8, heading slightly up due to the last green candlestick, but still, the pressure seems to be there.
The price has been trading towards the downward direction if we see the DOT’S progress for the past month. This is why the technical indicators chart for DOT/USD is indicating a bearish trend, with only one indicator on buying position, eight indicators on neutral position, and 16 indicators on selling position.
Polkadot price analysis conclusion
The Polkadot price analysis report shows a downward movement in price has been observed during the last 24-hours, which is a continuation of the bearish trend. The price has dropped down to the $28.7 level because of the constant downtrend that has been following for the past few days and took a steep plunge yesterday. The price might go lower in the coming hours as the last candlestick on the four hours price chart might also turn red, as the momentum is not there for bulls, and the RSI is indicating the same.
Polkadot Price Analysis: DOT finds support at $24.35 after heavy selloff overnight
- Polkadot price analysis is bullish today.
- DOT/USD dropped over 35 percent since the last high.
- Support was found at $24.35 this morning.
Polkadot price analysis is bullish today as we expect recovery to follow after a quick reaction higher from the newly found swing low. Therefore, we expect DOT/USD to move higher later today and look to retest previous support as resistance at $33.
The crypto market overall saw strong selling pressure over the last 24 hours. The market leader, Bitcoin, declined by 16.54 percent, while Ethereum 13.81 percent. Meanwhile, the rest of the top altcoins follow with an even bigger loss.
Polkadot price movement in the last 24 hours: Polkadot continues to decline, spikes below $25
DOT/USD traded in a range of $24.72 – $36.49, indicating strong volatility over the last 24 hours. Trading volume has spiked by 207 percent, totaling $2.83 billion. Meanwhile, the total market cap trades around $27.83 billion, ranking the coin in 9th place overall.
DOT/USD 4-hour chart: DOT starts to react higher
On the 4-hour chart, we can see the Polkadot price action finding strong support at $24.35 this morning, likely leading to swift recovery over the next 24 hours.
Polkadot price has seen a steady decline over the past weeks. After the previous low at $33 was reached on the 28th of November, DOT/USD slowly retraced higher.
Another lower high was set around $39, leading to a slow decline again during the first days of December. After some consolidation on Thursday, DOT started to rapidly move lower Yesterday.
The previous low at $33 was quickly reached and clearly broken, opening the way for a lot more downside. Overnight, strong selling pressure continued, taking the Polkadot price to a new low at $24.35. However, buying pressure has quickly returned since, likely leading DOT/USD to recover most of the loss over the weekend.
Polkadot Price Analysis: Conclusion
Polkadot price analysis is bullish today as we saw a strong decline end with a quick rejection from the $24.35 mark. Therefore, we expect DOT/USD to regain the loss and move towards the previous low around $33 next.
While waiting for Polkadot to move further, see our articles on the Best Crypto Wallet 2021, Decred Wallet, and Ripple vs SEC.
Solana (SOL) vs Polkadot (DOT): Features and Perspectives
Decentralized applications (dApps) have found their application in different directions: online games and virtual casinos to financial projects. A common problem for developers and users is the speed of the network bandwidth. The most common blockchain for dApps is Ethereum. However, the increased demand is overwhelming the platform. The race for performance leads to the emergence of new projects. Among such projects, Solana and Polkadot are the most popular. Let’s compare these projects and Polkadot with the DOT token vs. Solana with the SOL token.
Distinguishing Features of Solana and Polkadot
Solana cryptocurrency has many features that make it stand out among hundreds of other digital assets:
- The architecture is theoretically capable of processing up to 710,000 transactions per second. So far, a result of 60,000 operations has been achieved. But even this figure makes it one of the fastest videos to use.
- The network is designed so that it can easily handle growing workloads. Several technological innovations, including the original Proof-of-History protocol, make this platform a flexible and highly scalable tool.
- The project has made savings in audience size. In 2021, several hundred thousand users will be using the Solana network in November. Thanks to this, it was possible to maintain a low price for transactions within the system and in decentralized applications on the site’s platform.
- A high degree of compatibility is achieved by eliminating the need for users to deal with shards or second-level systems. Solana can interact with other crypto platforms as well.
Polkadot features that make this project stand out in the cryptocurrency market:
- Fast transaction processing by distributing operations across parallel parachains.
- It is based on a completely decentralized network—user control.
- Simplified creation and connection of DeFi services.
- High interoperability. It is possible to interact with all parachains that are included in the network. Free transfer of assets and any data is carried out.
- No need to hard forks to implement updates.
- Providing complete security for all blockchain projects connected to the network.
The Future and Prospects of SOL and DOT
Serious partners believe in the Solana project. For example, in early June 2021, Solana raised more than $ 314 million through a private token sale. Significant investments followed from Andreessen Horowitz. This firm once invested in other well-known projects (Skype, Facebook and Twitter).
Time will help to understand the platform’s applicability. As of July 2021, the system works in test mode, which does not cause failures. For example, the incorrect operation of the blockchain eight months ago led to the stoppage of all services for 6 hours.
Polkadot is a promising digital currency that has not yet reached its maximum price because the project is under active development. In 2021, according to the Roadmap, ideas and services will be implemented that will positively affect the course. Large companies and developers will start buying tokens for free “slots” on parachains to become part of the decentralized ecosystem. This can lead to the growth of the system.
The outlook for dot vs solana depends on the amount of blockchain used. The number of their partners is growing. But so far, the projects remain at the level of a startup with good potential.