Is Polkadot a Good Investment?

Last Updated July 23rd 2021
40 Min Read

Polkadot (DOT) was a relatively unknown protocol to several stakeholders in the decentralized finance (DeFi) sector of the cryptocurrency and blockchain space.

The digital asset has performed extremely well having gained 1,163.66% since its inception in the trading market in August 2020.

Like all cryptocurrencies and networks, DOT benefitted extensively from the February, 2021 rally which saw all cryptocurrencies and their related networks as well as decentralized applications and protocols follow parent crypto (Bitcoin) to increase substantially in price.

Evidently, Polkadot (DOT) hit an all-time high in the process with a trading price of $42.06 on 20th February but has since dropped more than 20% in value.

With DOT being a heterogeneous multi-chain network coupled with the upgrade of Ethereum 1.0 to Ethereum 2.0 and Cardano (ADA) as well as Tron (TRX) providing third generation blockchains to compete for the greatest share of the decentralized finance market; can DOT survive as a result of its unique features?

Will the crypto asset become an “Ethereum Killer” in the next ten (10) years?

Or like other blockchain innovations, will it be added to a new category called “dead protocols”?

Contents:

Polkadot: What is it?

What Are the Advantages of Polkadot?

Polkadot: Will It Be a Good Investment in 2021?

Will Polkadot Continue to Soar?

So, Is Polkadot a Good Investment?

Price Predictions of Polkadot in 2021 and Beyond

Is DOT a Buy?

Should I Invest in Polkadot?

Does Polkadot Have a Future?

 

Polkadot (DOT) is currently trading at $35.08 having gained 3.18% in value in the last 24 hours.

The multi-chain network has made it possible for other blockchains to become interoperable with each other.

Interoperability means the ability of blockchain systems and networks to work together across organizational boundaries in order to advance the web of decentralization.

On Polkadot’s network, “True interoperability enables cross-chain blockchain transfers of any type of data or asset, not just tokens”.

Additionally, developers who decide to connect their blockchain to Polkadot will have the benefit of being able to interoperate with a wide variety of blockchains in the network of Polkadot.

Such a unique feature is what has made major crypto news and analysis websites share sentiments as to how the future price of DOT is going to look like in the short and long term.  

The Economy Forecast Agency  has strongly opined that the future of DOT remains bullish in 2021. The agency which does a long forecast of assets believes DOT will finish the second quarter of the year with a trading price of $52.25 and close 2021 with a price of $76.29.

EFA sees a continuation of the bullish run into 2022, where DOT will start January and close December with trading prices of $79.68 and $92.54 respectively.

2023 has been predicted by major crypto news outlets to have a bearish season and EFA has forecasted the same. The forecasts site believes the price of the crypto asset is going to drop to $77.85 in 2023 and increase slightly to $77.97 at the end of 2024 and increase substantially in the following years.

Wallet Investor sees Polkadot  as a good investment for growth investors. The online portal which provides good quality and free-of-charge technical forecasts for cryptocurrency rates believes that by the end of 2026, DOT will have a trading price of $324.022.

In a current era of digital currencies where several developers are trying to take advantage of the interest and demand of the public for cryptocurrencies for its usage and as a store of value in terms of investments, Digital Coin Price sees DOT as capable of providing imminent solutions in the crypto finance space.

The online portal for accurate crypto market analysis and data believes the crypto asset has a long term growth potential.

Digital Coin Price believes DOT will increase from its current price and trade at $73.88 in 2023 and as per great sell-off by investors as a result of crossing $70 as a price milestone, drop to $71.33 by the end of 2024.

Polkadot will maintain its bullish momentum based on the addition of more protocols and the facilitation of interoperability among blockchains which will see the coin trade at $107.57 and $162.24 in 2027 and 2028 respectively.

Polkadot (DOT) is currently trading between the range of $33.63 / $36.36, with a trade volume of $2,176,117,211 within the last 24 hours.

Polkadot is the only protocol currently in the decentralized web of finance which has been able to enable a common set of validators to secure multiple blockchains.

