Polkadot’s ecosystem saw significant expansion in Q3 2023, with the addition of five new parachains, a rise in staking metrics, and major technical upgrades. The total volume of staked DOT increased to 663 million, and the platform recorded more than 190 million on-chain events. The quarter also saw the introduction of native USDC and a 20% quarter-on-quarter rise in XCM messages.
Staking and Metrics
Polkadot reported a quarter-on-quarter increase in the total volume of staked DOT, from 578 million to 663 million. The percentage of the total DOT supply staked is now just shy of 49%, close to the ideal staking rate of 52.5%. Nomination pools, launched in November 2022, ended the quarter with 15,281 members and more than 7 million DOT staked.
New Parachains
Five new teams acquired parachain slots, diversifying Polkadot’s Web3 use cases. The new projects include peaq, Bit.Country, InvArch, Energy Web, and Nodle. These projects focus on various sectors such as DAOs, the metaverse, IoT, and sustainable energy.
Technical Upgrades
Major proposed technical upgrades like agile coretime and asynchronous backing are nearing completion. Agile Coretime aims to provide more flexible ways for Web3 projects to access Polkadot’s computing power. Asynchronous backing could potentially increase Polkadot’s scalability eight-fold and is expected to be rolled out on the testnet Rococo soon.
Other Highlights
Native USDC was introduced, eliminating the need for bridged versions of the stablecoin.
Zodia Custody announced institutional custody and staking services on Polkadot.
A 20% quarter-on-quarter rise in XCM messages indicates increased cross-chain activity.
Polkadot is shifting towards an application-centric model, similar to cloud computing services. The upcoming technical upgrades are projected to enable support for over 1,000 parachains and 1 million transactions per second, preparing Polkadot for Web3 mass adoption.
Bill Laboon, the Head of Education and Grants at Web3 Foundation, has provided critical updates on the ongoing parachain lease auctions for Polkadot ($DOT) and Kusama ($KSM) networks. In a Twitter thread dated August 31, 2023, Laboon shed light on the leading projects and upcoming changes within these ecosystems.
Astar’s Dominance in Polkadot Auctions
With just half a day left in the current Polkadot parachain lease auction, Astar has been in the lead for the majority of the Ending Period. Laboon’s tweet, which has garnered 8,934 views, 12 reposts, and 61 likes, confirms Astar’s strong position.
Astar is Japan’s top smart contract platform and supports EVM and WebAssembly environments, enabling interoperability through a Cross-Virtual Machine. It’s user-friendly, utilizing familiar tools and languages, and part of the Polkadot network, contributing to blockchain ecosystem and driving web3 technology adoption.
Kabocha’s Unwavering Lead in Kusama Auctions
On the Kusama network, Kabocha has maintained its lead throughout the entire Ending Period of the current parachain lease auction. With three and a half days remaining, the project has already attracted significant attention.
The Growing Importance of “Blockspace”
Laboon also touched upon the increasing discussions around “blockspace” within the Polkadot ecosystem. He directed followers to an article by Rob Habermeier, titled “Blockspace over Blockchains,” for an in-depth understanding of the subject.
Educational Opportunities and Grant Programs
For developers interested in the Polkadot and Substrate platforms, Laboon highlighted a free on-demand course offered by the Blockchain Training Alliance. Additionally, the Web3 Foundation’s Grants Program aims to encourage innovation within the Polkadot ecosystem.
Implications and Future Developments
The parachain lease auctions are a pivotal element for both Polkadot and Kusama networks, as they allow projects to secure a slot on the respective blockchains for a specific duration. The strong performance by Astar and Kabocha indicates robust community interest and investment.
The early leads by these projects could set the stage for their increased influence within their respective ecosystems. Moreover, the ongoing discussions about “blockspace” suggest that Polkadot is actively working to optimize its infrastructure, which could have broader implications for the crypto community.
