No Comments
The Polkadot (DOT) community is charged with anticipation for the upcoming Polkadot 2.0 update – but what does this mean for DOT price?
This is why 7 years ago the founder of Polkadot (DOT) and co-founder of Ethereum Dr. Gavin Wood coined the term Web 3.0 — the next logical step in internet technology.
With that backdrop, Wood’s Layer-1 smart contract platform Polkadot aims to become the Web 3.0 poster boy and a lynchpin of the entire blockchain ecosystem through an innovative parachain model.
(DOTUSDT)
So far this year, DOT is up +15.31% to $9.56. That sounds nice until you compare it with other top crypto assets, indeed, against the backdrop of a broader market resurgence, which has already seen Bitcoin climb +67.85% YTD, DOT has been trailing behind the rest of the market.
Yet, ever resilient, Polkadot doesn’t plan to get left in the dust and with their Polkadot 2.0 update slated for this year, a lot can happen.
Let’s get into what exactly Polkadot 2.0 is, and whether it will break out during the 2024 bull market.
What is Polkadot (DOT)?
Polkadot (DOT) is a layer-1 solution aiming to become the most interoperable cryptocurrency and usher in a new internet revolution called Web 3.0, rather than being an “Ethereum Killer” like Cardano or Solana.
The key difference with Polkadot is that it connects multiple blockchains into a single network, it does this via a main blockchain called a relay chain, which integrates user-created blockchains called parachains. As per Kraken’s definition —
Parachains can be customized for any number of uses and feed into the main blockchain, so that parachain transactions benefit from the same security of the main chain.
Polkadot works by auctioning off relay chains to allow various protocols to compete for network space, and as each parachain on the network has a specific function, this creates endless possibilities.
For instance, one can act as a decentralized finance hub, another as a platform for stablecoin transactions, and even one for integrating an eco-friendly energy network.
Here’s Why Polkadot 2.0 Update Could Change Everything
Forget everything you know about Polkadot because Polkadot 2.0 revolutionizes it, Polkadot 2.0 is introducing the Agile Coretime system, replacing the auction-based model.
This new system will enable parachains to adjust resource procurement based on actual needs and user activity through flexible acquisition of what they call “core time” and block space.
Polkadot 2.0 also emphasizes creating an app-centric base layer characterized by shared security, interoperability, high chain customization, improved scalability, and simplified app-chain onboarding processes.
The Potential Impact of Polkadot 2.0 on DOT Price
Expert crypto analyst Michaël van de Poppe suggested that ongoing developments inside Polkadot coupled with the anticipation for Polkadot 2.0, could send DOT to the moon – with a current overhead price target at $17.
Here are some other key metrics for DOT price:
Total Value Locked (TVL) Growth: The TVL has seen a notable increase on Polkadot, signifying a robust level of asset staking and trust in the platform.
Social Metrics and Market Sentiment: Interest in DOT has declined lately despite an initial rise in social dominance. This could indicate a temporary period of investor disinterest, offering buying opportunities before significant price movements.
Market Dynamics: The funding rate for DOT has remained positive, although it has decreased compared to two weeks prior. This suggests that while perpetual sellers may be losing confidence, there is strong buying pressure from spot traders, hinting at a bullish outlook for DOT in the near term.
The Bottom Line: Polkadot 2.0 Could Catalyze Gains
DOT isn’t the trendiest coin to hold, but if it continues to develop quietly, it could regain its former glory – especially with the exciting possibilities expected to be deployed this year. Furthermore, with the steadfast stewardship of Gavin Woods, Ethereum Co-Founder and developer of Solidity – it’s not wise to rule out Polkadot just yet.
Explore: BakerySwap PUMP Raises $280M in Biggest-Ever Meme Coin Presale – Could New Dogecoin Be Next?
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
