In the letter
- Polkadot is very popular among developers and retail investors in China.
- The community support, especially from the Web3 Foundation, is particularly strong.
- To some extent, it follows a similar course as EOS.
It’s no secret that in China, resembles a newer, better one , the public blockchain that captured the Chinese crypto ecosystem in 2018.
Both projects have inspiring foreign – especially Caucasian – leaders who frequently attend China’s blockchain conferences and cocktail parties. (I don’t want to sound racist, but the fact that they are white plays a big part. Some Chinese Ponzi scammers have actually hired white actors during their road shows to deceive retail buyers.)
EOS and Polkadot are backed by Chinese capitalists who spread the Ethereum killer narrative on crypto wechat whenever they can. These capitalists, especially stock exchanges like Binance, Huobi, and MXCCome with a war chest to lure entrepreneurs into the Polkadot ecosystem. Both projects have met with great interest from Chinese retailers, but are far less known abroad.
Despite the perceived similarities between the two projects, Polkadot has developed its own narrative and community. These weeks there bing explores the rise of polkadot and how this reflects the state of crypto in China.
The construction of Rome takes more than a day
Obvious is Polkadot, whose selling pitch as the blockchain of blockchains is big everywhere right now, having recently flipped XRP to become the fourth largest cryptocurrency by market cap.
No project can win China without spending time and money on blockchain conferences and road shows. And Polkadot perfected this game. In addition to being based in the Shanghai area, its founder, Gavin Wood, has built a community of influencers, investors, developers, marketers, and speculators. They believe in Polkadot’s technological vision, his monetary vision, or both.
Perhaps more importantly, Polkadot got a lot of developers to give up Ethereum, which Wood co-founded, and build on its blockchain instead. A report from Runaway companies shows that in the twelve months to May 2020, Polkadot saw monthly active developers increase by 44%, while Bitcoin and Ethereum saw a slight decrease.
Chinese developers are particularly active in the polkadot community. Based on Web3’s recent announcement among the near 200 grant recipients 20% of the recipients come from china.
For example, Marvin Tong, Founder and CEO of Phala Network, a substrate-based confidential blockchain for smart contracts, told me that in his original quest for privacy for the blockchain world, he examined EOS, Ethereum Layer2, Cosmos and Polkadot.
“We chose Polkadot instead because we believe the technology is the most advanced and I think we made the right decision. More importantly, substrate is an important tool. This allows us to reduce repetitive blockchain development work, ”said Tong. (Substrate is a framework that developers can use to create blockchains.)
It’s too early to tell if Polkadot is more advanced than other blockchains. Data show that at its peak polkadot processes 12,619 transactions in one dayCompared to Ethereum’s average of 1.1 million per day, this shows that the tech race is not over yet. (Even in January 2017, when Ether was priced around $ 10, the network was averaging 50,000 transactions per day – more than four times higher than Polkadot’s best day to date.)
But in China at least, there is something other than technology that sets Polkadot apart. “The Web3 Foundation, Parity and Gavin are very powerful together,” Tong told me. “No other foundation can be so generous and strategic in the selection of scholarship holders. They also provide great support in marketing our projects. ”
This feeling of being taken care of hits a home run.
After all, entrepreneurs need not only initial capital but also attention and cultivation. Ethereum and many other blockchains have taken a neutral but distant approach to the Chinese market, partly because of the language barrier and partly because of a lack of understanding. Polkadot manages to penetrate the Chinese market like a well-oiled marketing machine. it also shows that they care.
Cynics might argue that this “care” is based on a desire to make their mark. Maybe. Given that the crypto world is based on “consensus,” anything that can make people believe in a narrative is a win.
Missed DeFi, gotta catch the $ DOT
Polkadot also occupies a narrative position. China was late for the DeFi Yield Farming Festival last summer. The country didn’t wake up until September, shocked by the unstoppable power of the Degens’ 5-digit APY farming, and wondered, “What’s the next hot thing?”
Chinese retailers moving to Polkadot are fulfilling their FOMO while providing convenience.
First, it has a legitimate founder portrayed as the actual developer behind Ethereum. Wood’s narrative of Ethereum as a toy versus Polkdadot as a real thing is resonating with many in China. After all, who wouldn’t choose a senior engineer with decades of programming experience over against you? 26 year old “child? ”
Second, Polkadot introduced an auction game similar to that of EOS. In both projects, investors are asked to place tokens in order to gain influence. For EOS, users are deploying tokens to become a super node. For Polkadot, users use $ DOT to win a parachute.
The Chinese crypto circle went through a wild EOS super node race back in 2018, so it sounds good to have another race in 2021. The winning strategy of such a game is to raise enough capital so that your knot or parachute takes its final place. How do I raise capital? Good old marketing and community shillings. These are well-known tactics that Chinese capitalists can play with their eyes closed.
And finally, DeFi happened. As Ethereum sets out to find its true product market viability, Polkadot also benefits from that narrative win as it can simply claim that DeFi works better it is Ecosystem instead of the congested Ethereum network. Indeed Binance established A $ 10 million fund that encourages developers to exclusively build DeFi projects around the Polkadot ecosystem. Two birds, one stone.
Chinese home-grown projects like Acala It also managed to raise capital from well-known investors, although Polkadot’s version of credit and DEX products were being developed. If Ethereum DeFi continues to innovate, Polkadot can also preserve its DeFi ecosystem for some time.
The game is still running
The rise of polkadot in China should come as no surprise. It shows the perfect playbook on how foreign projects can be successful in China: cult founders, tireless marketing and a receptive audience waiting for the next crypto story.
But we mustn’t forget one thing: It’s all about the community because the community creates a consensus. Polkadot has built a serious consensus in China as the most credible Ethereum it wants to be. This narrative was reinforced by the increasing interest of international actors from investors such as Polychain, who a Polkadot focused fund in October 2019.
However, can it escape the same rise and fall fate as the other Ethereum wanna-be, EOS? It’s early days and some Polkadot projects, like Mantra, a MakerDAO copycat that claims to be the first DeFi project on Polkadot, will be received very bad press in China.
But the game is far from over. As long as the community continues to grow and entrepreneurs build on Polkadot, the platform will continue to be the favorite kid of the Chinese crypto circle.