Binance, one of the world’s premier cryptocurrency exchanges, has announced the removal of a significant number of liquidity pools from its Liquid Swap platform. This decision stems from Binance’s periodic review aimed at refining the trading experience for its users by concentrating liquidity. Traders should closely monitor these tokens, as the removal of token trading pairs may influence their prices.
The liquidity pools slated for removal on September 1, 2023, at 04:00 (UTC) include: ADA/BNB, ALICE/BTC, APE/BTC, AVA/USDT, AVAX/BNB, BTC/TUSD, CHZ/BNB, CHZ/BTC, CTSI/BNB, DOT/BUSD, ENJ/USDT, FIL/BNB, FRONT/BUSD, GALA/BNB, ICP/BNB, ID/BTC, KDA/USDT, LIT/USDT, MATIC/BNB, NEO/BNB, PAXG/USDT, PEPE/USDT, SANTOS/USDT, SUSHI/BNB, SUSHI/BTC, SXP/BNB, SXP/BTC, THETA/BNB, THETA/BTC, TKO/USDT, TLM/USDT, TRX/BNB, TRX/ETH, WBTC/ETH, XMR/ETH, XMR/USDT, XVS/BTC, XVS/USDT, and ZEN/USDT.
Users with positions in these liquidity pools will automatically have their deposited assets returned to their Spot wallets at the aforementioned date and time.
It’s crucial for users to understand that the removal of these liquidity pools won’t affect the trading of the corresponding pairs on Binance Spot. Starting from August 28, 2023, at 06:00 (UTC), the platform will cease accepting liquidity additions to these pools. However, users have the option to redeem their assets from these pools before the removal date. After September 1, deposits in these liquidity pools will be determined based on the prevailing composition ratios of each pool and will be automatically redeemed to users’ Spot wallets.
Binance has also emphasized that Liquid Swap positions might undergo changes in composition ratios due to the inherent nature of liquidity pools. For a deeper understanding, users are directed to the platform’s FAQ section.
The announcement was officially made on August 28, 2023, by the Binance Team.
According to Messari, Polkadot, a blockchain network designed to support interconnected, application-specific Layer-1 chain, has made significant progress in Q2 2023. The network launched OpenGov, a fully-decentralized governance model, and XCM V3, a new iteration of the messaging format, both of which are expected to enhance the network’s functionality and interoperability.
OpenGov introduces concurrent referenda, community-centered governance bodies, and enhanced delegation flexibility, enabling a more efficient and transparent decision-making process. The new governance model replaces the Council and Technical Committee with the Fellowship, a developer DAO that ensures decentralization through community voting and checks and balances. This shift reflects Polkadot’s commitment to a more democratic and efficient decision-making process.
The launch of XCM V3 has generated significant excitement in the Polkadot community. The new version introduces advanced programmability, bridging capabilities with external networks, cross-chain locking, improved fee payment mechanisms, and support for non-fungible tokens (NFTs). This upgrade is expected to pave the way for increased functionality and interoperability across the Polkadot network.
Polkadot’s native token, DOT, was not flagged by the SEC as a security. This follows the Web3 Foundation’s statement that DOT had morphed and was no longer deemed a security after three years of discussions with the SEC. This omission from the SEC’s list of securities is a significant milestone for Polkadot, providing a level of regulatory clarity for the network and its users.
The network also saw Acala and Moonbeam re-lease their parachain slots, indicating increased competition for slots as new projects seek to join and existing projects aim to re-sign. The first batch of parachain leases is set to expire in October, which is expected to intensify the competition for parachain slots.
Polkadot’s market capitalization experienced a 16% decrease QoQ, declining from $7.74 billion to $6.24 billion. Despite this, Polkadot ranked as the 12th largest crypto project by market cap and the fourth largest base layer protocol, following Ethereum, Cardano, and Solana.
Looking ahead, Polkadot plans to implement additional system parachains, asynchronous backing, and parathreads, which will further enhance the network’s functionalities, scalability, and interoperability. With one of the largest developer communities in the crypto space, Polkadot is well-positioned to continue delivering on its roadmap and shipping products.
