Speckle (CCC:DOT-USD) is now the eighth largest crypto currency according to Coinmarketcap. Its market cap was $ 36.55 billion at $ 37.73 shortly after the market closed on September 14. It was only a month and a half ago, at the end of July, when I last wrote about crypto, that it was the ninth largest crypto.
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DOT tokens are clearly gaining popularity, which is why Polkadot tokens are increasing in price. For example, from a recent low on July 19 of $ 10.98 per DOT token, it’s now up 244% over the past month and a half. Additionally, Polkadot is up 370% year-to-date from $ 8.07 at the end of last year.
One reason for this could be Polkadot’s ability to enable smaller cryptos. Polkadot acts as a bridge across all other blockchains, including private, public, and permissionless networks. It is like “how HTML allows sites, browsers, and servers to interact with each other”.
Polkadot: Make DeFi better
Polkadot was founded in 2017 by one of the founders of. founded ether (CCC:ETH-USD), Dr. Gavin Wood, a British computer scientist. He built Polkadot to enable developers to create their own blockchain that can communicate with other ledgers and form a system of parachains. Polkadot doesn’t support smart contracts on its main block chain. But it can support small smart contract apps on its parachain system.
One of the functions he wants to make more efficient is Defi (decentralized finance). Polkadot is gaining ground with smart contracts because of its ease of use and scalability. For example, a Defi app called Acala uses the DOT blockchain network. Acala signed a contract with a New York-based bank called Current. They focus on the “unbanked” who do not have access to traditional banking products.
This is not to say that Polkadot is trying to compete against Ethereum and its popular Ethereum Virtual Machine (EVM). EVM is the software in Ethereum’s blockchain that enables smart contract bytecode to be executed. Gavin Wood is developing a system of interconnected parachains that will support the implementation of Ethereum and other smart crypto contracts.
The founders of Polkadot want to drive innovation and efficiency in the development of decentralized applications and services. If Polkadot succeeds in its efforts, DOT could go up even further next year.
Institutions behind DOT crypto
Recently, a Chinese fund, LD Capital, announced that it was investing $ 10 million in a new Polkadot Ecosystem Fund. It is designed to provide capital support, development advice, community building, and marketing to early stage founders who believe in building Polkadot’s blockchain. LD Capital is one of the oldest venture capital firms in China focusing on blockchain technology.
Earlier this year, a crypto staking company, Moonstake, partnered with Singapore-based RockX to “accelerate the proliferation of polkadot in the blockchain industry through staking.” Moonstake chose RockX because of its expertise in the Polkadot blockchain. RockX aims to develop the polkadot ecosystem. In addition to running its own Polkadot node, it launched a five-year $ 20 investment program in September.
Where are investors staying in Polkadot
An important feature of DOT that has helped make it more attractive is its authentication system. Polkadot does not use a proof of work that other mining cryptos, including Ethereum, are currently using. Polkadot has a proof-of-stake system. Here the nominators support the validators with their own money (ie DOT tokens) as a sign of trust in the good behavior of the supported validator.
This system could be a subtle reason why DOT tokens have gone up, along with Polkadot’s increasing foray into defi and smart contracts. Investors may want to take part, even though crypto has already risen a good bit. This doesn’t mean things are looking up, especially if the founders of Polkadot are successful in their defi focus.
At the time of writing, Mark R. Hake was long in Ethereum, but no other security mentioned in the article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s posting guidelines.
Mark Hake writes about personal finances mrhake.medium.com and runs the Guide to Total Yield Value which you can check here.