The launch of Polkadot made a splash in the cryptocurrency market. Today it is one of the most talked-about blockchain projects, which some have already called the “killer” of Ethereum. So it is or not – we’ll see. However, the potential for DOT is huge.
In simply a couple of months, he was capable to enter the top five largest crypto assets. At the time of writing, the coin is trading at $ 25,111. The market cap is USD 4,573,761,437. In this article, we will talk in detail about the key features of Polkadot, its advantages and disadvantages, as well as where to buy and store such coins.
What is Polkadot?
Polkadot is a decentralized Web3 platform that integrates state and individual blockchains and other high-tech solutions. This ecosystem is designed to facilitate the creation, deployment, and connection of various decentralized settings and applicability. Within the Polkadot relay chain, confident blockchains can change activities as properly as information. Note that in August 2020, DOT supported Binance, which was an additional impetus to the growth of the popularity and value of this coin.
Among the main features of the Polkadot cryptocurrency stage are:
- cross-chain compatibility, which allows the transfer of assets or data between different blockchains;
- a high level of reliability, which many validators take care of; creating a secure blockchain in just a couple of minutes;
- excellent scalability, transmitted transactions are distributed along parallel chains;
- decentralized management, decision-making takes into account the votes of community members;
- quick adaptation to new conditions, high level of fault tolerance;
- the ability to use the native DOT token to receive dividends, manage and add new protocols.
In addition, the ecosystem has a reward program that allows active participants to receive additional tokens.
Functions of the DOT token: why it is worth investing in this cryptocurrency
In addition to the fact that the DOT cryptocurrency has a great price growth potential, this coin performs the following functions directly in the ecosystem: ecosystem management. Coin owners can vote on changes in the platform. This concerns the determination of web commissions, corrections, and updates; helping to build agreement.
For the stable operation of the ecosystem and operational transactions between blockchains, the help of coin holders is important, that is, staking; adding new sidechains. During the operation of the park chains, a certain amount of DOT is blocked, and after the chain is deleted, they are returned to the owner. Thus, owners of native tokens work as collators, validators, and nominators in making any decisions related to making changes to the custom.
In a few months, Polkadot has formed a large army of fans on YouTube and social media. Participation in the growth of the project of eminent developers, the growing number of blockchain projects in this ecosystem, support for top exchanges – all this predicts great prospects for Polkadot. Thanks to the DeFi boom, DOT managed to catch the “price wave”, its rate continues to grow actively (+ 4% today).
However, some experts emphasize that it is still difficult to say whether the project will have enough endurance to successfully continue its path further. Some analysts say investing in small-cap projects that operate in the Polkadot ecosystem could be more profitable.
Long-term cryptocurrency forecasts are rarely reliable because they cannot account for many factors. To date, Polkadot has existed for less than a year, and more historical data is required to analyze its rate, but the price can be $ 0.469-42.