Morgan Creek Capital Management’s Mark Yusko is naming four crypto assets that he believes could withstand a market downturn relatively well.
According to a Business Insider report, Yusko says that the native tokens of smart contract-enabled blockchains Solana (SOL), Avalanche (AVAX), Cosmos (ATOM) and Polkadot (DOT) are among the crypto assets capable of surviving a bear market.
In the case of Solana, the Morgan Creek founder says that the seventh-largest blockchain by market cap is a “great protocol.”
“There’s probably still some potential volatility in the price ahead. But long term, I think it’s a great protocol.”
According to Yusko, cryptocurrencies will be in a bear market for the next 12 months or so before the next Bitcoin halving event kicks off a bull cycle.
“What you’re seeing is crypto is definitely in a bear cycle. It’s going to struggle for the next 12-ish months then we’ll go back to the next bull cycle triggered by the next halving event.”
The last Bitcoin (BTC) halving event occurred in May of 2020. The next one is expected to take place during the first six months of 2024.
Yusko also says that Bitcoin is not correlated to stocks though it might appear to be so on shorter time frames. For instance, Bitcoin is down 7.77% year-to-date compared to the tech-heavy Nasdaq which has fallen 9.89% year-to-date in the wake of the Federal Reserve’s intentions to hike rates.
“You can’t calculate correlation over the short-term. Just the math doesn’t work. And so yes, it is true that in times of stress, ‘all correlations go to one.’
Zoom out, the correlation of Bitcoin to equities is 0.15 for long periods of time. Some weeks, some months, it goes higher, but over the long term, it’s still 0.15 and to bonds, it’s 0.”
Correlation can take a value of between -1 and 1. The higher the value, the stronger the correlation, and the lower the value, the weaker the correlation.
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A popular crypto strategist and trader is outlining what’s next for Ethereum (ETH) and its rivals Polkadot (DOT) and Terra (LUNA) as altcoins flash signs of life.
Pseudonymous analyst Altcoin Sherpa tells his 167,100 Twitter followers that while leading smart contract platform Ethereum looks bullish on the lower timeframes, he warns that a correction is in sight as ETH is now trading at a key resistance area.
“This isn’t generally how bottoms are formed; I think a return to the lows is likely (eventually). With that said, price has still maintained a bullish market structure on the 4h with [higher highs and higher lows]. Approaching a scary area in the $3,000s. Be careful.”
Source: Altcoin Sherpa/Twitter
Next up is interoperable blockchain Polkadot. According to the crypto analyst, DOT looks ready to ignite a 27% rally from its current price of $21.90 to his target at $28.
“I think that a short-term bottom may be forming; to be determined if this is the long-term bottom. Price will need to consolidate here for a while before I think that happens. Possible lower high to mid $20s near the 200-day exponential moving average and then lower.”
Source: Altcoin Sherpa/Twitter
Another coin on the trader’s list is decentralized finance (DeFi) payment network Terra. Altcoin Sherpa says LUNA may be carving a bottom between $45 and $53 as it trades in a high-volume node (HVN) region.
“I still think the bottom is in for the short term. Lots of volume and a HVN on volume profile is around this area. Expecting this to chop and then go up.”
Source: Altcoin Sherpa/Twitter
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New data reveals that Ethereum challenger Polkadot (DOT) consumes the least amount of electricity out of any leading blockchain.
According to new research conducted by the Crypto Carbon Ratings Institute (CCRI), the interoperable blockchain platform uses less power than other popular crypto assets such as Bitcoin (BTC), Ethereum (ETH) and Solana (SOL).
The institute found that DOT consumes just 6.6 times the electricity the average US household uses in a year, making it the least power-draining digital asset among the top chains.
For comparison, ETH uses 1.6 million times what the average US household uses in electricity while that number jumps up to 8.6 million for BTC, according to the CCRI.
“An average US household consumes about 10,600 kWh per year and therefore, the least electricity consuming network Polkadot consumes about 6.6 times the electricity and the most electricity consuming network Solana about 200 times the electricity (U.S. Energy Information Administration, 2021)…
Bitcoin consumes much more electricity than any Proof of Stake system due to its Proof of Work consensus mechanism, resulting in the deployment of energy-intensive hardware.”
