This is a deep-dive post on Polkadot, its tech, tokenomics, and NEAR future projects.
What is Polkadot?
Polkadot is a network protocol that allows arbitrary data—not just tokens—to be transferred across blockchains.
This means Polkadot is a true multi-chain application environment where things like cross-chain registries and cross-chain computation are possible.
Polkadot can transfer this data across public, open, permissionless blockchains as well as private, permissioned blockchains.
What makes Polkadot better than other blockchains?
First, Polkadot is the "blockchain of blockchains." This means, it is a Layer ZERO chain, whereby other chains are built on top of Polkadot's Relay Chain. Polkadot's innovative tech essentially allows other projects to use Polkadot's network security to secure their blockchain rather than expending resources to configure security (proof of stake; proof of work; etc.) on their own.
Additionally, developers are able to plug-and-play with Substrate, which is Polkadot's "blockchain-building framework that is the distillation of Parity Technologies’ learnings building Ethereum, Bitcoin, and enterprise blockchains." This allows for easy configuration, and seamless upgrades to blockchains with out forking.
Is Polkadot decentralized? How is the team?
Polkadot is lead by Ethereum co-founder, Dr. Gavin Wood. In 2015, Dr. Wood drafted his Yellow Paper detailing his vision for a decentralized multi-chain.
Dr. Wood has been a big proponent of decentralization:
What about the tokenomics?
Current Price: ~$46/DOT
Market Cap: $44,988,355,055
Total DOT issued: 1,128,167,412
Deflationary/Inflationary? Inflationary (~7.9% currently)
CoinMarketCap Rating: B
Why is this a good investment today?
First, as noted above, Polkadot is a L0 blockchain, thus projects compete to obtain Polkadot's security via Auctions. These auctions are for "slots" on the Polkadot network. There are currently 100 slots to be auctioned; and the first 10 have been scheduled. These auctions just started.
Auction 1: Nov. 11, 2021 – Nov. 18, 2021
Auction 2: Nov. 18, 2021 – Nov. 25, 2021
Auction 3: Nov. 25, 2021 – Dec. 2, 2021
Auction 4: Dec. 2, 2021 – Dec. 9, 2021
Auction 5: Dec. 9, 2021 – Dec. 16, 2021
Auction 6: Dec. 23, 2021 – Dec. 30, 2021
Auction 7: Jan. 6, 2022 – Jan. 13, 2022
Auction 8: Jan. 20, 2022 – Jan. 27, 2022
Auction 9: Feb. 3, 2022 – Feb. 10, 2022
Auction 10: Feb. 17, 2022 – Feb. 24, 2022
To participate in these auctions, DOT holders "contribute" their DOT to a "crowdloan" in support of a project. Contributing to a crowdloan will LOCK the user's DOT for the lease period (generally, two years). In exchange for this commitment, DOT holders obtain the currency from the projects they support. After the lease period ends, the DOT is returned to the holders.
Ok, so what makes this exciting?
Good question. Two things, I believe indicate that DOT will skyrocket: the amount already contributed to just the first auction; and rapid user growth.
First, we still have four days left for the first auction, and already 76 million DOT (or 6.75% of the entire circulating supply) has been contributed. This will ONLY continue to grow at a very rapid pace.
Further, just to note, 53.7% of total supply is already locked into staking. No flash crashes likely, as it requires 28 days "cooling off" to remove from staking.
Finally, user growth. The Polkadot User Base is growing RAPIDLY. Here is the chart:
The ecosystem is adding 2-3K users PER DAY. The reason could be because Polkadot is not simply a buy-and-hold crypto, but users can participate in governance, auctions, and the forthcoming L1 auction-winners. It is clearly a growing community.
This should be easily No. 3 is Market Cap in 2022.