With more decentralized applications and protocols to be mounted on the platform as a result of the high fees charged by Ethereum as gas fees which is pushing more developers away from ETHs network, Polkadot (DOT) has risen as one of the eminent projects and the next best alternative which can hold up different assets without scalability and cost problems.

With several projects in the pipeline and DOT providing enormous speed and scalability which sees its network process over one million transactions per second (TPS), DOT has a long-term potential in the market and it’s a great asset any investor (novice or expert) can consider having on their portfolio of investments.

Polkadot: What is it?

Polkadot is primarily referred to as an open-source sharding multi-chain protocol that facilitates the cross-chain transfer of not only tokens but any asset or data type, in the process making several blockchains interoperable with one another.

The developers of Polkadot are on track with regards to the delivering of a robust platform for scalability, security and innovation.

With its primary feature of interoperability, Polkadot has an aim of establishing a fully decentralized private web which would be controlled by users of the internet by simplifying the creation of new applications, services and institutions.

In the current Web 2.0 which is run by tech giants, the freedom of users is in the hands of a significant few while the masses struggle for privacy and independence.

This is where Polkadot (DOTs) protocol comes in to connect public and private chains, oracles, permissionless networks and future technologies by granting them the required accessibility to share information and transactions trustlessly through one of the technology’s core competencies (relay chain).

Components and layers are essential parts of blockchain technology, several blockchains have one, others have two, some have three but Polkadot (DOT) has four. The components of DOT are relay chain, parachains, parathread and bridges.

Polkadot’s Relay Chain is known across developer circles as the blockchain’s heart. It serves a primary purpose of helping with the creation of consensus, shared security and interoperability across different chain networks.  

Polkadot’s Parachains are chains which are independent enough to have their own tokens and can also be optimized for specific use cases.

Polkadot’s Parathread provides connectivity in a flexible way which is based on an economical model popularly termed as pay-as-you-go. Parathread is a bit similar to parachains.

The last component is Bridges and this creates a compatible connection which allows users to securely transfer data or tokens between blockchains whether they belong to private enterprises or public institutions.

DOT is the cryptocurrency that powers the protocols and serves as a primary function of being used for governance, staking and bonding.

Who Created Polkadot and When did it Start Trading?

Peter Czaban, Thiel Fellow Robert Habermeier and Gavin Wood are widely credited as the founders of Polkadot.

Like all organizations, there are several people who make up the core team. Normally,  there is one person who leads the team from a mere conception of an idea to execution and then to reality of operations. That man is Gavin Wood.

Gavin Wood is one of the founders of Ethereum (ETH) and even served as Ethereum Foundation’s first Chief Technology Officer (CTO).

During his time working on the Ethereum Project, particularly its upgrade (Ethereum 2.0), Dr. Wood needed to include a certain specification which is known as sharding.

According to Investopedia “Sharding is a database partitioning technique which is employed by blockchain companies with the purpose of scalability and thus increases a blockchains speed of processing (transactions per second).

After identifying such an important specification (sharding), Gavin Woods became extremely innovative and decided to solve the problems which would be associated with the specification in addition to writing the specification. 

As a result, he moved from a mere conception of an idea to writing a white paper to back his findings. It took him at least four hours to come up with a heterogeneous multi-chain network which he named the POLKADOT PROTOCOL.

Wood then founded Web3 Foundation which focuses on decentralizing the current infrastructure and technology on the internet with POLKADOT PROTOCOL as its primary project.

Aside from Ethereum and Polkadot, Wood once worked for Microsoft as a research scientist.  

Founder Robert Habermeier is a Thiel Fellow (fellowship which was created by Peter Thiel which offers students under 23 years $100,000 over a two (2)-year period to drop out of school and pursue other activities related to work, from working on a social movement, being involved in scientific research or creating a startup).

He is an accomplished blockchain and cryptography developer as well as researcher who brings extensive experience of his findings to the table when new protocols and applications have to be built on the Polkadot platform.

Peter Czaban is the technology director (TD) of the Web3 Foundation

Czaban is helping with the development of a new generation of distributed technology by thriving on the wealth of experience obtained from working in several highly specialized Financial Technology (FinTech) industries.  