Source: Crypto Carbon Ratings Institute
The data shows leading smart contract platform ETH is right behind BTC in terms of power usage, followed by other layer-1 protocols SOL, Cardano (ADA), Algorand (ALGO), Avalanche (AVAX) and Tezos (XTZ).
“Algorand consumes up to the factor of 9 compared to other cryptocurrencies such as Cardano and Polkadot. Tezos is in between these two groups. It consumes up to factor 5 of the low-energy blockchains, but only about 50% of Algorand’s consumption.”
Polkadot is exchanging hands at $21.45 at time of writing, an 23% increase from its seven-day high of $17.42.
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This week in coins. Illustration by Mitchell Preffer for Decrypt.
After a veryrocky start to the year, crypto price watchers finally saw the start of a promising recoverylast week. This week, prices continued to rise. In fact, today’s growth alone has been particularly noteworthy: The global crypto market cap climbed 10% in just 24 hours, to hit $1.9 trillion.
The two market leaders posted noteworthy gains this week. Friday, Bitcoinrecrossed the $40k threshold, and it sustained that growth well into Saturday. The world’s most popular cryptocurrency has grown 8.8% over the last week and currently trades at $41,460.
But Bitcoin’s growth has been overshadowed by Ethereum, which grew 16% this week and trades at $3,015.
In fact, all top 30 cryptocurrencies (excluding stablecoins) are up this week, except for Fantom, which lost 0.6% and trades at $2.16.
The biggest successes of the week are: Solana, up 17% to $115; Polkadot, up 15% to $21.60; Avalanche, up 10% to $78.36; Litecoin, up 10% to $121.95; Near Protocol, up 18% to $13.29; and Decentraland, up a whopping 26% to $2.99.
News of the week
On Monday, the International Monetary Fund’s financial counselor, Tobias Adrian, warned of creeping ‘cryptoization,’ his term for cryptocurrency crossing over into the financial mainstream. The senior official said “capital flow management measures will need to be fine-tuned.”
Adrian highlighted some of the risks we’re facing: “Crypto is being used to take money out of countries that are regarded as unstable [by some external investors].”
Adrian also noted that Bitcoin is now showing a strong correlation with traditional financial markets: “The correlation between crypto and equity markets has been trending up strongly. Crypto is now very closely tied to what is happening in equities. We can’t just dismiss it.”
On the same day, JP Morgan senta note to investorswarning that Bitcoin is still too volatile for mass institutional adoption. Meanwhile, Ethereum, which has enjoyed second place in the market cap table thanks largely to the NFT and DeFi capabilities of its smart contract-enabled blockchain, is facing pressure from competitors like Solana and Terra.
On Tuesday, Indian finance minister Nirmala Sitharaman announced a30% tax on crypto incomewith no exemptions or deductions. Investors filing their tax returns won’t be able to show losses due to price crashes or theft in order to offset the tax on their profits.
At the same time, Sitharaman said that the Reserve Bank of India (RBI) will introduce a digital rupee in the next financial year. The minister confirmed that this will be a blockchain-basedCBDC, but gave no further details.
The British government updatedthe ruleson DeFi and staking on Wednesday. Her Majesty’s Revenue and Customs (HMRC) confessed that “it is not possible to set out all the circumstances in which a lender/liquidity provider earns a return from their activities and the nature of that return,” and offered crypto investors four “guiding principles” to help them fill out their tax returns. (Across the pond, a U.S. lawsuit may have implications for how the Internal Revenue Servicetaxes staking rewards.)
Finally, Meta (formerly Facebook) had a tough week.Shares plummeted 21%in pre-market trading on Thursday. CEO Mark Zuckerberg blamed a fall in projected first-quarter earnings on “increasing competition,” particularly from TikTok, but the billions Meta has thus far spent in developing its metaverse pivot could also be a major factor in the expected shortfall.
