Polkadot (DOT) is currently the 11th largest cryptocurrency in the world. However, Polkadot’s $7.19 billion market cap puts it in the middle of major cryptocurrencies. Altcoin has experienced some negative developments recently. Therefore, it is not easy to make a real DOT price estimation. Knowing what developers are currently working on to be able to predictthere is benefit. Only then can investors start making a DOT price claim that can guide their investment decisions.
Polkadot promises a new kind of blockchain
The Web3 Foundation is a Swiss organization that funds R&D groups working to build the infrastructure to support web3. Its flagship project is Polkadot, launched in 2017. One of the founding partners, Dr. Gavin Wood was also involved in the creation of Ethereum. The project aims to create a new blockchain network made of private subchains called parachain. The creators of Polkadot describe parachains as “advanced, next-generation layer-1 blockchains that transcend the limitations of legacy networks.” Specialized and interconnected parachains form a diverse ecosystem of independent platforms, communities and economies that enhance the way we relate online.”
All of Polkadot’s interconnected parachains are linked to a single underlying platform called the Relay Chain. Developers can use Polkadot for a custom-built blockchain for their applications or services in minutes. When custom-made blockchains – or parachains – are connected to the Relay Chain, developers can connect and work faithfully with all other parachains in the Polkadot network. Polkadot provides cross-blockchain transfer of any asset or data, not just tokens. Each chain manages itself independently, but follows one-to-one security protocols. This framework gives Polkadot scalability, makes its prices low price and network power efficient.
DOT serves three primary purposes
As Koindeks.com also reported, DOT is Polkadot’s native token and is used to facilitate the basic functions of the platform. It also serves three basic purposes:
- Network governance: DOT owners have full control over the protocol, including managing exceptional events such as fixes and upgrades, setting network prices and auction dynamics, timing of new chains. In traditional blockchains, this kind of governance is purely the exclusive right of miners.
- Staking: DOT is a permissive system to keep game theory staking participants honest. Good actors get DOT and bad actors lose their stake.
- Bonding: DOT facilitates a proof-of-stake system that connects tokens to create new parachains and removes connected tokens to remove non-useful or outdated parachains.
Now that you know what it is, you can take a look at the Polkadot price assumptions.
Polkadot price predictions
Like many cryptocurrencies, the DOT peaked in November 2021 when it surpassed $54. Again, like many other altcoins, it soon surrendered to the crypto winter. Today, its price remains even under $7. This trend does not bode well to name DOT’s prospects over the next three years. But this trajectory may be changing. Daria Morgen predicted that the DOT would trade at $6.62 in September. This claim seems close to being fulfilled for now… Analyst consensus puts the DOT higher than $7.23 in December by year-end. This translates to a 19 percent return on investment. Looking at the claims year by year:
- 2023- Changelly’s projection for 2023 predicts DOT to hit double digits. Assumptions are on the side that it will process at an average of $10.14 per year for an 89 percent ROI.
- 2024- Projection is that DOT can deliver a 178 percent ROI. According to the assumptions, the DOT will process at an average of $ 15.11.
- 2025- Estimates are on the side that DOT will process in 2025 at an average price of $22.39.
Changelly’s long-term Polkadot price prediction is that the DOT will trade at an average of $103.73 in 2029. However, the DOT traded over $54 less than a year ago. So $100 over seven years is not a particularly distant projection.
Is Polkadot worth investing in?
If Polkadot emerges as the winner of the web3 creation race, Trading Education predicts DOT will reach $515.80 by 2030. This represents an increase of 837.81 percent from the current high of the DOT. Here, too, there are so many variables and so many unknowns that the competition fueled by up to $500 at the end of the decade is little more than educated guesswork.
An investment in DOT is an investment in the Polkadot network. Rather than relying on remote price claims, they can be more adequately served by valuing their belief in the concept of interconnected parachains as the building blocks of web3. It is a complex concept that requires valuable research, but anecdotally, there is evidence that at least some of Polkadot’s promises are being fulfilled.
New staking protocol and developer activity boosts optimism
One of the most promising developments is Polkadot’s expanding role in the DeFi space. On September 18, a Polkadot parachain named Bifrost Finance tweeted some numbers that sparked renewed interest in DOT. Polkadot’s new staking liquidity protocol, called vDOT, minted 121,551 tokens in the first 30 hours after launch. TVM – total monetary value – with a TVM of $840,000, the combined APR on Bitfrost’s vDOT assets increased 60 percent. Bifrost is of course Polkadot’s golden child, but the chain is not alone in accelerating the progress of the parachain. Just the same day, Polkadot Insider said that Polkadot developers have absolutely crushed the competition. At the same time, he tweeted that it topped the blockchain development activity charts for that week.
Polkadot developers scored 2,658.57, compared to 177.07 for Ethereum #2 and 99.07 for Solana #3. Behind Polkadot were Algorand, Bitcoin, Near, Avalanche, Tron, Phantom and BNB. Cryptocurrency writer Suzuki Shillsalot predicts that these developments will soon push the DOT back to double digits.
Strong winds facing Polkadot should not be ignored
Polkadot’s recent network successes are impressive, but there are points that should not be overlooked when investing in DOT. The crypto winter has been brutal for everyone. However, the DOT proved particularly vulnerable during the ongoing bear market. For example, on Sept. 22, when the DOT dropped to $6.25, crypto writer Kanav Jain’s “3. It posted a massive 12.5 percent weekly loss, which it said was “a big red alert for investors feeling the heat of the market for most of the quarter.”
Polkadot is an exciting and appropriately funded project started by cryptocurrency pioneers. This and its native token DOT have the potential to make the promise of web3 a reality. But he is not alone. Before investing in DOT, you should learn as much as possible about the Polkadot project. However, you should also research its key competitors.