The first token sale of Polkadot took place on October 27, 2017 which raised a total of 485,331 ETH. In August 2020, the DOT token was launched at a trading price of $2.70.   

Why was Polkadot created?

The primary purpose for the creation of Polkadot was to facilitate interoperability between blockchains.

Instead of several blockchains to thrive in a centralized manner through their respective foundations, DOT has come in to allow the internet to be extremely decentralized from all forms of third parties which includes founders of blockchain technology.

With this, decentralized application (DAPP) developers can create their own blockchain which can communicate with other ledgers.

Additionally, developers decide the kind of transactions they would like to charge as well as how fast they can confirm blocks of transactions across several digital ledgers.

Where was it created?

The project is being developed by Web3 Foundation which is based in Switzerland.

How Many DOTS Are In Supply?

There are 920,986,181 DOT in circulation on a maximum supply of 1,057,450,010 DOT

What Are the Advantages of Polkadot?

As an investor, one of the prime areas you should look out for are the benefits a particular asset provides to its users.

In the case of Polkadot, one important question you should ask is, what are the benefits of the network for developers who want to mount their blockchains on DOT’s platform?

One of the primary issues associated with the adoption of blockchain technology is scalability. Individuals, organizations and corporations are fed up with the use of the old technological systems and require new and improved systems.

Unfortunately, several blockchain technologies which have been built by developers due to the crypto boom have not been able to meet the scalability needs of individuals and business organizations. 

Several corporations urgently need these technological solutions to help perform tasks in an efficient and effective manner. 

So far, blockchains with slow speeds which lead to congested networks and high fees have taken over the decentralized market.

Polkadot provides two forms of scalability which are economic and transactional

For economy scalability, Polkadot enables a common set of validators to provide security to multiple blockchains.

It makes provision for transactional scalability through the spread of transactions across multiple parallel blockchains.

Evidently, current estimates suggest that Polkadot can process over 160,000 transactions per second (TPS) and more if the platform is functioning at its maximum speed.  

On April 30, 2020, co-founder of Ethereum and founder of Polkadot, Gavin Wood shared a tweet which revealed deep information about the potential of the network if it’s functioning 100%.

Excerpts of the tweet go “Latest benchmarks indicate @polkadotnetwork, even without parachains or multithreading, will still push a sustained rate in excess of 1,000 transactions per second. With parachains and multithreading then maybe 1,000,000 transactions per second, 100% secure, upgradable and decentralized”.

Ethereum’s 1.0 supports only 15 to 30 transactions per second (TPS), Ethereum 2.0 supports 100,000 transactions per second, Bitcoin (BTC) with its longstanding SHA-256 algorithm supports 4.6 transactions per second (TPS), Litecoin (LTC) with its SCRYPT algorithm supports 56 transactions per second (TPS), Cardano (ADA) processes 1,000 transactions per second (TPS), Binance (BNB) supports 300 transactions per second (TPS) and Bitcoin Cash (BCH) supports 116 transactions per second (TPS) and approximately 2,000 transactions per second (TPS) for Tron (TRX).

Scalability as we all know too well has a direct relationship with fees (low and high depending on how slow or fast processing speeds are). 

Overall, Bitcoin Cash (BCH) has a transaction fee of $0.0028, Litecoin (LTC) has a transaction fee of $0.5, Ethereum (ETH) has a transaction fee of $18.01, Bitcoin (BTC) has a transaction fee of $22.13, Dash (DASH) has a transaction fee of $0.2 and $0.3, Dogecoin (DOGE) has a transaction fee of $0.15, Stellar Lumens (XLM) has a transaction fee of $0.000004, Cardano (ADA) has a transaction fee of $0.18, Tron has a transaction fee of $0 and Ripple (XRP) has a transaction fee which is equivalent to the trading price of 1 XRP.

Polkadot on the other hand uses a weight-based fee model as opposed to what Ethereum uses, which is called a gas-metering model.

For DOT, the fees are charged before the execution of a transaction. Once the fee has been settled, then the nodes will see to the execution of the transaction.

