Is #Polkadot $DOT still alive?
Is the “Ethereum Killer” narrative still valid?
What's new with the protocol that was supposed to replace #Ethereum?
Thread 🧵👇
1/46
When #Polkadot launched in the second half of 2020, you could hear that we are dealing with the real successor to #Ethereum.
medium.com/coinmonks/polk…
2/46
The #Polkadot $DOT narrative was so strong that there was a temporary trend of pumping and getting excited about all projects that had anything to do with Polkadot.
3/46
PolkaCity, PolkaFoundry, PolkaStarter... are ERC20 tokens, however, the name referring to #Polkadot caused huge increases. Madness 🤯
👇
coingecko.com/en/categories/…
4/46
This trend lasted for several months. At the same time, Polkadot $DOT was one of the strongest tokens.
5/46
However, at some point, the narrative died very quickly and it looked like most investors suddenly forgot about #Polkadot. So what happened?
6/46
I will try to answer this question, but at this point it is worth briefly summarizing the development of #Polkadot $DOT since then.
7/46
By far the most important change was the launch of #parachains in November 2021.
8/46
At that time $DOT reached its peak. It has dropped almost 90% since then.
10/46
The first two paid over 30m $DOT for a parachain slot. At that time, these amounts exceeded $1b!
coindesk.com/tech/2021/11/1…
11/46
A year later, at the end of 2022, the @DarwiniaNetwork paid 9.9k DOT or approximately $45k for a parachain slot.
12/46
This situation perfectly illustrates how much the bear market has changed the rules. Not only have there been huge drops in valuations, but also in engagement.
13/46
Such situations can be a great investment opportunity. A small capital commitment results in much larger prizes from the auctions. But that’s the story for another time. Let's move on.
14/46
Another big event for the #Polkadot ecosystem took place in May 2022 and it was the launch of the first version of the #XCM protocol that allows communication between parachains.
cryptobriefing.com/polkadot-ecosy…
15/46
In January this year, @gavofyork announced the release of version 3 of the #XCM protocol.
This cross consensus message format enables parachains to ‘communicate’ without the need for bridges.
16/46
Thanks to the #XCM protocol, by the end of 2022, 160k transactions were carried out between various parachains with a total value of $605m.
Source: dotinsights.subwallet.app/polkadot-repor…
17/46
Is that a lot? It depends.
For example, #Cosmos ecosystem, thanks to #IBC, carries out almost a million transactions per week with a value exceeding $300m.
mapofzones.com/zones?columnKe…
18/46
With the launch of version 3, there will probably be a faster increase in the popularity of this type of communication between parachains. However, the way to reach the #IBC level is a long way off.
19/46
Undoubtedly, one of the most interesting information related to #Polkadot $DOT appeared along with the annual @ElectricCapital report.
20/46
It turns out that #Polkadot $DOT is definitely ahead of the competition in terms of the number of active developers.
21/46
If we compare the development dynamics of #Polkadot and #Ethereum, it turns out that @gavofyork's child is developing faster than #Ethereum.
22/46
Active developers motivated to create a decentralized future is the most important fundamental indicator of any protocol. In this case, #Polkadot $DOT comes out great.
23/46
However, 2022 has not been kind to the Polkadot ecosystem. The two largest parachains, #Moonbeam $GLMR and #Acala $ACA, have been hacked.
24/46
#Moonbeam $GLMR suffered from the Nomad Bridge hack in August. Although most of the stolen funds have been returned, TVL on the chain has dropped dramatically.
25/46
#Acala $ACA was also hit in August. These two events led to the destruction of trust in Polkadot-based protocols.
26/46
I noticed that one of the problems of $DOT is the lack of liquidity in the entire ecosystem.
Liquidity, stablecoins, activity = network effect.
#Polkadot still doesn't have it. Which makes the chain boring. Could this change in the near future?
27/46
The fuel for the growth of TVL may turn out to be the release of the long-awaited trustless bridge, which will connect #Polkadot with #Ethereum.
👇
snowfork.com
28/46
Of course, with the development of XCM v3, much newer and more interesting applications will be created. Adding well-thought-out liquidity programs will probably speed up the adoption process.
29/46
Already at this point you can notice the accelerated development of some parachains. In my opinion, Astar Network $ASTR is the dark horse of the #Polkadot ecosystem.
30/46
The development of $ASTAR requires a description in a separate thread. However, I encourage you to read:
👇
31/46
Another project worth mentioning is #Centrifuge $CFG.
One of the few protocols that fits into the #RWA (Real World Asset) narrative recently mentioned by Delphi Digital.
members.delphidigital.io/reports/real-w…
32/46
#Polkadot $DOT has one more problem, which is very often mentioned in the comments as "an insurmountable barrier for some"
33/46
The problem is UX, so how complicated it is to use the @Polkadot ecosystem. Despite quite a lot of knowledge, I had problems with the wallet myself.
It has been noticed and there are more and more better solutions.
34/46
One of them is Talisman:
talisman.xyz
35/46
The second one worth mentioning is the @subwalletapp
subwallet.app
36/46
The infrastructure is definitely developing in the right direction. These types of facilities will convince new people joining the #Polkadot ecosystem.
Source: dotinsights.subwallet.app/polkadot-repor…
37/46
However, I left the most interesting and bullish information about #Polkadot $DOT for the very end.
38/46
After the collapse of @FTX_Official , we entered a period of closer scrutiny of the regulator on the crypto market. The effects of this are plain to see.
39/46
Kraken receiving a penalty for staking, BUSD loses Paxos support. Everything indicates that this is not the end.
40/46
One of the most important questions every crypto investor should ask himself is whether his tokens can be considered as a “security”.
41/46
At this point, it's extremely difficult to answer this question, because we don't really know any guidelines. It looks like Gessler is shooting blindly at various projects.
42/46
It turns out, however, that the Web3 foundation has been in constant contact with the SEC for several years to finally avoid defining $DOT as security.
43/46
The Web3 Foundation talks about the $DOT token as software. So far, of course, we can't count on any confirmation from the SEC about the validity of this thesis.
👇
cointelegraph.com/news/polkadot-…
44/46
However, several years of work by Web3 lawyers directly with the SEC gives a good chance of success. In that case, $DOT would be given rocket fuel for growth.
45/46
With increasing regulatory pressure, I predict a trend towards “non-security” tokens 🐂
46/46
It is difficult to fit all the news and changes in such a huge ecosystem as #Polkadot in one thread.
I'll probably do another part of this thread soon.
If you liked today's part, then please follow my account and retweet the post. Thank you!
👇❤️
Share this Scrolly Tale with your friends.
A Scrolly Tale is a new way to read Twitter threads with a more visually immersive experience.
Discover more beautiful Scrolly Tales like this.