The list of the top 10 cryptocurrencies by market capitalization changed a lot during 2022. Many newcomers entered the list, mostly stablecoins. This is because 2022 was a bearish year, and most crypto investors turned to stablecoins to hedge lower prices. However, other cryptos were competing to stay on the list. Recently, Polkadot surpassed Dogecoin to become the #10 biggest crypto by market cap. Is Polkadot still worth it? Should you invest in Polkadot when the crypto market rebounds? In this Polkadot price prediction article, we take a fundamental look at the Polkadot project and analyze DOT technically.
What is Polkadot (DOT)?
Polkadot is a blockchain project launched in 2017 by the Swiss non-profit organization Web3 Foundation. The inventor of the project is Dr. Gavin Wood, one of the co-founders of Ethereum and one of the developers of the Solidity programming language for smart contracts. The ICO in 2017 raised $145 million at the time.
When the company was founded, 10 million DOTs were issued as network tokens. The number of DOT increased to a number of 1 billion in August 2020 for the sake of simplicity. The project is still in ongoing development. However, a large part of the desired functions of the network is now live.
How does Polkadot Work?
Polkadot is intended to form a blockchain network that connects other different blockchains with each other and thus creates a so-called “Internet of blockchains”. In other contexts, there is also talk of Web 3.0. The unique selling point is the so-called parachain, which connects and communicates with different blockchains. As a consensus mechanism, Polkadot uses NPoS (Nominated Proof of Stake) protocol.
The network token DOT has several roles at Polkadot:
- Network Management: Token holders can control changes to the platform, such as setting network fees, scheduling events, updates and fixes.
- Staking: The active token holders ensure the functionality of the platform by validating transactions through staking.
- Adding Parachains: As new parachains are added, DOT tokens are bound. Should these parachains be useless and removed, the DOT tokens will become freely available again.
Polkadot BEATS Dogecoin for the #10 spot
Dogecoin has been battling to stay the 10th biggest cryptocurrency project by market cap. However, in the last few days, Polkadot managed to beat Dogecoin and took its place. Polkadot’s current market capitalization stands around $8.2 billion, just $160 million more than Dogecoin’s market cap. The latter had its main support from Elon Musk taken away in the last couple of months. However, Polkadot on the other hand still stands as a sophisticated blockchain project.
With the latest market drop, Dogecoin failed to recover while Polkadot had its fair share of a comeback. DOT is up by more than
Polkadot Price Prediction – Will DOT continue to rise?
If we look back at figure 1, we can see that DOT is in a sideways trend delimited between $6.8 and $7.6. As prices continue to rise towards the resistance of $7.6, we expect a retracement lower towards $7.2. This retracement might bring Dogecoin ahead in case it managed to increase in prices. The difference between Polkadot and Dogecoin is still slim.
Looking at the previous all-time high of Polkadot, we can see an x8 increase on the horizon in case the crypto market picks back up. An investment in DOT would have targets of $40 and $50 prices, but definitely not in 2022.