Transaction fee calculation for Polkadot (DOT) is done on its relay chain and it is calculated based on three (3) parameters which are per-byte fee (length fee), weight fee and an optional parameter called tip.

The product of a constant per-byte fee and the size of the transaction in bytes is called length fee.

According to Polkadot Wiki “Weights are a fixed number designed to manage the time it takes to validate a block. Each transaction has a base weight which accounts for the overhead of inclusion as well as dispatch weight that accounts for the time to execute the transaction”.

The total weight is multiplied by a per-weight fee to calculate the transaction's weight fee.

You should note that the fees are divided in portions (80% for Treasury and 20% for block producer).

Mathematically, it can be calculated as (total weight × per-weight fee) = Transactions Weight Fee (which is relatively lesser than other transaction fees).

One of the vital features of Polkadot (DOT) which make it unique is Interoperability

It has been extremely difficult for other cryptocurrency networks to accept other blockchain networks on their platform since every innovation which has come through the doors of decentralized finance(DeFi) in the last ten (10)-years aims to colonize the whole system.

Polkadot (DOT) on the other hand does not look forward to colonizing the whole decentralized finance system or becoming an “Ethereum-Killer” just like other advanced blockchain such as Tron (TRX) and Cardano (ADA) have proposed to do.

The war of words on which cryptocurrency network is going to become the king of the decentralized web normally brings a lot of heat on social media platforms Twitter and Reddit.

Reddit is normally used by fans (community) while Twitter is used by some Chief Executive Officers (CEO) to accuse other members of stealing information from white papers which did not originally belong to their networks.  

Other CEOs use the social media platform to inform their members as to the next protocol they are developing which has all the essential features to take over the whole DeFi space

Polkadot’s (DOTs) network allows different varieties of blockchains to exchange and make use of information, thereby enabling cross-blockchain transfers of any type of asset or data and not just tokens which other platforms are used to.

Hosting several blockchains on one network brings up the issue of security due to numerous cases of hacking which has strongly been associated with some blockchain technologies in the past.

Fortunately, Polkadot (DOTs) novel validity and availability scheme goes a long way to allow different chains to interact with each other. 

Although the blockchains are independent with regards to whom and which system controls it, in terms of security; it is united and bound by the technological features of the Polkadot (DOT) protocol.

Moreover, user-driven network governance is another essential feature which is beneficial to users. 

In a decentralized world, the founder of the network ensures there is a smooth system where each user is treated equally in terms of decision making

During upgrades, there is on-chain coordination by all stakeholders which is carried out autonomously. 

This goes a long way to ensure that the primary theme of Polkadot (DOT) is upheld which avoids stagnation on the network (stagnation slows processing which leads to increased cost in fees).

Also, the ease of blockchain innovation is another primary advantage for users. 

Like Ethereum’s 2.0 which makes it possible to develop decentralized applications and protocols, DOT allows users to build their own blockchain from scratch using already good go-to pallets.

Custom blockchains can be built within minutes coupled with security, even systems for user contribution and interoperability and this extensively helps the DOT network grow.

The last advantage is its forkless and future-proof nature

Most blockchains go through forks (hard and soft) to see an upgrade but Polkadot is extremely different in its approach which makes it easy for use. 

As a result, the network’s adaptation to changes and upgrades is relatively easier when new and better technologies become available. 

Polkadot: Will It Be a Good Investment in 2021?

As a trader or investor, for you to understand if an Polkadot is going to be a good investment for a particular year, you should do a thorough analysis of that particular asset’s performance in the year which preceded the current one.

Polkadot (DOT) could be a great investment in 2021 and can reach new price milestones this year and beyond. According to Digital Coin Price, Polkadot could be valued at $52.79 in December. 

Image: Digital Coin Price

Polkadot (DOT) closed the third (3rd) quarter of 2020 with a trading price of $4.35 in September. The multi-chain protocol closed the year 2020 (December 31) with a trade price of $9.29.

The crypto asset started January 2021 with the previous close of $9.29 and ended January 2021 with a trading price of $16.12.

