Polkadot (DOT) is currently the 11th largest cryptocurrency in the world. However, Polkadot’s market cap of $7.19 billion puts it among the major cryptocurrencies. The altcoin has experienced some negative developments lately. Therefore, it is not easy to make an accurate DOT price prediction. It’s good to know what the developers are working on right now so you can guess. Only then can investors begin to make a DOT price prediction that can guide their investment decisions.
Polkadot promises a new type of blockchain
The Web3 Foundation is a Swiss organization that funds R&D teams 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 are improving the way we connect online.”
All of Polkadot’s interconnected parachains are connected 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 blockchains – or parachain – are connected to the Relay Chain, developers can securely communicate and work with any other parachain in the Polkadot network. Polkadot enables cross blockchain transfer of any asset or data, not just tokens. Each chain manages itself independently but follows the same security protocols. This framework gives Polkadot scalability, keeps its fees low, and makes the network energy efficient.
DOT serves three main purposes
As cryptokoin.com also reported, DOT is Polkadot’s native token and is used to facilitate the core functions of the platform. It also serves three main purposes:
- Network governance: DOT owners have full control over the protocol, including managing exceptional events such as fixes and upgrades, determining network fees and auction dynamics, timing of new chains. In traditional blockchains, this type of governance is only the exclusive right of miners.
- Staking: DOT is the mechanism that allows game theory staking participants to keep 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 unhelpful or outdated parachains.
Now that you know what it is, you can take a look at the Polkadot price predictions.
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 for DOT’s prospects over the next three years. However, this trajectory may be changing. Daria Morgen predicted that the DOT would trade at $6.62 in September. This forecast seems close to being realized 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 year-on-year forecasts:
- 2023- Changelly’s projection for 2023 predicts the DOT to hit double digits. Estimates are that it will trade at an average of $10.14 per year for an 89 percent ROI.
- 2024- The projection is that DOT could offer a 178 percent ROI. According to estimates, DOT will trade at an average of $ 15.11.
- 2025- Forecasts are that DOT will trade at an average price of $22.39 in 2025.
Changelly’s long-term Polkadot price prediction is that DOT will trade at an average of $103.73 in 2029. However, the DOT was trading above $54 less than a year ago. So $100 over seven years isn’t 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 837.81 percent increase from DOT’s current high. Here, too, there are so many variables and so many unknowns that the struggle fueled by competition for up to $500 at the end of the decade is little more than an educated guess.
An investment in DOT is an investment in the Polkadot network. Rather than relying on distant price predictions, they may be better served by assessing their belief in the concept of interconnected parachains as the building blocks of web3. It’s a complex concept that requires significant research, but anecdotally, there is evidence that at least some of Polkadot’s promises are coming true.
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 called 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 value for money — with a TVM of $840,000, the combined APR on Bitfrost’s vDOT assets increased 60 percent. Bifrost is undoubtedly Polkadot’s golden child, but the chain is not alone in accelerating parachain progress. That same day, Polkadot Insider said that Polkadot developers have absolutely crushed the competition. He also tweeted that it topped the blockchain development activity charts 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 DOT back into double digits.
Strong winds facing Polkadot should not be ignored
Polkadot’s recent networking achievements are impressive, but there are points that should not be overlooked when investing in DOT. The crypto winter has been brutal for everyone. But the DOT proved particularly vulnerable during the ongoing bear market. For example, on September 22, when the DOT dropped to $6.25, crypto writer Kanav Jain wrote “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 well-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.
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