Meta was also hit by allegations of verbal abuse and sexual harassment during atech demofor the company’s virtual reality metaverse. Add to that the fact that the company’s “borderless global currency” Diem is nowdead in the water: Meta officially announced it was selling off all of the project’s assets and intellectual property to Californiancrypto-friendly bank Silvergate.
Still, in spite of, or perhaps because of Meta’s bad news, Metaverse-related tokensare surging right now.
Real Vision CEO Raoul Pal says that Ethereum is set to rally and that two altcoins popular among investors may be ready to compete with ETH.
In a new interview with Altcoin Daily, the macro guru says that a number of influential people whom he considers to be important investors are bullish on decentralized finance (DeFi) payment network Terra (LUNA) and interoperable blockchain Polkadot (DOT).
“You notice that there’s a huge amount of investors who are very bullish on Terra still including Remi (Tetot) who works for me, who was a co-founder of Real Vision and works for Global Macro Investor. He’s a big investor in that space, loves it and a lot of people are.
A lot of people that I think are very important investors in the space are very bullish on Polkadot still, and they have been for a long time. It’s never really done what everybody expected it to do, but again you’ve got to keep your mind open to these things or it could be something else. Something else comes out of the blue, finds a different use case and before you know it, so it’s really hard to trade this kind of stuff.”
Pal also shares his 2022 forecast for Ethereum. He says the leading smart contract platform is still the greatest trade in the world.
“I still think we actually got a strong run to come. I think this kind of year-long sideways correction that we’ve essentially had is just a springboard to further gains as more adoption rolls out, more use cases roll out, etcetera…
I still think, risk-adjusted, ETH will do extremely well over time. The reason why it’s expensive to use is because it’s so damn popular. It’s like a chain of prestige now for things to be built on because it is the more decentralized of all of the other layer-1s. So it makes sense to me, I think, with the change towards ETH 2.0 coming as well. I think that narrative will build over time as well, so I still think the upside in ETH is massive. In terms of market cap, where could it go, it could still go another 10x from here in terms of market cap alone. Over what period of time, who knows.”
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A closely followed crypto strategist is mapping out what’s ahead for Ethereum-competitors Cardano (ADA), Polkadot (DOT), Terra (LUNA) and four other altcoins.
Pseudonymous analyst Altcoin Sherpa tells his 165,700 Twitter followers that he’s looking at where smart contract platform Cardano’s price could potentially bounce.
“ADA: since everyone’s exposed to just altcoins, I’m going to be doing a bunch of alt charts where I think decent support is. That doesn’t mean that there won’t be bounces before this time but these are meaningful levels of support where prices could eventually go.
support: $0.40.”
Source: Altcoin Sherpa/Twitter
The trader says that the $1.00 level for Cardano could hold, but if it fails, he sees ADA going down to $0.40.
Altcoin Sherpa is also looking at interoperable blockchain Polkadot (DOT), which he says could find support at $15.
Source: Altcoin Sherpa/Twitter
Next up is decentralized parallel blockchain network Cosmos (ATOM), which Altcoin Sherpa believes can go as low as $20.
Source: Altcoin Sherpa/Twitter
Another altcoin on the trader’s list is decentralized finance (DeFi) payment network Terra. According to Altcoin Sherpa, the area between $30 to $40 can serve as a key support level for LUNA.
Source: Altcoin Sherpa/Twitter
Next is meme crypto asset Dogecoin (DOGE), which Altcoin Sherpa believes may ignite a sell-off event if it dips below support at $0.128.
“Support: $0.05.”
Source: Altcoin Sherpa/Twitter
Altcoin Sherpa is also keeping an eye on play-to-earn blockchain-based game Axie Infinity (AXS). According to the crypto trader, he sees AXS holding support around $35.
Source: Altcoin Sherpa/Twitter
The last coin on the trader’s radar is decentralized oracle network Chainlink (LINK). According to the crypto strategist, LINK could potentially see a reversal at $12.
Source: Altcoin Sherpa/Twitter
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