On the 1st day of February, it opened at $16.12 and closed at $33.61 per coin on 28th February. DOT is currently trading at a price of $35.08 and has a market capitalization of $32,310,025,825.

In the past 30 days, the price of DOT has increased by 9.66%, while its accomplishments in the 1-year time frame amount to 324.45% Year-to-Date (YTD).

Crypto analyst, Tabassum Naiz of Ripple Coin News believes one of the biggest refreshments for the crypto community in 2021 is Polkadot (DOT) as a result of its performance and potential in the market as a protocol of choice for developers.

Experts at Wallet Investor have forecasted the long-term earning potential of the asset at +173 per coin in one year. 

The online portal, which provides good quality technical forecasts for cryptocurrency rates, has opined through its experts that Polkadot could go up from its current trading price to $95.045 in one year. This means more price milestones will be crossed before the end of 2021.

Akash Girimath of FXStreet has done an extensive technical analysis which came out with the conclusion of ascending triangles.

Ascending Triangles in trading terms are normally seen by experts as inherently bullish and a sign of a continuation pattern.

Because of this, the bearishness which revolves round DOT’s price would not be permanent and could just be temporary.

The analyst who writes for the online portal believes that if DOT closes above $39.1 in the short-term, it could eventually cross its all-time high of $42.4 and go on to hit a price milestone of $50 before the end of 2021

Will Polkadot Continue to Soar?

Several considerations must be taken into account if Polkadot will continue to soar or plummet into the red zone in the not-so-distant future.

Most often times, the number of partnerships, integrations, market sentiment for cryptocurrencies with the performance of parent crypto (BTC) under keen perspective as well as investor interest such as trade volume and market capitalization go a long way to help understand the entirety of an asset and whether it is worth the risk in terms of investment.

Nidhi Kolhapur, an analyst for CoinPedia opined in the early days of 2021 that DOTs bullish trend from the previous year will sink into the performance of the protocol which will see it trade between the price range of $20 and $30.76 by the middle of 2021.

Fortunately, his prediction has been surpassed thanks to the crypto rally the financial markets enjoyed in February which saw several digital assets including DOT reach its all-time high.

The analyst who writes for the most trusted cryptocurrency service agency for blockchain technology and overall digital assets has further forecasted that by the end of 2021, DOT will have a trading price of at least $50.

Experts at CoinPedia also see a bullish run towards the end of the year where DOT will trade between $50 and $70 by 2021 and cross the $100 price milestone in the near future.

There are several projects which have been mounted on the Polkadot platform to facilitate cross-chain integration and so far have experienced rallies since most developers are running away from the high fees being charged by major DeFi competitor, Ethereum (ETH).

Ren (REN), Celer Network (CELR) and Ocean Protocol (OCEAN) have seen a spike in trading volume as well as the number of holders of active holders due to its integration with the Polkadot (DOT) protocol.

According to the website of Celer Network, it is a leading layer-2 scaling platform which enables easy, fast and secured off-chain transactions for not only payment transactions, but also generalized off-chain smart contracts.

The Celer Network also has an additional feature of allowing anyone to build, operate and use highly scalable decentralized applications (DAPPS) through innovations in off-chain scaling techniques and incentive-aligned crypto-economics.

On 20th February 2020, Polkadot’s official Twitter Handle (@Polkadot), tweeted that “Celer Network will build its advanced State Channel Network technology on Polkadot, enabling nearly instantaneous, low-cost and trust-free transactions for @substrate_io based chains”.

Celer Network replied strongly that “We are excited to announce that Celer will partner with Web3 Foundation to enable State Channel Network on @polkadotnetwork as a layer-2 scaling solution!”

Fast forward into 2021 and on 19th January, Celer’s (CELR) integration with the Polkadot (DOT) ecosystem was announced.

The project released its state channel substrate model that supports layer 2-scaling and instant payments on Polkadot.

Celer (CELR) ended the 3rd quarter of 2020 (September) with a trading price of $0.005349 and the year 2020 on December 31 at a price of $0.004408.

The scaling platform started 2021 from where it left off the previous year and climbed to $0.00812 as a closing price on January 19 (the day the integration was finally announced).

