Just the beginning: Polkadot (DOT) hits new all-time high
Polkadot (DOT) is now one of the five largest cryptocurrencies in the world. Although the project has already bagged a new all-time high, there seems to be no end to the price rally in sight. What is behind the price increase?
Polkadot wants to be the bridge builder for the Internet of tomorrow. The ambitious project of the Web3 Foundation aims to unite an entire network of specially developed blockchains and thereby enable them to communicate and work together with one another. Thus, the data exchange between every type of blockchain should become a reality.
In the last 24 hours, the DOT price has increased by over 25 percent and is currently quoted at 11.20 US dollars.
DOT does not want to be a competitor to Ethereum
DOT is a relatively new project in the crypto space. It was set up under the direction of Gavin Wood and Jutta Steiner from Parity Technologies. Most recently Parity Technologies worked on Crypto Engine scam projects until 2019 and developed Polkadot at the same time. However, as of December 2019, Parity decided it wanted to focus solely on developing Polkadot.
Nevertheless, Polkadot does not see itself as a competitor to Ethereum. Rather, the network was designed to connect multiple blockchains together so that they can be interoperable. DOT is the network’s native token and is a governance and utility token at the same time. On the one hand, you can stake DOT for voting on network upgrades and, on the other hand, DOT must be stored when creating so-called parachains. Parachains are special chains that allow different blockchains to work together.
Why is the DOT rate rising?
Polkadot has built a thriving developer community since its mainnet launch. Many Decentralized Finance (DeFI) projects are already using Polkadot. For example, just a few days ago the decentralized exchange SushiSwap announced that it would work together with Polkadot in terms of scaling and interoperability. This should make it possible to develop a test version for an interoperable, decentralized exchange by the second quarter of 2021. But not only SushiSwap but also Chainlink , the Ocean Protocol, Akropolis, Centrifuge and many more are already working with Polkadot.
In addition, the web3foundation, which is significantly involved in the development of Polkadot and its ecosystem, has allocated money to over 100 projects in a funding program . By means software development and research of distributed applications is to use the Polkadot, be promoted .
There is currently a lot going on at Polkadot and the network is growing rapidly. The crypto exchange Binance also seems to have recognized this and recently supported the project with 10 million US dollars . In addition, Binance put the DOT / USD trading pair on its main page for a short time. The resulting surge in popularity, coupled with the well-known cooperations and supporters, has most likely contributed to the price increase in recent days.