A bullish trend followed this announcement as CELR closed January 31 at $0.008588 and February 28 at a closing price of $0.02322.

Celer Network (CELR) reached an all-time high of $0.06589 on March 15, 2021 and achieved a great daily volume of $187,342,956.

As at the time of writing, CELR had a trade volume of $74,962,664 and $293,190,006 market capitalization in the last 24 hours with a trading price of $0.05317.

One of the most essential aspects of this integration is that CELR trades on some of the most popular cryptocurrency exchanges such as Binance, TOKENCAN, HitBTC, ZT and BitAsset (exchanges which records millions and billions of dollars in trade volumes daily).

As a result of DOT providing a technology which makes CELR interoperable with other chains, every activity that happens on the scaling platform reflects in the performance of Polkadot.

Much of DOTs performance in the month of February where it reached its all-time high can be attributed to the performance of CELR which has soared over 240% since the integration.

Celer’s performance will continuously reflect in DOTs price as the digital asset maintains its bullish run to mid-2021 and the end of the year as a whole.

Such an integration, FX Leaders believe will increase the price of Polkadot substantially in the short-term.

The online portal which provides the best forex signals and strategies, trading news and market analysis predicts Polkadot to trade between $50 and $60 in the middle of 2021 based on positive crypto sentiment, the performance of Ethereum and the FEDs devaluation of the United States dollar.

Other reasons include technical resistance of the DOT at $20 and a potential regulation of cryptocurrencies and the whole world of decentralized finance.

Another integration is the collaboration with REN.

As an open blockchain protocol, REN was specifically designed by its developers to provide liquidity and interoperability between a large number of blockchains which included Polkadot (DOT), Bitcoin (BTC) and Ethereum (ETH).

On 22nd July, 2020, Ren announced via social media platform (Twitter) that “We are excited to be building with @AcalaNetwork and @Polkadot. It speaks to the power of RenVM and is a key step in Ren’s larger vision of enabling permissionless transfers of value between any blockchain”.

As at the time of the announcement, REN closed the day (July 22, 2020) with a trading price of $0.1696.

Interoperability brought Ren a new feature of being able to relate to other blockchains and this saw the crypto asset increase substantially in price, closing 2020 with a trading price of $0.3213.

REN gained 89.45% in price from the time of the announcement to the end of the year, 2020.

Ren (REN) started where it left off in 2020 and closed January with a price of $0.630 which was further increased to a new price of $1.83 on 20th February. REN eventually closed February trading at $1.04.

REN trades on some of the most popular exchanges such as Binance, Huobi Global, HBTC, Coin Tiger and OKEx.

With a current trading price of $1.11, trade volume of $110,077,172, market capitalization of $1,114,855,115 in the last 24 hours and a 1-year time frame of an increment in gains of 245.26%, REN is performing well when compared to other decentralized applications which tagged themselves as Ethereum Killers and DeFi colonizers, only to end up going bust.

Such volumes by REN positively reflect the trading price of Polkadot (DOT) since it uses its features in enabling REN to connect and have successful transactions with other blockchains.

Analyst Shain Vernier of FX Leaders predicts that after one year, a price of $100 will be written next to DOT as a result of bullish crypto sentiment due to its extensive promotion by CEOs and adoption by several mainstream institutions.

Other factors which will lead to the $100 trading price include a devaluation of the United States dollar and expansion of the blockchain platform to be able to host more chains while maintaining its unique features.

In the early days of July, 2020, Ocean Protocol Building announced that it is building on top of Polkadot.

In the process, Polkadot was going to play a primary function of bridging data sets across blockchains to unlock innovation.

On 26th January 2021, the social media handle of Ocean; @oceanprotocol announced via Twitter that “Ocean Protocol is entering the @Polkadot ecosystem via an integration @MoonbeamNetwork”.

On 1st July 2020, OCEAN closed with a price of $0.07814 and at the end of July 2020, had a closing price of $0.2021.

It maintained its bullishness throughout the rest of the year and closed 2020 with a price of $0.327.

OCEAN began the year with $0.3271 and closed the day of the announcement, January 26 with a price of $0.5992.

OCEAN ended February 28 with a price of $0.8392 and has since gone on to achieve milestones such as reaching its all-time high of $1.67 on March 7.

OCEAN is currently trading at a price of $1.45, has a trade volume of $54,702,370 and a market capitalization of $601,545,432 in the last 24 hours.  

Analyst Plato of Zephyrnet.com expects Polkadot to increase in mid-year where the digital asset will surge to $80 based on direct activities on decentralized applications and protocols which have an indirect effect on the price of DOT.

Plato sees DOT eventually close the year with a trading price of $100.

So, Is Polkadot a Good Investment?

Coin Arbitrage Bot sees Polkadot as a good investment for growth investors as forecasts the protocol to have a trading price of at least $400 by 2024.

FX Leaders believe there will be a rebound of the United States dollar, a full recovery of the coronavirus pandemic and a decrease in the growth of blockchain technologies due to government and central bank intervention which will see digital assets without proper structures fold.

This will lead to few protocols such as Polkadot (DOT) to compete for a fair share of the DeFi market through increased regulation in the next two to three years.

The online portal for reliable news and real-time forex analysis forecasts a price of $200 to $300 for DOT which signals a good investment in the long term.

As a trader or investor, you must look out for the performance of decentralized applications (DAPPS) and protocols running on an asset’s platform to better help you make an investment decision.

Some of these platforms are Moonbeam (a new smart contract mounted on Polkadot’s platform which makes it easy to build natively interoperable blockchain applications).

Centrifuge is a decentralized finance asset which serves as a gateway for real-world assets into decentralized finance (DeFi). It also helps facilitate lending and borrowing on the blockchain.

Edgeware is a smart contract blockchain which has a community-managed treasury, a decentralized proposal system and a network of Decentralized Autonomous Organizations.

The protocol has a price of $0.034, trade volume of $1,890,114, market capitalization of $186,991,228, circulating supply of 5,476,963,521 EDG on a maximum supply of 6,093,817,058 EDG in the last 24 hours.

Polkastarter (POLS) enables projects to raise capital in a decentralized, interoperable and permissionless environment.

The protocol had a price of $4.94, trade volume of $148,111,346 and market capitalization of $297,808,603, on a circulating supply of 60,295,000 POLS and a maximum supply of 100,000,000 POLS in the last 24 hours.

Akropolis (AKRO) is a decentralized platform that helps with the building of community economies.

It has a price of $0.054, a trade volume of $36,459,245 and a market capitalization of $146,412,682 on a circulating supply of 2,709,327,981 AKRO within the last 24 hours.

ExceedMe (XED) is a gaming platform which was designed to create new revenue streams for the users of the decentralized application.

As at the time of writing, XED had a trade price of $1.92, trade volume of $4,728,879 and a fully diluted market capitalization of $192,277,610 on a 100,000,000 XED maximum supply in the last 24 hours.  

Kusama (KSM) has nearly the same codebase as Polkadot (DOT) and it’s a scalable network of specialized blockchains.

It has a trading price of $358.58, trade volume of $295,632,485 and a market capitalization of $3,040,761,773, circulating supply of 8,470,098 KSM and a maximum supply of 9,651,217KSM within the last 24 hours.

According to Harry Atkins of Invezz.com, “a combination of price and volume fluctuations help you gain a better understanding of an asset’s trend direction”.

These trade volumes are relatively great when compared to other tradable assets and tokens on other blockchains such as Tron’s (TRX) Network and Ethereum’s (ETH) 2.0 Network.

Additionally, DOT trades on some of the most popular exchanges such as Huobi Global, BitZ, Upbit, OKEx and Binance among others.

These are cryptocurrency exchanges which record millions and billions of daily trade volumes which undoubtedly has a positive reflection on the assets which are listed on their sites for trading, which of course includes Polkadot (DOT).

With more protocols to be added to DOT, CoinPedia maintains its bullish sentiment into the long term. According to the online news portal, Polkadot will start 2022 with a trade price of $50 and end the year with a price of $70.20 if it upgrades and constantly improves its protocol.   

Read Also: Crypto Predictions for 2021: Where to Invest

Price Predictions of Polkadot in 2021 and Beyond

According to Long Forecast, Polkadot is going to end 2021 with a trading price of $74.64, end 2022 with $90.55, go through the 2023 bearish season and trade for a coin at $76.18, and have a trade price of $76.30 in 2024.

According to CoinPedia, the protocol will attract several capital investors since its platform provides opportunities to access existing and new blockchains.

In the next five years, CoinPedia still remains bullish about the performance of DOT and feels several technological communities will integrate with the platform as a result of its unique features and close 2025 within the price range of $170 to $200.

Wallet Investor has forecasted DOT to have a trading price of up to $95.045 within one year and trade at $324.022 by 2026.

FX Leaders forecasts Polkadot to trade at a price of $100 by the close of 2021 and in the range of $200 to $300 in the next two to three years.

Image: Wallet Investor

After going through an extensive analysis of Polkadot (DOT) and the reasons why it may be a good investment in 2021 in the short and long-term, if you have a dream of investing in the protocol, we would like to make a recommendation.

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Is Polkadot a Buy?

According to Wallet Investor and several crypto news outlets,  Polkadot (DOT) is a buy and worth considering in the short and long term.

There are several cryptocurrency platforms out there but many of them are interested in surpassing each other and having a huge share of the DeFi market.

On the other hand, Polkadot looks forward to bringing all competing blockchains together to make the use of the decentralized web easy and exciting.

Through DOT, users can access different protocols, applications and information within a short period of time in a swift and secure manner due to its unique feature of interoperability.

This is the main reason why it has been referred to as the United Nations of Blockchains.  

Trading outlet Previsioni Bitcoin has forecasted DOT to end 2021 with a trade price of $166.57.

Should I Invest in Polkadot?

Polkadot enjoys a great standing in the crypto world and with an impressive blockchain technology that offers interoperability, it will go a long way to scale transactions faster than crypto enthusiasts imagined.

This will lead more developers to consider DOT as the smart contract of choice. As the demand for usage of the protocol increases, this would positively affect the price of Polkadot in the long term.

There are several innovations which are filling up the decentralized world day in and day out but Polkadot offers something fresh which is unique and different in many ways from other smart contracts.

Only time will tell if the protocol can surpass Ethereum (ETH) and beat other altcoins such as Cardano (ADA) and Tron (TRX), whose developers are doing everything they can to build great applications which would have a strong user base which will ultimately see them control DeFi for the next decade.

Does Polkadot Have a Future?

For you to determine the future of Polkadot, you must consider the asset’s rank as per the category it falls under, its trade volume, market capitalization and the performance from most importantly, the preceding year.

DOT has increased 245.26% Year-to-Date (YTD), ranks at number 6 when considering the market capitalization of cryptocurrencies, and has daily trade volumes which surpass millions of dollars. 

DOT has performed far better than 2020 since most of its integrations and partnerships launched and became operational in 2021. 

The market capitalization of DOT currently stands at $33.533 billion which places the digital asset under the category of a large cap crypto asset since it is well over $10 billion.

Additionally, there is a current circulating supply of 921,072,660 DOT with the maximum supply capped at 1,057,000,181.

If the founders make a strong decision to keep the supply finite, the total supply will be mined in the short term and this will trigger the basic laws of economics.

In the laws of demand and supply, as demand increases to a point where it cannot be met, the scarce product (DOT) will be made available to buyers at higher prices set by sellers.

With this, the price of DOT could naturally shoot up and hit new all-time highs in the not-so-distant future.

Polkadot (DOT) looks forward to bringing “parachains” to life in the coming months.

Parachains are going to play a great role in unlocking the complete functionality of the Polkadot Network.

With near functionality, DOT has been able to function effectively by providing great services to its users, an upgrade to full functionality would take DOT to new heights with regards to adoption and price. 

These are the factors why DOT has a great future but it depends on how patient you are as an investor, to buy and hold the asset till it meets your investment goals

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